Case: 09-50157 Document: 00511005648 Page: 1 Date Filed: 01/15/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 15, 2010
No. 09-50157 Charles R. Fulbruge III
Clerk
WESLEY MURRAY; KELLY RENEE MURRAY,
Plaintiffs - Appellants
v.
FIDELITY NATIONAL FINANCIAL INC.; FIDELITY NATIONAL TITLE
GROUP; CHICAGO TITLE INSURANCE COMPANY; TICOR TITLE
INSURANCE COMPANY; CHICAGO TITLE INSURANCE GROUP;
FIDELITY NATIONAL TITLE INSURANCE COMPANY,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Texas
Before KING, GARZA, and HAYNES, Circuit Judges.
EMILIO M. GARZA, Circuit Judge:
This appeal from a dismissal in which the district court held that the
Murrays’ claims were moot before they became named plaintiffs invites us to
extend our reasoning in Zeidman to plaintiffs added through amendment. For
the following reasons, we decline to do so.
I
Appellants Wesley Murray and Kelly Renee Murray (the “Murrays”) were
not parties to the instant suit when it was filed. The suit began when Rosa
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Maria Arevalo 1 and Amy Lyn Rash (“Original Plaintiffs”) filed a class action
alleging that Ticor Title Insurance Company (“Ticor Title”) had overcharged
them to record documents related to their residential real estate closings and
that the other Defendants were also liable under theories of vicarious liability.
It soon became clear that Original Plaintiffs had not in fact conducted any
business with Ticor Title or any of the other Defendants. Rather, they had dealt
with a third party that promoted itself as “Ticor Title of San Antonio,” despite
having no authority to act for any of the Defendants.
Original Plaintiffs filed a F ED. R. C IV. P. 15(a)(2) motion for leave to amend
their complaint and add the Murrays, who had dealt with Defendant Chicago
Title Insurance Group (“Chicago Title”), as class representatives. While that
motion was pending, Chicago Title tendered a check to the Murrays’ counsel as
full payment of their claim. Notwithstanding the tender, the district court
granted Original Plaintiffs’ motion for leave to amend, and the Murrays were
added as named representatives of the putative class. Original Plaintiffs and
the Murrays filed a Second Amended Class Action Complaint.
Defendants responded with two motions challenging the subject matter
jurisdiction of the district court. They filed a motion to dismiss, arguing, inter
alia, that the Murrays’ claims had been mooted by the tender of payment before
they became parties to the suit. They also filed a motion for summary judgment,
arguing, inter alia, that Original Plaintiffs failed to establish any case or
controversy against any Defendant, because none of the Defendants handled
Original Plaintiffs’ real estate transactions.
1
Due to health concerns, Arevalo eventually withdrew as a class representative and
voluntarily dismissed her claims prior to the district court’s dismissal of the case. The
Murrays have not argued that her withdrawal impacts our analysis. Thus, any such
arguments are waived. See, e.g., Goodman v. Harris County, 571 F.3d 388, 399 (5th Cir. 2009)
(issues inadequately briefed on appeal are waived).
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The district court granted Defendants’ motions. The Murrays appeal the
decision dismissing their claims against Chicago Title. Original Plaintiffs have
not appealed, and the Murrays have not challenged the district court’s finding
that Original Plaintiffs lacked standing to sue.
II
We review de novo the district court’s dismissal of the Murrays’ claims.
In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007).
The Murrays argue that, because Rule 15(a)(2) requires plaintiffs to seek
leave of the court before amending, plaintiffs are forced to inform defendants of
proposed class representatives before those representatives are protected by
Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030 (5th Cir. 1981) and Sandoz
v. Cingular Wireless LLC, 553 F.3d 913 (5th Cir. 2008). This, they argue,
provides defendants the opportunity to “pick off” would-be class representatives
by tendering the amount claimed individually by the plaintiff, thereby effectively
preventing the original plaintiffs from amending a complaint to add other
plaintiffs who better represent the interests of the putative class.
As a general principle, a purported class action becomes moot when the
personal claims of all named plaintiffs are satisfied and no class has been
certified. Zeidman, 651 F.2d at 1045. In such a case there is no plaintiff (either
named or unnamed) who can assert a justiciable claim against any defendant
and consequently there is no longer a “case or controversy” within the meaning
of Article III of the Constitution. See, e. g., Weinstein v. Bradford, 423 U.S. 147,
149 (1975); Board of School Comm’rs. v. Jacobs, 420 U.S. 128, 130 (1975);
Sannon v. United States, 631 F.2d 1247, 1252 (5th Cir. 1980).
We have, however, recognized a limited exception to this general principle.
In Zeidman, the plaintiffs’ motion for class certification was pending when the
defendants tendered to the named plaintiffs the full amount of their personal
claims and moved for the dismissal of the entire action as moot. 651 F.2d at
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1036. Although the case did not present the type of “transitory” claims typically
involved in the “capable of repetition, yet evading review” exception to the
mootness doctrine, the court found that the same logic applied to situations in
which “the defendants have the ability by tender to each named plaintiff
effectively to prevent any plaintiff in the class from procuring a decision on class
certification.” Id. at 1050. In both situations, the plaintiff’s claim is prematurely
mooted, thus justifying his continuance as class representative. Grant ex rel.
Family Eldercare v. Gilbert, 324 F.3d 383, 389 n.11 (5th Cir. 2003).
Foreshadowing the concerns raised by the Murrays, the court noted “that in
those cases in which it is financially feasible to pay off successive named
plaintiffs, the defendants would have the option to preclude a viable class action
from ever reaching the certification stage.” Id. The court ultimately held “that
a suit brought as a class action should not be dismissed for mootness upon
tender to the named plaintiffs of their personal claims, at least when . . . there
is pending before the district court a timely filed and diligently pursued motion
for class certification.” Id. at 1051.
The reasoning of Zeidman was extended in Sandoz.2 In Sandoz, a Fair
Labor Standards Act case, the defendant sought to moot the plaintiff’s claims by
making a Rule 68 offer before other employees had an opportunity to opt-in to
the suit. We were concerned that allowing this practice to moot the suit would
obviate the collective action provision because defendants could always “‘pick off’
a named plaintiff’s FLSA claims before the plaintiff has a chance to certify the
collective action.” 553 F.3d at 919. Accordingly, we held that “when a FLSA
2
Although Sandoz involved a Federal Labor Standards Act claim and the instant case
arose in the Rule 23 class action context, Sandoz is nonetheless instructive. As the Sandoz
court noted, “the differences between class actions and FLSA § 216(b) collective actions do not
compel a different result regarding whether a certification motion can ‘relate back’ to the filing
of the complaint [because]. . . the policies behind applying the ‘relation back’ principle for Rule
23 class actions apply with equal force to FLSA § 216(b) collective actions.” 553 F.3d at 920.
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plaintiff files a timely motion for certification of a collective action, that motion
relates back to the date the plaintiff filed the initial complaint, particularly when
one of the defendant’s first actions is to make a Rule 68 offer of judgment.” Id.
at 920)921.
The Murrays argue that the same reasoning should apply where a
defendant attempts to moot the plaintiffs’ individual claims while a F ED. R. C IV.
P. 15(a)(2) motion is pending. Since the relation back doctrine would have
applied had the Murrays filed a separate complaint instead of moving for leave
to be added, they contend there is no principled reason not to apply the relation
back doctrine to cover the period after the motion for leave gives the defendants
notice that new plaintiffs are being added but before those plaintiffs are
protected by Zeidman. In both situations, they argue, plaintiffs should be
allowed a reasonable period of time to file a motion for class certification before
their claims can be mooted by tender of the individual damages.
Although the Murrays have insisted that the interests of judicial economy
motivated their decision to amend rather than to file a new complaint, we are
not so concerned with the effects of multiple filings. F ED. R. C IV. P. 42 provides
that actions before the district court involving common questions of fact or law
may be consolidated. Accordingly, the Murrays could have availed themselves
of Zeidman and Sandoz by filing a separate complaint, which could have been
consolidated with the original suit, had that suit not been moot. The availability
of consolidation undermines the rationale for extending Zeidman to plaintiffs
seeking to be added through amendment and minimizes the burden of multiple
filings on the district court’s docket.
Unlike the plaintiffs in Zeidman and Sandoz, the Murrays had a readily
available means of preventing the defendants from mooting their suit. Had the
Murrays chosen to file a separate complaint rather than seeking to be added to
the original complaint, the defendants would have been unable to moot their
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claims. See Sandoz, 553 F.3d at 921; Zeidman, 651 F.2d at 1051. Further, had
the Murrays, rather than individuals who had no valid claims against
Defendants, been the original parties to the suit, Defendants would have been
unable to moot their claims. See id. In light of these available remedies, we see
no need to extend Zeidman and Sandoz to the circumstances of this case.
Furthermore, even if we were inclined to extend Zeidman to cover
plaintiffs seeking to be added to existing class complaints, we could not do so in
this case. Original Plaintiffs’ suit was non-justiciable from the moment it was
filed because it presented no case or controversy as required by Article III. See
Samnorwood Indep. Sch. Dist. v. Tex. Educ. Agency, 533 F.3d 258, 264 (5th Cir.
2008) (noting that “a case or controversy must exist throughout the litigation”);
Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 527 (5th Cir. 2008)
(noting that a case becomes moot when there are no longer adverse parties with
sufficient legal interests to maintain the litigation or when the parties lack a
legally cognizable interest in the outcome of the litigation). If a case is moot, “a
federal court has no constitutional authority to resolve the issues that it
presents.” Envtl. Conservation Org., 529 F.3d at 525. Because Original
Plaintiffs’ suit was moot from the very beginning, a determination which the
Murrays have not challenged, there was no suit to which the Murrays could be
added.
III
In sum, although we recognize the Murrays’ concerns, we decline their
invitation to extend Zeidman. Not only were the Murrays’ claims mooted before
they ever became parties to the suit, the suit itself was moot from the day it was
filed. We affirm the district court’s dismissal of the suit.
AFFIRMED.
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KING, Circuit Judge, specially concurring:
I concur in the judgment affirming the district court’s dismissal of the suit
and in the panel’s decision not to extend the reasoning in Zeidman to plaintiffs
added by amendment.
7