Payne filed this suit against Progressive for alleged violations of the Fair Debt Collection Practices Act (“FDCPA”), the Texas Debt Collection Practices Act, and the Texas Deceptive Trade Practices Act. Payne alleged that Progressive made numerous harassing phone calls, called her at inconvenient times, and did not properly identify itself as a debt collector. On her FDCPA claims, Payne requested statutory damages of $1,000, actual damages, attorneys’ fees, and costs.
After filing an answer, Progressive served Payne with a Federal Rule of Civil Procedure 68 offer of judgment. Progressive offered entry of judgment against itself in the amount of $1,001 for damages of any kind, plus attorneys’ fees and costs incurred as of the date of the offer and to be determined by agreement or court order. The offer also stated that it would expire fourteen days after service. Payne did not respond to the offer.
Progressive moved for dismissal under Rules 12(b)(6) and 12(b)(1). The district court denied Progressive’s 12(b)(6) challenge on the ground that Progressive waived the defense of failure to state a claim by failing to raise the defense before filing or in its answer. The district court, however, granted Progressive’s 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction. The court found that Progressive’s unaccepted offer rendered Payne’s FDCPA claims moot because Progressive’s offer equaled or exceeded the amount that Payne was entitled to recover on her FDCPA claims. The court reasoned that Payne was not entitled to actual damages because she failed to plead sufficient facts to support a claim for actual damages in her complaint. After dismissing Payne’s federal claims as moot, the court then declined to exercise supplemental jurisdiction over her state-law claims and dismissed the case without prejudice. Payne timely appealed.
Judge(s): Stephen Higginson
Jurisdiction: U.S. Court of Appeals, Fifth Circuit
Related Categories: Civil Procedure , Finance / Banking
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