April 4, 2017
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 16 C 4507 - Harry
D. Leinenweber, Judge.
WOOD, Chief Judge, and Kanne and ROVNER, Circuit Judges.
idea of a theme and variations is a common one in music. It
should be in law, too. Here we return to the familiar theme
of a defense effort to pretermit a proposed class action by
picking off the named plaintiff's claim. Several
variations on that theme have been tried and have failed. See
Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016)
(Rule 68 offers of judgment); Fulton Dental, LLC v.
Bisco, Inc., 860 F.3d 541 (7th Cir. 2017) (Rule 67
payments to court registry).
the defendant in the case now before us asserts that an
unaccepted offer of relief before a putative
plaintiff files a lawsuit deprives that plaintiff of
standing. We see no reason why the timing of the offer has
such a powerful effect. Black-letter contract law states that
offers do not bind recipients until they are accepted. See,
e.g., ALI Restatement (Second) of Contracts §
17 (1981). Hence while the legal effect of every variation on
the strategic-mooting theme has not yet been explored, we are
satisfied that an unaccepted pre-litiga-tion offer does not
deprive a plaintiff of her day in court.
case, at base, is about a car purchaser's disappointed
expectations. The cars are Volvos, and the dispute centers on
the difference between the model XC90 and the XC90 T8
("the T8"). Both are luxury SUVs, but the XC90 runs
on gas, whereas the T8 is a plug-in hybrid. The latter
feature comes at a premium; the 2016 T8 retailed for around
$20, 000 more than its gas-only sibling. Plaintiffs Xavier
and Khadija Laurens overcame the sticker shock and paid $83,
475 for a new T8. They also purchased, for an additional $2,
700, a charging station that was installed in their garage.
Laurenses quickly realized that the car they bought fell
short of the car the ads had promised. Volvo's
advertisements had claimed that the T8's battery range
was 25 miles, and the Laurenses had relied on this
representation when deciding to purchase that model for a
premium price. In practice their T8 averaged a puny eight to
ten miles of battery-only driving, far below the promised
distance. On April 21, 2016, Xavier filed this action, both
on his own behalf and for a class of others similarly
situated. He relied on the Class Action Fairness Act (CAFA),
28 U.S.C. § 1332(d), for subject-matter jurisdiction,
because he was a citizen of Illinois, whereas Volvo Cars USA
is a Delaware limited liability company controlled by Volvo
Cars of North America (another Delaware LLC), which is itself
wholly owned by its Swedish parent (a publicly traded,
share-based limited liability company, or AB, with its
principal place of business in Gothenburg, Sweden), and the
aggregate amount in controversy exceeds (he asserted) $5,
000, 000. For himself, Xavier sought damages equal to the
premium he paid for the hybrid model ($20, 000), the cost of
the charging station ($2, 700), injunctive relief, punitive
damages, and attorney's fees.
complaint's core theory was that Volvo's misleading
advertising caused Xavier to pay the extra money for the
hybrid version of the car. A wrinkle arose when it turned out
that Xavier was not listed on either the car's purchase
agreement or the title; only Khadija was. On June 8, 2016,
the Laurenses received a letter from Volvo that offered
"immediately" to give Khadija (but not Xavier)
"a full refund upon return of the vehicle if you are not
satisfied with it for any reason" and to "arrange
to pick up your vehicle at your home." The next day
Volvo moved to dismiss Xavier's suit on the theory that
he lacked standing; it argued that Khadija, the titleholder,
was the only person with any possible injury, and she was not
at that moment a party. Before the district court ruled on
the motion, the Laurenses added Khadija to the complaint.
Volvo responded with a motion to dismiss under Federal Rule
of Civil Procedure 12(b)(1); its motion contended that
Khadija also lacked standing because its letter had offered
complete relief for her before she filed suit. The
district judge agreed with Volvo, finding that Xavier had
never suffered an Article III injury and that Volvo's
offer had redressed Khadija's injury before she became a
party. The court dismissed the action, and this appeal
the Constitution does not define the precise extent of
"[t]he judicial Power of the United States/' it does
say that this power is limited to "Cases" and
"Controversies, " U.S. CONST, art. Ill.
§§ 1, 2. This requires federal courts to police
their own authority, so that they do not entertain matters
outside the scope of these terms. Of the several doctrines
that perform the policing task, the one with which we are
concerned is standing. The Supreme Court has said that
"the irreducible constitutional minimum of standing
contains three elements." Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560 (1992). In the Court's
words, "[t]he plaintiff must have (1) suffered an injury
in fact, (2) that is fairly traceable to the challenged
conduct of the defendant, and (3) that is likely to be
redressed by a favorable judicial decision." Spokeo,
Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016).
pleading stage, it is normally not difficult to pass the
standing bar. Plaintiffs need only "'clearly ...
allege facts demonstrating' each element."
Id. (quoting Worth v. Seldin, 422 U.S. 490,
518 (1975)). Things get more complicated when the defendant
challenges a plaintiff's standing in a motion to dismiss
for want of Article III jurisdiction, pursuant to Rule
12(b)(1). District courts deciding such motions "must
accept as true all material allegations of the complaint,
drawing all reasonable inferences therefrom in the
plaintiff's favor, unless standing is challenged
as a factual matter." Remijas v. Neiman Marcus
Grip., LLC, 794 F.3d 688, 691 (7th Cir. 2015) (emphasis
added) (quoting Reid L. v. III. State Bd. of Educ,
358 F.3d 511, 515 (7th Cir. 2004)). If a defendant raises a
factual challenge to standing, the plaintiff bears the burden
of proving standing by a preponderance of the evidence.
Kathrein v. City of Evanston, III., 636 F.3d 906,
914 (7th Cir. 2011). We review the district court's
standing decision de novo, accepting any underlying
factual findings unless they are clearly erroneous.
Winkler v. Gates, 481 F.3d 977, 982 (7th Cir. 2007).
and redressability are not in question here. The Laurenses
maintain that Volvo caused their injury by misleading them,
and they seek damages that would redress the financial harms
that flowed from the misrepresentation. Their complaint also
includes a request for injunctive relief, but it is premature
for us to say whether they do or do not have standing for
this part of the case. On the one hand, even an individual
plaintiff "bears the burden of showing that he has
standing for each type of relief sought." Summers v.
Earth Island Inst,555 U.S. 488, 493 (2009). That means
that either Xavier or Khadija had to demonstrate a stake in
injunctive relief in particular. In Summers, the
plaintiffs failed to meet that burden, because the parties
had settled their dispute with respect to the only national
forest in which they had a personal stake, and Volvo suggests
that the Laurenses' claim for injunctive relief should
fail for similar reasons. Once burned, twice shy, it argues:
how will either Xavier or Khadija ever be fooled again by its
advertising? But there is another side to this argument.
First, unlike the plaintiffs in Summers, as we
discuss below, the question whether the underlying dispute
has been settled is a live one. Second, the fact that the
Laurenses are seeking to serve as class representatives
complicates matters. The Supreme Court held in United
States Parole Comm'n v.Geraghty, 445 U.S.
388 (1980), that "an action brought on behalf of a class
does not become moot upon expiration of the named
plaintiff's substantive claim, even though class
certification has been denied." Id. at 404.
"When the claim on the merits is 'capable of
repetition, yet evading review, ' the named plaintiff may
litigate the class certification issue despite loss of his
personal stake ...