                         RECOMMENDED FOR FULL-TEXT PUBLICATION
                             Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                      File Name: 13a0165p.06

                 UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________


                                                 X
                                                  -
 CHRISTOPHER G. HRIVNAK,
                                                  -
                                  Plaintiff-Appellee,
                                                  -
                                                  -
                                                      No. 11-3142
            v.
                                                  ,
                                                   >
                                                  -
                                                  -
 NCO PORTFOLIO MANAGEMENT, INC.; NCO
                                                  -
 GROUP, INC.; NCO PORTFOLIO
                                                  -
 MANAGEMENT; NCO FINANCIAL SYSTEMS,
                                                  -
                       Defendants-Appellants. N
 INC.; JAVITCH, BLOCK & RATHBONE, LLP,

                    Appeal from the United States District Court
                  for the Northern District of Ohio at Cleveland.
                No. 1:10-cv-646—Donald C. Nugent, District Judge.
                                      Argued: June 8, 2012
                             Decided and Filed: June 11, 2013
             Before: SUTTON, MCKEAGUE and RIPPLE,* Circuit Judges.

                                      _________________

                                           COUNSEL
ARGUED: Michael D. Slodov, SESSIONS, FISHMAN, NATHAN & ISRAEL, LLC,
Chagrin Falls, Ohio, for Appellants. Adina H. Rosenbaum, PUBLIC CITIZEN
LITIGATION GROUP, Washington, D.C., for Appellee. ON BRIEF: Michael D.
Slodov, JAVITCH, BLOCK, & RATHBONE LLC, Cleveland, Ohio, David Israel,
Allison L. Cannizaro, Brian D. Roth, SESSIONS, FISHMAN, NATHAN & ISRAEL,
LLC, Metairie, Louisiana, for Appellants. Adina H. Rosenbaum, PUBLIC CITIZEN
LITIGATION GROUP, Washington, D.C., Anand N. Misra, THE MISRA LAW FIRM,
LLC, Beachwood, Ohio, Robert S. Belovich, Broadview Heights, Ohio, for Appellee.
Kenneth W. Zeller, AARP FOUNDATION LITIGATION, Washington, D.C., for
Amicus Curiae.




        *
          The Honorable Kenneth F. Ripple, Senior Circuit Judge for the United States Court of Appeals
for the Seventh Circuit, sitting by designation.


                                                  1
No. 11-3142        Hrivnak v. NCO Portfolio Mgmt., Inc.                               Page 2


                                 _________________

                                       OPINION
                                 _________________

       SUTTON, Circuit Judge. Christopher Hrivnak sued several debt-management
companies and a law firm, (1) claiming they violated federal and state law when they
dunned him on several credit-card debts and (2) seeking to obtain monetary and
injunctive relief on behalf of a class of like-situated individuals. In response, the
defendants gave Hrivnak an offer he could not refuse—$7,000 plus reasonable costs and
attorney’s fees—or so they thought. Hrivnak rejected the offer. The defendants think
their offer moots the case and, with it, the class action. We disagree. The offer at most
resolves some, but not all, of Hrivnak’s claims. We therefore affirm.

                                            I.

       Hrivnak filed this lawsuit in state court under the Fair Debt Collection Practices
Act, 15 U.S.C. §§ 1692–1692p, and Ohio consumer-protection law, Ohio Rev. Code
§§ 1345.01–.99, 4165.01–04. In addition to seeking class relief, he requested statutory,
compensatory and punitive “damages . . . exceeding $25,000,” as well as injunctive and
declaratory relief. R.1-1 at 24; 1-2 at 11. The defendants removed the case to federal
court on federal-question grounds.

       Two days after removing the case, the defendants made an offer of judgment to
Hrivnak under Civil Rule 68. In material part, the offer said:

       1.      Judgment shall be entered against Defendants for damages in the
               total amount of Seven Thousand and No/100 Dollars ($7,000) for
               Defendants’ alleged violations of the Fair Debt Collection
               Practices Act, (“FDCPA”), 15 U.S.C. § 1692, et seq. and Ohio
               law;
       2.      In addition, the Judgment entered shall include an additional
               amount for plaintiff’s reasonable costs and attorney’s fees that
               apply to his claims against Defendants either: 1) as agreed to by
               counsel for the parties; or 2) in the event counsel cannot agree, as
               determined by the Court upon application by plaintiff’s counsel;
No. 11-3142         Hrivnak v. NCO Portfolio Mgmt., Inc.                             Page 3


          3.    The Judgment entered in accordance with this Offer of Judgment
                is to be in total settlement of any and all claims that plaintiff
                brought or could have brought against NCO Capital II, LLC d/b/a
                NCO Portfolio Management, NCO Portfolio Management, Inc.,
                NCO Group, Inc., NCO Financial Systems, Inc., NCOP Nevada
                Holdings, LLC and Javitch, Block, & Rathbone, LLP;
          4.    This Offer of Judgment is made solely for the purposes specified
                in Fed. R. Civ. P. 68, and is not to be construed either as an
                admission that Defendants are liable in this action, or that
                plaintiff has suffered any damage;
          5.    In accordance with Fed. R. Civ. P. 68, if this Offer of Judgment
                is not accepted by plaintiff within 14 days after service of the
                Offer, the Offer shall be deemed withdrawn and evidence of this
                Offer will be inadmissible except in any proceeding to recover
                costs. If this Offer of Judgment is not accepted by plaintiff and
                the judgment finally obtained by plaintiff is not more favorable
                than this Offer, the plaintiff must pay his costs incurred after
                making this Offer, as well as the costs of Defendants as allowed
                by the law of this Circuit.

R.18-2.

        Hrivnak moved to strike the offer or, in the alternative, for class certification.
The defendants opposed the motion and claimed that the offer mooted the case because
it satisfied all of Hrivnak’s claims. The district court rejected the mootness argument.
Instead of considering whether the offer had satisfied each of Hrivnak’s claims, the court
grappled with the significance of an allegation of mootness with respect to the individual
claims in a complaint when the Rule 68 offer occurs before the claimant files a motion
for class certification. Finding that the defendants could not establish that Hrivnak had
exhibited a “lack of diligence” in pursuing certification, the district court concluded that
Hrivnak’s claims should be allowed to proceed. R.31 at 15.

        The defendants moved the court to reconsider its holding and to dismiss the case
for lack of jurisdiction, raising their mootness arguments in both motions. The district
court affirmed its original holding. It certified this legal issue for immediate appellate
resolution, and we permitted the interlocutory appeal. See 28 U.S.C. § 1292(b).
No. 11-3142          Hrivnak v. NCO Portfolio Mgmt., Inc.                           Page 4


                                             II.

          Article III of the United States Constitution limits the jurisdiction of federal
courts to “cases” and “controversies,” U.S. Const. art. III, § 2, cl. 1, “a cradle-to-grave
requirement” that must be satisfied at the time a plaintiff first brings suit and that must
remain satisfied throughout the life of the case, Fialka-Feldman v. Oakland Univ. Bd.
of Tr., 639 F.3d 711, 713 (6th Cir. 2011). The limitation requires a party who invokes
the jurisdiction of the federal courts to “demonstrate that he possesses a legally
cognizable interest, or ‘personal stake,’ in the outcome” of the case. Genesis Healthcare
Corp. v. Symczyk, 133 S. Ct. 1523, 1528 (2013) (quoting Camreta v. Greene, 131 S. Ct.
2020, 2028 (2011)). If after filing a complaint the claimant loses a personal stake in the
action, making it “impossible for the court to grant any effectual relief whatever,” the
case must be dismissed as moot. Church of Scientology v. United States, 506 U.S. 9, 12
(1992).

          The defendants claim that their Rule 68 offer of judgment had that effect. From
their vantage point, the only relief available to Hrivnak under the FDCPA and Ohio law
is a statutory damages award of no more than $1,000 plus attorney’s fees and costs.
They maintain that Hrivnak is ineligible for any additional actual or punitive damages,
and they point to precedent from other circuits that says the FDCPA bars private citizens
from obtaining the injunctive and declaratory relief Hrivnak demanded. Having
purported to establish that their offer to pay Hrivnak $7,000 in damages would give him
everything he deserved, they insist that Hrivnak’s resistance to the Rule 68 offer makes
the entire case—his individual and yet-to-be-certified class claims included—moot.

          Embedded in this line of reasoning are two premises—that the defendants have
offered Hrivnak everything he could possibly win as an individual and that, once that is
the case, the individual and uncertified class claims both must be dismissed as moot. In
our view, the defendants have not cleared the first hurdle, and accordingly we need not
reach the class-claims argument.

          To moot a case or controversy between opposing parties, an offer of judgment
must give the plaintiff everything he has asked for as an individual. That means his
No. 11-3142          Hrivnak v. NCO Portfolio Mgmt., Inc.                           Page 5


“entire demand,” as we have said, O’Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567,
574 (6th Cir. 2009), and as others have said, see Zinni v. E.R. Solutions, Inc., 692 F.3d
1162, 1166 (11th Cir. 2012) (“Offers for the full relief requested have been found to
moot a claim.”) (emphasis added); Friedman’s, Inc. v. Dunlap, 290 F.3d 191, 197 (4th
Cir. 2002) (“[O]ne such circumstance mooting a claim arises when the claimant receives
the relief he or she sought to obtain through the claim.”) (emphasis added); Rand v.
Monsanto Co., 926 F.2d 596, 598 (7th Cir. 1991) (“Once the defendant offers to satisfy
the plaintiff’s entire demand, there is no dispute over which to litigate.”) (emphasis
added).

          An offer limited to the relief the defendant believes is appropriate does not
suffice. The question is whether the defendant is willing to meet the plaintiff on his
terms. Gates v. Towery, 430 F.3d 429, 432 (7th Cir. 2005). Nor is anything in Civil
Rule 68 to the contrary. The point of Rule 68 is twofold: (1) to provide a process for
making offers of judgment and for accepting or denying them, Fed. R. Civ. P. 68(a)-(c),
and (2) to create an incentive for taking offers of judgment seriously by providing that,
“[i]f the judgment that the offeree finally obtains is not more favorable than the
unaccepted offer, the offeree must pay the costs incurred after the offer was made.” Fed.
R. Civ. P. 68(d). By declining the defendants’ offer of judgment, Hrivnak converted the
defendants’ proposal into a “withdrawn” offer and exposed himself to the risk of being
on the hook for costs incurred by the defendants “after the offer was made.” Yet Rule
68 does not by itself tell us whether the defendants’ offer moots the case; mootness
occurs only when the offer is accepted or the defendant indeed offers to provide every
form of individual relief the claimant seeks in the complaint.

          In this case, the defendants did not offer to satisfy all of Hrivnak’s individual
demands. They offered to satisfy just those demands they believed were legitimate
under state law and the FDCPA. Hrivnak asked for more than $25,000, reasonable
attorney’s fees and injunctive and declaratory relief. Yet the defendants offered him
$7,000 plus costs and attorney’s fees. That was it. Reasonable though the defendants’
No. 11-3142         Hrivnak v. NCO Portfolio Mgmt., Inc.                               Page 6


offer may have been (and may still prove to be), the disparity between what they offered
and what the plaintiff sought generally will preclude a finding of mootness. Just so here.

        This case turns less on the intricacies of Rule 68 and more on the distinction
between the merits of a claim and the existence of a live controversy. As the defendants
would have it, claims with little to no chance of success should be dismissed as moot
whenever they are mixed in with promising claims that a defendant offers to compensate
in full. That is not how it works. “A bad theory (whether of liability or of damages)
does not undermine federal jurisdiction.” Gates, 430 F.3d at 432. “[T]he absence of a
valid (as opposed to arguable) cause of action does not implicate subject-matter
jurisdiction, i.e., the courts’ statutory or constitutional power to adjudicate the case.”
Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 89 (1998); see Bell v. Hood,
327 U.S. 678, 682 (1946) (“Jurisdiction . . . is not defeated . . . by the possibility that the
averments might fail to state a cause of action on which petitioners could actually
recover. For it is well settled that the failure to state a proper cause of action calls for
a judgment on the merits and not for a dismissal for want of jurisdiction.”).

        Two Supreme Court cases shed light on the distinction. In one, Adam Clayton
Powell, Jr. filed a lawsuit after the House of Representatives refused to permit him to
take the seat to which he had been elected. Powell v. McCormack, 395 U.S. 486, 489
(1969). Powell sought an injunction clearing the way to assume office, a declaratory
judgment that his exclusion was unconstitutional and payment of the salary withheld
during his exclusion. Id. at 494, 496. After the House seated Powell, the defendants
argued that Powell’s claims were moot. Id. at 495–96. He no longer had an injury
warranting injunctive relief, they said, and he had brought his action to recover backpay
in the wrong court. Id. at 498–500. The Court rejected the second half of this mootness
argument: “[R]espondents seem to argue that Powell’s proper action to recover salary
is a suit in the Court of Claims, so that, having brought the wrong action, a dismissal for
mootness is appropriate. The short answer to this argument is that it confuses mootness
with whether Powell has established a right to recover . . . , a question which it is
inappropriate to treat at this stage of the litigation.” Id. at 500.
No. 11-3142        Hrivnak v. NCO Portfolio Mgmt., Inc.                             Page 7


       Chafin v. Chafin, 133 S. Ct. 1017 (2013), reached a similar conclusion. While
stationed overseas, Jeffrey Lee Chafin, an army sergeant and United States citizen,
married a woman from the United Kingdom, and the two had a daughter together. Id.
at 1022. When the marriage unraveled, Ms. Chafin sought custody and, after obtaining
a favorable verdict in a district court in Alabama, moved back to Scotland and took the
child with her. Id. Mr. Chafin appealed the district court’s order, but the Eleventh
Circuit dismissed his appeal as moot, holding that the federal courts “became powerless”
to grant relief as soon as Ms. Chafin left the country. Id. at 1022–23. The Supreme
Court reversed. An argument that “goes to the . . . legal availability of a certain kind of
relief” “confuses mootness with the merits,” the Court said. Mr. Chafin’s “prospects of
success are . . . not pertinent to the mootness inquiry.” Id. at 1024; see also id. at 1023
(“[A] case becomes moot only when it is impossible for a court to grant any effectual
relief whatever to the prevailing party. As long as the parties have a concrete interest,
however small, in the outcome of the litigation, the case is not moot.”) (internal
quotation marks omitted).

       This Circuit has said the same. In Primax Recoveries, Inc. v. Gunter, 433 F.3d
515 (6th Cir. 2006), the Gunters, a couple injured in an automobile accident, received
insurance benefits from a plan covered by ERISA. Some time thereafter, the Gunters
filed an application for attorney’s fees, citing an ERISA provision, and Primax countered
with a motion to dismiss for lack of subject matter jurisdiction, arguing that the relevant
provision provided only for equitable, as opposed to legal, relief.           Id. at 517.
Highlighting two recent Supreme Court decisions that “admonished courts to use the
term ‘jurisdiction’ with more precision,” id. at 518, we explained that Primax’s defense
should have been presented in a motion to dismiss for failure to state a claim, not a
motion to dismiss for lack of subject matter jurisdiction, id. at 519. See also Arbaugh
v. Y & H Corp., 546 U.S. 500, 510–11 (2006) (acknowledging that the Court has
“sometimes been profligate” in its use of the term “jurisdiction” and urging courts to be
more “meticulous” in their differentiation between lack of subject matter jurisdiction and
failure to state a claim); Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 443–45 (6th Cir.
2006) (noting the confusion that often ensues when “standing and merits questions
No. 11-3142         Hrivnak v. NCO Portfolio Mgmt., Inc.                             Page 8


converge” and stating that, unless a plaintiff’s claim is “so insubstantial that it fails to
present a federal controversy,” courts may properly reach the merits and retain
jurisdiction). The court retained jurisdiction over the action, we said, even if the ERISA
provision at issue did not authorize the relief the Gunters sought.

        So too here. The defendants did not say, “We are willing to give Hrivnak all of
the relief he asked for.” They in effect said, “We are willing to give Hrivnak all of the
relief he asked for, save the relief he should not receive on the merits.” Because these
other claims were not “so insubstantial” that they “fail[ed] to present a federal
controversy,” the defendants’ Rule 68 offer did not deprive the court of subject matter
jurisdiction. Moore, 458 F.3d at 445. Yes, the offer created a risk that Hrivnak would
be hit with all costs later incurred if he failed to obtain more than $7,000 on the merits,
as Rule 68 provides, but that is not the same thing as ending the otherwise-vested subject
matter jurisdiction of the court.

        All of this should cast a new light on the defendants’ arguments about the
weaknesses of Hrivnak’s federal and state claims: (1) that he failed to allege any
physical, mental or employment-based harm and thus should not be entitled to seek
actual damages; (2) that he may not recover more than $1,000 per violation under the
FDCPA or more than $200 on his state claims; (3) that he is not authorized as an
individual to seek declaratory or injunctive relief under the FDCPA; and (4) that he is
not authorized as an individual to seek punitive damages. Each argument warrants an
identical response: The defendants may be right, but each argument goes to the merits
of Hrivnak’s claims, and the merits of those claims are not so insubstantial as to deprive
the court of jurisdiction. To pick one example, the defendants may be right that the
FDCPA does not authorize declaratory or injunctive relief. But neither our court nor the
Supreme Court has reached that conclusion, and it is surpassingly strange to think that
this court and the Supreme Court do not have jurisdiction to resolve this point of law.
Plaintiffs have the right to win—and lose—cases, and we have jurisdiction to make the
call. To rule on whether Hrivnak is entitled to a particular kind of relief is to decide the
merits of the case. Neither Civil Rule 68 nor any other Rule or tradition requires the
No. 11-3142        Hrivnak v. NCO Portfolio Mgmt., Inc.                             Page 9


district court to do that in response to a motion to dismiss for lack of subject matter
jurisdiction.

        To the extent some of Hrivnak’s claims lack merit, ample mechanisms exist to
force the issue, including some that do not require discovery. The defendants could seek
to dismiss some of Hrivnak’s claims for failure to state a claim. Fed. R. Civ. P. 12(b)(6);
see also Primax Recoveries, 433 F.3d at 519. They could ask for a merits determination
regarding the availability of Hrivnak’s requested relief by way of a motion for summary
judgment. Fed. R. Civ. P. 56. They could move for a judgment on the pleadings. Fed.
R. Civ. P. 12(c). They could even file a Rule 11 motion seeking sanctions against
Hrivnak’s attorney for making frivolous arguments or “needlessly increas[ing] the cost
of litigation.” Fed. R. Civ. P. 11(b). Or they could seek Rule 68 costs if Hrivnak fails
to obtain more than $7,000 in the case. What they may not do is require the district court
to address their other merits arguments in order to determine whether a Rule 68 offer of
judgment as to some claims moots all claims.

                                           III.

        For these reasons, we affirm.
