Let's say an employee sues you, claiming that you
withheld certain wages owed under the Fair Labor Standards Act. In addition to
defending the lawsuit, you make her what is called an "offer of judgment" to
make her whole for all wages she claims she is owed (including any liquidated
damages and attorneys' fees). Does the offer render her lawsuit-that she not
only brought on her own behalf, but also sought on behalf of a class of
similarly situated co-workers-moot? Alternatively, does the fact that she
sought relief on behalf of others keep her lawsuit alive, despite the fact that
she no longer has any personal skin in the game?
Yesterday, the Supreme Court took up this important issue
in Genesis HealthCare Corp. v. Symczyk. The precise issue
the Court considered during yesterday's oral argument is as follows:
Whether a case becomes moot ... when the lone plaintiff
receives an offer from the defendants to satisfy all of the plaintiff's claims.
In the case below, the 3rd Circuit offered a succinct
explanation of the doctrine of mootness, its role in federal court cases, and
how an offer of judgment impacts it:
Article III of the United States Constitution limits the
jurisdiction of the federal courts to "actual 'Cases' and 'Controversies.'"
When the issues presented in a case are no longer 'live' or the parties lack a
legally cognizable interest in the outcome, the case becomes moot and the court
no longer has subject matter jurisdiction. An offer of complete relief will
generally moot the plaintiff's claim, as at that point the plaintiff retains no
personal interest in the outcome of the litigation. Thus, whether or not the
plaintiff accepts the offer, no justiciable controversy remains when a defendant
tenders an offer of judgment under Rule 68 encompassing all the relief a
plaintiff could potentially recover at trial. (internal quotations omitted).
Genesis HealthCare is
not the Supreme Court's first rodeo on the issue of offers of judgment in class
actions. In Deposit Guar. Nat'l Bank v. Roper, the Court previously
expressed its concern about the use of offers of judgment to strategically
"pick off" claimants:
Requiring multiple plaintiffs to bring separate actions,
which effectively could be "picked off'" by a defendant's tender of judgment
before an affirmative ruling on class certification could be obtained,
obviously would frustrate the objectives of class actions; moreover it would
invite waste of judicial resources by stimulating successive suits brought by
others claiming aggrievement.
How did the Court address these issues in yesterday's
oral argument, and what do the Court's questions tell us about how the Court
may rule in the case?
The outcome of this case is difficult to gauge based on
the oral argument, because both potential sides of the Court attacked the
underlying issues so differently. Again and again, however, this pro-business Court has revealed itself
to be pro-employee in its recent employment rulings. Reading the tea leaves, I
predict that the Court rules against the employer and concludes that the
unaccepted offer of judgment did not moot the collective action in this case.
A copy of the oral argument transcript is available for download [pdf] from the Supreme Court's website.
subscribers can access enhanced versions of the opinions cited in this article:
v. Genesis Healthcare Corp., 2011 U.S. App. LEXIS 18114 (3rd
Cir., Aug. 31, 2011)
Guar. Nat'l Bank v. Roper, 1980 U.S. LEXIS 30 (Mar. 19, 1980)
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