Split U.S. High Court: Individual, Collective Claims Mooted by Judgment Offer

Split U.S. High Court: Individual, Collective Claims Mooted by Judgment Offer

WASHINGTON, D.C. - (Mealey's) Individual and collective claims by the sole named plaintiff in a wage-and-hour collective action were rendered moot once her employer offered judgment in an amount that represented alleged unpaid wages plus attorney fees, costs and expenses under Federal Rule of Civil Procedure 68, a split U.S. Supreme Court ruled on April 16 (Genesis HealthCare Corp., et al. v. Laura Symczyk, No. 11-1059, U.S. Sup.; See December 2012, Page 7) (lexis.com subscribers may access Supreme Court briefs and the opinion for this case).

"In the absence of any claimant's opting in, respondent's suit became moot when her individual claim became moot, because she lacked any personal interest in representing others in this action.  While the FLSA authorizes an aggrieved employee to bring an action on behalf of himself and 'other employees similarly situated,' 29 U.S.C. §216(b), the mere presence of collective-action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.  In order to avoid this outcome, respondent relies almost entirely upon cases that arose in the context of Federal Rule of Civil Procedure 23 class actions, particularly United States Parole Comm'n v. Geraghty, 445 U.S. 388 (1980); Deposit Guaranty Nat. Bank v. Roper, 445 U.S. 326 (1980); and Sosna v. Iowa, 419 U.S. 393 (1975).  But these cases are inapposite, both because Rule 23 actions are fundamentally different from collective actions under the FLSA [Fair Labor Standards Act], see Hoffmann-La Roche Inc., 493 U.S.., at 177-178 (Scalia, J., dissenting), and because these cases are, by their own terms, inapplicable to these facts.  It follows that this action was appropriately dismissed as moot," Justice Clarence Thomas wrote for the majority.

Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy and Samuel Anthony Alito Jr. joined in the majority opinion.

Wages Sought

Laura Symczyk initiated the instant collective action in December 2007 in the U.S. District Court for the Eastern District of Pennsylvania against her employer, Genesis Healthcare Corp. and Eldercare Resources Corp. (collectively, Genesis).  In February 2010, Genesis filed an answer to the complaint and served Symczyk with an offer of judgment under Rule 68 in the amount of $7,500 in alleged unpaid wages plus attorney fees, costs and expenses.  Symczyk declined to respond.

The District Court, unaware of the offer of judgment, held a scheduling conference on March 8, 2010.  Two days later, it entered an order providing a 90-day initial discovery period.  Genesis moved to dismiss for lack of subject matter jurisdiction.

The District Court "tentatively concluded" that the defendants' Rule 68 offer mooted the collective action and that it should be dismissed for lack of subject matter jurisdiction.  The court ultimately dismissed Symczyk's FLSA claim with prejudice and declined to exercise supplemental jurisdiction over her state law claims.  Symczyk appealed.

Reversing, the Third Circuit panel opined that "[a]bsent undue delay, when an FLSA plaintiff moves for 'certification' of a collective action, the appropriate course - particularly when a defendant makes a Rule 68 offer to the plaintiff that would have the possible effect of mooting the claim for collective relief asserted under § 216(b) - is for the district court to relate the motion back to the filing of the initial complaint."

The panel said that on remand, Symczyk should move for conditional certification, and if the court finds that the motion was made without undue delay, it shall relate the motion back to the date Symczyk filed her initial complaint.  Then, if the court permits the case to move forward as a collective action and at least one other similarly situated employee opts in, "then defendants' Rule 68 offer of judgment would no longer fully satisfy the claims of everyone in the collective action, and the proffered rationale behind dismissing the complaint on jurisdictional grounds would no longer be applicable.  If, however, the court finds Symczyk's motion to certify would be untimely, or otherwise denies the motion on its merits, then defendants' Rule 68 offer to Symczyk - in full satisfaction of her individual claim - would moot the action."

Genesis petitioned the U.S. Supreme Court.  Oral arguments were held Dec. 3.

Dissenting Opinion

Justice Elena Kagan, author of the dissent in which Justices Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor joined, opined that the majority erred in resolving "an imaginary question, based on a mistake the courts below made about this case and others like it."

The dissenting justices opined that it is an unfounded assumption that Symczyk's individual claim became moot.  "We made clear earlier this Term that '[a]s long as the parties have a concrete interest, however small, in the outcome of the litigation, the case is not moot.'  Chafin v. Chafin, 568 U.S. __, __ (2012) (slip op. at 6) (internal quotation marks omitted).  '[A] case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party.'  Ibid. (internal quotation marks omitted).  By those measures, an unaccepted offer of judgment cannot moot a case.  When a plaintiff rejects such an offer-however good the terms-her interest in the lawsuit remains just what it was before.  And so too does the court's ability to grant her relief.  An unaccepted settlement offer-like any unaccepted contract offer-is a legal nullity, with no operative effect.  As every first-year law student learns, the recipient's rejection of an offer 'leaves the matter as if no offer had ever been made.'  Minneapolis & St. Louis R. Co. v. Columbus Rolling Mill, 119 U.S. 149, 151 (1886).  Nothing in Rule 68 alters that basic principle; to the contrary, that rule specifies that '[a]n unaccepted offer is considered withdrawn.'  Fed. Rule Civ. Proc. 68(b).  So assuming the case was live before-because the plaintiff had a stake and the court could grant relief-the litigation carries on, unmooted," they said.

Counsel

Ronald J. Mann of New York represent Genesis.  Gary F. Lynch of Carlson Lynch in New Castle, Pa., and Neal Katyal of Washington represent Symczyk.

Nicole G. Berner of Washington filed an amicus curiae brief on behalf of the Service Employees International Union, National Women's Law Center, Change to Win, National Partnership for Women and Families, National Consumer League and National Consumer Voice for Long Term Care.  James B. Coppess of the American Federation of Labor and Congress of Industrial Organizations in Washington filed an amicus brief on behalf of the American Federation of Labor and Congress of Industrial Organizations.  Rebecca M. Hamburg of San Francisco filed an amicus brief on behalf of the National Employment Lawyers Association, et al.  Mark D. Harris of Proskauer Rose in New York filed an amicus brief on behalf of the U.S. Chamber of Commerce, the American Health Care Association, the National Federation of Independent Business, the National Center for Assisted Living and the Society for Human Resource Management.

Jocelyn Larkin of The Impact Fund in Berkeley, Calif., filed an amicus brief on behalf of The Impact Fund, Asian Law Caucus, Asian Pacific American Legal Center of Southern California, Bet Tzedek, Disability Rights California, the Lawyers' Committee for Civil Rights Under Law, the Legal Aid Society - Employment Law Center, Public Advocates Inc., Public Counsel, the Public Interest Law Project, Public Justice P.C. and the Western Center on Law and Poverty.  Jonathan S. Massey of Massey & Gail in Washington filed an amicus brief on behalf of Scholars Stephen B. Burbank, John C. Coffee Jr., Cynthia Estlund and David L. Shapiro.  Danny E. Petrella of Norris, Tysse, Lampley & Lakis in Washington filed an amicus brief on behalf of the Equal Employment Advisory Council.  Michael D. Slodov of Sessions, Fishman, Nathan & Israel in Chagrin Falls, Ohio, filed an amicus brief on behalf of ACA International.  Henry M. Sneath of Chicago filed an amicus brief on behalf of DRI - The Voice of the Defense Bar.  Solicitor General Donald B. Verrilli Jr. and Anthony A. Yang of the Office of the Solicitor General in Washington filed an amicus brief on behalf of the United States.

Lexis.com subscribers can access enhanced versions of the opinions cited in this article:

United States Parole Comm'n v. Geraghty, 445 U.S. 388 (1980)

Deposit Guaranty Nat. Bank v. Roper, 445 U.S. 326 (1980)

Sosna v. Iowa, 419 U.S. 393 (1975)

Hoffmann-La Roche Inc. v. Sperling, et al., 493 U.S. 165 (1989)

Chafin v. Chafin, 568 U.S. __, 2013 U.S. LEXIS 1122 (2012)

Minneapolis & St. Louis R. Co. v. Columbus Rolling Mill, 119 U.S. 149 (1886)

Mealey's is now available in eBook format!

For more information about LexisNexis products and solutions connect with us through our corporate site.