Tag Archives: OJ

3d Cir.: Defendant May Not “Pick Off” a Putative Collective Action by Tendering Full Relief to Named-Plaintiff at Outset

Symczyk v. Genesis Healthcare Corp.

In an issue that has now been addressed by several circuits in recent years, the Third Circuit was presented with the question of whether a defendant-employer in an FLSA case may “pick off” a putative collective action (prior to conditional certification), where it tenders full relief to the named-Plaintiff.  Consistent with other circuits to have taken up this issue, the Third Circuit held that a defendant may not do so and that such an offer of judgment (OJ) does not moot a putative collective action.  As such, the court reversed the decision below, dismissing the case on mootness grounds.

In dismissing the case initially, the trial court below reasoned, “[Plaintiff] does not contend that other individuals have joined her collective action. Thus, this case, like each of the district court cases cited by Defendants, which concluded that a Rule 68 offer of judgment mooted the underlying FLSA collective action, involves a single named plaintiff. In addition, Symczyk does not contest Defendants’ assertion that the 68 offer of judgment fully satisfied her claims….”

After discussing the application of full tender relief offers in the Rule 23 context, the court concluded that the same reasoning precludes picking off the named-plaintiff in a representative action brought pursuant to 216(b).  Instead, the court held that a motion for conditional certification in an FLSA case made within a reasonable time “relates back” to the time of the filing of the Complaint and thus such a representative action may proceed, notwithstanding to purportedly “full tender” offer to the named-plaintiff.  The court explained:

“Although the opt-in mechanism transforms the manner in which a named plaintiff acquires a personal stake in representing the interests of others, it does not present a compelling justification for limiting the relation back doctrine to the Rule 23 setting. The considerations that caution against allowing a defendant’s use of Rule 68 to impede the advancement of a representative action are equally weighty in either context. Rule 23 permits plaintiffs “to pool claims which would be uneconomical to litigate individually.” Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). Similarly, § 216(b) affords plaintiffs “the advantage of lower individual costs to vindicate rights by the pooling of resources.” Hoffmann–La Roche, 493 U.S. at 170. Rule 23 promotes “efficiency and economy of litigation.” Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 349, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983). Similarly, “Congress’ purpose in authorizing § 216(b) class actions was to avoid multiple lawsuits where numerous employees have allegedly been harmed by a claimed violation or violations of the FLSA by a particular employer.” Prickett v. DeKalb Cnty., 349 F.3d 1294, 1297 (11th Cir.2003).

When Rule 68 morphs into a tool for the strategic curtailment of representative actions, it facilitates an outcome antithetical to the purposes behind § 216(b). Symczyk’s claim-like that of the plaintiff in Weiss—was “acutely susceptible to mootness” while the action was in its early stages and the court had yet to determine whether to facilitate notice to prospective plaintiffs. See Weiss, 385 F.3d at 347 (internal quotation marks omitted). When the certification process has yet to unfold, application of the relation back doctrine prevents defendants from using Rule 68 to “undercut the viability” of either’ type of representative action. See id. at 344.

Additionally, the relation back doctrine helps safeguard against the erosion of FLSA claims by operation of the Act’s statute of limitations. To qualify for relief under the FLSA, a party plaintiff must “commence” his cause of action before the statute of limitations applying to his individual claim has lapsed. Sperling v. Hoffmann–La Roche, Inc., 24 F.3d 463, 469 (3d Cir.1994).  For a named plaintiff, the action commences on the date the complaint is filed. 29 U.S.C. § 256(a). For an opt-in plaintiff, however, the action commences only upon filing of a written consent. Id. § 256(b). This represents a departure from Rule 23, in which the filing of a complaint tolls the statute of limitations “as to all asserted members of the class” even if the putative class member is not cognizant of the suit’s existence. See Crown, Cork & Seal Co. 462 U.S. at 350 (internal quotation marks omitted). Protracted disputes over the propriety of dismissal in light of Rule 68 offers may deprive potential opt-ins whose claims are in jeopardy of expiring of the opportunity to toll the limitations period—and preserve their entitlements to recovery—by filing consents within the prescribed window.

In sum, we believe the relation back doctrine helps ensure the use of Rule 68 does not prevent a collective action from playing out according to the directives of § 216(b) and the procedures authorized by the Supreme Court in Hoffmann–La Roche and further refined by courts applying this statute. Depriving the parties and the court of a reasonable opportunity to deliberate on the merits of collective action “conditional certification” frustrates the objectives served by § 216(b). Cf. Sandoz, 553 F.3d at 921 (explaining “there must be some time for a[n FLSA] plaintiff to move to certify a collective action before a defendant can moot the claim through an offer of judgment”). Absent 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.

Upon remand, should Symczyk move for “conditional certification,” the court’ shall consider whether such motion was made without undue delay, and, if it so finds, shall relate the motion back to December 4, 2009the date on which Symczyk filed her initial complaint. If (1) Symczyk may yet timely seek “conditional certification” of her collective action, (2) the court permits the case to move forward as a collective action (by virtue of Symczyk’s satisfaction of the “modest factual showing” standard), and (3) 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.

For the foregoing reasons, we will reverse the judgment of the District Court and remand for proceedings consistent with this opinion.”

Thus, while ultimately the OJ might have the effect of mooting the case, it could not do so prior to a reasonable opportunity to plaintiff of seeking conditional certification of same.

Click Symczyk v. Genesis Healthcare Corp. to read the entire decision.

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S.D.Tex.: Defendant Who Prevailed at Trial Following OJ, Not Entitled to Award of Attorney’s Fees Under FLSA

Tran v. Thai

While not a novel concept, this case demonstrates a commonly misunderstood concept in FLSA jurisprudence, an FLSA defendant who prevails at trial, following the tender of an offer of judgment (OJ), is not entitled to an award of its attorneys fees.

In this case the defendant had served an OJ on the plaintiff in the amount of $500.00, which the plaintiff did not accept.  The case then proceeded to trial and resulted in a defense verdict.  Following the defense verdict, the defendant moved for an award of its fees and costs, citing Rule 68, the OJ statute.  Denying the defendant’s motion, the court explained that OJ’s do not shift attorney’s fees in FLSA cases, because: (1) OJ’s only shift fees where a plaintiff prevails at trial, but for less than the amount of the OJ; and (2) the FLSA does not permit fee shifting to a defendant.

Reasoning that an award of the defendant’s attorney’s fees was impermissible here, the court explained:

“There are two flaws in the defendants’ request for the fees they incurred after the plaintiff failed to accept the $500 offer. First, Rule 68 “applies only to offers made by the defendant and only to judgments obtained by the plaintiff. It therefore is simply inapplicable to this case because it was the defendant that obtained the judgment.” Delta Air Lines, Inc. v. August, 450 U.S. 346, 352, 101 S.Ct. 1146, 67 L.Ed.2d 287 (1981); MRO Communications, Inc. v. American Tel. & Tel. Co., 197 F.3d 1276, 1280 (9th Cir.1999); see also CHARLES ALAN WRIGHT, et al., 12 FED. PRAC. & PROC. CIV. § 3006 (2d ed.) (“[Rule 68] is entirely inapplicable … if the defendant, rather than the plaintiff, obtain judgment.”). In Delta Airlines, Justice Powell, concurring in the result noted that the Court’s holding implies that “a defendant may obtain costs under Rule 68 against a plaintiff who prevails in part but not against a plaintiff who loses entirely.” 450 U.S. at 362 (Powell, J., concurring) (emphasis in original). In other words, if the jury in this case had awarded Nguyen $300 against the defendants, they could seek attorney fees under Rule 68(d). But because the jury awarded nothing, and judgment is entered in favor of the defendants, there is no basis to award attorney’s fees. See Farley v. Country Coach, Inc., No. 05-71623, 2008 WL 795788, at *1 (E.D.Mich. Mar.26, 2008); Drewery v. Mervyns Dept. Store, No. C 07-5017 RJB, 2008 WL 222627, at *1-2 (W.D.Wash. Jan.25, 2008).

In support of their argument that Rule 68 is relevant to an award of costs in this case, the defendants have cited Haworth v. Nevada, 56 F.3d 1048 (9th Cir.1995). In that case, however, the plaintiffs prevailed on one of their claims. The Ninth Circuit held that the defendant was entitled to costs under Rule 68 because the defendant’s offer of judgment exceeded the final judgment obtained by the plaintiffs. Id. at 1052. In this case, the defendants prevailed and the plaintiff lost entirely. Rule 68 is not applicable.

The second flaw is that the FLSA does not appear to be in the category of statutes on which Rule 68 operates to include fees. The Supreme Court considered the applicability of Rule 68 to statutory fee-shifting provisions in Marek v. Chesny, 473 U.S. 1, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985). The Court upheld the application of Rule 68 to the fee-shifting provision of 42 U.S.C. § 1983. The Court reasoned that in an action under § 1983, “all costs properly awardable in an action are to be considered within the scope of Rule 68 ‘costs.’ Thus, absent congressional expressions to the contrary, where the underlying statute defines ‘costs’ to include attorney’s fees, we are satisfied such fees are to be included as costs for purposes of Rule 68.”   Id. at 9, 105 S.Ct. at 3016. Because § 1983 defined costs to include attorney’s fees, Rule 68 applied to bar recovery for any attorney’s fees incurred after a Rule 68 offer was made when the plaintiff recovered less by judgment than the settlement offer. Id. The FLSA is different. The FLSA defines attorney’s fees separately from costs. 29 U.S.C. § 216(b). Unlike attorney’s fees in a § 1983 action, attorney’s fees in an FLSA action are not automatically shifted by Rule 68. Accord Fegley v. Higgins, 19 F.3d 1126, 1135 (6th Cir.1994), cert. denied, 513 U.S. 875, 115 S.Ct. 203, 130 L.Ed.2d 134 (1994); Cox v. Brookshire Grocery Co., 919 F.2d 354, 358 (5th Cir.1990) (dicta); Haworth v. State of Nev., 56 F.3d 1048, 1051 (9th Cir.1995).

The motion for judgment is denied to the extent it seeks to include $22,057.90 in attorney’s fees after the offer of judgment.”

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N.D.Ill.: Offer Of Judgment, Silent On Its Face As To Attorneys Fees And Costs, Read To Allow For Attorneys Fees And Costs

Garcia v. Oasis Legal Finance Operating Co.

Plaintiff filed a one-count Complaint against Defendant in which she asserted violations of the Equal Pay Act, 29 U.S.C, § 206 et seq., and requested, inter alia, the following relief; an Order awarding her the difference between wages paid to her and those paid to similarly situated male employees, liquidated damages, and statutory attorneys’ fees and costs. Defendant answered the Complaint, denying the material allegations. This Motion concerned Plaintiff’s acceptance of Defendant’s Offer of Judgment, as more fully detailed below.

On November 20, 2008, Defendant’s attorney mailed a Rule 68 Offer of Judgment to Garcia’s counsel. Defendant’s attorney also faxed a copy of this Offer to Plaintiff’s counsel on that same date. This Offer read in its entirety:

As you know our firm represents Oasis Legal Finance, LLC, and Oasis Legal Finance Operating, LLC in reference to the above captioned matter. This letter is being written to you pursuant to F .R.C.P. 68, “Offer of Judgment”. Please be advised that pursuant to F.R.C.P. 68 the defendants offer judgment to the plaintiff, Karina Garcia, in the sum of $3,850.00. Pursuant to F.R.C.P. 68, your client has ten (10) days to accept the offer in judgment as set forth herein. If you have any questions, please contact me. Thank you,

On December 8, 2008, Plaintiff’s attorney submitted a letter to Oasis’ counsel accepting the Offer. This letter read in its entirety:

This letter is in response to Defendant’s offer of judgment which was served via U.S. mail on November 20, 2008. Your letter provided only that “defendants offer judgment to the plaintiff, Karina Garcia, in the sum of $3,850.00″ in connection with Ms. Garcia’s cause of action under the Equal Pay Act in the above referenced federal case. Because the offer of judgment is for an amount in excess of the value of Plaintiff’s Equal Pay Act claim, Plaintiff hereby accepts the offer of judgment as stated for her currently pending federal action. Since Defendant’s offer made no reference to costs or attorney’s fees, Plaintiff will proceed with a petition for fees and costs as to this cause of action upon entry of the judgment. Plaintiff’s claims under Title VII and the Illinois Human Rights Act remain under investigation at the EEOC/IDHR and cannot be resolved through the offer of judgment. If you wish to discuss those claims as the investigation moves forward, please feel free to call me.

Defndant then filed a Motion to Strike Plaintiff’s Purported Acceptance of Offer of Judgment, asserting Plaintiff’s purported acceptance was not in fact an acceptance, but was rather a rejection and a counter-offer, which is impermissible under Rule 68, Plaintiff cross-motioned for judgment in her favor. On January 26, 2009, the Court granted Plaintiff’s Motion, denied Defendant’s Motion, and directed the Clerk to enter judgment for Plaintiff. The Clerk entered judgment on January 27, 2009. The Court, in its January 26, 2009 Opinion and Order, granted Plaintiff leave to file a motion for attorneys’ fees if it was appropriate to do so. Plaintiff filed her Motion for Attorneys’ Fees on February 17, 2009.

The Court discussed, at length, the issue of whether Defendant’s Offer of Judgment, as made, was inclusive or exclusive of attorneys fees:

“Oasis correctly asserts that its Rule 68 Offer covered the sole Count of Garcia’s complaint, and that Garcia’s claim sought attorneys’ fees as part of the requested relief. The Court must therefore first determine, as a threshold matter, whether Garcia’s acceptance of Oasis’ Offer of Judgment precludes her from seeking a further award of attorneys’ fees.

Oasis contends that Nordby controls. In that case, defendants made a Rule 68 Offer of Judgment “in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint.” Nordby, 199 F.3d at 391. Plaintiff accepted the Offer, and moved the district court for a statutory award of attorneys’ fees. Id. The court denied the motion, reasoning that the Offer as accepted included fees. Id. On the specific set of facts before it, the Seventh Circuit affirmed, finding that the Offer unambiguously included fees. ” ‘One total sum as to all counts of the amended complaint’ can only mean one amount encompassing all the relief sought in the counts. One of those counts specified attorneys’ fees as part of the relief sought. That relief was covered by the offer.” Id. at 392.

Garcia, on the other hand, asserts that Oasis’ Offer of Judgment is more like the one made by defendants in Webb. In that case, defendants’ Offer read in its entirety; “The Defendants, Dick James and Dick James Ford, Inc., by their attorneys, Steven C. Wolf and Victoria A. Barnes, hereby make an offer of judgment in the above-captioned matter in the amount of Fifty Thousand Dollars ($50,000.00) pursuant to Federal Rule of Civil Procedure 68.” Webb, 147 F.3d at 619. The district court granted plaintiff’s separate motion for fees, and the Seventh Circuit affirmed. The Seventh Circuit first noted that, “[o]n its face, the offer did not address costs or fees,” id., and later observed that it would have been a simple matter for defendants to “have drafted the offer to signal Webb that it was inclusive of attorney’s fees.” Id. at 623, Because a Rule 68 Offer puts plaintiffs at risk whether or not they accept it, the Seventh Circuit reasoned, “the defendant must make clear whether the offer is inclusive of fees when the underlying statute provides fees for the prevailing party … [T]he plaintiff should not be left in the position of guessing what a court will later hold the offer means.” Id. The Seventh Circuit found that the defendants should therefore “bear the burden of the ambiguity created by their silence on fees,” and held that the district court could “award an additional amount to cover costs and fees.” Id.

In this case, although it is a close call, the Court determines that the Offer of Judgment made by Oasis is more like the one in Webb than the one in Nordby. Here, the Offer of Judgment states in part, “Please be advised that pursuant to F.R.C.P. 68 the defendants offer judgment to the plaintiff, Karina Garcia, in the sum of $3,850.00.” The Offer is silent as to attorneys’ fees and costs, and does not include, like the Offer in Nordby, language to the effect that the Offer is “one total sum” as to the entirety of Garcia’s requested relief Moreover, there is no question that it would have been a simple matter for Oasis to clearly indicate in its Offer whether fees were included. A standard Rule 68 Offer of Judgment form published by Bender’s Federal Practice includes specific language defendants can use to indicate that costs and fees are included in an Offer of Judgment. 11-68 Bender’s Federal Practice Forms No. 68:3; see also 11-68 Bender’s Federal practice Forms, Comment on Rule 68, ¶ 6 (“it is well established that when an offer is silent about whether the sum specified includes costs and attorney’s fees, the silence means that the court will add costs and attorney’s fees to the amount stated. An argument that the lump sum was meant to include all costs and attorney’s fees will be unavailing.”). Because Oasis failed to take the simple step of indicating whether the Offer included fees and costs, Oasis must “bear the burden of [its] ambiguity created by [its] silence on fees.” See Webb, 147 F.3d at 619. The Court therefore determines that Garcia’s acceptance of Oasis’ Offer of Judgment does not preclude her from pursuing an award of fees and costs.”

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