When the petition for certiorari in Genesis Healthcare Corp. v. Symczyk was granted, it appeared that the Supreme Court was poised to resolve a clear split in the Circuits about the permissibility of “pick off” moves, at minimum for actions under the Fair Labor Standards Act if not, at least by inference, under Rule 23 as well. The Court granted cert on the following question: “Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff’s claims.”
But when the decision came down early last week, observers were left debating exactly how much the Court had decided, and what the path forward in the lower courts was likely to be.
The FLSA sets federal minimum wage, maximum hour and overtime guarantees which cannot be modified by contract. Although Congress barred traditional Rule 23 class actions under the FLSA in 1947, Congress has provided instead for an FLSA “collective action”: the plaintiff sues on behalf of “all persons similarly situated,” and interested employees must opt-in, rather than opting out.
Symczyk, a registered nurse, filed a collective action FLSA complaint alleging that her employer had deducted meal break times from her paycheck whether or not she had an uninterrupted break. Along with its answer, the defendant served the plaintiff with an offer of judgment under Federal Rule 68, offering the plaintiff all the unpaid wages she was seeking, plus “such reasonable attorneys’ fees, costs, and expenses” as the Court might set. Plaintiff never responded to the offer, and when the time limit ran out, the defendant moved to dismiss on grounds of mootness, the plaintiff having been offered full relief. The district court granted the motion, but the Third Circuit reversed. According to the Third Circuit, even if the individual plaintiff’s claim was mooted by the offer of judgment, the eventual certification of a collective action would relate back to the day the complaint was filed.
In an opinion by Justice Thomas (with the Chief Justice and Justices Scalia, Kennedy and Alito joining), the Supreme Court reversed the Third Circuit. The case was not an appropriate vehicle for resolving the mature split in the Circuits on the issue of whether a collective action plaintiff can be “picked off” by a Rule 68 offer, the majority found. Both the District Court and the Third Circuit had held that Symczyk’s own claim was mooted by the unaccepted offer, and Symczyk had failed to file a cross-petition for certiorari on the point. The plaintiff having waived the point, the majority assumed for purposes of the case – without deciding – that a Rule 68 offer of judgment, whether it’s accepted or not, moots the individual plaintiff’s claim.
Once the majority disposed of that issue, it had little difficulty disposing of the remainder of the case. As we discussed in our detailed preview of Symczyk here, the plaintiffs’ principal argument on appeal was that two 1980 Supreme Court decisions, Deposit Guar. Nat’l Bank of Jackson v. Roper and United States Parole Comm’n v. Geraghty, should be extended from Rule 23 class actions to FLSA collective actions. Roper and Geraghty had both held that under certain circumstances, the mooting of a class representative’s claim does not necessarily moot the action, but the Symczyk majority held that both were distinguishable.
The Roper-Geraghty line of cases, the majority held, turned on the independent legal status of a Rule 23 class once it has been certified. Absent employees who might – or might not – choose to opt in to an FLSA collective action, in contrast, had no such status. The representative plaintiff’s mere interest in continuing with a collective action despite the offer of judgment is not sufficient to overcome mootness. The majority acknowledged that mooting out the current plaintiff’s claim would have the effect of blocking unjoined employees from vindicating any claims they might have in the present suit, but pointed out that there was nothing keeping them from suing on their own.
Justice Kagan dissented, joined by Justices Ginsburg, Breyer and Sotomayor. The dissenters argued that the majority opinion was based on a fallacy: that the unaccepted Rule 68 offer had, in fact, mooted the individual plaintiff’s claim. Given that, in the dissenters’ view, “an unaccepted offer of judgment cannot moot a case,” the remainder of the majority’s decision answered a question that never should have arisen in the first place. Nevertheless, the dissenters made it clear that they disagreed with the majority’s resolution of that issue, arguing that the named plaintiff’s right to represent unjoined employees was just as much a cognizable stake in the action for an FLSA case as the right to represent a Rule 23 class was.
So where does all this leave the law? To be sure, Symczyk has laid to rest the notion that FLSA collective actions are merely Rule 23 class actions under a different name. Given the explosive increase in FLSA filings in recent years, this is important progress. The battle going forward seems certain to be joined on the issue which the majority declined to settle – whether a defendant can moot out an individual plaintiff’s claim by serving a Rule 68 offer of judgment. There seems to be something constitutionally dubious (to put it mildly) about the notion that litigation can or should continue without plaintiffs’ counsel having a named plaintiff with a concrete financial stake in the matter to represent. Nevertheless, whether or not a Rule 68 offer of judgment will moot a representative action will likely depend, at least in the short run, on the Circuit in which a case is pending, with each side of the Circuit split adhering to its own prior precedents until such time as the Supreme Court is ready to take up the issue again.