Sandoz v. Cingular Wireless LLC

• Decision Date: 23 December 2008
• Docket Number: No. 08-30769.,08-30769.
• Parties: Courtney SANDOZ, Plaintiff-Appellee, v. CINGULAR WIRELESS LLC; Cingular Wireless Employee Services LLC; AT&T Mobility LLC, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

553 F.3d 913

Courtney SANDOZ, Plaintiff-Appellee, v. CINGULAR WIRELESS LLC; Cingular Wireless Employee Services LLC; AT&T Mobility LLC, Defendants-Appellants.

No. 08-30769.

United States Court of Appeals, Fifth Circuit.

December 23, 2008.

Christopher Leonard Zaunbrecher (argued), Briney & Foret, Lafayette, LA, for Sandoz.

Phyllis Guin Cancienne (argued), Christopher G. Morris, Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Baton Rouge, LA, for Defendants-Appellants.

Appeal from the United States District Court for the Western District of Louisiana.

Before REAVLEY, CLEMENT and PRADO, Circuit Judges.

PRADO, Circuit Judge:

In this case, we deal with the difficult question of when an employer can moot a purported collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219, by paying an employee's claim in full. In particular, we must consider the complex interplay between Federal Rule of Civil Procedure 68, which stipulates how a defendant can make an offer of judgment that would fully satisfy a plaintiff's claim, and the FLSA's provision for collective actions under § 216(b). Because Plaintiff-Appellee Courtney Sandoz ("Sandoz") filed a motion to certify her collective action that, if timely and if granted, will relate back to when she initiated her lawsuit against Defendant-Appellant Cingular Wireless ("Cingular"),¹ we vacate the district court's judgment and remand for consideration of the timeliness, and, if necessary, the merits of Sandoz's certification motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Sandoz worked for Cingular as a part-time retail sales consultant in Lafayette, Louisiana, from October 10, 2004, until she voluntarily resigned on October 5, 2005. On April 23, 2007, Sandoz brought suit against Cingular in Louisiana state court, alleging that the way in which Cingular paid its part-time employees for excess time worked violated the minimum wage provisions of the FLSA. See 29 U.S.C. § 206. In essence, Sandoz argues that Cingular's accounting system resulted in paychecks that paid her less than the minimum wage for all of the hours she worked in certain weeks. She styled her case as an opt-in collective action under § 216(b) of the FLSA. See id. § 216(b). Sandoz served Cingular with the state court petition on July 27, 2007. On August 13, 2007, Cingular removed the case to the district court. Cingular filed its answer to Sandoz's petition on August 20, 2007.

On September 6, 2007, twenty-four days after removing the case to the district court and a little over a month after receiving Sandoz's petition, Cingular made Sandoz an offer of judgment under Federal Rule of Civil Procedure 68 for $1,000, plus her reasonable attorneys' fees. Sandoz failed to accept the offer of judgment within ten days. See FED.R.CIV.P. 68(a) ("If, within 10 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment."). Instead, Sandoz filed a motion to strike the reference to the offer of judgment. Cingular filed a motion to dismiss for lack of subject matter jurisdiction, asserting that the offer of judgment fully satisfied Sandoz's claims. The district court denied Sandoz's motion to strike and denied Cingular's motion to dismiss. The court rejected Cingular's argument that a make-whole offer to a named plaintiff alone in a collective action under the FLSA divests the court of subject matter jurisdiction. However, the court granted Cingular's motion to allow an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). On June 5, 2008, about three weeks after the district court denied Cingular's motion to dismiss, Sandoz filed a motion for certification of her collective action. This court granted Cingular's motion to stay the district court's proceedings and expedited the appeal.

II. JURISDICTION AND STANDARD OF REVIEW

This court has jurisdiction pursuant to 28 U.S.C. § 1292(b), as the district court certified for interlocutory appeal its order denying Cingular's motion to dismiss. We review de novo a district court's ruling on a motion to dismiss for lack of subject matter jurisdiction. See LeClerc v. Webb, 419 F.3d 405, 413 (5th Cir.2005).

III. DISCUSSION

A. Mootness

Under Article III of the U.S. Constitution, a federal court may adjudicate only "cases" or "controversies." U.S. CONST. art. III, § 2; see Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). "Such a case or controversy must exist throughout the litigation; in other words, the case cannot be moot." Samnorwood Indep. Sch. Dist. v. Tex. Educ. Agency, 533 F.3d 258, 264 (5th Cir.2008). Thus, "[i]f a case has been rendered moot, a federal court has no constitutional authority to resolve the issues that it presents." Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 525 (5th Cir.2008). A case becomes moot when "`there are no longer adverse parties with sufficient legal interests to maintain the litigation' or `when the parties lack a legally cognizable interest in the outcome' of the litigation." Id. at 527 (quoting Scruggs v. Lowman (In re Scruggs), 392 F.3d 124, 128 (5th Cir.2004) (per curiam)).

The issue in this appeal is whether a FLSA claim becomes moot when the purported representative of a collective action receives an offer that would satisfy his or her individual claim and no other plaintiffs have opted in to the collective action. Therefore, we must determine whether Sandoz represents only herself in this claim or if she also represents other similarly-situated employees in a FLSA collective action.

Section 216(b) of the FLSA provides,

[a]ny employer who violates the provisions of [the FLSA] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages .... An action to recover the liability prescribed in [this section] may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

29 U.S.C. § 216(b). Thus, the FLSA allows an employee to bring a claim on behalf of other similarly-situated employees, but the other employees do not become plaintiffs in the action unless and until they consent in writing.² Id.; see Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240, 1243-44 (11th Cir.2003) (per curiam). The parties do not dispute that at this time, no similarly-situated employees have opted in to Sandoz's case.

The Supreme Court has explained the history behind the opt-in provision of the FLSA:

In 1938, Congress gave employees and their "representatives" the right to bring actions to recover amounts due under the FLSA. No written consent requirement of joinder was specified by the statute. In enacting the Portal-to-Portal Act of 1947, Congress made certain changes in these procedures. In part responding to excessive litigation spawned by plaintiffs lacking a personal interest in the outcome, the representative action by plaintiffs not themselves possessing claims was abolished, and the requirement that an employee file a written consent was added. See 93 Cong. Rec. 538, 2182 (1947) (remarks of Sen. Donnell). The relevant amendment was for the purpose of limiting private FLSA plaintiffs to employees who asserted claims in their own right and freeing employers of the burden of representative actions.

Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 173, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989).

In LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 287 (5th Cir.1975) (per curiam), this court considered an interlocutory appeal of a district court's order dismissing a class action claim in an age discrimination suit. In affirming the district court's decision, we compared § 216(b) of the FLSA, which allows plaintiffs to opt in to a collective action, to Federal Rule of Civil Procedure 23(c), which provides for class actions:

There is a fundamental, irreconcilable difference between the class action described by Rule 23 and that provided for by FLSA [§ 216(b)]. In a Rule 23 proceeding a class is described; if the action is maintainable as a class action, each person within the description is considered to be a class member and, as such, is bound by judgment, whether favorable or unfavorable, unless he has "opted out" of the suit. Under [§ 216(b)] of FLSA, on the other hand, no person can become a party plaintiff and no person will be bound by or may benefit from judgment unless he has affirmatively "opted into" the class; that is, given his written, filed consent.

Id. at 288. The court continued, "Rule 23(c) provides for `opt out' class actions. FLSA [§ 216(b)] allows as class members only those who `opt in.' These two types of class actions are mutually exclusive and irreconcilable." Id. at 289. We concluded that because the Age Discrimination in Employment Act adopted § 216(b) of the FLSA, a plaintiff could maintain only "opt in" type class actions for age discrimination cases. Id. Given this language, the rules and policies underlying "opt out" class actions might not apply when construing the FLSA, as the statute treats the representative plaintiff and opt-in plaintiffs differently. For example, in a FLSA collective action, the statute of limitations for a named plaintiff runs from the date that the plaintiff files the complaint, while the limitations period for an opt-in plaintiff runs from the opt-in date. See Atkins v. Gen. Motors Corp., 701 F.2d 1124, 1130 n. 5 (5th Cir.1983).

The Eleventh Circuit is the...