Monday, August 1, 2011

FLSA RIP?



I don't do employment cases, but if I did I would be mystified at this 11th Circuit opinion constructing the statute dealing with fees to basically eliminate the role of the attorney in obtaining full relief for her client.

In a nutshell, the plaintiff -- through counsel -- filed an FLSA complaint for unpaid overtime wages.

The defendant ultimately did a full tender of the amount sought (excluding fees and costs) and then moved to dismiss on mootness grounds.

Plaintiff acknowledged the tender was correct as to the amount of overtime owed, but asked the court to retain jurisdiction to consider fees and costs.  The court did as requested but otherwise dismissed the case.

Regarding fees and costs, however, the district court held that plaintiff's counsel was not entitled to fees as a "prevailing party" because there was no "judgment" awarded to plaintiff as required by the statute.

On appeal, the 11th affirmed:
Dionne has failed to cite to any case that supports his contention that the entry of a defendant’s motion to dismiss a plaintiff’s claims as moot because the trial court no longer has subject matter jurisdiction constituted a judgment in favor of the plaintiff.
The 11th also rejected the notion that plaintiff's counsel -- through preparing the complaint and paying the filing fee and serving the defendant -- was the "catalyst" in plaintiff's recovery:
In the present case, the District Court did not approve any agreement or retain jurisdiction to enforce any settlement or order; the parties did not even reach a formal settlement agreement to present to the court.
Does this make sense?

The 11th's reasoning is contrary to my understanding of Florida's interpretation of similar statutes, and also runs counter to the public policy expressed in FLSA.

So now the defendant can bitterly contest the case for years and, on the eve of trial, tender the amount of overtime sought and walk away?

Plaintiff's counsel doesn't even get its filing fee under this logic.

What lawyer would bring such a case when the rug can be pulled out at the last minute?

19 comments:

  1. Makes no sense. Since the 11th Circuit has not yet entered the 22nd century and posts appellate briefs we cannot see what was plead. But, isn't such a case capable of repetition that would trump mootness?
    What this means is that a plaintiff should also plead some sort of emotional stress claim, and further burden the courts, in order to get a modicum of justice.

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  2. Totally outrageous!

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  3. no it is not. the tender was immediate, pre-answer and immediately after the complaint was filed. obviously if a tender is made at the end of litigation, it will be totally unenforceable. but this at least puts a notice requirement in place for a defendant who wishes to pay a claim in full, without having to pay unnecessary fees. in most cases a defendant will not want to pay any liquidated amount, so the impact of this in most cases is negligible. so don't stress out. only the worst of the worst cases will be affected.

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  4. the timing of the tender is irrelevant according to opinion. Statute either applies or doesn't.

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  5. This is an absurd decision that defies logic and guts the entire purpose of the FLSA - which was to act as a great leveling mechanism for employees.

    By ignoring both the catalyst theory and not addressing the confession of judgment issue, the 11th's opinion makes no sense and begs for further review.

    The opinion punishes an attorney who accurately sets forth the amount of the client's claim by depriving him/her of a fee.

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  6. just take a contingency fee to protect yourself as an attorney if the defendants pull this again.

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  7. It may not directly mention the timing but it is implicit in the opinion. Lawyers are protected by the contingent fee agreement. So no big deal.

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  8. FLSA contingency fee? Do you hacks practice law?

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  9. This so obviously was not what Congress intended when it passed the FLSA.

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  10. The basic reason the court reached the result it did is the case or controversy requirement of Article III. The issue raised in this case is not confined to FLSA cases. Defendants employ the same tactic in cases under Title III of the ADA which requires the removal of architectural barriers.

    The ways to address that issue include, where possible, filing suit in state court under state law where the plaintiff is in a court of general jurisdiction. A second is to seek injunctive relief. In the FLSA context, that would be a difficult claim to moot.

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  11. Terrible opinion because it ignores the confession of judgment angle and allows a defendant to avoid fees no matter how long the case has gone on. Florida state courts deal with a similar issue much more logically when addressing fees under the insurance statute.

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  12. A few points:

    Although the court recognized the early timing of the tender, the opinion is based on statutory construction, which according to this court requires some "judicial imprimatur."

    So if that imprimatur is lacking it doesn't matter when the tender is made.

    As for contingency fees in FLSA cases, given the small amounts typically at issue I don't see how this protects an attorney who invests significant time and money in the case only to have a tender delivered on the eve of trial.

    But what the hail do I know?

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  13. on the other hand it forces the bottom-feeders to do what they should do anyway, which is to give notice of the claim before they do any work on it. if they do that, and no effort at resolution is made pre-litigation, their position on a post-litigation tender is strengthened. and the other way to protect themselves is to bill their clients so they are out of pocket money (not collecting it of course) at the time the tender is received. so a plaintiff would then require payment of the full claim and the outstanding legal bill, and the refusal to accept anything short of that would be reasonable and get around the case. so, again, no big deal.

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  14. I read the DC pleadings and decision. This is a plaintiff's lawyer screw up which results in bad law. The plaintiff's lawyer was wrong in admitting that the case was moot and should have rejected the tender. Instead he admitted that the case was moot and stated (which was wrong) that the defendant admitted liability in their motion; they did not.

    Also the tender made pre answer was rejected. This was done later in the litigation.

    The plaintiff's lawyer was a young associate at a firm in central Florida which has billboards all over the highway who have raised the ire of MDFLA judges in the past. The young lawyer got sandbagged and the partner did not get involved until it was too late.

    There are several ways to preserve your fees in these cases in light of this decision. But I'll keep those to myself.

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  15. The law is a crooked crapshoot. This is news?

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  16. As an HR Guy, this kind of case gets me all riled up anyway.

    And SFL, it's also why you need to start doing some employment law! LOL.

    "As for contingency fees in FLSA cases, given the small amounts typically at issue I don't see how this protects an attorney who invests significant time and money in the case only to have a tender delivered on the eve of trial." This is a correct statement.

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