Symczyk v. Genesis Healthcare Corp., 656 F.3d 189 (3d Cir. 2011). In Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004), the Third Circuit held that a defendant in a class action could not moot the case by making an offer of judgment that would satisfy the damage claim of the named plaintiff only. [Disclosure: I was counsel for the defendant in Weiss v. Regal Collections]. Judge Scirica, then the Chief Judge of the Third Circuit, wrote that opinion, which reversed a ruling of the District of New Jersey.
Symczyk involved a variation on Weiss— a collective action Fair Labor Standards Act (“FLSA”) opt-in case, rather than a class action under the opt-out regime of Rule 23. As in Weiss, defendants made an offer of judgment to the named plaintiff, seeking to moot the action by paying her full alleged damages, fees and costs. As in Weiss, the district court (this time, the Eastern District of Pennsylvania) granted a defense motion for lack of subject matter jurisdiction, based on the offer of judgment. And, as in Weiss, on appeal to the Third Circuit, Judge Scirica (now no longer the Chief Judge), who has written many of the major class action decisions by the Third Circuit, wrote an opinion for the panel that reversed the dismissal and reinstated the case.
In essence, defendants asserted a distinction between opt-in and opt-out cases. Unlike in a Rule 23 class action, where the named plaintiff putatively represents a class from the moment that the case is filed, a named plaintiff in an opt-in case “whose individual claim has been mooted by a Rule 68 offer of judgment before anyone has opted in to the action cannot purport to possess a personal stake in representing the interests of others,” as Judge Scirica summarized the defense argument.
Though “defendants’ logic has some surface appeal,” their attempt to moot the action before there could be “conditional certification” of the case and notice to potential opt-ins of their right to join the case had the same adverse effect as the offer of judgment in Weiss– it short-circuited the rights of those absent potential parties. Judge Scirica held that the named plaintiff must be given some time to move to certify a collective action before a defendant can moot the case with an offer of judgment to that named plaintiff.
The Third Circuit remanded the case for further proceedings. In particular, if plaintiff moved for conditional certification of her collective action, the district court was to decide whether that motion was timely and, if so, whether it should be granted on its merits. If collective action status were granted, the offer of judgment would “no longer fully satisfy the claims of everyone in the collective action,” and the case could not be dismissed. If the district court did not grant collective action status, then the offer of judgment to plaintiff would moot the case.
The Third Circuit rightly perceived that, as in the Rule 23 context, allowing defendants to pre-empt a collective action by “picking off” the named plaintiff would be a self-defeating result for the process. Having adopted the Weiss rule, which other Circuits have since followed, the Third Circuit correctly extended it to the collective action context.