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Briggs v. Arthur T. Mott Real Estate LLC

November 14, 2006

WILLIAM BRIGGS, INDIVIDUALLY AND ON BEHALF OF ALL OTHER PERSONS SIMILARLY SITUATED, PLAINTIFFS,
v.
ARTHUR T. MOTT REAL ESTATE LLC, DEFENDANT.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM OF DECISION AND ORDER

On February 2, 2006, William Briggs ("Plaintiff" or "Briggs") commenced this action individually and on behalf of all others similarly situated against Arthur T. Mott Real Estate LLC ("Defendant " or "Mott") asserting claims under section 216(b) of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), and the New York Labor Law §§ 650 et seq. for unpaid wages for overtime work for which they did not receive overtime pay. The FLSA claims are brought as purported collective claims and the state law claims are brought as purported class action claims on behalf of similarly situated persons. Presently before the Court is Mott's motion to dismiss Briggs' claims pursuant to Rules 12(b) (1) and (6) of the Federal Rules of Civil Procedure. For the reasons set forth below, the motion is granted.

BACKGROUND

The following facts are taken from the Amended Complaint and the documents submitted in connection with the motion to dismiss which are properly considered on a Rule 12 (b)(1) motion. Phifer v. City of New York, 289 F.3d 49, 55 (2d Cir. 2002).

Briggs was employed by Defendant from January 15, 2005 to September 29, 2005 as a non-exempt assistant mechanic. Briggs was paid an hourly wage of $10.00 per hour during his entire tenure with Mott. The number of hours worked by Briggs for each of the thirty-seven weeks of his employed with Mott are set forth in weekly time sheets submitted on the motion. According to these time sheets, Briggs worked a total of 205.5 overtime hours. He was paid at his straight time rate of $10.00 for these hours.

On February 2, 2006, Briggs filed the original complaint in this action. He brought the FLSA claims as a collective action on behalf of himself and other similarly situated current and former employees of Mott who elect to opt into this action who were non-exempt employees who did not receive overtime compensation for which they were entitled. To date, no persons have opted into the collective action. Additionally, Briggs asserts class claims, pursuant to Rule 23 of the Federal Rules of Civil Procedure, on behalf of those similarly situated current and former employees who are entitled to back wages for overtime for which they did not receive premium pay in violation of the New York Labor Law. No motion for class certification has yet been made.

On March 7, 2006, Mott presented Briggs with an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure in the amount of $3,000.00 plus "reasonable attorney's fees, costs and expenses and reasonable expert fees actually incurred, to which Mr Briggs is entitled by law, in an amount to be determined by the Court." According to Defendant, the $3,000.00 exceeds any amount Briggs could recover. The most Briggs could recover for unpaid overtime is $1027.50 (205.5 hrs x $5.00). Added to that amount are liquidated damages in an equal amount, bringing the total to $2055.00. Briggs did not accept the offer.

Defendant then moved to dismiss the complaint, as amended, pursuant to Rules 12(b)(1) and (6). Defendant's argument is that its offer of full relief to Briggs moots his FLSA claim, thereby divesting this Court of subject matter jurisdiction and, given the absence of a federal claim, the Court should decline to exercise supplemental jurisdiction over the state claim.

DISCUSSION

When faced with a motion under Rule 12(b)(1) to dismiss for lack of subject matter jurisdiction, a court need not accept contested jurisdictional allegations and may resolve disputed jurisdictional facts by reference to matters outside the pleadings. Phifer, 289 F.3d at 55; Ward v. Bank of New York, 2006 WL 2925650 at *2 (S.D.N.Y. 2006). As the party invoking this court's jurisdiction, Plaintiff has the burden of demonstrating subject matter jurisdiction. Id. (citing Aurecchione v. Schoolman Transp. Sys, Inc., 426 F.3d 635, 638 (2d Cir. 2005).

Under the FLSA, an employer is required to pay its employees at a rate not less than one and one half times the employee's regular rate for all hours worked in excess of forty hours per week. 29 U.S.C. §207(a). Any employer who fails to satisfy the overtime pay requirement is liable for the unpaid overtime plus liquidated damages in the amount of the unpaid wages, together with reasonable attorney's fees and costs. Id at §216(b).

Article III, Section 2 of the United States Constitution limits the jurisdiction of federal courts to "actual cases and controversies." Central States Southeast and Southwest Areas Health & Welfare Fund v. Merck-Medco Managed Care L.L.C., 433 F.3d 181, 198 (2d Cir. 2005); Jefferson v. Abrams, 747 F.2d 94, 96 (2d Cir. 1984). "When the issues presented are no longer 'live' or the parties 'lack a legally cognizable interest in the outcome,' the case is moot." Id. When a defendant offers all that a plaintiff could hope to recover through litigation, "there is no justification for taking the time of the court and defendant in the pursuit of a minuscule claim which defendant has . . . satisfied." Abrams v. Interco, Inc., 719 F.2d 23, 32 (2d Cir. 1983). In such a case, the plaintiff has no legally cognizable interest or personal stake. Ambalu v. Rosenblatt, 194 F.R.D. 451, 452 (E.D.N.Y. 2000) (citing Rand v, Monsanto Co., 926 F.2d 596, 598 (7th Cir. 1991) ("Once the defendant offers to satisfy the plaintiff's entire demand, there is no dispute over which to litigate . . . and a plaintiff who refuses to acknowledge this loses outright under Fed. R. Civ. P. 12(b)(1), because he has no remaining stake."). When a case lacks a legally cognizable interest, a justiciable case or controversy no longer exists and the case must be dismissed for lack of subject matter jurisdiction. Fox v. Bd. of Trustees of the State Univ. of New York, 42 F.3d 135, 140 (2d Cir. 1994), cert. denied, 515 U.S. 169 (1995); Abrams, 719 F.2d at 32.

While the Second Circuit had not had ruled on the issue of mootness when an offer of judgment is made in an FLSA collective action, other courts have. In those cases where no other similarly situated individuals have opted in and the offer of judgment satisfies all damages of the plaintiff, plus all costs and attorney's fees, the courts have held that a Rule 68 offer of judgment moots an FLSA collective action thereby depriving the court of subject matter jurisdiction. See, e. g. Ward, 2006 WL 2925650 at *4-6; Vogel v. American Kiosk Mgmt, 371F. Supp.2d 122, 129 (D. Conn. 2005); Mackenzie v. Kindred Hospitals East, L.L.C., 276 F. Supp. 2d 1211, 1213 (M.D. Fla. 2003). Cf. Reed v. TJX Cos., 2004 U.S.Dist. LEXIS 21605 at *2 (N.D. Ill. October 27, 2004)(denying motion to dismiss for lack of subject matter jurisdiction because court could not determine from record whether offer of judgment satisfied damages claim and two additional individuals had opted in); Reyes v, Carnival Corp., 2005 U.S. Dist. LEXIS 11948 (S.D. Fla. May 25, 2005) (denying motion to dismiss as two individuals opted in after offer and there was a dispute over whether offer of judgment was sufficient); Geer v. Challenge Fin. Investors Corp., 2006 U.S. Dist. LEXIS 10903 (D. Kan March 14, 2006) (denying motion to dismiss as offer covered only two of three opt-in plaintiffs and evidence was insufficient to determine if offer covered all damages); Raney v. Young & Brooks, 2005 WL 1249265 (S.D. Tex. April 26, 2005) (denying motion to dismiss as offer of judgment did not include attorney's fees).

In this case, Plaintiff argues that the offer of judgment does not moot his FLSA for three reasons. First, it is argued that subject matter jurisdiction exists because defendant has not fully satisfied Plaintiff's claim. Second, allowing an employer to use an offer of judgment to pick-off a named plaintiff to avoid its legal obligation to other collective action members violates the policies of the FLSA. ...


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