High Court to Review ‘Relation Back’ Doctrine

(CN) - The Supreme Court has agreed to hear a Pennsylvania woman's claim that her employer's use of Rule 68 preemptively mooted her case, depriving her and members of a prospective class from a reasonable opportunity to deliberate the merits of collective action.

Laura Symczyk, a nurse employed by the Genesis Healthcare Corp., also known as Genesis Edlercare, sued her employer on behalf of herself and similar situated individuals in December 2009, claiming the company's then new pay-deduction policy violated the Fair Labor Standards Act.

The policy subjected the pay of certain employees to an automatic meal break deduction whether or not they performed compensable work during their breaks.

In February 2010, Genesis filed an answer to Symczyk's complaint and served her with an offer of a Rule 68 judgment of $7,500 in alleged unpaid wages, attorneys' fees and court costs.

Unaware of the offer - to which Symczyk did not respond - the federal court in Philadelphia entered a scheduling offer providing or an initial 90 day discovery period, at the close of which Symczyk could move for conditional certication.

Following the court's ruling on certification, the parties were to have an additional 6 month discovery period to commence at the close of any court-ordered opt-in window.

Genesis moved to dismiss, raising objections from Symczyk that the company had engaged in a strategic attempt to "pick [her] off" before the court could consider her certification motion.

In May 2010, the court concluded the Genesis offer mooted the collection action and that the action should be dismissed for lack of subject matter jurisdiction.

Symczyk appealed, complaining that class certification within the 3rd Circuit is essentially a moving target because some courts rely merely on plaintiffs having made a "substantial allegation" in their pleadings, while others demand a "modest factual showing"

Against such a backdrop, she asked the court to decide whether an FLSA collective action becomes moot when "(1) the putative representative receives a Rule 68 offer in full satisfaction of her individual claim prior to moving for "conditional certification," and (2) no other potential plaintiff has opted in to the suit."

On review, the 3rd Circuit concluded the "modest factual showing" standard - which works in harmony with the opt-in requirement to cabin the potentially massive size of collective actions - "best comports with congressional intent and with the Supreme Court's directive that a court 'ascertain the contours of [a collective] action at the outset.'"

As for the Rule 68 judgment the court acknowledged that such an offer would moot a case involving an individual plaintiff, but said "conventional mootness principles do not fit neatly within the representative action paradigm."

In that light, the court said that when a Rule 68 judgment is offered, the most appropriate course of action for the court is to relate the certification motion back to the filing of the class complaint.

Such an act, it said, would ensure the use of Rule 68 would not prevent a collective action from playing out according to the directives of the Fair Labor Standards Act.

"In essence, the relation back doctrine allows a district court to retain jurisdiction over a matter that would appear susceptible to dismissal on mootness grounds by virtue of the expiration of a named plaintiff's individual claims," wrote Circuit Judge Julio Fuentes.

He added later, "The relation back principle ensures that plaintiffs can reach the certification state... [and] helps safeguard against the erosion of FLSA claims by operation of the Act's statute of limitations."

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