Carlos Padilla v. Redmont Properties LLC ( 2022 )

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-13469
____________________
CARLOS PADILLA,
Plaintiff-Appellant,
versus
VINCENTA BONET SMITH,
BONET & SMITH, PC
Interested Parties-Appellees,
REDMONT PROPERTIES LLC,
REDMONT PROPERTIES EG LLC,
REDMONT PROPERTIES OF HOMEWOOD LLC,
FRED G. NUNNELLY, III,
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2 Opinion of the Court 20-13469
RM MANAGEMENT, LLC,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Northern District of Alabama
D.C. Docket No. 2:17-cv-01826-MHH
____________________
Before ROSENBAUM, TJOFLAT, Circuit Judges, and STEELE,* District
Judge.
TJOFLAT, Circuit Judge:
The controversy in this case is rooted in the propriety of a
lawyer charging a wage earner a contingent attorney’s fee for pros-
ecuting the wage earner’s Fair Labor Standards Act (“FLSA”)
claims in a U.S. District Court. The wage earner paid the contin-
gent fee and then sued his lawyer in Alabama state court to recover
part of the fee. That court stayed the action so the wage earner and
his lawyer could present the attorney’s fee controversy to the Dis-
trict Court that had presided over the FLSA case. They did so, fil-
ing motions the District Court lacked subject matter jurisdiction to
* The Honorable John Steele, United States District Judge for the Middle Dis-
trict of Florida, sitting by designation.
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20-13469 Opinion of the Court 3
entertain. At the end of the day, the District Court found the con-
tingent fee excessive, ordered the lawyer to return the attorney’s
fee, and dismissed the proceeding as moot. This appeal followed.
We dismiss the appeal because the District Court lacked subject
matter jurisdiction.
I.
A.
Carlos Padilla believed his employer owed him back wages
and overtime. He spoke with an attorney, Vicenta Bonet-Smith,
who agreed. On October 30, 2017, she filed a collective action 1
complaint on behalf of Padilla and similarly situated employees in
the United States District Court for the Northern District of Ala-
bama, alleging a claim against Redmont Properties, LLC, Redmont
Properties E.G., LLC, Redmont Properties of Homewood, LLC,
and Fred G. Nunnelly III. In the complaint, Padilla sought relief in
the form of unpaid wages, unpaid overtime, and liquidated dam-
ages, as well as statutory attorney’s fees, under the FLSA, 29 U.S.C.
§ 201, et seq. Prior to filing the lawsuit, on June 23, 2017, Padilla
signed an Attorney-Client Retainer Agreement with Bonet &
1 A FLSA collective action is different from a Rule 23 class action because in a
class action, each person within the class description is considered a class mem-
ber and is bound by the judgment unless they have opted out of the suit; in a
collective action, however, no person is bound by the judgment unless they
have affirmatively opted into the action by giving written, filed consent. Cal-
derone v. Scott, 838 F.3d 1101, 1103–04 (11th Cir. 2016); 29 U.S.C. § 216(b).
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4 Opinion of the Court 20-13469
Smith, P.C. Padilla agreed that he would pay Bonet & Smith 40%
of any recovery as an attorney’s fee if his claims were settled before
filing suit and that he would pay Bonet & Smith 45% of any recov-
ery if suit was filed.
Three months after filing the complaint, Bonet-Smith filed a
first amended complaint adding RM Management, LLC as a de-
fendant.2 In addition to the FLSA collective action claim, Padilla
brought claims against Redmont for employment discrimination
under both Title VII of the Civil Rights Act of 1964, 42 U.S.C. §
2000e, et seq., and the Civil Rights Act of 1866, as amended, 42
U.S.C. § 1981. 3
On March 6, 2018, Padilla sought leave to file a second
amended complaint adding Demetrio Padilla (“D. Padilla”) and
Jorge Ortiz as named plaintiffs in the FLSA collective action and
2 Hereinafter, all defendants are collectively referred to as “Redmont.”
3 This first amended complaint, however, was not filed in compliance with
Fed. R. Civ. P. 15(a) because Bonet-Smith never requested leave to file an
amended complaint from the District Court. Rule 15(a) allows one amend-
ment as a matter of course within 21 days of serving the complaint or within
21 days of receipt of a responsive pleading. Otherwise, a party must seek leave
from the court. Padilla’s initial complaint was filed on October 30, 2017; Red-
mont’s answers were filed on December 7, 2017. The first amended complaint
was not filed until January 31, 2018—well outside the 21-day window. Red-
mont filed a motion to strike the first amended complaint for this reason. Be-
cause, as discussed above, Padilla requested—and the District Court granted—
leave to file a second amended complaint, which would become the operative
pleading, the District Court denied Redmont’s motion to strike as moot.
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20-13469 Opinion of the Court 5
asserting claims for employment discrimination.4 The District
Court granted this motion, but ordered the plaintiffs to file their
second amended complaint as a separate docket entry. Based on
the wording of the District Court’s order, it is clear the Court’s in-
tent was that the second amended complaint would not be opera-
tive until it was separately filed. 5 Because Bonet-Smith never filed
it, the second amended complaint was not properly before the Dis-
trict Court.6
Each of the three plaintiffs and Redmont subsequently en-
tered into two separate agreements—for a total of six separate
agreements. For each plaintiff, one agreement would settle the
plaintiff’s FLSA claims, and one would settle his employment dis-
crimination claims. 7 Under Padilla’s FLSA settlement agreement,
4 Many documents in the record refer to the “nonFLSA” claims and “non-
FLSA” settlement. This opinion uses the terms “Title VII and § 1981” and
“employment discrimination” instead of “nonFLSA.”
5 The order stated: “On or before April 5, 2018, the plaintiffs shall file as a
separate docket entry their second amended complaint . . . . Because the plain-
tiffs’ second amended complaint will become the operative pleading, the
Court denies as moot the defendants’ motion to strike the plaintiffs’ amended
complaint.” Doc. 30 (emphasis added).
6 However, by subsequently approving Redmont’s settlement of the three
plaintiffs’ FLSA claims pursuant to the parties’ joint motion for settlement ap-
proval, as discussed infra, the District Court tacitly accepted the second
amended complaint as properly before the Court.
7 The total amount of the settlements was $345,868.54, $70,868.54 of which
Redmont paid Ortiz and D. Padilla for their FLSA claims before they retained
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6 Opinion of the Court 20-13469
executed on April 26, 2018, Redmont would pay Padilla $65,660.78,
minus applicable taxes and withholdings, for claimed unpaid
wages, unpaid overtime wages, and liquidated damages. In addi-
tion, Redmont would pay Bonet & Smith $2,666.67 for attorneys’
fees and costs in prosecuting Padilla’s FLSA claims.
On the same day, Padilla and Redmont executed a confiden-
tial general release and settlement for Padilla’s employment dis-
crimination claims, which were settled for a total of $109,339.22.
The settlement was divided as follows: (1) $10,000, minus applica-
ble taxes and withholdings, would be paid to Padilla for claimed
benefits; (2) $20,589.22, with no taxes or withholdings applied, cov-
ered claimed compensatory and emotional distress damages; and
(3) $78,750.00 would be paid to Bonet & Smith for claimed attor-
neys’ fees and costs, with no taxes or withholdings applied.
Thereafter, on May 3, 2018, the plaintiffs and Redmont
jointly moved the District Court to approve the terms of the their
agreements to settle their FLSA claims and to dismiss the action
with prejudice pursuant to Fed. R. Civ. P. 41(a)(2). 8 While the joint
Bonet & Smith as counsel. Of the remaining $275,000, $175,000 was to be paid
to Padilla for his FLSA and employment discrimination claims and $50,000 was
to be paid to Ortiz and D. Padilla each for their discrimination claims. The
agreement included an additional $8,000 for Bonet-Smith’s FLSA attorney’s
fee. The $2,666.67 attorney’s fee discussed as part of Padilla’s FLSA settlement
was one-third of the overall $8,000 attorney’s fee Bonet-Smith received for the
FLSA claim.
8 The joint motion for approval was necessary because, unlike most claims, a
FLSA claim can only be settled by (1) a payment supervised by the Department
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20-13469 Opinion of the Court 7
motion mentioned that the parties had reached agreements to set-
tle all of the plaintiffs’ claims against Redmont, the motion was si-
lent as to the terms of the agreements to settle the plaintiffs’ Title
VII and § 1981 claims.
On May 30, 2018, Padilla and Redmont executed an adden-
dum to the agreement settling Padilla’s employment discrimina-
tion claims. They agreed that to the extent the District Court ap-
proved a FLSA attorney’s fee above $2,666.67, Bonet & Smith
would refund to Redmont from the $78,750 paid to Bonet & Smith
the difference between the fee approved by the District Court and
$2,666.67—in other words, Bonet & Smith would reduce its fee un-
der the employment discrimination settlement by such amount.
Because the settlements and dismissal of the Title VII and
§ 1981 claims did not require court approval, while the parties’ joint
motion was pending with the District Court, the plaintiffs and Red-
mont filed a joint stipulation dismissing all plaintiffs’ employment
of Labor under 29 U.S.C. § 216(c) or (2) by “a stipulated judgment entered by
a court which has determined that a settlement proposed by an employer and
employees, in a suit brought by employees under the FLSA, is a fair and rea-
sonable resolution of a bona fide dispute over FLSA provisions.” Lynn’s Food
Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982).
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8 Opinion of the Court 20-13469
discrimination claims with prejudice pursuant to Fed. R. Civ. P.
41(a)(1)(A)(ii) 9 on May 31, 2018. 10
The District Court issued an order acknowledging that the
parties filed a joint motion for approval of their FLSA settlement
on October 5, 2018. The Court indicated it was in the process of
drafting an order approving the joint motion with a few changes.
The District Court would entertain objections to its amended ver-
sion of the FLSA settlement until October 12, 2018. 11
9 The rule reads: “Subject to Rules 23(e), 23.1(c), and 66 and any applicable
federal statute, the plaintiff may dismiss an action without a court order by
filing . . . (ii) a stipulation of dismissal signed by all parties who have appeared.”
Fed. R. Civ. P. 41(a)(1)(A)(ii) (emphasis added). A stipulation filed pursuant to
this subsection is self-executing and dismisses the action upon becoming effec-
tive—a district court may not act after the stipulation becomes effective be-
cause the stipulation, once effective, divests the district court of jurisdiction.
Anago Franchising, Inc. v. Shaz, LLC, 677 F.3d 1272, 1278 (11th Cir. 2012).
10 The parties’ stipulation of dismissal of the Title VII and § 1981 claims, how-
ever, had no legal effect because it did not dismiss the action. And “[t]his Court
has made abundantly clear that a Rule 41(a)(1) voluntary dismissal disposes of
the entire action, not just some of the plaintiff’s claims.” Absolute Activist
Value Master Fund Ltd. v. Devine, 998 F.3d 1258, 1265 (11th Cir. 2021) (em-
phasis in original).
11 The only change the District Court made to the FLSA settlements was that
it limited the enforceability of a provision allowing the settlement agreements
to be introduced as a complete defense to any claims existing as of the date of
the FLSA agreement that the plaintiff could have asserted against Redmont.
The Court found that language too broad and limited it to FLSA claims exist-
ing as of the date of the FLSA settlement agreement, not all claims.
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20-13469 Opinion of the Court 9
On November 30, 2018, the District Court issued a memo-
randum opinion approving the parties’ proposed FLSA settle-
ment—Padilla’s settlement consisting of $65,660.78, minus applica-
ble taxes and withholdings, and $2,666.67 in attorney’s fees.12 The
District Court approved the FLSA settlements without a hearing,
based solely on the parties’ submissions. The Court then issued an
order dismissing the action with prejudice and asking the Clerk to
close the file.13
As per the terms of the settlement agreements, Padilla re-
ceived the following payments from Redmont: $45,962.55 for the
FLSA settlement ($65,660.78 less $19,698.23 in taxes and withhold-
ings), $20,589.22 for compensatory and emotional distress damages
caused by the employment discrimination, and $7,000 for benefits
deprived by the employment discrimination ($10,000 less $3,000 in
taxes and withholdings).
B.
Prior to the District Court’s approval of the FLSA settle-
ments and its dismissal of the action, Padilla, apparently dissatisfied
12 As mentioned above, in approving the FLSA settlement with the two addi-
tional named plaintiffs, Ortiz and D. Padilla, the District Court implicitly
found the second amended complaint to be operative.
13 Because the parties’ stipulation of dismissal was not effective, the effect of
this order on the Title VII and § 1981 claims was that it dismissed them with
prejudice. This left the parties with separate settlement agreements that dis-
posed of the employment discrimination claims without court intervention.
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10 Opinion of the Court 20-13469
with Bonet-Smith’s representation and concerned with the amount
of his recovery under his settlement agreements, contacted attor-
ney Freddy Rubio of Rubio Law Firm on or about August 6, 2018.
He did so without informing Bonet-Smith.
Following the entry of the District Court’s order approving
the FLSA settlements, on January 14, 2019, Rubio Law Firm wrote
Bonet & Smith, claiming that the firm owed Padilla $29,550.35. 14
The letter argued that while Padilla’s retainer agreement with
Bonet & Smith covered both the FLSA and employment discrimi-
nation claims, the District Court did not approve a 45% attorney’s
fee for the FLSA claim—it approved $2,666.67. The letter claimed
that Bonet & Smith improperly calculated their fee based on either
(1) a 45% attorney’s fee from Padilla’s $175,000.00 global FLSA, Ti-
tle VII, and § 1981 settlement, or (2) a 72% fee from Padilla’s
$109,339.22 Title VII and § 1981 settlement. 15
Bonet & Smith responded on January 28, 2019, claiming that
Rubio had been improperly giving legal advice to Padilla and that
14 The letter is mistakenly dated January 14, 2018.
15 Under the retainer agreement, Bonet & Smith was entitled to receive 45%
of the $65,660.78 sum that Padilla received for the settlement of his FLSA
claims, which would be $29,547.35. In essence, in his letter to Bonet & Smith,
Rubio argued that in executing the agreement that settled Padilla’s FLSA
claim, Padilla and Bonet & Smith effectively amended the retainer agreement
such that Bonet & Smith would not receive 45% of Padilla’s FLSA recovery
but $2,666.67, the fee the District Court approved.
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20-13469 Opinion of the Court 11
he had been “secretly enticing Mr. Carlos Padilla behind [Bonet &
Smith’s back] for several months.” Letter from Bonet & Smith to
Rubio Law Firm (Jan. 28, 2019), Doc. 38-9. Bonet & Smith also
stated that Padilla received the maximum FLSA dollar amount, re-
gardless of how the settlement was structured, and that Padilla
signed all the documents and knew what the terms were.
Following a lack of resolution by Bonet & Smith, Padilla,
now represented by Rubio Law Firm, filed suit against Bonet &
Smith in the Circuit Court of Jefferson County, Alabama, to re-
cover $29,520.35. Padilla argued that Bonet & Smith breached
their retainer agreement with him or, in the alternative, obtained
unjust enrichment. With respect to the breach of contract claim,
the complaint alleged that there was a valid and binding contract—
the retainer agreement—between Padilla and Bonet & Smith
whereby Bonet & Smith would receive 45% of any recovery if a
lawsuit was filed, and that Bonet & Smith breached that contract
when it retained more than 45% of the employment discrimination
settlement. 16 Regarding the unjust enrichment claim, the com-
plaint alleged that Bonet & Smith either (1) received a total of
$8,000.00 in legal fees 17 and costs for work related to the FLSA
16 That is, Bonet & Smith was entitled to 45% of Padilla’s $109,332.22 employ-
ment discrimination settlement, or $49,202.65 and they breached that agree-
ment by taking $78,750, or 72%.
17 This is the attorney’s fee negotiated as part of the FLSA settlements with
the three plaintiffs. Padilla’s portion of this fee was $2,666.67.
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12 Opinion of the Court 20-13469
claims and then retained an additional $29,520.35 for attorney fees
and costs related to the same claims, or (2) took 72% of the recov-
ery—an unreasonable and unjust fee—in the employment discrim-
ination settlement. 18
Bonet & Smith moved the Circuit Court to dismiss the com-
plaint, but the Circuit Court denied the motion. It stayed the case,
however, so the parties could present their dispute to the District
Court. The Circuit Court was concerned that it might encroach
on the District Court’s jurisdiction if it decided the breach of con-
tract and unjust enrichment claims.
On October 1, 2019, Bonet & Smith moved the District
Court to hold a hearing to resolve the fee dispute. Bonet & Smith
attached five documents to its motion: (1) the complaint Padilla
filed in the Circuit Court of Jefferson County; (2) Bonet & Smith’s
alternative state court motions to dismiss or for judgment on the
pleadings; (3) the Circuit Court’s order denying the motions; (4)
the contingency fee contract; and (5) a record of the hours Bonet-
Smith spent on the case.
18 Padilla is treating the retainer agreement as having been modified by the
court-approved settlement of his FLSA claim, such that instead of receiving an
attorney’s fee of 45% of Padilla’s FLSA settlement, or $29,547.35, Bonet-Smith
received $2,666.67. On the employment discrimination claims, then, Bonet-
Smith was entitled to receive 45% of $109,339.22, or $49,202.65, instead of 45%
of $175,000, or $78,750.
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20-13469 Opinion of the Court 13
In its motion for a hearing, Bonet & Smith stated that Pa-
dilla’s state law claims were based in part on the assumption that
contingency fee contracts, like the one it had with Padilla, were not
permissible under the FLSA. Bonet & Smith contended that in the
circumstances of the case, the 45% fee was appropriate and Padilla
agreed to pay it. Bonet & Smith asked the District Court to hold a
hearing to:
address the issues presented by Padilla’s complaint
and [the Circuit Court’s] Order in the State Court Ac-
tion. Furthermore, to the extent this Honorable
Court finds that a fairness hearing should be held to
address the reasonableness of the attorney’s fees
and/or disbursements made as to the total settlement
and recovery should be had, the undersigned counsel
welcomes such opportunity.
Mot. for Hr’g, Doc. 37 at 11. 19
In response to Bonet & Smith’s motion, Padilla filed a mo-
tion for relief from judgment pursuant to Fed. R. Civ. P. 60(b)(3),
19 In effect, Bonet & Smith was attempting to remove the litigation of the
attorney’s fee controversy from the Circuit Court to the District Court.
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14 Opinion of the Court 20-13469
60(b)(6), 20 and 60(d)(3) 21 on December 2, 2019. 22 Padilla’s motion
did not seek relief from the judgment he had obtained against Red-
mont (in the form of an order approving the FLSA settlement) on
the ground that Redmont had committed a fraud on the Court.
Redmont had done nothing wrong. Pursuant to the FLSA settle-
ment agreement the Court had approved, Redmont had paid Pa-
dilla the full amount of unpaid wages claimed: $65,660.78. What
Padilla sought was an order requiring Bonet & Smith to pay him
$29,547.35, based on a claim that Bonet & Smith had received an
excessive contingency fee of 72%, or $78,750, from the settlement
of his employment discrimination claims of $109,339.22, as op-
posed to a fee of 45%.
20 The pertinent text of Rule 60(b) reads: “On motion and just terms, the court
may relieve a party or its legal representative from a final judgment, order, or
proceeding for the following reasons: . . . (3) fraud (whether previously called
intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
. . . or (6) any other reason that justifies relief.”
21 According to Rule 60(d): “This rule does not limit a court’s power to: . . .
(3) set aside a judgment for fraud on the court.”
22 All motions under Rule 60(b) must be made “within a reasonable time.”
Fed. R. Civ. P. 60(c)(1). In addition to the “reasonable time” requirement,
motions under Rule 60(b)(3) have a strict one-year deadline for filling. Id. Be-
cause November 30, 2019—one year from the day the District Court entered
the order of dismissal—was a Saturday, the motion filed on Monday, Decem-
ber 2, 2019 is considered to have been filed within that one year window. That
it was filed within one year of the final order, however, does not automatically
mean the motion was filed within a reasonable time for Rule 60(b) purposes.
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20-13469 Opinion of the Court 15
Padilla’s Rule 60 motion alleged that Bonet & Smith ob-
tained the excessive contingency fee by defrauding the District
Court. The fraud was Bonet & Smith’s failure to reveal to the
Court the existence of the retainer agreement Padilla signed before
filing suit. This failure to disclose constituted “a misrepresentation
to[] the Court.” Mot. for Relief from J., Doc. 38 at 2.
In the motion’s “prayer for relief,” Padilla asked the District
Court to decide the issues presented in his action in the Circuit
Court of Jefferson County23 or, alternatively, to “allow[ ] the State
case to proceed.” 24
23 The prayer for relief asked the District Court to provide the relief Padilla
sought in the Circuit Court of Jefferson County including a “find[ing] that
Bonet & Smith improperly charged [him] a 45% contingency fee, contrary to
well-settled case law,” and an “order that Bonet & Smith reimburse Mr. Padilla
the amount charged as a contingency fee,” i.e., $29,547.35. Mot. for Relief
from J., Doc. 38 at 20. We interpret the first quotation as requesting the Dis-
trict Court to adhere to its November 30, 2018, order approving the FLSA set-
tlement and an attorney’s fee of only $2,666.67 for Bonet & Smith. We inter-
pret the second quotation as requesting the Court to order Bonet & Smith to
reimburse Padilla for the contingency fee it received pursuant to the agree-
ment settling the employment discrimination claims. The prayer for relief
also sought an award (against Bonet & Smith) of interest on the $29,547.35
reimbursement, a reasonable attorney’s fee for Rubio Law Firm for prosecut-
ing the action in the Circuit Court of Jefferson County and the Rule 60(b) mo-
tion, and a sanction against Bonet & Smith “as the Court deemed appropri-
ate.” Id. at 20–21.
24 The prayer for relief also asked the District Court to “modify the Final Or-
der entered on November 30, 2018,” which, as noted supra, approved Padilla
and Redmont’s joint motion for the approval of the FLSA settlement
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16 Opinion of the Court 20-13469
Essentially, Padilla’s motion, like Bonet & Smith’s, at-
tempted to litigate the state court breach of contract and unjust en-
richment claims in the District Court. Padilla tried to use Rule 60
to avoid the retainer agreement and the settlement agreements
that he signed, but it is, for all intents and purposes, the same
breach of contract and unjust enrichment dispute in a different ve-
hicle. Padilla was asking the District Court to find that the settle-
ment agreement effectively amended the retainer agreement.
Bonet & Smith responded to Padilla’s Rule 60 motion on
December 10, 2019. Bonet & Smith claimed that the relief the mo-
tion sought was not available under Rule 60 because the motion
did not seek relief from a final judgment or order of the District
Court. Rather, the motion sought an order modifying the Padilla-
Redmont agreement, as amended, that settled Padilla’s employ-
ment discrimination claims on the ground that the $78,750 attor-
ney’s fee it awarded Bonet & Smith was excessive. As Bonet &
Smith stated in its response, “Padilla’s motion requests that the
Court make findings and impose liability as it relates to the con-
tractual relations between the attorney and client.” Resp. in Opp’n
to Mot. for Relief from J., Doc. 41 at 3. Bonet & Smith then argued
that even if the relief Padilla requested was theoretically available
under Rule 60, he failed to satisfy the Rule’s requirements.
agreement. The Rule 60 motion does not reveal the modification it sought;
thus, we disregard the motion’s request for a modification.
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20-13469 Opinion of the Court 17
After receiving Bonet & Smith’s and Padilla’s motions, the
District Court held a telephone conference on December 11, 2019.
Bonet-Smith, Rubio, David Warren, counsel for Redmont, and
James Spinks, counsel for Bonet & Smith were all present at the
conference.25 After hearing from the lawyers, the District Court
concluded that it could not resolve the attorney’s fee controversy
without an evidentiary hearing and entered an order to that effect.
The evidentiary hearing took place on February 27, 2020.
Bonet-Smith testified that Bonet & Smith’s retainer agreement
with Padilla was made after she informed Padilla that he had bona
fide FLSA claims against Redmont. The agreement provided that
Bonet & Smith would receive a contingent fee of 45% of any re-
covery Padilla received if suit were filed.
Turning to the agreements she and Warren reached for the
settlement of Padilla’s, D. Padilla’s and Ortiz’s FLSA claims, Bonet-
Smith acknowledged that she would receive $2,666.67 (a total of
$8,000) as an attorney’s fee for representing each of the plaintiffs.26
25 At that hearing the Court indicated that it was trying to determine whether
the dispute was “purely a state court matter” or whether it was “pertinent to
[the] Court’s judgment.” Tel. Conf. Tr., Doc. 45 at 6-7. According to Warren,
the dispute in question was a breach of contract claim.
26 The settlement agreements with respect to Ortiz’s and D. Padilla’s employ-
ment discrimination claims are not in the record; therefore, we are unaware
of the attorney’s fee those plaintiffs agreed to pay Bonet & Smith for handling
those claims. We do know from Warren’s testimony at the hearing that those
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18 Opinion of the Court 20-13469
Since $2,666.67 would not amount to 45% of Padilla’s recovery,
Bonet-Smith further acknowledged that to obtain a 45% contin-
gent fee for handling Padilla’s FLSA claims, the fee would have to
be paid as part of the settlement Padilla received for his employ-
ment discrimination claims. So, in drafting the agreement settling
those claims, Warren provided that Bonet & Smith would receive
$78,750 (45% of $175,000). Warren also testified at the hearing.
His testimony about the settlement agreements Padilla made with
Redmont essentially coincided with Bonet-Smith’s.
At the close of the evidentiary hearing, the District Court
stated:
The Court doesn’t know whether what happened
here is the consequence of poor lawyering that may
rise to the level of incompetent or of intentional mis-
representation to the Court. I think there are other
bodies that will have to sort through the record that
has been created here and make that determination.
The Court, however, believes it is necessary to set
aside the settlement agreement.
Evid. Hr’g Tr., Doc. 63 at 139.
Several months after the hearing concluded, on June 19,
2020, Bonet & Smith moved the District Court to modify its No-
vember 30, 2018, order approving the settlement of Padilla’s FLSA
two plaintiffs received $50,000 each in settlement of their discrimination
claims.
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20-13469 Opinion of the Court 19
claims.27 Bonet & Smith requested that the Court approve its at-
torney’s fee (for handling those claims) of $29,547.35 (45% of Pa-
dilla’s $65,660.78 FLSA recovery, per the retainer agreement) and
reduce the amount of Padilla’s FLSA recovery by the same
amount. 28 In modifying the November 30, 2018, order in this way,
the Court would effectively modify the agreements that settled Pa-
dilla’s FLSA claims and Padilla’s employment discrimination
claims. In the alternative, Bonet & Smith asked the Court to re-
structure its retainer agreement with Padilla to provide for a FLSA
attorney’s fee pursuant to the lodestar approach in lieu of the
27 This motion, like Bonet & Smith’s earlier motion for a hearing, lacked a
legal foundation. It could not have had a foundation in law because Bonet &
Smith was not a party to the original dispute between Padilla and Redmont.
At best, Bonet & Smith’s motion could be classified as a third-party response
to Padilla’s motion for Rule 60 relief. The nature of Bonet & Smith’s motions
and the fact that, unless the Court modified the FLSA approval order, Red-
mont was for all intents and purposes irrelevant to the post-dismissal proceed-
ings, further underscores that the post-dismissal proceedings were an attempt
to litigate a state court action for breach of contract and unjust enrichment in
the District Court.
28 As part of this proposal, Bonet & Smith would refund Redmont the
$2,666.67 attorney’s fee Bonet & Smith received pursuant to Padilla’s FLSA
settlement. Padilla’s FLSA recovery of $66,660.78 would be decreased by
$29,547.35, and Padilla would receive $36,113.43. Bonet & Smith’s $78,750
attorney’s fee under the employment discrimination settlement would like-
wise be reduced by $29,547.35, making it $49,202.65. Essentially, Bonet &
Smith asked the District Court to retroactively approve what had already been
done. Aside from Bonet & Smith refunding $2,666.67 to Redmont, no other
money would change hands.
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20 Opinion of the Court 20-13469
$2,666.67 attorney’s fee the Court had approved in its November
30, 2018, order. 29
On August 18, 2020, the District Court entered an order
denying Bonet & Smith’s June 19, 2020, motion for an amended
order of approval. In addition, the District Court sua sponte or-
dered Bonet & Smith to pay Padilla $29,547.35 of the fee it had re-
ceived in the settlement of Padilla’s discrimination claims.30 The
District Court ordered the payment because Bonet-Smith withheld
from the Court information about the 45% contingent attorney’s
fee (called for by the Padilla-Bonet & Smith retainer agreement)
when she and Warren submitted the joint motion to approve the
FLSA settlement to the Court for approval. 31 Because requiring
29 The lodestar approach calculates reasonable attorney’s fee “by multiplying
the number of hours reasonably expended on litigation times a reasonable
hourly rate.” ACLU of Ga. v. Barnes, 168 F.3d 423, 427 (11th Cir. 1999) (quot-
ing Blum v. Stenson, 465 U.S. 886, 888, 104 S. Ct. 1541, 1544 (1984)). The “fee
applicant bears the burden of establishing entitlement and documenting the
appropriate hours and hourly rates.” Norman v. Hous. Auth. of the City of
Montgomery, 836 F.2d 1292, 1303 (11th Cir. 1988). According to Bonet &
Smith’s records, Bonet & Smith attorneys expended 90.1 hours of billable time
on Padilla’s FLSA claim.
30 The $29,547.35 represented part of the attorney’s fee Bonet & Smith took
from the recovery Padilla received in settling his employment discrimination
claims.
31 The District Court cited nothing in Rule 60 or the cases applying Rule
60(b)(3), (b)(6) or (d)(3) authorizing the monetary payment the District Court
required Bonet & Smith to make. Nor did the Court draw on its inherent
power in requiring the payment.
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20-13469 Opinion of the Court 21
Bonet & Smith to pay Padilla $29,547.35 made Padilla whole, the
District Court apparently concluded that Padilla’s motion for Rule
60 relief was moot, so on August 18, 2020, in a separate order, the
Court denied the motion for that reason.32
Padilla appeals the District Court’s order denying his Rule
60 motion as moot. Padilla contends that the controversy his Rule
60 motion created is not moot because the District Court failed to
consider his claims for (1) an attorney’s fee to be paid to Rubio Law
Firm for representing him in the action he brought in the Circuit
Court of Jefferson County and in prosecuting his Rule 60 motion
and (2) interest on the $29,547.35 Bonet & Smith must pay him.
He also appeals the part of the District Court’s order denying Bonet
& Smith’s June 19, 2020, motion that requires Bonet & Smith to
pay him $29,547.35 because the Court provided that he would have
to pay the attorney’s fee Rubio Law Firm would charge him out of
his own pocket.33
32 Nothing in Padilla’s Rule 60 motion sought this monetary relief as a Rule
60 remedy. What the motion sought was a resolution of the claims Padilla
was asserting in the action pending in the Circuit Court of Jefferson County.
33 The part of the District Court’s order requiring Bonet & Smith to pay Pa-
dilla states: “Mr. Padilla shall compensate his current counsel from the re-
funded amount.”
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22 Opinion of the Court 20-13469
II.
Padilla appeals the order on the theory that the controversy
created by his Rule 60 motion is not moot.34 The motion sought
the recovery of a reasonable attorney’s fee for Rubio Law Firm for
its prosecution of both the breach of contract action in the Circuit
Court of Jefferson County and the Rule 60 motion. The motion
also sought interest on the $29,547.35 attorney’s fee Padilla paid
Bonet & Smith out of the recovery he had obtained on his employ-
ment discrimination claims. 35
It is important not to lose sight of the fact that Padilla’s Rule
60 motion requested relief against Bonet & Smith, not Redmont.
Padilla acknowledged that Redmont had paid him everything the
District Court’s order of approval required. Padilla’s position was
not that Redmont had committed a wrong that Rule 60 could rem-
edy, but that Bonet & Smith had received an excessive attorney’s
fee for litigating his discrimination claims.
34 Bonet & Smith, however, does not appeal the District Court’s order, in-
stead acknowledging “the Court’s power and discretion to effect its judgment
and [order the repayment of the fee].” Br. for Bonet & Smith, Appellate Doc.
36 at 14.
35 The $29,547.35 is the amount that Padilla alleged was improperly taken
from his employment discrimination settlement because it represented more
than the negotiated 45% contingency fee. He moved the District Court to
have Bonet & Smith pay interest on that amount beginning on November 30,
2018, the date of the final order of dismissal.
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20-13469 Opinion of the Court 23
We have jurisdiction over Padilla’s appeal under 28 U.S.C §
1291 because it is the appeal of a final decision of a district court.
That post judgment order is final because it left nothing to do and
resolved all the issues in the post judgment motions. Mayer v. Wall
Street Equity Grp., Inc., 572 F.3d 1222, 1224 (11th Cir. 2012).
The issue the appeal expressly presents is a question of law that we
review de novo: whether Padilla’s Rule 60 motion is moot.36
Troiano v. Supervisor of Elections in Palm Beach Cnty., 382 F.3d
1276, 1282 (11th Cir. 2004).
Before we address that issue, however, we must determine
whether the District Court had subject matter jurisdiction to enter-
tain Padilla’s Rule 60 motion in the first place. 37 Mitchell v.
Maurer, 293 U.S. 237, 244, 55 S. Ct. 162, 165 (1934); see also Abso-
lute Activist Value Master Fund, Ltd. v. Devine, 998 F.3d 1258,
1264 (11th Cir. 2021). Just as we must be mindful as to whether we
have jurisdiction to entertain an appeal, Anago Franchising, Inc. v.
Shaz, LLC, 677 F.3d 1272, 1275 (11th Cir. 2012), we must also be
36 Sometimes whether an appeal is moot is a mixed question of law and fact,
in which case we review first the district court’s findings of fact for clear error.
Here, there is no dispute regarding the facts on which the District Court made
its mootness ruling.
37 If the District Court lacked subject matter jurisdiction to entertain Padilla’s
Rule 60 motion, we must dismiss this appeal and direct the District Court, on
receipt of our mandate, to dismiss the motion (which we refer to in the text
infra) for lack of jurisdiction.
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24 Opinion of the Court 20-13469
mindful as to whether the trial court had jurisdiction of the contro-
versy before it.
The controversy before the District Court was, in essence,
the same controversy pending in the Circuit Court of Jefferson
County. In that court, the controversy was in the form of a com-
mon law action for breach of contract. In the District Court, that
controversy was presented in three separate motions. The first
motion was Bonet & Smith’s “Motion for a Hearing.” The second
motion was part of the relief prayed for in Padilla’s Rule 60 motion.
The third motion was Bonet & Smith’s motion to modify the Dis-
trict Court’s order approving the settlement of Padilla’s FLSA
claims to fix Bonet & Smith’s attorney’s fee at $29,547.35. In sub-
stance, all three motions are bound up in Padilla’s appeal of the
District Court’s order. The question is whether the District Court
had subject matter jurisdiction to entertain any of them. The an-
swer is no.
The first motion presented the same cause of action as the
one pending in the Circuit Court of Jefferson County, except that
the parties were reversed. In the Circuit Court, Padilla was the
movant. His theory was that the FLSA settlement agreement mod-
ified his contingency fee arrangement with Bonet & Smith in order
to provide that the attorney’s fee Bonet & Smith would receive for
handling his FLSA claims would be $2,666.67 instead of 45% of his
total FLSA recovery. In the District Court, Bonet & Smith was the
movant. It sought (in substance) a declaration that the FLSA set-
tlement agreement did not modify the contingency fee
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20-13469 Opinion of the Court 25
arrangement and that it was entitled to receive 45% of Padilla’s
FLSA recovery.
Bonet & Smith’s motion for a hearing failed to invoke the
District Court’s subject matter jurisdiction. The motion did not
purport to remove the Jefferson County action to the District
Court under 28 U.S.C. § 1441, nor did it purport to serve as a com-
plaint for an independent action under the District Court’s federal
or diversity jurisdiction under 28 U.S.C. §§ 1331 or 1332. 38 The
District Court therefore did not have jurisdiction over the motion.
Our jurisdictional disposition of the first motion controls
our jurisdictional disposition of the third motion. The third motion
assumed that the District Court somehow retained jurisdiction
over Padilla’s FLSA claims after approving the FLSA settlement
agreement and entering an order dismissing the lawsuit with prej-
udice. The retained jurisdiction may have provided a basis for a
motion by either party, Padilla or Redmont, for modification of the
order approving the FLSA settlement agreement. But it could not
have provided the basis for a motion for modification brought by a
non-party to the FLSA action, such as Bonet & Smith. Indeed,
nothing in Bonet & Smith’s motion even purported to provide a
38 While district courts may award attorney’s fees in “independent proceed-
ings supplemental to the original proceeding” and such requests are not “for a
modification of the original decree,” Bonet & Smith did not seek additional
fees from Redmont. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395, 110
S. Ct. 2447, 2455 (1990) (citation omitted).
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26 Opinion of the Court 20-13469
legal foundation for its request to modify an agreement to which it
wasn’t a party.
The second motion, Padilla’s Rule 60 motion, if taken on its
face, would appear to have fallen within the District Court’s subject
matter jurisdiction. It didn’t, however, because Padilla filed the
motion solely for the purpose of having the District Court decide
the controversy he brought to the Circuit Court of Jefferson
County. We explain.
A Rule 60 motion seeks relief from a judgment or order. On
its face, that’s what Padilla’s motion sought—relief from the Dis-
trict Court’s order approving the FLSA settlement agreement. But
it didn’t. 39 The jurisdictional problem, though, is that the motion
didn’t seek relief from Padilla’s opposing party, Redmont, but from
a third party to the FLSA litigation, Bonet & Smith. We need look
no further than to the motion’s alternative prayers for relief to ap-
preciate that. First, the motion sought a declaration that Bonet &
Smith could receive nothing more than $2,666.67 as an attorney’s
fee for prosecuting Padilla’s FLSA claims and an order requiring
39 Rule 60 can only be used to set aside a prior order or judgment, not to grant
additional affirmative relief. United States v. One Hundred Nineteen Thou-
sand Nine Hundred Eighty Dollars, 680 F.2d 106, 107 (11th Cir. 1982). None
of the relief Padilla sought in his Rule 60 motion asked the District Court to
set aside its November 30, 2018, order approving the FLSA settlements and
dismissing the action—which was the only relief available under Rule 60. To
be sure, while Padilla didn’t seek more affirmative relief from Redmont—he
merely sought to reapportion his recovery—he also didn’t ask the settlement
with Redmont to be set aside.
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20-13469 Opinion of the Court 27
Bonet & Smith to reimburse Padilla for the contingency fee it re-
ceived for handling the employment discrimination claims, i.e.,
$29,547.35. Alternatively, the motion asked the District Court to
allow Padilla to pursue his breach of contract action then pending
in the Circuit Court of Jefferson County. None of these requests
are within the scope of Rule 60.
Bell v. Hood, 327 U.S. 678, 66 S. Ct. 773 (1946), teaches that
a district court may dismiss a baseless “claim” under Rule 12(b)(6)
of the Federal Rules of Civil Procedure for failure to state a claim
for relief or under Rule 12(b)(1) for lack of subject matter jurisdic-
tion if the claim “clearly appears to be immaterial and made solely
for the purpose of obtaining jurisdiction or where such a claim is
wholly insubstantial and frivolous.” Id. at 682–83, 66 S. Ct. at 776;
see also Blue Cross & Blue Shield. v. Sanders, 138 F.3d 1347, 1352
(11th Cir. 1998). 40
A Rule 60 motion may be brought as “an independent ac-
tion,” Rule 60(d)(1), and thus as a “claim” the legal sufficiency of
which may be judged under Rule 12(b)(6). So, from a functional
point of view, Padilla’s Rule 60 motion, which sought relief under
Rule 60(b)(3), (b)(6), and (d)(3), was akin to an independent action
or claim. As such, Padilla’s motion was subject to being denied
40 A dismissal under Rule 12(b)(1) is without prejudice because the district
court lacked subject matter jurisdiction to adjudicate the controversy. A dis-
missal under Rule 12(b)(6) can be with prejudice (assuming the district court
does not give leave to replead).
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28 Opinion of the Court 20-13469
under Rule 12(b)(6) for failure to state a claim for relief or under
Rule 12(b)(1) if it was “made solely for the purpose of obtaining
jurisdiction” or was “wholly insubstantial and frivolous.” Bell, 327
U.S. at 682–83, 66 S. Ct. at 776. Since Padilla brought his Rule 60
motion solely for the purpose of obtaining federal subject matter
jurisdiction over the attorney’s fee controversy, the motion failed
to invoke the District Court’s subject matter jurisdiction. 41
41 Dismissing a Rule 60 motion for lack of subject matter jurisdiction when it
is not a “true” Rule 60 motion—i.e. when the motion does not seek Rule 60
relief at all, or does not seek Rule 60 relief on one of the grounds listed in Rule
60—is consistent with what we do with Rule 60 motions in the context of ha-
beas proceedings. When a Rule 60 motion attacks the substance of the federal
court’s resolution of a petition’s claim on the merits, as opposed to a defect in
the integrity of the habeas proceeding, it is not truly a Rule 60 motion—it is a
successive habeas petition. Williams v. Chatman, 510 F.3d 1290, 1294 (11th
Cir. 2007) (quoting Gonzalez v. Crosby, 545 U.S. 524, 532, 125 S. Ct. 2641, 2648
(2005)). When a Rule 60 motion qualifies as a second or successive habeas
petition, it must comply with the requirements of such petitions. Id. at 1294.
If it doesn’t, the district court lacks jurisdiction to entertain it. See, e.g., Boone
v. Sec’y., Dep’t of Corr., 377 F.3d 1315, 1317 (11th Cir. 2004) (per curiam)
(holding that the district court lacked subject matter jurisdiction over a Rule
60 motion because it was not brought to prevent a fraud on the court, but
rather to reopen a habeas judgment based on intervening law).
Here, Padilla’s Rule 60 motion was not a “true” Rule 60 motion be-
cause it did not seek relief from a final judgment or order in the form of setting
aside that judgment or order. It sought to litigate the attorney’s fee contro-
versy between a plaintiff and his counsel and used a Rule 60 motion as a vehi-
cle for getting federal jurisdiction over that controversy. Like a Rule 60 mo-
tion that is really a successive habeas petition, the District Court should have
dismissed it.
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20-13469 Opinion of the Court 29
To sum up, had Padilla’s Rule 60 motion sought actual Rule
60 relief, the District Court would have had jurisdiction to enter-
tain it because the District Court had jurisdiction over the underly-
ing FLSA and employment discrimination controversy. But Padilla
did not ask for—and the District Court did not grant—the type of
relief authorized by Rule 60. Doing anything more than reopening
the matter that had previously been dismissed, which is all Rule 60
allows, required an independent jurisdictional basis. The District
Court did not have such an independent jurisdictional basis when
it litigated the state court breach of contract action as if it had been
brought under 28 U.S.C. § 1332. Because the District Court lacked
subject matter jurisdiction to entertain the motions Padilla and
Bonet & Smith filed, we are unable to entertain Padilla’s appeal.
We must dismiss the appeal and direct the District Court on receipt
of our mandate to vacate its orders of August 18, 2020, and deny
Bonet & Smith’s and Padilla’s motions for lack of jurisdiction.
* * *
This appeal is DISMISSED. On receipt of our mandate, the
District Court is instructed to VACATE its orders of August 18,
2020, and DENY Bonet & Smith’s and Padilla’s motions for lack of
subject matter jurisdiction.
SO ORDERED.