Phyllis Wolff v. Royal American Management, Inc.

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-15981
Non-Argument Calendar
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D.C. Docket No. 1:11-cv-00351-N
PHYLLIS WOLFF,
Plaintiff - Appellee,
versus
ROYAL AMERICAN MANAGEMENT, INC.,
Defendant - Appellant.
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Appeals from the United States District Court
for the Southern District of Alabama
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(October 1, 2013)
Before MARCUS, MARTIN and FAY, Circuit Judges.
PER CURIAM:
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Defendant-Appellant Royal American Management, Inc. (“RAM”) appeals
from the final judgment of the district court in favor of Plaintiff-Appellee Phyllis
Wolff, awarding attorneys’ fees and costs to Wolff’s counsel in her suit against her
former employer, RAM, for alleged unpaid overtime wages under the Fair Labor
Standards Act (“FLSA”). On appeal, RAM argues that: (1) Wolff’s FLSA claims
were rendered moot when RAM tendered to Wolff’s counsel the amount of
Wolff’s claimed damages, or, in the alternative, when Wolff voluntarily accepted
and cashed RAM’s check as full and complete settlement of the FLSA action; and
(2) the district court abused its discretion by awarding $61,810.44 in prevailing
party attorneys’ fees under the FLSA. After thorough review, we affirm.
We review the district court’s legal conclusions regarding mootness de novo
and its factual findings for clear error. Zinni v. ER Solutions, Inc., 692 F.3d 1162,
1166 (11th Cir. 2012). Whether the facts are sufficient to render the plaintiff a
“prevailing party” for purposes of attorneys’ fees is a legal question also reviewed
de novo. Church of Scientology Flag Serv., Inc. v. City of Clearwater, 2 F.3d
1509, 1513 (11th Cir. 1993). Where the district court has authority to award
attorneys’ fees, the district court’s decision of whether to award attorneys’ fees and
costs is reviewed for abuse of discretion. Sahyers v. Prugh, Holliday & Karatinos,
P.L., 560 F.3d 1241, 1244 (11th Cir. 2009).
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The relevant background is this. After filing a complaint alleging FLSA
violations, Wolff calculated that RAM had failed to pay her $1800 in overtime
wages. Liquidated damages under the FLSA in the same amount brought her total
itemized damages claim to $3600. In December 2011, RAM tendered $3600 to
plaintiff through her attorney, and moved to dismiss the complaint; Wolff’s
counsel returned the check. In December 2012, RAM offered to settle the case for
$5000, but Wolff’s counsel claimed that he never submitted the offer to Wolff
because it was never put into writing. Nevertheless, in February 2012, Wolff
received a 1099 form reflecting a payment of $3600, and called RAM to determine
the reason for the 1099. RAM informed Wolff for the first time of the prior tender
to her counsel, and Wolff said she wanted to settle the case. Wolff then met with
RAM, signed a general release and took the $3600 check. Thereafter, the parties
moved the court to determine whether the payment and release rendered the action
moot, stripping Wolff of attorneys’ fees on the ground that there was no judgment
in the case to indicate that Wolff was the prevailing party. The district court
ultimately approved the settlement as reasonable, even though the parties reached
the settlement without the participation of Wolff’s counsel. The district court
further found that the settlement had not mooted the lawsuit, and later awarded
Wolff’s counsel $61,810.44 in fees and costs. This timely appeal follows.
Under the FLSA,
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Any employer who violates the provisions of section 206 or section 207 of
this title shall be liable to the employee or employees affected in the amount
of their unpaid minimum wages, or their unpaid overtime compensation, as
the case may be, and in an additional equal amount as liquidated damages . .
. . The court in such action shall, in addition to any judgment awarded to the
plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the
defendant, and costs of the action.
29 U.S.C. § 216(b). We have said that because the FLSA seeks to protect
employees from “inequalities in bargaining power between employers and
employees,” Congress had made its provisions mandatory. Lynn’s Food Stores,
Inc. v. U.S. Dep’t. of Labor, 679 F.2d 1350, 1352 (11th Cir.1982). Thus, “FLSA
rights cannot be abridged by contract or otherwise waived because this would
nullify the purposes of the statute and thwart the legislative policies it was
designed to effectuate.” Id. (quotation omitted). We’ve also held that “[t]he FLSA
plainly requires that the plaintiff receive a judgment in his favor to be entitled to
attorney’s fees and costs.” Dionne v. Floormasters Enters., Inc., 667 F.3d 1199,
1205 (11th Cir. 2012).
The Supreme Court, considering the fee-shifting provisions in “[n]umerous
federal statutes [that] allow courts to award attorney’s fees and costs to the
‘prevailing party,’” has recognized that a plaintiff is a prevailing party only when
she obtains either (1) a judgment on the merits, or (2) a settlement agreement
“enforced through a consent decree.” Buckhannon Bd. & Care Home, Inc. v. W.
Va. Dep’t. of Health & Human Res., 532 U.S. 598, 603-604 (2001), superseded by
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statute on other grounds, Open Government Act of 2007, Pub.L. No. 110-175, 121
Stat. 2524. The Buckhannon Court reasoned that a prevailing party needs a
judgment or consent decree to prove that there has been an “alteration in the legal
relationship of the parties.” Id. at 605. Thus, in the absence of a judgment on the
merits, to be a prevailing party, the FLSA plaintiff needs a stipulated or consent
judgment or its “functional equivalent” from the district court evincing the court’s
determination that the settlement “is a fair and reasonable res[o]lution of a bona
fide dispute over FLSA provisions.” Lynn’s Food Stores, 679 F.2d at 1355;
American Disability Ass’n, Inc. v. Chmielarz, 289 F.3d 1315, 1317, 1320 (11th
Cir. 2002) (holding that the district court’s approval of the terms of a settlement
coupled with its explicit retention of jurisdiction are the functional equivalent of a
consent decree, which renders the settlement a “judicially sanctioned change in the
legal relationship of the parties” for purposes of the “prevailing party”
determination necessary for attorneys’ fees).
In Dionne, we held that an employer, who denied liability for nonpayment
for overtime work, did not need to pay attorneys’ fees and costs under the FLSA if
the employer tendered the full amount of overtime pay claimed by an employee,
and the employee conceded that “the claim for overtime should be dismissed as
moot.” 667 F.3d at 1200. In other words, we concluded that Dionne was not a
prevailing party under the FLSA because in granting the defendant’s motion to
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dismiss for lack of subject matter jurisdiction, the district court did not award a
judgment to the plaintiff. Notably, however, we expressly limited our holding,
emphasizing on rehearing that:
Our decision in this matter addresses a very narrow question: whether an
employee who conceded that his claim should be dismissed before trial as
moot, when the full amount of back pay was tendered, was a prevailing party
entitled to statutory attorney’s fees under § 216(b). It should not be
construed as authorizing the denial of attorney’s fees, requested by an
employee, solely because an employer tendered the full amount of back pay
owing to an employee, prior to the time a jury has returned its verdict, or the
trial court has entered judgment on the merits of the claim.
Id. at 1206 n.5 (emphasis added).
Thereafter, in Zinni, we held that a settlement offer for the full amount of
statutory damages requested under the Fair Debt Collection Practices Act
(“FDCPA”), without an accompanying offer of judgment, did not offer full relief
to an FDCPA plaintiff and therefore did not render the plaintiff’s claim moot. 692
F.3d at 1167-68. Zinni involved three cases that were consolidated on appeal: in
each case, the debt collector offered to settle for $1,001, an amount exceeding by
$1 the maximum statutory damages available to an individual plaintiff under the
FDCPA, as well as an unspecified amount of attorneys’ fees and costs. Id. at
1164-66. None of the plaintiffs accepted the settlement offers. Id. The district
court granted the defendants’ motions to dismiss for lack of jurisdiction because
the offers left the plaintiffs with “no remaining stake” in the litigation. Id. at 1164.
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On appeal, we reversed, holding that “the failure of [the debt collectors] to
offer judgment prevented the mooting of [the plaintiffs’] FDCPA claims.” Id. at
1168. We said that a settlement offer for the “full relief requested” means “the full
amount of damages plus a judgment.” Id. at 1166-67. The court explained that
judgment is important to a plaintiff because it is enforceable by the district court,
whereas a settlement offer without an offer of judgment is “a mere promise to pay”
which, if broken, required the plaintiff to sue for breach of contract in state court.
Id. at 1167-68 (quoting from and relying on Simmons v. United Mortg. & Loan
Inv., LLC, 634 F.3d 754, 766 (4th Cir. 2011) (FLSA overtime case)). We also
noted that “even if the [settlement] check had been tendered [to the plaintiff], that
fact would not change our ultimate conclusion.” Id. at 1164 n.5. In fact, we said
that even if the plaintiff accepted the offer, without an offer of judgment, full relief
had not been offered. Id. at 1167 n.8 (“The issue of whether the offer was accepted
or rejected, while argued by the parties, is not relevant to our analysis because
Appellees never offered full relief.”).
Here, RAM’s settlement offer to Wolff did not include an offer of judgment
in Wolff’s favor and against RAM. Rather, Wolff signed a release providing that
she “acknowledge[d] receipt of [the $3600] check as full and complete satisfaction
of any monies owed to [Wolff] from Royal American.” As a result, under Zinni --
which expressly relied on a FLSA case from the Fourth Circuit -- we are
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compelled to conclude that RAM’s offer did not constitute full relief of Wolff’s
FLSA claim. We recognize that in Zinni, the plaintiff did not accept the settlement
check, but here, Wolff accepted the check and signed a release. However, Zinni
made clear that so long as a settlement agreement does not include an offer of
judgment against a defendant (and it did not in this case), whether a plaintiff
accepted the settlement makes no difference. Thus, RAM’s settlement with Wolff
did not moot her FLSA claim, and she was entitled to seek attorneys’ fees and
costs from RAM.
RAM argues that the Supreme Court’s recent decision in Genesis Healthcare
Corp. v. Symczyk, 133 S.Ct. 1523 (2013), requires a different result. There, the
Supreme Court held that a “collective action” brought under the FLSA -- wherein
an employee brings an action to recover damages for FLSA violations on behalf of
himself and other “similarly situated” employees -- became non-justiciable when
the lone plaintiff’s individual claim became moot. Id. at 1526. However, Genesis
involved a settlement offer that included an offer of judgment -- unlike the offer
here, and unlike the one in Zinni. See id. at 1527 (“When petitioners answered the
complaint, they simultaneously served upon respondent an offer of judgment under
Federal Rule of Civil Procedure 68.”). What’s more, Genesis explicitly said that it
was “assum[ing], without deciding, that [an employer’s] Rule 68 offer mooted [an
employee’s] individual claim.” See id. at 1529; see also id. n.4 (“[W]e do not
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resolve the question whether a Rule 68 offer that fully satisfies the plaintiff’s
claims is sufficient by itself to moot the action.”). Accordingly, Genesis is not
directly on point, and expressly does not answer the question before us.
We also find unavailing RAM’s claim that the district court abused its
discretion in awarding the fees in this case. As for RAM’s claim that Wolff was
not a prevailing party for purposes of obtaining FLSA attorneys’ fees, we are
unpersuaded. As we’ve said, to be entitled to fees under the FLSA, a plaintiff must
“receive a judgment in [her] favor.” Dionne, 667 F.3d at 1205. Here, the district
court plainly found that the settlement -- which RAM admits included the full
amount of back pay as well as an equal amount for liquidated damages -- was
reasonable, and by doing so, the district court entered a judgment in Wolff’s favor.
See Lynn’s Food Stores, 679 F.2d at 1355; Chmielarz, 289 F.3d at 1317, 1320.
RAM provides us with no reason to depart from Lynn, which directs a district
court to enter a judgment after “scrutinizing” for fairness a proposed settlement
entered into between the employee and the employer in an action brought for back
wages under the FLSA. Id. at 1353. Further, unlike in Thomas v. State of La., 534
F.2d 613, 615 (5th Cir. 1976),1 it is unclear in this case whether Wolff received
“everything to which [she was] entitled under the FLSA at the time the agreement
1
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all Fifth Circuit decisions that were issued before October 1, 1981.
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[wa]s reached,” since the district court found that the parties did not intend the
settlement agreement to preclude attorneys’ fees under the FLSA. 2
As for RAM’s claim that it was denied due process when the district court
entered the judgment, the record shows that RAM was given an opportunity to
respond to Wolff’s motions on this matter, and that RAM expressly made
arguments regarding its liability in its papers before the district court. Nor has
RAM shown, based on the record of this case -- including the record of attorney
and party conduct on both sides -- that the district court abused its considerable
discretion in granting attorneys’ fees using the lodestar analysis. This is especially
true given that in cases like this one where attorney fees are allowed to the
prevailing party by federal statute, the compensable fees include time spent
litigating both the entitlement to and amount of fees incurred; i.e. “fees for
litigating fees.” Thompson v. Pharmacy Corp. of Am., Inc., 334 F.3d 1242, 1245
(11th Cir. 2003) (statutory fees for civil rights litigants includes “fees for litigating
fees”). Accordingly, we affirm.
AFFIRMED.
2
While RAM argues that under our case law the parties can settle FLSA claims without
providing for attorneys’ fees, it does not argue to us that the district court clearly erred in finding,
in this case, that the parties did not intend the settlement to preclude an award of fees. As for its
claim that the district court did not make this finding, we disagree. It expressly held that a
settlement agreement purporting “to preclude any award for attorney’s fees . . . would not be
reasonable” and that, in any event, that kind of agreement “does not appear to be the
intention of the parties: for example, after plaintiff accepted the $3600.00 check, counsel for
plaintiff and defendant continued to negotiate over a reasonable attorney’s fee to be paid by
defendant.”
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