Update: The Supreme Court Hears Arguments in Genesis HealthCare v. Symczyk

On December 3, 2012, the U.S. Supreme Court heard oral argument in the case Genesis HealthCare v. Symczyk, 656 F.3d 189 (3d Cir. 2011), cert. granted 80 U.S.L.W. 3512 (U.S. June 25, 2012) (No. 11-1059). As explained in a prior post , in Genesis, the company seeks to overturn the Third Circuit Court of Appeals’ ruling reinstating a collective action brought under the Fair Labor Standards Act (FLSA) after the plaintiff rejected Genesis’s offer for full relief under Rule 68 of the Federal Rules of Civil Procedure. Genesis asserts that the plaintiff’s rejection of the Rule 68 offer deprived her of any continuing stake in the litigation thereby mooting her claim. The Supreme Court’s statement of the question presented was:

Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff’s claims.

In the case below, the Third Circuit explained the doctrine of mootness, its role in federal cases, and how an offer of judgment affects it:

Article III of the United States Constitution limits the jurisdiction of the federal courts to “actual ‘Cases’ and ‘Controversies.’” “When the issues presented in a case are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome, the case becomes moot and the court no longer has subject matter jurisdiction.” “An offer of complete relief will generally moot the plaintiff’s claim, as at that point the plaintiff retains no personal interest in the outcome of the litigation.” Thus, whether or not the plaintiff accepts the offer, no justiciable controversy remains when a defendant tenders an offer of judgment under Rule 68 encompassing all the relief a plaintiff could potentially recover at trial. (Internal citations omitted.)

Not surprisingly, during oral argument, the Court’s more liberal justices questioned the employer’s counsel on the perceived underlying fairness of dismissing a collective action when the sole named plaintiff has been offered full relief. The more conservative justices focused on the underlying procedural issues and the inability of a named plaintiff to affect the interests of potential collective action members who have not yet joined the lawsuit.

Many of the Court’s questions focused on whether the plaintiff’s failure to accept the offer of judgment actually mooted her claims, an issue not decided by the Third Circuit. Based on the Court’s questions during oral argument, it remains unclear whether the Court will address the issue of whether the mooting of a named plaintiff’s claims effectively ends a putative collective action, or whether the Court will limit its ruling to the narrower issue of whether the district court properly found the plaintiff’s claims were moot in light of the Rule 68 offer.

A decision is expected next year.

Beth A. Moeller is a shareholder in the Atlanta office of Ogletree Deakins.