MEMORANDUM
Three motions are before the Court in this Fair Labor Standards Act (“FLSA”) putative collective action: the defendant’s motion to dismiss the opt-ins, the defendant’s motion to dismiss for lack of jurisdiction, and the plaintiffs motion for leave to amend the first amended complaint. For the reasons that follow, the Court will deny the defendant’s motions to dismiss the opt-ins and to dismiss for lack of jurisdiction and grant the plaintiffs motion to amend. ■.
I. Background
The Court outlines the background of this action relevant to the motions at issue.
On February 17, 2009, the plaintiff brought suit individually and on behalf of others similarly situated against the defendant, Delta-T Group, Inc. (“Delta-T”), for violations of the FLSA. He asserted that the defendant, which hires healthcare workers 1 and places them in various healthcare facilities when such facilities require staffing, misclassified him and others as “independent contractors” rather than “employees.”
On July 27, 2009, after approximately sixty workers filed notices of consent to opt into this action (“the opt-ins”), the plaintiff moved for FLSA conditional collective action certification and court-facilitated notice of the collective action to the putative class.
2
In a memorandum and order, the Court denied the plaintiffs motion without prejudice.
Bamgbose v. Delta-T Group, Inc.,
The potential to establish subclasses later in this action ... does not adequately address the Court’s current concerns. If, after the parties complete discovery and develop the record, subclasses become appropriate, the plaintiff may then renew his motion for class certification and propose subclasses.
The Court then ordered the parties to report to the Court as to how they would like to proceed, in view of its decision. The plaintiff requested clarification of the Court’s intentions as to the healthcare workers who had opted into the case to date, totaling over ninety. The Court’s order did not dismiss the opt-ins, and the plaintiff presumed that the Court would allow collective discovery as to all of them, so that he could renew his motion for certification at a later date. The defendant responded that the opt-ins were dismissed by the Court’s order. It argued that the action was a single-plaintiff lawsuit and that discovery could not proceed on a collective basis.
The Court held a telephone conference to discuss the parties’ arguments. Attempting a compromise, the Court told the parties that discovery should proceed as to the named plaintiff’s claim, so that the parties could try one case on the merits and avoid discovery disputes in relation to the opt-ins. Before any additional discovery could take place with respect to the opt-ins, the plaintiff was to articulate his theory as to a subclass. Once articulated, certain opt-ins would be dismissed for not meeting the subclass definition. Until then, the opt-ins would remain in the case, unless the defendant could demonstrate that their presence in the action was contrary to law. Conf. Tr. 14-15, 21, 23; Feb. 24, 2010.
A series of activities then followed. On March 16, 2010, the defendant filed a motion to dismiss the opt-ins. Two days later, the defendant served the plaintiff with an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure for a sum of $15,000, plus all reasonable costs and attorneys’ fees. 3 On March 23, 2010, the plaintiff filed his motion to amend the complaint, and then he accepted the offer of judgment. One day after he accepted the offer of judgment, the defendant filed its motion to dismiss for lack of subject matter jurisdiction. 4
II. Analysis
The Court addresses the three pending motions in turn. First, it finds that it is not contrary to law to keep the opt-ins in this action, and concerns for judicial econo
A. The Defendant’s Motion to Dismiss the Opt-ins
The defendant moves to dismiss the opt-ins, arguing that courts uniformly conclude that if conditional class certification is denied, or if a motion for decertification is granted subsequent to conditional class certification, opt-ins are to be dismissed from the case without prejudice and the case proceeds with the individual claims of the named plaintiff only. The opt-ins are then free to file their own lawsuits if they choose to pursue their claims.
The Court disagrees. First, the defendant does not cite to, and the Court could not find, any authority that requires the Court to dismiss the opt-ins upon the denial of certification without prejudice. Courts that dismiss opt-ins do so after granting a motion for decertification, when an action becomes a single plaintiff lawsuit.
E.g., Sandoz,
Second, judicial economies favor maintaining the opt-ins in this action. The United States Supreme Court explained in
Hoffmann-La Roche, Inc. v. Sperling,
The rationale of
Hoffmann
applies here. Were the Court to dismiss the opt-ins, the opt-ins would file individual lawsuits, which would require individual conferences and orders for case management. Upon some articulation of a subclass, the plaintiff would move to consolidate the applicable cases to one. To manage the joining of multiple parties to this action, the Court
B. The Defendant’s Motion to Dismiss for Lack of Jurisdiction
Article III of the United States Constitution limits federal court jurisdiction to “cases” or “controversies.” U.S. Const, art. III § 2;
Flast v. Cohen,
In the class action context, settlement of a named plaintiffs claim will moot the action if the class has not yet been certified, unless: (1) the plaintiff appeals the denial of a class certification motion presented when his claims were still live, or (2) a plaintiffs claims are so transitory that a court will not have sufficient time to rule on a motion for certification before the proposed representative’s claims expire.
Lusardi v. Xerox Corporation (Lusardi II),
Although the United States Supreme Court and the Court of Appeals for the Third Circuit have not addressed the circumstances under which a Rule 68 offer of judgment made to a named plaintiff in an FLSA action moots the collective action,
7
two cases from the Third Circuit help frame the issue. In
Lusardi v. Xerox Corp. (Lusardi II),
The Court of Appeals for the Fifth Circuit applied the reasoning of
Weiss
to the FLSA context. In
Sandoz v. Cingular Wireless, L.L.C.,
Many district courts that have addressed the circumstances under which a Rule 68 offer of judgment moots a putative collective action have declined to go as far as
Sandoz.
They have required other individuals to have opted into the suit for the action to remain live because, unlike Rule 23 class actions, a named plaintiff in an FLSA suit represents himself only until other individuals affirmatively opt in.
Symczyk v. Genesis Healthcare Corp.,
No. 09-5782,
Delta-T argues that its offer of judgment divested the Court of jurisdiction over this action pursuant to
Lusardi II,
but the Court finds
Lusardi II
does not control this matter. First, in
Lusardi II,
the district court had already decided the certification issue with finality and dismissed the opt-ins when the plaintiffs settled their claims and then moved again for
Because over ninety opt-ins remain in this action, and because the plaintiff has not yet had an opportunity to renew his motion for conditional certification, the Court holds that the defendant’s offer of judgment did not moot the plaintiffs collective action claim. The present opt-ins, some of whom opted in after the offer of judgment, demonstrate that the plaintiff does not only represent himself in this action. 10 Further, the plaintiff has not yet had the opportunity to have his motion for certification decided fully. In view of the unique procedural posture of this action and the fact that the Court has not yet decided with finality the similarly situated status of the opt-ins, the plaintiff shall timely renew his motion for collective action certification so that the certification issue may “play out” with due deliberation by the parties and the Court.
C. The Plaintiffs Motion to Amend the Complaint
The plaintiff moves to amend his complaint pursuant to Federal Rules of Civil Procedure 15 and 20 to add a new named plaintiff, John Harris, and to add three new defendants, Joanna McAndrews, Scott McAndrews, and Chris McAndrews (“the proposed defendants”). 11 The plaintiff alleges that John Harris, who opted into the suit on August 14, 2009, worked for the defendant within the applicable statutory period, worked in excess of forty hours, and did not receive compensation for overtime. The proposed defendants own and operate Delta-T and its affiliates, and they constitute the senior management team. The plaintiff explains that he moves to amend so as to renew his motion for collective action certification because the defendant’s Rule 68 offer of judgment disposed of his individual claim.
The Court will grant the plaintiffs motion because it finds that the plaintiff has met the requirements of Rules 15 and 20 of the Federal Rules of Civil Procedure. Rule 15 states: “[A] party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). Such leave should be granted in the absence of undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, and futility of the amendment.
Foman v. Davis,
Rule 20 of the Federal Rules of Civil Procedure states:
Persons ... may be joined in one action as defendants if: (A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.
Fed.R.Civ.P. 20(a)(2). A court has discretion to deny a motion for joinder, even if the conditions of Rule 20(a) are met, in order to prevent undue delay or other prejudice to the other parties. See
McPhail v. Deere & Co.,
First, the addition of the defendants meets the requirements of Rule 20(a)(2). The plaintiffs claim against the proposed defendants arises from the same transactions or occurrences already alleged, and there are questions of law or fact common to all of the defendants. Delta-T does not dispute this in its brief in opposition.
Second, in accordance with Rules 15 and 20, the plaintiffs motion is not brought with undue delay or dilatory motive. The plaintiff moved to add a named plaintiff upon the defendant’s offer of judgment, when he determined that it was necessary to do so. Also, although this action has been pending for over one year, it is still in a relatively early stage because the issue of conditional certification has not yet been decided fully. The delay, then, is not all that lengthy, particularly in the FLSA context.
See, e.g., Copantitla v. Fiskardo Estiatorio, Inc.,
No. 09-1608,
Third, there is no undue prejudice to the defendant upon granting the plaintiffs motion. To successfully oppose the plaintiffs motion, the defendant must “demonstrate that its ability to present its case would be seriously impaired were amendment allowed.”
Dole v. Arco Chem. Co.,
The defendant argues that the plaintiffs addition of the proposed defendants is grounded in bad faith as a means to gain leverage, but the Court finds no improper motive. Prior to his motion for conditional certification, the plaintiff told the defendant that he would seek to add the proposed defendants. Also, counsel for the plaintiff explained that, because the defendant is a nonpublic company and has not yet disclosed its finances, the addition of the proposed defendants is meant to help ensure payment of a judgment should Delta-T prove financially unviable.
Fourth, the plaintiffs motion is not futile. A court determines the futility of a proposed amendment by the amendment’s ability to survive a motion to dismiss.
Burlington Coat Factory,
The defendant’s arguments are premature. The plaintiff has not yet renewed his motion for conditional certification, and so the Court cannot apply the doctrines the defendant cites because the plaintiff has yet to ask the Court to decide an issue it has already decided. Also, the doctrines that the defendant asserts require a court to have reached a final decision on an issue sought to be relitigated. Res judicata and collateral estoppel are not triggered when a court decides something without prejudice; rather, they require final judgments.
See, e.g., San Remo Hotel, L.P. v. City & County of S.F.,
III. Conclusion
For the reasons herein stated, the defendant’s motion to dismiss the opt-ins is denied, the defendant’s motion to dismiss for lack of jurisdiction is denied, and the plaintiffs motion for leave to amend his first amended complaint is granted. The plaintiff will have one week to present to the Court his discovery plan with respect to what discovery he needs to conduct in order to renew his motion for conditional certification. The defendant will then have one week to respond. An appropriate order shall issue separately.
ORDER
AND NOW, this 30th day of June, 2010, upon consideration of the defendant’s Motion to Dismiss OpNIns (Docket No. 152), the plaintiffs Motion for Leave to Amend the First Amended Complaint (Docket No. 155), the defendant’s Rule 12(b)(1) Motion to Dismiss for Lack of Jurisdiction (Docket No. 159), the parties’ briefs in opposition and replies thereto, a telephonic oral argument held on June 18, 2010, on the parties’ motions, and for the reasons stated in a memorandum of law bearing today’s date, IT IS HEREBY ORDERED that:
1. The defendant’s Motion to Dismiss Opt-ins is DENIED.
2. The plaintiffs Motion for Leave to Amend the First Amended Complaint is GRANTED.
3. The defendant’s Rule 12(b)(1) Motion to Dismiss for Lack of Jurisdiction is DENIED.
4. The plaintiff shall have one week to present to the Court his discovery plan with respect to what discovery he needs to conduct in order to renew his motion for conditional certification. He shall also include a proposed deadline for renewing his certification motion. The defendant shall have one week to respond.
5. The Clerk of Court shall docket the plaintiffs Second Amended Complaint, attached as Exhibit A to the plaintiffs Motion for Leave to Amend the First Amended Complaint.
Notes
. The plaintiff and defendant use different characterizations to refer to the persons at issue in this litigation, labeling them "healthcare. workers” or "professionals,” respectively. The Court will refer to the persons at issue as “healthcare workers” or "workers” for the sake of consistency, and without an evaluation of the merits of the parties’ arguments.
. Unlike class actions under Rule 23 of the Federal Rules of Civil Procedure, the FLSA requires class members to affirmatively opt into collective actions to be considered part of the class. See 29 U.S.C. § 216(b). Courts often engage in a two-step certification process because of this requirement. Upon a motion for conditional certification, a court may conditionally certify the action and disburse notice to the class, so that putative class members have the opportunity to join the suit. After discovery is complete, the defendant may move to decertify the action on the grounds that the class is not similarly situated.
See, e.g., Sandoz v. Cingular Wireless, L.L.C.,
. It is undisputed that the offer of judgment amounts to a full recovery on the plaintiffs claim.
. The Court entered judgment pursuant to the plaintiff's acceptance of the defendant's offer. It ordered the parties to meet and confer as to attorneys' fees and costs, and upon an inability to agree, the plaintiff to file a petition for fees by May 1, 2010. The entry of judgment triggered new disputes between the parties. The parties were unable to come to an agreement on the fee issue, and the plaintiff moved for a stay of the fee petition deadline, which the defendant opposed. After a telephone conference with the parties, the Court granted the plaintiff's motion and stayed the fee petition until resolution of the parties' three pending motions. The parties then disagreed as to whether the defendant was bound to pay the $15,000 judgment, in view of the stayed fee petition. Upon consideration of letters from the parties and another telephone conference, the Court ordered the defendant to pay the judgment.
. The defendant also appears to assert that the Court cannot maintain the opt-ins in this action because "the Third Circuit has held that district courts do not even have jurisdiction over opt-in claims after class certification is denied,” citing
Lusardi v. Xerox Corp. (Lusardi I),
. Further, it appears that other courts have not dismissed opt-ins upon denying conditional certification motions without prejudice.
Gomez
v.
United Forming Inc.,
09-cv-576,
. Even more, the parties have not identified, and the Court has been unable to find, any case that addresses the circumstances here, where putative class members opted into an FLSA collective action suit, the Court denied without prejudice a motion for FLSA conditional collective action certification, a defendant made a full offer of judgment to the named plaintiff, subsequent opt-ins filed notices of consent to join the suit, and the defendant moved to dismiss for lack of jurisdiction before the plaintiff renewed his motion for certification.
.Although Lusardi II involved an FLSA collective action, the court applied precedent from Rule 23 class actions to reach its holding.
. Courts also hold that an offer of judgment that fails to satisfy the named plaintiff’s claim in full will not moot a collective action, even if no other individuals have opted into the action.
See, e.g., Davis
v.
Abercrombie & Fitch Co.,
No. 08-1859,
. Although the Court found that the opt-ins were not similarly situated to the plaintiff based on the manner in which he initially defined the class, any number of them may fit the new class definition upon the plaintiffs renewed certification motion.
. The plaintiff's complaint is the same in all material respects to his initial complaint, except that it does not include a party that the Court dismissed previously pursuant to the parties’ stipulation, nor claims the Court dismissed in a prior decision.
