Michaels v. McPherson, Kansas, City of

Filing 36

MEMORANDUM AND ORDER granting plaintiff's 26 Motion to Amend Complaint. Plaintiff is ordered to file the amended complaint within seven days of this Memorandum and Order. Signed by District Judge Carlos Murguia on 7/29/2013. (mg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

MATTHEW B. MICHAELS,
on behalf of himself and all others
similarly situated,
Plaintiff,
v.
CITY OF MCPHERSON, KANSAS,

Defendant.

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Case No. 12-1372-CM

MEMORANDUM AND ORDER
This putative collective action brought pursuant to the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 216(b), is before the court on plaintiff Matthew B. Michaels’s Motion to Amend Complaint
(Doc. 26). Plaintiff seeks to add Lark L. Stutts as a representative party plaintiff. Defendant opposes
the motion, arguing that amendment is futile. Also pending before the court is plaintiff’s Motion for
Conditional Certification of Class Claims Under § 216(b) of the FLSA for McPherson Police Officers
(Doc. 11). Briefing on the motion for conditional certification has been stayed since January 2013, and
the motion is not yet ripe for review.
Rule 15 of the Federal Rules of Civil Procedure governs amendment of pleadings. Where, as
here, responsive pleadings have been served, a party may amend only by leave of court, but the court
freely grants such leave when justice so requires. Fed. R. Civ. P. 15(a). The decision is entrusted to
this court’s discretion. Hall v. Witteman, No. 07-4128-SAC, 2008 WL 2949567, at *4 (D. Kan. July
30, 2008) (citing Stewart v. Bd. of Comm’rs for Shawnee Cnty., Kan., 216 F.R.D. 662, 664 (D. Kan.
2003)). Generally, the only justifications for refusal of leave to amend are (1) undue delay, (2) undue

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prejudice to the opposing party, (3) bad faith, or (4) futility of amendment. Id. A court may deny a
proposed amendment on the basis of futility if the “amendment would not withstand a motion to
dismiss or otherwise fails to state a claim upon which relief may be granted.” Stewart, 216 F.R.D. at
664 (citing Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir. 1992); Schepp v. Fremont Cnty., Wyo., 900
F.2d 1448, 1451 (10th Cir. 1990)).
Defendant argues that the court should deny plaintiff’s motion to amend because this court no
longer has jurisdiction over the action, rendering amendment futile. Specifically, defendant claims that
because defendant made an offer of judgment pursuant to Fed. R. Civ. P. 68, offering plaintiff full
relief, plaintiff’s action is moot. Defendant cites the recent Supreme Court ruling in Genesis
Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1527 (2013), in support of its position.
In Genesis, an employee filed suit against her employer on behalf of herself and “all other
persons similarly situated” seeking statutory damages under the FSLA. 133 S. Ct. at 1527. The
plaintiff never filed for conditional certification of the putative class and remained the sole plaintiff
throughout the proceedings. Id. The district court held that because no one joined the suit and
defendant’s Rule 68 offer fully satisfied plaintiff’s individual claim, the defendant’s unaccepted Rule
68 offer mooted plaintiff’s claim. Id. The court dismissed for lack of subject-matter jurisdiction. Id.
The Third Circuit reversed. Id. After agreeing that there were no other plaintiffs involved in
the suit and the defendant’s Rule 68 offer fully satisfied the plaintiff’s individual claim, the court
“nevertheless held that [the plaintiff’s] collective action was not moot.” Id. The court reasoned that
attempts to “pick off” named plaintiffs before conditional certification could occur “frustrate the goal
of collective actions” and remanded the case. Id.
Writing for the majority, Justice Thomas reversed. Both the district court and the Third Circuit
found that defendant’s Rule 68 offer fully satisfied plaintiff’s individual claim and that the claim—the

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individual claim—was moot. Id. at 1528–29. In light of these rulings, the Court assumed, without
deciding, that plaintiff’s individual claim was moot. Id. at 1529. The Court noted that “[w]hile the
Courts of Appeals disagree whether an unaccepted offer that fully satisfies a plaintiff’s claim is
sufficient to render the claim moot, we do not reach this question, or resolve the split, because the
question is not properly before us.” Id. at 1528–29. The majority then applied a “straightforward
application of well-settled mootness principles” and held that “[i]n the absence of any claimant’s
opting in, respondent’s suit became moot when her individual claim became moot . . . .” Id. at 1529.
Defendant contends that the Genesis holding compels a determination here that plaintiff’s claim is
moot and amendment is futile.
Genesis is distinguishable from the instant case. The Supreme Court did not decide the
question of whether an unaccepted offer that fully satisfies a plaintiff’s claim moots the claim. Neither
did the Supreme Court decide whether a pending motion for conditional certification changes the
analysis. Both of these differences are critical and convince this court that amendment is not futile.
It is not clear that defendant’s Rule 68 offer fully satisfies plaintiff’s complaint.
In response to plaintiff’s motion to amend, defendant argues that the unaccepted Rule 68 offer
fully satisfies plaintiff’s claim and therefore moots the claim. Plaintiff responds that the offer is not
fully satisfactory because (1) it contained a “no liability” clause and (2) defendant does not specify
how the costs were calculated.
Plaintiff fails to cite any case law to support the argument that defendant’s inclusion of a “no
liability” clause denies him full relief. Although a Rule 68 offer must be unconditional, a “no liability”
clause does not affect the validity of an otherwise valid Rule 68 offer. See Roska v. Sneddon, 366 F.
App’x 930, 939 (10th Cir. 2010) (discussing the purpose of Rule 68) (citing Mite v. Falstaff Brewing

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Corp., 106 F.R.D. 434, 435 (N.D. Ill. 1985) (holding that “no admission of liability” condition did not
render offer invalid)).
Plaintiff also argues defendant’s offer is not fully satisfactory because it is “devoid of any
calculations or accounting as to how the amount of the offer was determined.” (Doc. 29 at 5.)
“[C]ourts agree that a Rule 68 offer moots a case if it affords a plaintiff complete relief; however, they
disagree as to what constitutes complete relief.” Hernandez v. Asset Acceptance, LLC, 279 F.R.D.
594, 596–97 (D. Colo. 2012) (citations omitted). The Tenth Circuit has not addressed this issue. Id;
see also Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1243 (10th Cir. 2011) (“While
we have yet to address the question squarely, other circuits have concluded that if a defendant makes
an offer of judgment in complete satisfaction of a plaintiff’s claims in a non-class action, the plaintiff’s
claims are rendered moot because he lacks a remaining interest in the outcome of the case.”) (citations
omitted) (emphasis in original).
In Geer v. Challenge Financial Investors Corp., the court could not determine whether the
defendants’ Rule 68 offers fully satisfied the plaintiffs’ claims because the defendants did not describe
how their offers were calculated. No. 05-1109-JTM, 2006 WL 704933, at *3 (D. Kan. Mar. 14, 2006).
The court noted that “[a]lthough defendants do not have to prepare an itemized, detailed accounting,
the court requires more than [the] parties’ blanket claim of full judgment.” Id. (citations omitted.)
This is because a plaintiff must be able to figure out whether an offer is fully compensatory before the
plaintiff can be held accountable for the consequences of refusing an offer. See Roska, 366 F. App’x at
940–41 (quoting Arkla Energy Res. v. Roye Realty & Developing, Inc., 9 F.3d 855, 867 (10th Cir.
1993)) (“[T]he offeree must know what is being offered in order to be responsible for refusing the
offer.”); see also Sanders v. MPRI, Inc., No. CIV-08-345-R, 2008 WL 5572846, at *1 (W.D. Okla.
Oct. 16, 2008) (denying defendant’s motion to dismiss and stating, “Defendant has not shown that

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$10,500, plus reasonable attorney fees and costs, the amount of its offer of judgment, is equal to or in
excess of what Plaintiff could recover in overtime wages and liquidated damages under FLSA”).
Here, defendant offered plaintiff $4,249.74 to cover back wages, an equal amount as liquidated
damages, and reasonable attorney’s fees and costs. (Doc. 28 at 5, 7.) But defendant does not state how
it determined this amount. Without more information on defendant’s calculations, the court cannot
evaluate whether the offer fully satisfies plaintiff’s claim. Defendant has not shown that its offer of
judgment is fully satisfactory.
While plaintiff’s timely-filed motion for conditional certification is pending,
a fully satisfactory Rule 68 offer does not moot plaintiff’s case.
Even if defendant made a fully compensatory Rule 68 offer, the Tenth Circuit has not
addressed whether a plaintiff’s rejection of this offer would moot the claim when there is a pending
motion for conditional certification. See Sanders, 2008 WL 5572846, at *1 (“The Court recognizes
that there is a split of authority as to whether a settlement or offer of judgment as to the named Plaintiff
which would fully satisfy his or her economic claim moots an FLSA collective action which has not
been conditionally certified and/or in which no other person has joined as plaintiff.”)
In Lucero v. Bureau of Collection Recovery, Inc., the Tenth Circuit held that “a named plaintiff
in a proposed class action for monetary relief may proceed to seek timely class certification where an
unaccepted offer of judgment is tendered in satisfaction of the plaintiff’s individual claim before the
court can reasonably be expected to rule on the class certification motion.” 639 F.3d at 1250.
Reasoning that any interest a class has in a case exists when the case is filed, the court decided that an
offer of judgment should not prematurely moot the case. See id. But, importantly, the court also stated
that it was not deciding “the impact of a Rule 68 offer of judgment made in a collective, or ‘opt-in’
action.” Id. (citations omitted).

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Recently, in Perez v. Pinon Management, Inc., the District of Colorado concluded that the
Tenth Circuit would likely extend Lucero to collective action cases. No. 12-CV-00653-MSK-MEH,
2013 WL 1149567, at *4–6 (D. Colo. Mar. 19, 2013). Reasoning that Lucero was concerned with the
timely filing of a motion to certify, Perez held that a Rule 68 offer should not moot a plaintiff’s claims
where a plaintiff diligently filed a motion to certify a collective class. Id. at *6; see Roble v. Celestica
Corp., 627 F. Supp. 2d 1008, 1013–14 (D. Minn. 2007) (discussing how allowing a defendant to moot
plaintiff’s claims by making a Rule 68 offer days before plaintiff files for certification “would frustrate
the FLSA’s collective action provision allowing for the aggregation of small claims . . . .”); see also
Velasquez v. Digital Page, Inc., 842 F. Supp. 2d 486, 488 (E.D.N.Y. 2012) (“[C]ourts are wary of
attempts by defendants to evade FLSA collective actions by making Rule 68 offers of judgment at the
earliest possible time.”) (internal quotation marks and citation omitted).
Here, plaintiff filed a motion for conditional certification (Doc. 11) in the same month as his
complaint and before defendant made its Rule 68 offer. Now, plaintiff seeks to add another named
plaintiff. It would frustrate the FLSA’s purpose to allow plaintiff to be “picked off” by defendant’s
offer, especially before the court has ruled on plaintiff’s motion for conditional certification and when
another plaintiff seeks to join the case. See, e.g., Perez, 2013 WL 1149567 *4–6.
For these reasons, the court retains jurisdiction over this case and determines that amendment is
not futile. Plaintiff is ordered to file the amended complaint within seven days of this Memorandum
and Order. Once the amended complaint is on file, plaintiff may file an amended motion to
conditionally certify the class. Once an amended motion to conditionally certify the class is on file, the
court will deny the pending motion (Doc. 11) as moot.

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IT IS THEREFORE ORDERED that plaintiff Matthew B. Michaels’s Motion to Amend
Complaint (Doc. 26) is granted. Plaintiff is ordered to file the amended complaint within seven days
of this Memorandum and Order.
Dated this 29th day of July, 2013, at Kansas City, Kansas.

s/ Carlos Murguia
CARLOS MURGUIA
United States District Judge

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