Monday, July 22, 2013

Was Justice Kagan's Snarkiness in Genesis Healthcare v. Symczyk Justified?

By Mike Dorf

This is yet another post reacting to one of the relatively minor cases the SCOTUS decided last Term. Last week, I discussed two Takings cases (here and here) because I'm scheduled to make a presentation on those cases at the Practicing Law Institute Supreme Court Review session next week.  I'm also giving a presentation on class actions.  Most of that presentation will focus on the cases I discussed in a column in April, but in the interest of thoroughness, I've read all of the cases that relate to class actions. One such pretty minor case is Genesis Healthcare Corp. v. Symczyk, which is not directly about class actions but about a similar mechanism for representative litigation under a provision of the Fair Labor Standards Act.  That provision allows an individual with a FLSA claim to sue on behalf of herself as well as "similarly situated" individuals.  The question in the case was whether, if the individual plaintiff's claims have been mooted, she can continue on behalf of the absent similarly situated parties. The majority, in an opinion by Justice Thomas, said no.

Perhaps not surprisingly, the Court divided 5-4 ideologically, with the conservatives joining Justice Thomas and the liberals joining a dissent by Justice Kagan.  That's not surprising because, as I noted in the column linked above, the Court frequently divides ideologically about class actions--with liberals frequently regarding them as a means by which persons who could not otherwise afford to litigate can get some measure of justice, and conservatives frequently regarding them as a means by which opportunistic plaintiffs' lawyers extort money from businesses.

What was at least a little surprising was Justice Kagan's tone in dissent, which was extremely snarky. I'm not surprised that Justice Kagan was snarky.  As I've noted before, she can be Scalia-esque in going after her colleagues.  But in Genesis Healthcare, much of the snark is targeted at the lower federal courts.  To see why this is odd--and arguably unfair--requires a bit of context for the case.

The district court and the appeals court in Genesis Healthcare found that the plaintiff's individual claim was moot because she rejected--by failing to accept before the expiration of--an offer of judgment by the defendant that, by its terms, would have given her all of the individual relief she could have gotten by litigating.  The hard question for the courts was whether that mooting of the individual claim should be deemed to disqualify the individual plaintiff from representing similarly situated others.  If so, the plaintiff argued, that would permit defendants to "pick off" individual litigants, thus frustrating the group representation policy of the FLSA.  Nonetheless, the majority found that the mootness problem was insurmountable.

Justice Kagan and the dissenters did not reach the "picking off" problem because she argued in her dissent that the assumption of mootness was simply wrong.  And not just wrong but crazy, stupid wrong.  So wrong that its wrongness would be obvious to "every first-year law student."  The-appeals-courts-should-be-ashamed-of-themselves wrong.  Or as Justice Kagan put it:
So a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted-offer theo­ry. And a note to all other courts of appeals: Don’t try this at home.
Justice Kagan's core problem with what the Third Circuit did is this:  Federal Rule of Civil Procedure 68 authorizes a defendant to make an "offer of judgment"--essentially a formal settlement offer--and if the plaintiff refuses to accept the R. 68 offer but ends up achieving less at trial than the offer of judgment, then the plaintiff bears costs for the intervening period.  But, Justice Kagan points out, part (b) of R. 68 permits a plaintiff to reject an offer of settlement and part (d) makes clear that the case then goes forward, with the penalty of costs, not dismissal on mootness grounds.  And so, Justice Kagan says, Rule 68 "provides no appropriate mechanism for  a court to terminate a lawsuit without the plaintiff’s consent."

I read that and thought to myself: Can the Third Circuit judges and the judges in the other circuits that apply the same approach really be the idiots that Justice Kagan and the other dissenters think they are? So I read the lower court opinion and some of the cases cited therein, and lo and behold, I discovered that the appeals court judges are not idiots.  None of the cases says that Rule 68 authorizes a judge to dismiss a case as moot based on a rejected settlement offer.  What they say is that general principles authorize a judge to dismiss a case when the defendant offers the plaintiff everything to which the plaintiff is entitled.

Indeed, even Justice Kagan seems to acknowledge as much.  After mocking the circuit courts for reading Rule 68 in a way that none of them read it, she considers the possibility that courts have "inherent authority" to dismiss a case as moot based on an offer of full settlement.  She seems to say no, but almost immediately, there is a crucial admission.  Justice Kagan writes:
To be sure, a court has discretion to halt a lawsuit by entering judgment for the plaintiff when the defendant uncondi­tionally surrenders and only the plaintiff’s obstinacy or madness prevents her from accepting total victory.
Why isn't that this very case?  Justice Kagan goes on:
But the court may not take that tack when the supposed  capitulation in fact fails to give the plaintiff all the law authorizes and she has sought. And a judgment satisfying an individual claim does not give a plaintiff ... exercising her right to sue on behalf of other employees all that she has requested in the complaint (i.e., relief for the class).
(Citations and internal quotation marks omitted.)

Right, but now it's not at all clear that Justice Kagan is making anything but a semantic point.  The majority asks whether a claim that is moot with respect to the individual claims is nonetheless still live with respect to the representative claims.  Justice Kagan says that so long as there are representative claims, the individual claims aren't moot.  But isn't that just another way of answering the same question that the majority answers?  The majority thinks that settlement of the individual claims renders the plaintiff an improper representative of the similarly situated absentees.  The dissent thinks that the individual can still represent the absent similarly situated parties.  Fair enough.  Yet it's hard to see why that substantive difference of opinion warrants the mocking tone from Justice Kagan.

Justice Kagan does point to one legitimate oddity in the lower court case law: If a settlement offer for everything the plaintiff could get through litigation moots a case, it should only do so if the defendant in fact makes good on the offer--i.e., if the court tells the plaintiff that she must accept the defendant's offer.  The mere making of the offer should not be enough to moot the case.  Note, though, that nearly all of the circuit court cases I found that recite the rule at issue are in fact cases in which the plaintiff did accept the offer but then argued that ongoing issues made the case not moot.  It does appear that the district court in Genesis itself ordered dismissal without ordering the defendant to pay up on its offer, but if that's the core of Justice Kagan's complaint, then she and the other dissenters should have said that a mootness dismissal must come with payment, not that a mootness dismissal is absurd.

Bottom Line: Justice Kagan comes across as a bit of a bully in this dissent.  The entertainment value of such bullying is dubious in general but doubly dubious where, as here, it appears largely unjustified as a substantive matter.

38 comments:

David Ricardo said...

Question:

If the principle stands that when a defendant grants all of the relief that a plaintiff seeks (and actually provides that relief) then the case is rendered moot, does this not validate that part of Justice Scalia’s dissent in Windsor where he argues the Court had no right to decide the Windsor case?

Once the government declined to defend the ruling that Ms. Windsor was entitled to a refund of the Estate Tax it seems that consistency (always a difficult concept with the Court) required it to dismiss the Windsor case and that the Court had no right to go forward with a ruling just as Justice Scalia argued. Based on the explanation Mr. Dorf provides here, it seems correct to conclude that in Windsor the outcome was correct but the vehicle that produced that outcome was in fact fatally flawed.

AF said...

On my reading, Justice Kagan's snark is limited to what you call, with a great deal of understatement, a "legitimate oddity" -- namely, that an unaccepted settlement offer can moot a damages claim, without the plaintiff receiving any money. That is indeed "not just wrong but crazy, stupid wrong. So wrong that its wrongness would be obvious to "every first-year law student." The-appeals-courts-should-be-ashamed-of-themselves wrong." How can a damages claim possibly be moot if the plaintiff has not received any money?

As far as I can tell, it is that aspect of the lower court's decision to which Kagan directs her ridicule (pp. 2-5 of the slip opinion). She does go on to say that an offer of settlement would not moot an FLSA case even if the court were to enter judgment in the plaintiff's favor against the plaintiff's wishes, but she makes it clear that this proposition is "less preposterous" than the one accepted by the lower court: "That course would be less preposterous than what the court did here; at least Smith, unlike Symczyk, would get some money. But it would be impermissible as well." (p. 7)

So my bottom line is that your criticism of the dissent is off base. Justice Kagan's ridicule is directed toward a legitimately ridiculous aspect of the lower court's decision, and her "substantive difference of opinion" is not couched in snark.

Michael C. Dorf said...

AF's reading of the dissent is generous to Justice Kagan, mostly because of the following line, which I quoted: "So a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted-offer theo­ry. And a note to all other courts of appeals: Don’t try this at home." As I noted in the post, so far as I was able to ascertain, none of the other courts of appeals has held that a case is mooted by an unaccepted offer without the defendant being required to pay up. Therefore, it looks very much like the thing that Justice Kagan is mocking is mootness-by-unaccepted offer, even if there is a forced settlement.

Perhaps the best that can be said for Justice Kagan's tone in dissent is that she intended it only with respect to what the district court did in the case but wrote it in a way that applies more broadly. To my mind, this is yet another reason why Justices should avoid snark in opinions, even when addressing crazy-stupid positions. Leave the snark for the bloggers!

Michael C. Dorf said...

TDPE raises an interesting question. To my mind, there are some differences. First, in a case like Windsor (or Perry for that matter) the executive branch will enforce the law absent a court order. Indeed, what the executive branch wants is a court order telling it not to enforce the law, but won't do that voluntarily, because the executive recognizes the dangers of asserting a general non-enforcement power. Second, in Windsor, even if the government could be thought to be offering the plaintiff all that the plaintiff wants, it's the government defendant, not the plaintiff, that wants to keep the case alive. And third, for a set of reasons that I and others have discussed at length, the government is in a different position from ordinary defendants when taking an enforce-but-don't-defend position. I agree with those who say that this is an awkward position but I think that there are circumstances in which it's less bad than the alternatives of unilateral executive non-enforcement (which is subject to abuse by a President with idiosyncratic views of the Constitution) versus full-on enforcement and defense (which raises concerns about the President's failure to make any independent assessment about constitutionality). One may or may not find any or all of these distinctions fully persuasive, but they show that it is possible to think that the liberals plus Justices Kennedy and Alito are not being logically inconsistent in their pairs of votes on the justiciability questions in Genesis and Windsor.

AF said...

You don't seem to dispute that the Third Circuit's holding in the particular case before Justice Kagan was preposterous -- not to mention, which I suspect is what was motivating Justice Kagan, deeply unfair. I'm not sure why the fact that different cases applying the same principle are less preposterous makes Justice Kagan's tone unjustified -- particularly when she explicitly states that such cases are "less preposterous."

AF said...

Furthermore, the Third Circuit's mootness-by-unaccepted-offer theory is absurd regardless of whether judgment is in fact entered in favor of the plaintiff. An unaccepted offer in itself can never plausibly lead to mootness.

Michael C. Dorf said...

AF: Your last two comments appear to contradict each other. First you say that Justice Kagan really was only targeting the Third Circuit, not the other circuits to which she refers, so that the snark is reserved for the claim that a case is moot when a defendant makes an offer for all that a case is worth and the plaintiff rejects it. But then you say that it is also "absurd" to declare a case moot when a plaintiff rejects an offer--even an offer for everything a plaintiff wants. So you yourself think that the circumstances are comparable--even though you also say that the approach in this case is, in Justice Kagan's terms, "less preposterous." But still absurd?

Anyway, one final point and then we'll just have to agree to disagree: I think you're wrong about an unaccepted offer, and as the language I quoted in the post shows, even Justice Kagan seems to acknowledge this. If a defendant offers the plaintiff everything the plaintiff could have received by litigation, and the plaintiff still rejects the offer, the court is authorized to enter judgment--which then moots the case.

Michael C. Dorf said...

Just to be clear about that last point: the court enters judgment that orders the defendant to pay on the terms of its rejected offer.

AF said...

Let me clarify my position. It is absurd to declare a case moot because of an unaccepted offer of judgment. If, in a particular case, the unaccepted offer of judgment is converted into a judgment in favor of the plaintiff, it is not absurd to declare the case moot because of the entry of judgment. But in that case, the court would not be relying on a mootness-by-unaccepted-offer theory, it would be relying on a mootness-by-entry-of-judgment theory.

So if the other cases purporting to rely on the mootness-by-unaccepted-offer theory involved entry of judgment in favor of the plaintiff, they are not absurd in their result. But the principle as stated is absurd, because it logically leads to the outrageous result in Symczyk.

Michael C. Dorf said...

Okay, so I amend my position to say we'll have to agree to agree about the substance, and agree to disagree about the scope of Justice Kagan's snarkiness.

Hashim said...

Mike/AF,

The most important problem with Justice Kagan's snarkiness is not just that it was unjustified, but that it caused her to largely ignore the QP.

She claimed that it was unnecessary to reach the QP whether an FLSA collective action is moot when the named pltfs' individual claims have been mooted, because she asserted that the named pltfs' individual claims will never be mooted. As Mike demonstrates, however, that is indisputably wrong: every court of appeal to have addressed the question has held that a maximum-recovery Rule 68 offer moots the named pltfs' individual claim even where the pltfs purport to reject the offer; the only minor disagreement is whether the offer alone moots the claim or whether the court must force judgment on the named pltfs based on the offer. Although that disagreement matters to the named pltfs, it is utterly irrelevant to the QP concerning the class. (And as an aside, even the "offer alone" position is not as "preposterous" as Justice Kagan and AF think: one could plausibly argue that the pltfs' injury ceases to be "fairly traceable" to the defts' challenged conduct once the pltfs reject a maximum-recovery Rule 68 offer.) Moreover, Justice Kagan inexplicably ignores the obvious possibility that a named pltf might *accept* a maximum-recovery Rule 68 offer, in which case the QP concerning class mootness definitely would be presented, albeit on slightly different facts.

Thus, the biggest problem with Justice Kagan's snark is not that it is unjustified (though it is). Rather, the real problem is that it caused her to analyze the merits of the important QP in only a solitary footnote, in contrast to Justice Thomas's lengthy explication of the relevant precedents.

Hashim said...

PS. Given that you both seem to have agreed that the "mootness by unaccepted offer" theory is "absurd," I probably shouldn't have buried in my prior comment my defense of that theory under the "fairly traceable" prong of standing.

Michael C. Dorf said...

In light of Hashim's PS, I should clarify: I think it would be unfair/a bad idea/etc, simply to hold that an unaccepted max offer moots the case--where a plaintiff has a colorable argument that the offer is not a max offer. So, if the deft offers $X and the plaintiff rejects it because the plaintiff says that the max value of the case is actually $X+Y, then I think the proper procedure is for the trial court to give the plaintiff an opportunity to argue for $X+Y, and if the trial judge determines that the max value really is $X, at that point the court could give the plaintiff the option of accepting $X or nothing. (I'd have to think through how this would work for appeal: E.g., could the plaintiff take $X conditionally and still appeal? Could the plaintiff take nothing and appeal and then still get $X if he loses his appeal?)

Hashim said...

Mike,

I think there's a different, and simpler, solution to the issue posed by your clarification (which actually is implicated by *all* unaccepted offers, whether or not the court forces judgment based on the offer).

If deft offers $X but pltf alleges that it is entitled to $x+y, then the case is not moot *at all*. There is a live controversy because the parties disagree on the merits, and so the offer is rejected and a trial will occur, where the pltf might recover $x+y, $x, $0, or anything in between. (The pltf can't try to belatedly accept the $x offer if the judge/jury finds less than $x.)

By contrast, the issue in cases like Genesis is because the pltf *agrees* that $x is the maximum possible remedy. (My understanding is that defts pose the question in interrogatories, and then offer that amount.) And, where the pltf agrees about the maximum valuation but nonetheless rejects the offer, then the individual claim is definitely moot, w/ the *only* issue being whether the offer alone moots the case or whether judgment must be entered on the offer.

By the way, I note that you didn't response to my "fairly traceable" defense of the "offer alone" theory. Curious what you think.

Michael C. Dorf said...

Hash:

1) I wonder whether the limitation you have in mind is too generous to the crazy plaintiff. Suppose that plaintiff says defendant failed to pay him overtime to which he is entitled under the FLSA and that the complaint seeks $1000 for the overtime. Plaintiff refuses the offer because, he says, although the $1000 fully compensates him under the FLSA, he is also entitled to have the President joined as a R.19 party and to get an injunction ordering the President to withdraw U.S. troops from South Korea. It seems to me that the most sensible thing to do is to force the plaintiff to take the $1000 and go home, rather than to have a trial on the merits of the FLSA claim. I don't know how generalizable this sort of craziness is, but I might want to allow for some category of forced settlements for max offers that are not subject to reasonable dispute as to their max-ness. My main worry then would be about generating satellite litigation about max-ness.

2) The traceability suggestion is intriguing. I get what you're saying: It's no longer the deft's conduct that is the source of plaintiff's injury; it's the plaintiff's intransigence. But I guess that seems to me a bit too clever. After all, the deft's conduct is still a but-for cause of plaintiff's injury, if no longer a sufficient cause. I suspect, however, this is just a quibble over characterization, because it does seem to me that the issues here are mostly practical ones.

David Ricardo said...

I agree with what Mr. Dorf has said about the executive branch being unwilling to defend a statute and how that is different from a private party defendant, but his analysis involves what is good public policy but not necessarily good law. Furthermore, throw Perry into the mix where the Justices de facto mooted that case because of lack of defense by government and you get one huge set of confusions. The legislature can step in as defendant when the government punts (in Windsor), but not a private group (in Perry)??? What about a private group authorized by the legislature? Good grief.

The correct solution is legislative, not judicial. The Justices should have thrown Windsor out by denying cert effectively granting Ms. Windsor what she wanted and told the government that if they don’t like process of rendering a case effectively moot by failure to defend, fix it legislatively. Policy by judicial fiat is bad policy, whether it be liberal or conservative. This same logic applies to the discussion about mooting a case when a judge has entered an order in favor of the plaintiff. Fix it legislatively.

As a result of all of this the nation is faced with years of litigation on same sex marriage, and potentially state by state cases ad infinitum. We now have Pennsylvania where the state AG is refusing to defend the state’s ban on SSM. The current Governor may step in, but his re-election looks shaky and what happens if a new Governor declines to defend? All of this is due to the Court’s inconsistency.

T Jones said...

An interesting, but under-commented on above, element of Justice Kagen's dissent is her contention that Genesis's offer was not legitimately a "max offer" because it did not satisfy the Complaint's claim on behalf of similarly situated employees (p.8). This seems to evince a substantive (not semantic) disagreement with the majority and the courts below, which found satisfaction of the individual DAMAGE claim (ignoring the odd use of "satisfaction" where there was no actual compensation) equaled satisfaction of the entire claim, engendering the mootness discussion.

David Dean said...

It was my understanding that the plaintiff neither rejected or accepted in the trial court, but did nothing. The rule seems clear to me that it should be treated as rejected if not accepted. Genesis seems to disagree.

Also, in Genesis, she was never paid a dime. She still had a live case and it was dismissed.

Also, solicitation rules seem to keep plaintiffs from looking for other clients. So once the named plaintiffs are mooted before class certification, it would essentially stop a class action in its tracks. Seems like a cheap way to end litigation.

David Dean said...

>Anyway, one final point and then we'll just have to agree to disagree: I think you're wrong about an unaccepted offer, and as the language I quoted in the post shows, even Justice Kagan seems to acknowledge this. If a defendant offers the plaintiff everything the plaintiff could have received by litigation, and the plaintiff still rejects the offer, the court is authorized to enter judgment--which then moots the case.

How? An unaccepted offer cannot be used as evidence.


(b) Unaccepted Offer. An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs.

If you moved for dismissal on an unaccepted offer, how can you enter the offer into evidence?

Michael C. Dorf said...

In response to David Dean's last question, I think it's pretty clear that the unaccepted offer would not be offered into evidence at a trial on the merits but is made known at a settlement conference or status conference with the judge. If that's a problem under the language you quote, then it's a problem for all nine Justices, not just for me. The dissent acknowledges that a plaintiff's rejection of a truly max offer would be grounds for entry of judgment for the plaintiff (along with payment on the terms of the rejected settlement) and dismissal of the case. Justice Kagan merely thinks that the deft didn't make a truly max offer.

David Dean said...

Ah, ok. I couldn't figure out how that worked. It seems like its using the rule for something it wasn't meant to though. Despite the fact that rule 68 and even 408 seem to want to keep the courts out of settlement offers.

I think your comments takes Genesis to the next logical case. Where it's actually rejected, instead of accepted or unaccepted. It seems to me, as stated elsewhere above, that the issue is that the rule 68 offer doesn't cover other similarly situated plaintiffs. Which seems like the plaintiff can always say its not a full offer. FLSA and the rules seem to allow for that. Entering a judgment on a rejected offer really would be shoving it down the plaintiffs throats and I don't think the case law supports that.

Bart Torvik said...

In a normal case where the plaintiff is being intransigent about damages, the defendant can stiuplate to liability and move for summary judgment on damages of X. That puts the onus on the plaintiff to show a material fact dispute exists regarding damages. If it cannot, the judge enters summary judgment in the amount of X, and the plaintiff can appeal if it wishes. If it can, there's a trial. So summary judgment is the correct process, not some extra-judicial process of forced, take-it-or-leave it settlement that is not authorized by the rules.

It seems the impetus for this mootness morass is that the defendant wants a way to get rid of the case without an admission or finding of liability. The defendant wants this for the obvious reason that there are others "similarly situated" and the defendant doesn't want to admit liability as to them. So they've come up with the clever idea of arguing that an offer of full damages "moots" the case -- it gets rid of the lawsuit without a finding of liability by just vaporizing the case or controversy.

Justin said...

Is there a chance you are all overthinking these hypotheticals in light of Rule 11?

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Aiyasi said...

'N interessante, maar onder-kommentaar op bogenoemde element van Justisie Kagen se verdeeldheid is haar bewering dat Genesis se aanbod was nie wettig 'n "maksimum aanbod" omdat dit nie die klagte se eis voldoen namens soortgelyk geleë werknemers (p.8). Dit lyk na 'n substantiewe (nie semantiese) meningsverskil met die meerderheid en die howe hieronder, wat gevind bevrediging van die individu SKADE aanspraak op die dag lê (ignoreer die vreemde gebruik van "tevredenheid" waar daar geen werklike vergoeding) geëwenaar bevrediging van die hele eis, kweek die mootness bespreking.
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