United States District Court, D. Colorado
ANDREW DELGADO, on behalf of himself and all similarly situated persons, Plaintiff,
CASTELLINO CORPORATION, d/b/a Via Toscana; and ROBIN CASTELLINO, Defendants
For Andrew Delgado, on behalf of himself and all similarly situated persons, Plaintiff: Brian David Gonzales, The Law Offices of Brian D. Gonzales, Fort Collins, CO.
For Castellino Corporation, a Colorado corporation, doing business as Via Toscana, Robin Castellino, Defendants: Stephen M. Dehoff, Fortis Law Partners LLC d/b/a Friesen Lamb LLP, Denver, CO.
OPINION AND ORDER OVERRULING OBJECTIONS, ADOPTING RECOMMENDATION, AND DENYING MOTION TO DISMISS
Marcia S. Krieger, Chief United States District Judge.
THIS MATTER comes before the Court pursuant to Mr. Delgado's Objections (# 36) to the Magistrate Judge's May 20, 2014 Recommendation (# 35) that the Defendants' Motion to Dismiss (# 16) be denied, the Defendants' response (# 38), and Mr. Delgado's reply (# 40).
The issue before the Court is primarily a legal one, and thus, only a minimal factual recitation is necessary. Mr. Delgado, a former employee of a business owned by the Defendants, commenced this action alleging that the Defendants failed to pay him the minimum wage required by the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § 201 et seq., and related claims arising under Colorado's Wage Claim Act, C.R.S. § 8-4-101, and common-law breach of contract. Pursuant to 29 U.S.C. § 216(b), Mr. Delgado seeks to bring his FLSA claim as a " collective action"  on behalf of all similarly-situated employees who ultimately opt-in to such an action.
Shortly after Mr. Delgado commenced this action, the Defendants tendered an Offer of Judgment under Fed.R.Civ.P. 68, offering Mr. Delgado what the Defendants contend was the full amount of potential unpaid wages he could recover, an equal amount as liquidated damages permitted under the FLSA, costs of the action, and a reasonable attorney fee to be determined by the Court. Mr. Delgado did not accept the offer, and it eventually lapsed by its own terms.
The Defendants now move to dismiss (# 16) Mr. Delgado's FLSA claims (including the putative collective action claims) for lack of standing, arguing that their Offer of Judgment for the maximum amount recoverable by Mr. Delgado on his individual claim, whether accepted or not, operates to moot both his own individual claim and any as-yet-unadjudicated putative collective action claim.
The Court referred the Defendants' motion to the Magistrate Judge for a recommendation, and the Magistrate Judge recommended (# 35) that the motion be denied, citing to prior decisions by this Court and others on the same or similar legal questions, as discussed in greater detail below. The Defendants filed timely Objections (# 36) to the Recommendation, arguing that the Magistrate Judge misconstrued recent Supreme Court precedent
allegedly on-point. This Court reviews the objected-to portions of the Recommendation de novo. Fed.R.Civ.P. 72(b).
As will be explained in more detail below, this matter presents two separate legal questions, one embedded within the other: (i) does a defendant's tender of an Offer of Judgment for the full amount of a plaintiff's possible recovery, if unaccepted by the plaintiff, operate to render the plaintiff's claim moot and thus deprive the plaintiff of standing to pursue that claim?; and (ii) if it does, does that mootness further preclude the plaintiff from pursuing putative class-or collective action allegations in the complaint?
In recent decisions, this Court has answered the first question in the affirmative, and the second question in the conditional negative. In Miranda v. Receivables Performance Management, LLC, 2013 WL 3958367 (D.Colo. Aug. 1, 2013) (slip op.), this Court addressed the question of whether an unaccepted Rule 68 Offer of Judgment for the full amount of a plaintiff's claim operated to render that claim moot. This Court turned to Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1243 (10th Cir. 2011), for guidance. In Lucero, the plaintiff brought a putative class action claims against the defendant under the Fair Debt Collection Practices Act. The defendant made an Offer of Judgment in the full amount of the plaintiff's potential recovery, and then moved to dismiss the plaintiff's claim as moot. On appeal from the trial court's dismissal of the action as a whole, the 10th Circuit first acknowledged the general rule that " if an offer is made for a plaintiff's maximum recovery, his action may be rendered moot." 639 F.3d at 1243. It then noted that " [w]hile 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." Id ., citing Sandoz v. Cingular Wireless, LLC, 553 F.3d 913, 915 (5th Cir. 2008) and Rand v. Monsanto Co., 926 F.2d 596, 598 (7th Cir. 1991). Based on this authority, the Court reformed the somewhat ambiguous offer tendered by the defendant, deemed Ms. Miranda to have accepted it, and entered judgment in favor of Ms. Miranda consistent with the terms of the reformed offer. Implicitly, then, this Court recognized that an Offer of Judgment for the full amount of a plaintiff's claim would operate to moot that claim, even if unaccepted by the plaintiff.
This Court faced the second portion of the question above -- whether the mooting of a plaintiff's individual claim by an Offer of Judgment affects putative collective action allegations -- in Perez v. Pinon Management, Inc., 2013 WL 1149567 (D.Colo. Mar. 19, 2013) (slip op.). There, the plaintiff brought an FLSA overtime claim on behalf of herself and a putative " class," and the defendant made an Offer of Judgment in the full amount of the plaintiff's individual claim and sought dismissal of the entire action, including the putative collective action allegations, as moot. Again, this Court took its cue from Lucero. There, after a careful and thorough analysis, the 10th Circuit held that " a named plaintiff in a proposed [Rule 23] class action . . . may proceed to seek timely class certification where an unaccepted offer of judgment is ...