Settlement Bars Appeal of Order Denying Certification of FLSA Collective Action
By Cindy Caplan and Jing Li
In Smith v. T-Mobile USA, the Ninth Circuit held that an appeal of a district court’s denial of conditional certification of an FLSA collective action is moot where the named plaintiffs settled all of their individual claims prior to appeal. Plaintiffs Mentha Smith and Justin Gossett filed an FLSA collective action against T-Mobile for unpaid wages and meal and rest break violations, seeking to represent a class of 25,000 current and former T-Mobile USA employees. After the District Court denied conditional certification of the class, Smith and Gossett settled all of their individual claims with T-Mobile. Hoping to preserve their ability to appeal the District Court’s denial of certification while still settling their individual claims, plaintiffs agreed to a stipulated judgment that included a provision in which they reserved their right to appeal the denial of conditional certification and to continue to prosecute the case on behalf of the putative class should their appeal be successful. On appeal, the Ninth Circuit ruled that plaintiffs did not have standing to pursue the appeal, thus rendering the appeal moot. The Court reasoned that “a FLSA plaintiff who voluntarily settles his individual claims prior to being joined by opt-in plaintiffs and after the district court’s certification denial does not retain a personal stake in the appeal so as to preserve our jurisdiction.” Because Smith and Gossett did not have a personal stake in the appeal, their appeal was declared moot and they were barred from recovering attorneys’ fees, liquidated damages, and punitive damages relating to the collective action claims. The decision is here.