Manufacturing Mootness

Federal courts of appeals deny petitions for rehearing every day and, unless a judge on the court dissents, there is seldom an opinion accompanying the denial. A case from the 11th U.S. Circuit Court of Appeals offers an exception to the rule and a lesson for lawyers who might be thinking about pushing the envelope of appellate advocacy.

Perez v. Sanford-Orlando Kennel Club would appear to be a garden-variety wage and hour dispute under the Fair Labor Standards Act, or FLSA. The amount of money involved in the case was just a couple thousand dollars. Yet, the defendants’ attorney risked sanctions (hinted at but not imposed by the court of appeals) or, at a minimum, scorn and opprobrium, for the tactics he employed in an effort to avoid a precedent he feared.

At trial, a jury found in favor of plaintiff and against most of the defendants, awarding $2,100 in damages. Both sides appealed, the defendants challenging the judgment and the plaintiff challenging the court’s failure to award him liquidated damages. After briefing and oral argument, the parties effectively settled their dispute, with defendants agreeing to pay the $2,100 judgment plus interest, as well as attorneys’ fees of about $29,000. They even filed a satisfaction of judgment with the trial court.

But nobody told the court of appeals. In fact, the court’s opinion makes clear that this omission was intentional. The defendants had two other FLSA cases pending in the trial court raising the same issues. Apparently thinking they could create a no-lose situation for themselves, the defendants chose to let the appeal proceed, figuring that if the court came out their way, they would have a good precedent to invoke in the pending cases (and any others that came down the pike), a result they must have thought worth the $31,000 and change they had paid to “settle” the first case. And if the court of appeals ruled against them, creating unfavorable precedent, well, they had an answer for that as well: file a petition for rehearing, seeking to have the court’s opinion vacated on the ground that the appeal was mooted when the defendants satisfied the judgment — more than three months before the court issued its decision.

Not surprisingly, the court was none too pleased by the defendants’ gamesmanship. It didn’t help matters that the defendants filed a supplemental brief in the court of appeals on a particular merits issue after oral argument and after settling the case, but did not mention at that time that the case was moot. Even more troubling, the defendants asked the trial court in the two pending cases to stay proceedings pending the outcome of the court of appeals’ decision in the Perez case — an outcome they would later argue was invalid because of the settlement that had occurred before they sought the stay.

Given all of these circumstances, the court of appeals denied the petition for rehearing, holding that the appeal was not moot because the parties clearly indicated their intent to pursue their appeals, even after the putative settlement.  That conclusion is no doubt correct, though left unsaid by the court is the fact that the defendants apparently intended to pursue their appeal only if they won.

This posting is intended only to inform, not to provide legal advice; and readers should seek professional advice for specific applications of the information.

Bruce P. Merenstein
Schnader Harrison Segal & Lewis LLP
www.schnader.com

Advertisements
Explore posts in the same categories: Appellate Law, Bruce Merenstein

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: