Garcia Espindola v. Pizza Stop Corp.
- Vernon Broderick
- 1:19-cv-01026
- U.S. District Court · Southern District of New York
- 3
In Garcia Espindola v. Pizza Stop Corp., Judge Broderick ordered judgment under Rule 68 despite criticizing the parties’ effort to avoid review of their wage settlement.
The plaintiffs and defendants in this Fair Labor Standards Act case were affected by the entry of judgment under their Rule 68 offer and acceptance; the case was closed.
What happened
Cesario Garcia Espindola and the other plaintiffs sued Pizza Stop Corp. and the other defendants under the Fair Labor Standards Act. The parties reported reaching a settlement after mediation, then submitted an offer and acceptance of judgment under Rule 68.
The court said the parties’ sequence of actions conflicted with the purpose of a prior ruling requiring court or Department of Labor approval for many wage settlements. The court nevertheless concluded that a later Second Circuit decision required it to enter judgment under Rule 68.
Judge Vernon S. Broderick ordered judgment entered according to the parties’ Rule 68 offer and acceptance. He also directed the Clerk to terminate open motions and close the case.
The detailed version
- Garcia Espindola v. Pizza Stop Corp. · No. 1:19-cv-01026
- Vernon Broderick
- Jan. 14, 2021
Background
The parties submitted a December 11, 2020 letter describing their proposed settlement, the circumstances surrounding it, and why they believed resolution under Federal Rule of Civil Procedure 68 was appropriate. The opinion states that the parties first reported settlement on October 15, 2020, after participating in mediation on September 9, 2020. The court then ordered them to disclose the settlement terms and explain why the settlement was a fair and reasonable compromise. Days later, the parties filed Rule 68 materials consisting of an offer and acceptance of judgment.
Legal framework
The Fair Labor Standards Act, a federal wage-and-hour law, generally requires court or Department of Labor approval of settlements because of concerns about workers’ wages and unequal bargaining power. The court noted, however, that the Second Circuit had later held that court approval is not required for Rule 68(a) offers of judgment settling Fair Labor Standards Act claims. Rule 68(a) allows a defending party to offer judgment on specified terms; if the opposing party accepts within the required period, the court clerk must enter judgment.
Court’s reasoning
Judge Vernon S. Broderick stated that the Second Circuit’s decision compelled entry of judgment. He nevertheless criticized the parties’ conduct, reasoning that reporting settlement first and filing the Rule 68 offer and acceptance afterward conflicted with the purpose of the earlier settlement-approval requirement. He warned that the current system could encourage parties to avoid that review by submitting Rule 68 materials after reaching a settlement agreement.
Disposition
The court ordered that judgment be entered in accordance with the parties’ previously filed Rule 68 offer and acceptance. The Clerk was directed to terminate any open motions and close the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.