IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

ANTHONY ROLLINS §

§

VS. § ACTION NO. 4:05-CV-408-Y

§

SYSTEMS INTEGRATION, INC. §

ORDER GRANTING DEFENDANT’S MOTION TO

DISMISS FOR LACK OF SUBJECT-MATTER JURISDICTION

On June 27, 2005, plaintiff Anthony Rollins (“Rollins”) filed

suit, “on his behalf and on behalf of those similarly situated,”

against defendant Systems Integration, Incorporated (“Systems

Integration”), for unpaid overtime wages under the Fair Labor

Standards Act (“the FLSA”), 29 U.S.C. § 201, et seq. The crux of

Rollins’s complaint is that during certain periods of his employment, Systems Integration intentionally mischaracterized his

employment as an independent contractor to avoid paying him earned

overtime wages, in violation of section 207 of the FLSA. Rollins

sued Systems Integration for his overtime pay, liquidated damages,

and reasonable attorney’s fees and costs. Systems Integration

delivered an offer of judgment under FED.R.CIV.P. 68 to Rollins on

July 7, 2006. Systems Integration claims this offer of judgment

affords Rollins the full relief he would be entitled to if he

prevailed on the merits of his claims, and possibly more. Rollins

has rejected this offer.

Systems Integration then filed the instant motion to dismiss

Rollins’s cause of action for lack of subject-matter jurisdiction

 

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under FED.R.CIV.P. 12(b)(1). The motion presents the issue of

whether the Court now lacks subject-matter jurisdiction because

System Integration’s offer of judgment moots Rollins’s claims since

it accords Rollins, at a minimum, the full relief he would be

entitled to if he were to prevail on the merits of his claims. The

Court concludes that System Integration’s offer of judgment does

moot Rollins’s claims under the FLSA thereby divesting the Court of

subject-matter jurisdiction since there is no longer a case or

controversy. 

I. FACTUAL BACKGROUND

According to Rollins’s complaint, Systems Integration employed

Rollins as an electrician journeyman in March 2002. Beginning in

July 2003, Systems Integration informed Rollins that he would no

longer be considered an employee, but would be paid as an independent contractor. Although none of Rollins’s duties, responsibilities, or reporting supervisor relationships changed, Rollins ceased

to receive overtime pay at one and one-half times his hourly rate

for hours he worked in excess of 40 hours per work week. Rollins

remained characterized as an independent contractor until December

2003. 

In December 2003, Systems Integration changed Rollins’s status

back to that of an employee. Again, none of Rollins’s duties,

responsibilities, or reporting supervisory relationships changed.

 

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Rollins, however, was paid overtime wages for any hours he worked

in excess of 40 hours in a work week during this period. Rollins’s

status as an employee of Systems Integration continued through

November 2004. 

Starting in December 2004, Systems Integration again converted

Rollins’s status from employee to that of an independent contractor. As before, Rollins was not compensated overtime wages for

hours he worked in excess of 40 hours per work week. This

continued until Systems Integration terminated Rollins’s employment

in May 2005. 

As mentioned above, Rollins filed suit against Systems

Integration for its failure to pay him overtime wages during the

times Systems Integration classified him, in violation of the FLSA,

as an independent contractor. Rollins requested that the Court

award him his back overtime wages, liquidated damages equal to the

amount of his unpaid overtime wages in accordance with Section

216(b) of the Act, costs and attorney’s fees, and pre- and

postjudgment interest. 

On July 7, 2006, Systems Integration delivered to Rollins an

offer of judgment in the amount of $5500 under FED.R.CIV.P. 68.

Despite adamantly denying any wrongdoing, Systems Integration

calculated the amount of overtime pay Rollins would be entitled to

if he were to prevail in this case, doubled it to account for his

claim for liquidated damages, and left the reminder of its $5500

 

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offer to cover his costs and reasonable attorney’s fees up to the

date it tendered its offer of judgment. According to the evidence

Systems Integration submitted, Rollins was employed as an independent contractor from June 16, 2003, until June 22, 2003; July 7,

2003, until August 17, 2003; September 15, 2003, until November 16,

2003; and, from December 6, 2004, until April 24, 2004. Systems

Integration submitted time cards that reflect Rollins worked a

total of 28.75 hours of overtime during the times he was classified

as an independent contractor. Calculating Rollins’s rate of pay at

one and one-half times his regular hourly rate during the relevant

periods, Systems Integration determined that Rollins would be

entitled to $258.75 in back overtime wages if he were to prevail in

this litigation. Systems Integration’s offer of judgment of $5500

included the $258.75 in back overtime wages, plus an additional

$285.75 as liquidated damages under section 216(b), and $4982.50

for Rollins’s costs and reasonable attorney’s fees incurred up to

the date the offer of judgment was tendered. Rollins has rejected

the offer claiming it “is insufficient as to [his] total damages.”

 

II. ANALYSIS

Under FED. R. CIV. P. 12(b)(1), a court may dismiss a case for

lack of subject-matter jurisdiction. But unlike a motion to

dismiss under FED. R. CIV. P 12(b)(6), a trial court is free to weigh

evidence and satisfy itself of its authority to preside over the

 

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matter. See MDPhysicians & Assocs., Inc. v. State Board of Ins.,

957 F.2d 178, 181 (5th Cir. 1992). “A court may base its disposition of a motion to dismiss for lack of subject-matter jurisdiction

on (1) the complaint alone; (2) the complaint supplemented by

undisputed facts; or, (3) the complaint supplemented by undisputed

facts plus the court’s resolution of disputed facts.” Robinson v.

TCI/US West Communications, 117 F.3d 900, 904 (5th Cir. 1997).

The standard for reviewing a 12(b)(1) motion depends on

whether the defendant is making a facial or factual attack on the

plaintiff’s complaint. See Paterson v. Weinberger, 644 F.2d 521,

523 (5th Cir. 1981). A facial attack is made by the mere filing of

a Rule 12(b)(1) motion, at which point “the trial court is required

merely to look to the sufficiency of the allegations in the

complaint because they are presumed to be true.” Id. If those

jurisdictional allegations sufficiently allege a claim for recovery

directly under the Constitution or laws of the United States, the

complaint stands and the federal court must entertain the suit.

Id.; see also Bell v. Hood, 327 U.S. 678, 681-82 (1946)(“Before

deciding that there is no jurisdiction, the District Court must

look to the way the complaint is drawn to see if it is drawn so as

to claim a right to recover under the Constitution and laws of the

United States.”). “Jurisdiction, therefore, is not defeated . . .

by the possibility that the averments might fail to state a cause

 

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of action on which [plaintiff] could actually recover.” Bell, 327

U.S. at 682. 

Conversely, in a factual attack, the defendant submits

affidavits, testimony, or other evidentiary materials in support of

the motion. Paterson, 644 F.2d at 523. In that circumstance, “a

plaintiff is also required to submit facts through some evidentiary

method and has the burden of proving by a preponderance of the

evidence that the trial court does have subject-matter jurisdiction.” Id.; see also Middle South Energy, Inc. v. City of New

Orleans, 800 F.2d 488, 490 (5th Cir. 1986). Where a court reviews

extrinsic evidence for a Rule 12(b)(1) motion, no presumption of

truthfulness attaches to the plaintiff’s allegations. Williamson

v. Tucker, 645 F.2d 404, 412-13 (5th Cir. 1981). Moreover, “the

existence of disputed material facts will not preclude the trial

court from evaluating for itself the merits of the jurisdictional

claims.” Id. But regardless of whether the jurisdictional attack

is facial or factual, a motion to dismiss for lack of subject-matter jurisdiction should be granted only if it appears

certain that the plaintiff cannot prove any set of facts in support

of his claim that would establish the Court’s jurisdiction. See

Home Builders Ass’n v. City of Madison, 143 F.3d 1006, 1010 (5th

Cir. 1998). 

It is well settled that “federal courts lack jurisdiction to

decide moot cases because their constitutional authority extends

 

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only to actual cases or controversies.” Iron Arrow Honor Society

v. Heckler, 464 U.S. 67, 70 (1982). Generally, a settlement

renders moot any case between the parties growing out of the

settlement even if the parties remain at odds over particular

issues that they are litigating. See Lake Coal Co., Inc. v.

Roberts & Schaefer Co., 474 U.S. 120 (1985)(vacating judgment of

lower court and remanding with instructions to dismiss case as moot

when there was a “complete settlement of the underlying causes of

action”). 

In his response to Systems Integration’s motion to dismiss,

Rollins argues that “if damages were calculated reflecting his

status as an employee at all times during his employment with

[Systems Integration], [his] wages, including overtime, would

greatly exceed $5500.” Although Rollins disputes the fact that

$5500 is sufficient to afford him full relief, he provides no

evidence to support that contention. Instead, Rollins argues that

“he should not be obligated to tender substantial proof of [his]

allegations at this stage of the litigation.” 

But Systems Integration has made a factual attack to the

subject-matter jurisdiction of the Court. Under that circumstance,

Rollins is required to submit evidence and the burden rests with

him to establish by a preponderance of the evidence that the Court

does in fact enjoy subject-matter jurisdiction over his case.

Paterson, 644 F.2d at 523. Without any rebuttal evidence, the

 

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Court is left with only the conclusory assertion in his brief that

the amount Systems Integration offered is insufficient. Thus, the

Court will treat the evidence submitted by Systems Integration as

unrebutted. 

In pertinent part, Rule 68 provides:

At any time more than 10 days before the trial

begins, a party defending against a claim may

serve upon the adverse party an offer to allow

judgment to be taken against the defending

party for the money or property to the effect

specified on the offer, with costs then accrued . . . . If the judgment finally obtained by the offeree is not more favorable

than the offer, the offeree must pay the costs

incurred after the making of the offer. 

FED.R.CIV.P. 68. The purpose of Rule 68 is to encourage settlement

and avoid litigation. Marek v. Chesny, 473 U.S. 1, 5 (1985).

“Rule 68's policy of encouraging settlements is neutral, favoring

neither plaintiffs nor defendants; it expresses a clear policy of

favoring settlement of all lawsuits.” Id. at 10. And Rule 68

allows for the parties in a suit to evaluate the costs and risks of

litigation, and to balance that against the likelihood of success

after trial on the merits. Id. at 5. 

Here, Systems Integration made an offer of judgment designed

to afford Rollins all relief he would be entitled to under section

216(b) of the FLSA if he succeeded on the merits. First, Systems

Integration’s offer included the total amount of overtime wages

Rollins would be entitled to if he prevailed in his suit. To

support this, Systems Integration submitted all of Rollins’s time

 

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cards establishing the total hours of overtime Rollins worked

without receiving overtime pay and submitted evidence establishing

the rate of Rollins’s overtime pay. Rollins has submitted no

evidence in rebuttal. Second, the offer included an equal amount

of the unpaid overtime wages as liquidated damages Rollins would be

entitled to if he succeeded in his suit. And, third, the offer

included a specific amount to cover Rollins’s costs and reasonable

attorney’s fees incurred up to the time Systems Integration

tendered its offer. Again, although Rollins states in his

responsive pleading that the amount Systems Integration tendered is

insufficient, he has offered no evidence to substantiate that

claim. Thus, although Systems Integration’s offer included a

specific dollar amount for reasonable attorney’s fees and costs

incurred up to the date it tendered its offer, because Rollins has

failed to present any evidence in rebuttal, the Court concludes

that its offer of judgment sufficiently covers all of Rollins’s

reasonable costs and attorney’s fees incurred up to the point the

offer was tendered. 

Therefore, at the point Systems Integration made that offer,

Rollins’s legal dispute became moot because he no longer had any

case or controversy. Even though Rollins rejected the offer, “you

cannot persist in suing after you’ve won.” Greisz v. Household

Bank, 176 F.3d 1012, 1015 (7th Cir. 1999)(Posner, J.). Rollins’s

case became moot because he no longer had a legally cognizable

 

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interest in the outcome of the litigation. City of Erie v. Pap’s

A.M., 529 U.S. 277, 287 (2000). Systems Integration offered

exactly what Rollins would be entitled to if he prevailed in this

suit. At that point, the Court lost subject-matter jurisdiction

over this case. See, Rand v. Monsanto Company, 926 F.2d 596, 597

(7th Cir. 1991)(Easterbrook, J.)(“Once the defendant offers to

satisfy the plaintiff’s entire demand, there is no dispute over

which to litigate . . . and a plaintiff who refuses to acknowledge

this loses outright, under FED.R.CIV.P. 12(b)(1), because he has no

remaining stake.”); MacKenzie v. Kindred Hospitals East, L.L.C.,

276 F.Supp.2d 1211, 1219 (M.D.Fl. 2003)(holding offer of judgment

in excess of amount plaintiff could recover if prevailed in FLSA

suit mooted case); Ambalu v. Rosenblatt, 194 F.R.D. 451, 452-53

(E.D.N.Y. 2000)(holding plaintiff had no more stake in case after

defendant tendered offer of judgment in full amount plaintiff would

be entitled to recover); but see, Raney v. Young & Brooks, No. H05-0410, 2005 U.S.Dist. LEXIS 43813, slip op. at 2 (S.D.Tx. April

26, 2005)(holding defendant’s offer of judgment did not moot case

because it failed to offer costs and reasonable attorney’s fees).

Furthermore, although Systems Integration’s offer did not

address pre-judgment interest as prayed for in Rollins’s complaint,

he is not entitled to pre-judgment interest in claims arising under

section 216(b) of the FLSA. See Cox v. Brookshire Grocery Company,

919 F.2d 354, 357 (5th Cir. 1990)(stating “pre-judgment interest is

 

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not available for [section] 216 claims”). And although the offer

also did not mention postjudgment interest, that is moot since

Rollins would immediately receive his judgment with no time

available for interest to accrue. Finally, although Rollins

purports to bring this action “on behalf of those similarly

situated,” he has presented no evidence, and the record is devoid

of any evidence, that any other employee or former employee of

Systems Integration has consented in writing to join Rollins’s

action. See 29 U.S.C. § 216(b) (“No employee shall be a party

plaintiff to any such action unless he gives his consent in writing

to become such a party and such consent is filed in the court in

which such action is brought.”); see also LaChapelle v. OwensIllinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975)(holding plaintiff

under FLSA action has no right to represent a class). 

Fundamentally, Rollins fails to produce any evidence to

establish that Systems Integration’s offer of judgment fails to

make him whole, and as a result, fails to meet his burden establishing that the Court retains subject-matter jurisdiction.

Accordingly, the Court concludes that Systems Integration’s offer

of judgment fully accords Rollins all of the relief he would be

entitled to if he were to prevail, and thus, his case is now moot.

III. CONCLUSION

 

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For the foregoing reasons, the Court GRANTS Systems Integration’s motion to dismiss for lack of subject-matter jurisdiction.

Accordingly, the above-styled and -numbered case is DISMISSED

WITHOUT PREJUDICE. Should Systems Integration fail to pay Rollins

in accordance with its offer of judgment, Rollins is free to refile

his suit. Any unresolved motions as of the date of this order are

hereby RENDERED MOOT.

 SIGNED December 4, 2006.

 

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