Appeal on the Merits Untimely, and Costs Award to Defendant Under Rule 68 Affirmed, in FLSA Case

In a hectic end to 2020, we almost overlooked an interesting appellate procedure opinion affecting FLSA cases, Vasconcelo v. Miami Auto Max, Inc., 981 F.3d 934 (11th Cir. 2020). In Vasconcelo, the Eleventh Circuit dismissed an FLSA plaintiff’s appeal on the merits as untimely; affirmed the district court’s attorneys’ fees award, which awarded less than the plaintiff had sought; and affirmed the district court’s application of Rule 68 to tax costs against the plaintiff.

Vasconcelo worked as a sales associate at a car dealership. He brought an action against the dealership and its owner, asserting various claims under FLSA and seeking $6,397.65 in unpaid wages plus an equal amount of liquidated damages, for a total of $12,795.30.

Before trial, the dealership made an offer of judgment under Fed. R. Civ. P. 68, offering $3,500 “inclusive of liquidated damages, plus a reasonable amount of attorney[’s] fees and costs incurred to date,” with a stipulation that any resulting judgment would not be construed as an admission of liability. Vasconcelo rejected the offer and the case proceeded to trial. The jury awarded Vasconcelo $97.20 in damages, and the district court entered final judgment in that amount.

Vasconcelo moved to amend the judgment to add liquidated damages pursuant to the FLSA, and to tax his costs and attorneys’ fees against the defendant pursuant to the FLSA. The defendant moved pursuant to Rule 68 to tax their post-offer costs against Vasconcelo. Referring the costs and fees issues to a magistrate judge, the district court granted the motion to amend, and issued a final judgment for $194.40, representing the amount awarded by the jury plus an equal amount in liquidated damages. Nearly three months later, the district court adopted the magistrate court’s report and recommendation, which awarded Vasconcelo less than he had requested in fees and taxed the dealership’s post-offer costs to Vasconcelo. Vasconcelo appealed.

The Eleventh Circuit, in an opinion written by Judge William Pryor and joined by Judges Hull and Marcus, first considered the timeliness of Vasconcelo’s appeal of the $194.40 award. Vasconcelo filed his notice of appeal within 30 days of the order awarding attorneys’ fees and costs, but not within thirty days of the judgment awarding $194.40 in damages. Vasconcelo argued that Shelton v. Ervin, 830 F.2d 182 (11th Cir. 1987), in which the Eleventh Circuit had held that a final determination as to attorneys’ fees was required as part of the final appealable judgment in an FLSA case, made his appeal timely. But Shelton’s holding no longer stands after the Supreme Court’s decision in Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988). In Budinich, the Court adopted “a uniform rule that an unresolved issue of attorney’s fees for the litigation in question does not prevent judgment on the merits from being final.” Id. at 202. Thus Vasconcelo’s appeal of the damages award was untimely.

Turning to the award of fees and costs, the Eleventh Circuit affirmed the fee award, finding that the district court acted within its discretion, in light of Vasconcelo’s limited success at trial, when it awarded less in fees than Vasconcelo had requested. The court also affirmed the award of costs to the defendant, rejecting Vasconcelo’s argument that Rule 68 did not apply in FLSA cases: “Rule 68 applies in actions brought under the Fair Labor Standards Act no less than in any other case.” The court also rejected the claim that the offer of judgment was ambiguous; the comma made clear that the $3,500 was “inclusive of liquidated damages,” but not of “a reasonable amount of attorney[‘s] fees,” which would be added separately. The court also found no clear error in the district court’s “implicit factual finding” that the defendant’s non-pecuniary interest in avoiding a jury verdict was not worth more than the $3,305.60 difference between the amount awarded by the jury in damages ($194.40) and the $3,500 offered in the defendant’s offer of judgment.

Posted by Valerie Sanders.

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