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Borup v. CJS Solutions Group, LLC

United States District Court, D. Minnesota

October 8, 2019

Timothy C. Borup, Individually and on behalf of all others similarly situated, Plaintiff,
v.
The CJS Solutions Group, LLC, d/b/a/ The HCI Group, Defendants.

          ORDER

          DAVID T. SCHULTZ, UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         Plaintiff Timothy C. Borup moves to strike or otherwise invalidate the purported Rule 68 Offer of Judgment Defendant CJS Solutions Group, LLC (“HCI”) made on June 12, 2019. Relying upon authority from this District and from other circuits and districts, Borup argues that-whatever the mechanism used-the Court must invalidate HCI's offer of judgment as premature in the context of a putative class and collective action. Offering competing authority, HCI contends the Court must wait to decide the issue later, if it has to decide it at all.

         Although a Rule 68 offer of judgment offered solely to the named plaintiff in a putative class and collective action does not neatly square with the rules governing those types of actions, there is no reason to declare HCI's offer ineffective as the concern Borup raises does not exist and so will not come to roost.

         RELEVANT BACKGROUND

         Borup alleges that HCI misclassified him and other “at the elbow” consultants as independent contractors and accordingly failed to provide appropriate overtime pay. He asserts two causes of action: (1) a violation of the federal Fair Labor Standards Act, filed on behalf of himself and a putative FLSA collective, and (2) a violation of the Minnesota Fair Labor Standards Act, filed on behalf of himself and a putative Minnesota class. The case has proceeded at something short of breakneck speed. Stays, the result of both stipulation and the revelation of an undisclosed, related case in the Southern District of New York, as well as discovery issues, have stalled the normal case progression.

         On June 12, 2019, HCI served Borup with a Rule 68 Offer of Judgment on his individual claim. The pertinent terms of the Offer provide:

That Judgment be entered in Plaintiff's favor in the above-captioned case for a total sum of ten thousand and twenty five dollars and zero cents ($10, 000) [sic], as well as any amount for costs of suit, attorneys' fees, and any and all other accrued costs that might be recoverable against Defendant in this action, to be determined by the Court. This Offer includes all valid claims for damages that Plaintiff has alleged against Defendant, as well as compensation for costs and reasonable attorneys' fees accrued up to the date of this Offer (to the extent that (a) reasonable attorneys' fees are included in “costs” recoverable for certain of Plaintiff's causes of action; and (b) Plaintiff has incurred any attorneys' fees).

         Decl. of T. Joseph Snodgrass, June 21, 2019, Ex. F, at 1. The Offer further requires that “as a condition of this Offer, Plaintiff agrees to execute a mutually agreeable Settlement Agreement and Release for the purpose of releasing any and all claims against Defendant.” Id. at 1-2.

         Before the fourteen day period to accept HCI's Offer of Judgment elapsed, Borup filed the present motion to strike or otherwise invalidate the Offer.[1] That period elapsed, however, before the hearing on the motion took place. Because Borup did not accept the Offer within the fourteen days, it is considered unaccepted and withdrawn. Fed.R.Civ.P. 68(a)-(b).

         ANALYSIS

         At least 14 days before trial, a defendant may offer to allow judgment to be entered against it for a specific amount, including the costs then accrued. Fed.R.Civ.P. 68(a). If the offeree declines, and subsequently obtains a judgment “not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” Id. at 68(c). The “plain purpose of Rule 68 is to encourage settlement and avoid litigation . . . . The Rule prompts both parties to a suit to evaluate the risk and costs of litigation, and to balance them against the likelihood of success upon trial on the merits.” Marek v. Chesny, 473 U.S. 1, 5 (1985).

         Borup makes several arguments as to why HCI's purported Rule 68 Offer of Judgment should be stricken or invalidated. But his argument that the Court should do so now, rather than during a hearing to determine costs, as would be the normal course, rests on a single key premise. If the Court fails to act now, Borup's theory goes, the Offer will create an intractable conflict between his personal interests and his obligations as a representative of the putative class. This is so because the Offer, exclusive of costs and attorney's fees, is greater than any personal award he could hope to obtain at a trial on the merits. He now faces significant pressure to settle, lest he bear the burden of all costs incurred subsequent to the Offer, which may outstrip any award in his favor. HCI disagrees and argues that the matter is not ripe for decision and that the Court lacks the power to grant the relief Borup desires.

         The Court will not grant Borup's motion. This is so not because the Court lacks the power to do so or because the matter is unripe. Rather, the sword of Damocles dangling over Borup's head does not present the ...


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