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Seaman v. Focus on Renewal -- Sto-Rox Neighborhood Corp.

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


January 22, 2007

ROSEMARY SUSAN SEAMAN, PLAINTIFF,
v.
FOCUS ON RENEWAL -- STO-ROX NEIGHBORHOOD CORPORATION, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Judge McVerry

Magistrate Judge Caiazza

MEMORANDUM AND ORDER

I. MEMORANDUM

For the reasons that follow, the Plaintiff's Motion (Doc. 22) seeking to invalidate the Defendants' Offer of Judgment will be granted.*fn1

In this case, the Plaintiff asserts claims under the Fair Labor Standards Act and Pennsylvania's Wage Payment and Collection Law. See generally Pl.'s Mot. at ¶ 1. Although not part of the instant action, the Plaintiff also has filed administrative charges of employment discrimination with the PHRC and EEOC. See id. at ¶ 2.

On December 7, 2006, the Defendants served on the Plaintiff an Offer of Judgment pursuant to Federal Rule 68, agreeing to settle the case for $135,000.00. See Offer of Judg. at 1 (filed under Doc. 22-2). The Offer goes on to say that the Plaintiff's acceptance "would also resolve all claims in the pending administrative" actions before the PHRC and EEOC "with prejudice[,] and would release all claims [the] Plaintiff . . . could have brought." See id. at 1-2. This is not a valid offer of judgment.

Under Rule 68, the Defendants may make an offer regarding claims upon which "judgment [may be] finally obtained." See id. Unless and until the Plaintiff's discrimination charges are made part of this lawsuit, no judgment on them can be offered or taken. The Defendants' inclusion of the discrimination charges is legally unprecedented and inconsistent with the purpose of the Rule. Cf., e.g. , Association of Disabled Americans v. Neptune Designs, Inc., 469 F.3d 1357, 1360 n.4 (11th Cir. 2006) ("Rule 68 allows a defendant to make an offer of judgment," and "if a plaintiff refuses the offer and then ultimately recovers less at trial than the offer amount, the plaintiff is required to pay the costs incurred from the time of the offer") (emphasis added).

These conclusions are consistent with the rule that offers of judgment must be "unconditional." 12 Fed. Prac. & Proc. Civ.2d § 3002 (Wright & Miller 2006); accord 20 C.J.S. Costs § 40 (2006); Herrington v. County of Sonoma, 12 F.3d 901, 907 (9th Cir. 1993) (citation omitted); Arrow Electronics, Inc. v. Hecmma, Inc., 2005 WL 2276407, *2 (W.D. Va. Sept. 19, 2005) (citation omitted). While some exceptions have been recognized, they clearly are distinguishable.*fn2

For the reasons just stated, the Defendants' Offer of Judgment is invalid. And though Plaintiff's counsel seeks reformation, the proper course is to vacate the Offer. See Freeman v. B & B Assocs., 790 F.2d 145, 151-52 (D.C. Cir. 1986) ("the proper relief for an impermissibly coercive offer of judgment" is to "vacate rather than reform the offer"; "[e]limination of an express and integral term from an offer of judgment . . . destroys the binding force . . . on the defendant by vitiating the defendant's consent"). Accordingly, the court enters the following:

II. ORDER

The Plaintiff's Motion (Doc. 22) is GRANTED to the extent described above, and the Defendant's Offer of Judgment, served on the Plaintiff December 7, 2006, is hereby VACATED and shall be given no legal effect.

IT IS SO ORDERED.


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