FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MENTHA SMITH and JUSTIN
GOSSETT, on behalf of themselves
No. 08-55535
and all others similarly situated,
Plaintiffs-Appellants, D.C. No.
v. 2:05-cv-05274-
ABC-SS
T-MOBILE USA INC.; POWERTEL
OPINION
INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Audrey B. Collins, District Judge, Presiding
Submitted May 4, 2009*
Pasadena, California
Filed June 15, 2009
Before: Cynthia Holcomb Hall, Andrew J. Kleinfeld and
Barry G. Silverman, Circuit Judges.
Opinion by Judge Silverman
* The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
7129
SMITH v. T-MOBILE USA 7131
COUNSEL
Gwen Freeman, Knapp, Petersen & Clark, Glendale, Califor-
nia, for the plaintiffs-appellants.
James Severson, Bingham McCutchen, LLP, San Francisco,
California, for the defendants-appellees.
OPINION
SILVERMAN, Circuit Judge:
Appellants Mentha Smith and Justin Gossett — the only
named plaintiffs in this case — voluntarily settled their Fair
Labor Standards Act claims before this appeal was taken. We
hold today that such plaintiffs no longer have a personal stake
in the outcome. This case is thus rendered moot. Accordingly,
we dismiss this appeal for lack of jurisdiction.
7132 SMITH v. T-MOBILE USA
I. Background
Smith and Gossett (mother and son) are former hourly
employees of T-Mobile USA, Inc. who worked as sales repre-
sentatives in California. They brought an action in the district
court against T-Mobile under the FLSA, California Labor
Code § 200 et seq., and California Business and Professions
Code § 17200 et seq. They alleged that T-Mobile willfully
failed to pay its hourly employees for all the hours they
worked, forcing employees to work “off the clock” and deny-
ing pay for hours worked during breaks. Smith and Gossett
sought to represent a class of approximately 25,000 former
and current T-Mobile employees in a FLSA collective action.1
On October 26, 2005, Smith and Gossett filed a motion for
conditional certification of the collective action or, alterna-
tively, tolling of the statute of limitations. They proposed to
certify a class of “[a]ll hourly employees and former employ-
ees of T-Mobile nationwide who worked at T-Mobile at any
time for the period from three years predating the filing of
th[e] complaint to the present.” The district court denied the
1
The FLSA states, in relevant part, that “no employer shall employ any
of his employees . . . for a workweek longer than forty hours unless such
employee receives compensation for his employment in excess of the
hours above specified at a rate not less than one and one-half times the
regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). Employers
who violate § 207 are “liable to the employee or employees affected in the
amount of their . . . unpaid overtime compensation . . . and in an additional
equal amount as liquidated damages.” 29 U.S.C. § 216(b). Section 216(b)
also provides the mechanism for collective actions:
An action to recover the liability prescribed . . . may be main-
tained against any employer . . . in any Federal or State court of
competent jurisdiction by any one or more employees for and in
behalf of himself or themselves and other employees similarly
situated. 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.
29 U.S.C. § 216(b).
SMITH v. T-MOBILE USA 7133
motion for conditional certification without prejudice, but
tolled the statute of limitations until discovery was complete
and the court could rule on a second motion for conditional
certification. The court allowed the parties to conduct discov-
ery in anticipation of the second motion.
Discovery was protracted and contentious. Both plaintiffs
and defendants filed motions to compel, which were granted
in part. Approximately one year and four months after the dis-
trict court denied their first motion for conditional certifica-
tion, plaintiffs filed their second motion. At that point, no
other employees had opted in with viable claims; the sole opt-
in plaintiff was an acquaintance of plaintiffs, Earvin Chavez,
whose claim was legally barred by a previous settlement.
The district court initially granted the motion for condi-
tional certification. However, it reversed its decision after T-
Mobile filed a motion for reconsideration. Plaintiffs filed a
motion for reconsideration, which the district court denied.
Following that ruling, Smith and Gossett voluntarily
accepted an offer of judgment from T-Mobile and settled their
claims.2 A stipulated judgment set out the amounts T-Mobile
agreed to pay to plaintiffs as “full, complete, and final satis-
faction of all [their] individual claims as stated in this action.”
The parties agreed that Chavez was not entitled to any pay-
ment since all the claims he could have asserted were fully
satisfied in connection with the settlement of a prior lawsuit.
T-Mobile also agreed to pay plaintiffs’ counsel $10,000 as
“full, complete and final satisfaction of any claim they or their
clients may have for attorneys’ fees and/or costs of litigation
2
We use the term “voluntarily” here to contrast a situation where a
defendant purposefully makes an offer of judgment under Rule 68 of the
Federal Rules of Civil Procedure and tenders the full amount of a named
plaintiff ’s personal claims before the plaintiff can move for certification,
as in Sandoz v. Cingular Wireless, LLC, 553 F.3d 913, 917-19 (5th Cir.
2008).
7134 SMITH v. T-MOBILE USA
in connection with the individual claims asserted by their cli-
ents.”
Before reaching settlement, the parties represented to the
district court that they discussed whether there existed a
mechanism by which plaintiffs’ individual claims could be
settled while still preserving their ability to appeal the ruling
denying FLSA certification. They eventually signed a stipu-
lated judgment that stated:
At Plaintiffs’ request, . . . Plaintiffs’ acceptance of
this Offer shall be expressly subject to Plaintiffs[’]
. . . reservation of rights (a) to take an appeal, as con-
templated in Dugas v. Trans Union Corp., 99 F.3d
724 (5th Cir. 1996), and the cases cited therein, of
the Court’s earlier Order denying their motion for
conditional certification of this action as a collective
action under the Federal Fair Labor Standards Act
(“FLSA”), and (b) in the event such an appeal is pur-
sued, is successful and the case is remanded to this
Court for further proceedings, to continue to prose-
cute the case in accordance with the order of remand,
with the understanding, however, that their individ-
ual claims have been fully and finally compromised,
settled and dismissed, and that these claims may not
be reinstated or reopened, and that no further claims
of any kind may be asserted on their individual
behalf. In accepting this Offer, Plaintiffs and their
counsel acknowledge that they have relied solely on
their own legal analysis and not on any representa-
tion by Defendants or their counsel regarding the
legal effect of this Offer and/or their standing to
appeal.
The district court entered judgment in accordance with the
parties’ stipulations. Plaintiffs timely filed a notice of appeal.
SMITH v. T-MOBILE USA 7135
II. Discussion
We review de novo whether a case is moot and whether
plaintiffs have standing. Council of Ins. Agents & Brokers v.
Molasky-Arman, 522 F.3d 925, 930 (9th Cir. 2008); see also
Sable Commc’ns of Cal., Inc. v. FCC, 827 F.2d 640, 642 (9th
Cir. 1987) (“The question of whether a particular case pre-
sents an Article III case or controversy is . . . reviewed de
novo.”).
The case or controversy requirement of Article III restricts
federal court jurisdiction to “disputes capable of judicial reso-
lution.” U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 396
(1980). A case becomes moot, and incapable of judicial reso-
lution, “when the issues presented are no longer ‘live’ or the
parties lack a legally cognizable interest in the outcome.” See
Powell v. McCormack, 395 U.S. 486, 496 (1969). Generally,
when a party settles all of his personal claims before appeal,
an appeals court must dismiss the appeal as moot unless that
party retains a personal stake in the case that satisfies the
requirements of Article III. See Deposit Guar. Nat’l Bank v.
Roper, 445 U.S. 326, 333-34 (1980); Potter v. Norwest Mort-
gage, Inc., 329 F.3d 608, 611 (8th Cir. 2003).
We need not decide whether a Rule 23 class action plaintiff
who settles his individual claims can preclude mootness by
affirmatively preserving his claim to appeal in the settlement
agreement and then asserting a procedural right to represent
a class. Compare, e.g., Richards v. Delta Air Lines, Inc., 453
F.3d 525, 528-29 (D.C. Cir. 2006) (finding reservation suffi-
cient to preclude mootness) with, e.g., Potter, 329 F.3d at
613-14 (finding reservation insufficient to preclude moot-
ness); cf. Seidman v. City of Beverly Hills, 785 F.2d 1447,
1448 (9th Cir. 1986) (also declining to address this issue). We
do not decide this issue because here, structural distinctions
between a FLSA collective action and a Rule 23 class action
foreclose appellants’ claims of a continuing personal stake.
Accordingly, we join our sister circuits in holding that a
7136 SMITH v. T-MOBILE USA
FLSA plaintiff who voluntarily settles his individual claims
prior to being joined by opt-in plaintiffs and after the district
court’s certification denial does not retain a personal stake in
the appeal so as to preserve our jurisdiction. See Sandoz v.
Cingular Wireless LLC, 553 F.3d 913, 915-19 (5th Cir. 2008);
Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d
1240, 1247-49 (11th Cir. 2003).
[1] A plaintiff seeking FLSA collective action certification
does not have a procedural right to represent a class in the
absence of any opt-in plaintiffs. Section 216(b) of the FLSA,
the collective action provision, provides that no employee
other than the plaintiff “shall be a party plaintiff to [a FLSA
collective] 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.” Thus, while the existence of a
Rule 23 class action “does not depend in theory on the partici-
pation of other class members,” who can either opt in or opt
out, a FLSA case cannot become a collective action unless
other plaintiffs affirmatively opt in by giving written and filed
consent. Cameron-Grant, 347 F.3d at 1248-49. A FLSA
plaintiff therefore has no independent right to represent a
class that would preserve a personal stake in the outcome for
jurisdictional purposes; his right to represent a class depends
entirely on whether other plaintiffs have opted in. This key
difference between a Rule 23 opt-out class action and a FLSA
opt-in collective action cannot be overlooked for purposes of
determining our jurisdiction to entertain this appeal.
[2] Because plaintiffs did not have a right to represent a
class, they were not acting in the capacity of class representa-
tives at the time of settlement as they now claim. Compare
Dugas v. Trans Union Corp., 99 F.3d 724, 726-29 (5th Cir.
1996). Thus, Smith and Gossett’s acceptance of T-Mobile’s
offer of judgment when no other plaintiffs had opted in dis-
posed of the only claims they could assert at the time. See
Sandoz, 553 F.3d at 919 (“This means that when Cingular
made its offer of judgment, Sandoz represented only herself,
SMITH v. T-MOBILE USA 7137
and the offer of judgment fully satisfied her individual
claims.”).
[3] For the same reasons, Smith and Gossett’s argument
that they continue to retain a personal stake in the recovery of
attorneys’ fees and costs relative to the class claims, the “class
share” of any liquidated or punitive damages, and the
enhancement to which a class representative is entitled if the
claims ultimately prevail also fails. Plaintiffs’ attorneys
agreed to accept $10,000 as full satisfaction of any claim they
had to attorneys’ fees and costs of litigation in connection
with the individual claims. At the time they settled, plaintiffs
could only assert individual claims because they had no right
to represent a class, as to reiterate, they were the only plain-
tiffs in the case. Attorneys’ fees therefore do not provide the
plaintiffs with the personal stake required for a case or contro-
versy. Any enhancement a district court may order for plain-
tiffs’ service as class representatives also does not create a
personal interest in the case, as any enhancement awarded
would relate only to costs of litigation brought about by the
class litigation itself.3 They similarly had no right to liqui-
dated and punitive damages that a district court might award
if other plaintiffs opted in.
[4] Because the plaintiffs voluntarily settled all of their
claims after the district court’s denial of certification, they
have failed to retain a personal stake in the litigation and their
case is moot. Accordingly, we dismiss the appeal for lack of
jurisdiction.
APPEAL DISMISSED.
3
We do not express an opinion as to the availability of any enhancement
to a class representative in a FLSA collective action. Plaintiffs cite cases
awarding enhancements pursuant to Rule 23 actions only, and § 216(b)
does not mention the availability of any enhancement award.