Prevailing FLSA Defendant Entitled to Request Costs Under FRCP 54(d): Eighth Circuit | Practical Law

Prevailing FLSA Defendant Entitled to Request Costs Under FRCP 54(d): Eighth Circuit | Practical Law

In Lochridge v. Lindsey Mgmt. Co., the US Court of Appeals for the Eighth Circuit held that a prevailing defendant is entitled to request costs under Federal Rule of Civil Procedure (FRCP) 54(d) and that Section 216(b) of the Fair Labor Standards Act (FLSA) does not preclude an award of costs to a prevailing defendant.

Prevailing FLSA Defendant Entitled to Request Costs Under FRCP 54(d): Eighth Circuit

Practical Law Legal Update w-002-5515 (Approx. 5 pages)

Prevailing FLSA Defendant Entitled to Request Costs Under FRCP 54(d): Eighth Circuit

by Practical Law Labor & Employment
Published on 08 Jun 2016 • USA (National/Federal)
In Lochridge v. Lindsey Mgmt. Co., the US Court of Appeals for the Eighth Circuit held that a prevailing defendant is entitled to request costs under Federal Rule of Civil Procedure (FRCP) 54(d) and that Section 216(b) of the Fair Labor Standards Act (FLSA) does not preclude an award of costs to a prevailing defendant.
On June 2, 2016, in Lochridge v. Lindsey Mgmt. Co., the US Court of Appeals for the Eighth Circuit held that the prevailing defendant is entitled to request costs under Federal Rule of Civil Procedure (FRCP) 54(d) and neither Section 216(b) nor any other provision of the FLSA precludes an award of costs to a prevailing defendant ( (8th Cir. June 2, 2016)).

Background

In a collective action against employer Lindsey Management (Lindsey), alleging violations of the FLSA, the district court conditionally certified two classes, a Salaried Class and an Hourly Class. In December 2013, the Salaried Class was decertified. However, class members of the decertified Salaried Class (employees) continued to pursue their claims.
In September 2014, a jury returned a verdict in favor of Lindsey. Lindsey then filed a Bill of Costs under FRCP 54(d), seeking reimbursement of costs of $22,687. The employees objected to the Bill of Costs and requested the district court exercise its discretion to deny Lindsey's request. The district court agreed, holding that Lindsey's Bill of Costs should be denied because the FLSA:
  • Was remedial in nature.
  • Did not indicate defendants should recover costs.
Lindsey appealed to the Eighth Circuit:
  • Challenging the district court's order denying its Bill of Costs under Rule 54(d), and the FLSA (29 U.S.C. § 216(b)).
  • Asserting that the district court abused its discretion by denying its Bill of Costs without articulating appropriate grounds sufficient to overcome the presumption in favor of awarding costs to the prevailing party.

Outcome

The Eighth Circuit vacated the district court's order denying Lindsey's Bill of Costs and remanded, holding that the prevailing defendant is entitled to request costs under FRCP 54(d) and neither Section 216(b) nor any other provision of the FLSA precludes an award of costs to a prevailing defendant.
The Eighth Circuit noted that:
  • Rule 54(d)(1):
    • provides in relevant part "Unless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party;" and
    • "independently authorizes district courts to award costs to prevailing parties" unless a statute or rule precludes it (Marx v. Gen. Revenue Corp., 133 S. Ct. 1166, 1174 n.5 (2013)).
  • Section 216(b) of the FLSA:
    • provides "The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action;" and
    • is silent as to awards of costs to prevailing defendants.
  • In Marx v. Gen. Revenue Corp., the Supreme Court concluded that "permissive" statutes that state simply that "the court may award costs in its discretion:"
    • are not contrary to Rule 54(d)(1); and
    • do not displace the court's discretion under the Rule.
    (133 S. Ct. 1166, at 1173 (2013).)
The Eighth Circuit found that:
  • There is nothing contrary to Rule 54(d) in the FLSA.
  • Section 216(b) is silent regarding the court's authority when the defendant is the prevailing party.
  • Lindsey is not precluded from collecting its costs incurred because:
    • Section 216(b) addresses only an award of costs to a prevailing plaintiff; and
    • neither Section 216(b) nor any other provision of the FLSA precludes an award of costs to a prevailing defendant.
  • The fact that a prevailing party prosecutes its rights under the Federal Rules of Civil Procedure to an award of costs cannot be seen as chilling the flow of litigation (Reger v. The Nemours Found., Inc., 599 F.3d 285, 289 (3d Cir. 2010)).
  • Under Marx, Lindsey is entitled to a decision whether its Bill of Costs should be awarded under Rule 54(d)(1) without consideration of the FLSA's silence on the issue of prevailing defendants (Marx, 133 S. Ct. at 1172-73).

Practical Implications

This decision shows that defendants in FLSA cases may be entitled to an award of costs (although not attorneys' fees) if the defendant is the prevailing party. As part of considering whether to bring an FLSA lawsuit, a plaintiff should carefully consider the risks of litigation, and how likely the plaintiff is to prevail, before embarking on a lawsuit. A plaintiff who is ultimately unsuccessful in their claim may have to pay the prevailing defendant's costs.