Pitts v. Terrible Herbst, Inc., 2011 WL 3449473 (9th Cir. 2011)

Gareth Pitts filed a class action against his employer, Terrible Herbst, Inc., alleging a collective action under the Fair Labor Standards Act for failure to pay overtime and minimum wages, a class action for violations of Nevada labor laws and a class action for breach of contract. Although Pitts claimed only $88 in damages for himself, the employer made an offer of judgment to him pursuant to FRCP 68, offering to allow judgment to be taken against it in the total amount of $900, plus costs and reasonable attorney's fees. After Pitts refused the offer of judgment, Terrible filed a motion to dismiss for lack of subject matter jurisdiction on the ground that the offer of judgment rendered the entire case moot. The district court granted the motion on the ground that the offer mooted the action because Pitts had failed to timely seek class certification. The Ninth Circuit reversed, holding that the district court abused its discretion in finding that Pitts could no longer file a timely motion for class certification. The court further held that the district court should have permitted Pitts to abandon his federal claims so that there would be no incompatibility between his FRCP 23 class action and an FLSA collective action.