Labor & Employment Law Daily Avon’s claim for costs following settlement of employment dispute moot
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Tuesday, October 13, 2020

Avon’s claim for costs following settlement of employment dispute moot

By Ronald Miller, J.D.

A case becomes moot on appeal “when the issues presented are no longer live or when the parties lack a legally cognizable interest in the outcome.”

The First Circuit dismissed an employer’s request for an award of costs in an underlying employment discrimination lawsuit, finding that a settlement of the dispute reached by the parties prior to a ruling by the appeals court rendered the appeal moot. Further, the appeals court declined to vacate the lower court’s order regarding costs because FRCP 60(b)(5) afforded a potential path to relief before the district court. Since the parties sought relief as to a monetary award, after a settlement, this was a set of circumstances directly implicating Rule 60(b)(5) (Villeneuve v. Avon Products, Inc., October 7, 2020, per curiam).

In the underlying lawsuit, the plaintiff, a long-time employee of Avon, brought claims of age discrimination, sexual orientation discrimination, and unjust discharge under Puerto Rico law. Before discovery, the district court granted Avon’s motion to dismiss the sexual-orientation discrimination claim. Thereafter, Avon moved for summary judgment, which the district court granted. In a prior ruling, the First Circuit affirmed the relevant rulings in favor of Avon.

Bill of costs. In May 2017, before the appeals court decided the appeal, Avon, as the prevailing party, moved for an award of costs under FRCP 54(d). The deputy clerk of court for the district court entered an order denying relief, without prejudice to Avon refiling after judgment on appeal. In April 2019, after the mandate from the appeals court in the original appeal issued, Avon timely filed a motion restating its bill of costs.

In its motion, Avon requested an award of costs relating to: (1) copying, (2) translation and interpretation services, (3) producing deposition transcripts, and (4) service of process. In December 2019, the district court issued an opinion and order granting in part and denying in part Avon’s motion. The employee timely appealed the district court order.

Settlement. Before the deadline for the employee’s opening brief, the parties filed a joint motion informing the appeals court of a settlement agreement and requesting that the appeals court vacate the district court’s ruling. According to the parties, they reached a settlement agreement in the present case for the sole purpose of avoiding litigation costs.

Request for relief. The First Circuit observed that the parties sought two distinct forms of relief: dismissal and vacatur. First addressing the request for dismissal, the appeals court observed that a case becomes moot on appeal “when the issues presented are no longer live or when the parties lack a legally cognizable interest in the outcome.”

Here, the parties purported to have settled their dispute, leaving neither party with an issue to pursue on appeal. Based on the stipulated fact of settlement, the appeals court could only conclude that the issues presented in the initial appeal were “no longer live,’” meaning it must dismiss the appeal.

Vacatur. The parties also asked the appeals court to vacate the district court’s costs order. However, the appeals court declined to vacate the lower court order because the Federal Rules of Civil Procedure afforded a potential path to relief before the district court. Under Rule 60(b)(5), the court may relieve a party or its legal representative from a final judgment, order, or proceeding if “the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable.”

The parties sought limited relief, concerning a monetary award, after a settlement. The appeals court noted that this was a “set of circumstances” where the award of costs “has been satisfied, released, or discharged,” directly implicating Rule 60(b)(5). When relief under that provision may be available, parties in such circumstances should first seek relief under Rule 60(b)(5) before the district court, before making any request to the appeals court. Accordingly, the appeals court dismissed the appeal as moot.

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