After the Parties Settle All Claims, An Appeal From the Final Judgment Is Moot, Holds Eighth Circuit

In Folta v. Norfork Brewing Co., No. 22-3518 (8th Cir. Dec. 22, 2023), the Eighth Circuit dismisses an appeal from a case where all the claims settled, despite the defendant’s argument that it reserved the right to appeal in the settlement.

“Norfork operates a small brewery in Arkansas. Folta was employed there from approximately May 2018 through February 2021. In this action, he claimed that Norfork and [owner] Aamodt failed to provide overtime compensation, as required by the FLSA, when he worked more than forty hours per week.”

The parties cross-moved for summary judgment. The defendants argued that they were not a covered employer, while the plaintiff argued that “if he were covered by the FLSA, then the undisputed facts showed that he would be entitled to overtime pay. The district court agreed with [plaintiff] Folta and granted partial summary judgment for him on entitlement to pay. But neither the denial of summary judgment nor the grant of partial summary judgment was a final decision that could be appealed . . . . Therefore, the case remained pending in the district court to resolve whether Folta was a covered employee under the FLSA.”

The case then settled. Defendant Norfork nevertheless appealed, seeking “to challenge the denial of its motion for summary judgment and the grant of partial summary judgment for Folta. Among other things, Norfork maintains that the district court lacked subject matter jurisdiction over the case; the company asserts that whether an employee is covered under the FLSA is a ‘jurisdictional’ question. Folta responds that the appeal is moot in light of the settlement, and that this court lacks appellate jurisdiction in any event because the district court never entered a final decision. See 28 U.S.C. § 1291.”

The Eighth Circuit dismisses on mootness grounds. “The settlement agreement in this case is not in the record, but the district court characterized it as ‘resolving Plaintiff’s FLSA claims.’ Because the settlement resolved all of Folta’s claims, there is no live case or controversy.”

“Norfork asserts that the settlement agreement reserved its ability to pursue its ‘jurisdictional’ argument on appeal. According to the company, the agreement states that Norfork ‘does not waive any defense asserted in the litigation.’ But where the parties have settled their claims, they cannot avoid mootness by agreement . . . . Even if we assume that parties could in some circumstance maintain a live controversy by providing in a settlement agreement for a right to appeal, . . . the language cited here is insufficient. Norfork asserts that the agreement did not ‘waive any defense,’ but the company cites no provision unequivocally reserving a right to appeal. The language would be insufficient to allow an appeal from a consent judgment.”