Lupian v. Joseph Cory Holdings, LLC

• Decision Date: 07 March 2017
• Docket Number: Civ. No. 2:16–05172
• Citation: 240 F.Supp.3d 309
• Parties: Alejandro LUPIAN, Juan Lupian, Jose Reyes, Effrain Lucatero, Isaias Luna, Plaintiffs, v. JOSEPH CORY HOLDINGS, LLC, Defendant.
• Court: U.S. District Court — District of New Jersey

240 F.Supp.3d 309

Alejandro LUPIAN, Juan Lupian, Jose Reyes, Effrain Lucatero, Isaias Luna, Plaintiffs,

v.JOSEPH CORY HOLDINGS, LLC, Defendant.

Civ. No. 2:16–05172

United States District Court, D. New Jersey.

Signed March 7, 2017

Alexandra Koropey Piazza, Berger & Montague PC, Philadelphia, PA, for Plaintiffs.

Peter Francis Berk, Genova Burns LLC, Newark, NJ, for Defendant.

OPINION

WILLIAM J. MARTINI, U.S.D.J.

Plaintiffs Alejandro Lupian, Juan Lupian, Jose Reyes, Effrain Lucatero and Isaias Luna (collectively "Plaintiffs") bring this class action against Joseph Cory Holdings, LLC ("Defendant"), alleging violations of Illinois and New Jersey wage laws and unjust enrichment, in connection with Plaintiffs' independent contractor agreements with Defendant. This matter comes before the Court on Defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). There was no oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth below, Defendant's motion to dismiss is GRANTED, in part, and, DENIED, in part.

I. BACKGROUND

Defendant is a New Jersey motor carrier corporation that provides delivery services for retail companies throughout the United States, delivering appliances, furniture and other goods to the retail companies' customers. See Compl. ¶¶ 9, 13. Plaintiffs are Illinois residents who performed services for Defendant as delivery drivers at various times between the years 2000 and 2016. See id. at ¶¶ 3–8. At all times, Defendant engaged Plaintiffs as independent contractors pursuant to a contract executed by the parties. See id. at ¶ 15; Def.'s Mem. in Supp. of Its Mot. to Dismiss ("Def.'s Mem.") 1, n.1, ECF No. 8.

Defendant engages independent contractor delivery drivers under two types of agreements. Where the driver transports property under Defendant's motor carrier authority, the parties execute a Transportation Service Agreement ("TSA"). See Def.'s Mem., Ex. 2. Where the driver transported property under its own motor carrier authority, the parties execute a Dedicated Contract Carrier Agreement ("DCCA"). See id. , Ex. 1. Both the TSA and DCCA contain forum selection and choice-of-law clauses, which provide that all disputes between the parties shall be adjudicated in the State of New Jersey and under New Jersey law. See id. Ex. 1 at ¶ 28; Ex. 2 at ¶¶ 31–32. Plaintiffs operated under a DCCA. See Compl. at ¶¶ 11, 15.

Plaintiffs bring a class action complaint (the "Complaint") on behalf of themselves and all similarly situated persons who provided delivery services to Defendant, either as an individual or through a business entity, in the State of Illinois and throughout the United States. Id. at ¶ 26. Plaintiffs allege violations of Illinois and New Jersey wage laws and claims that Defendant was unjustly enriched. See id. at ¶¶ 33–56.

Defendant now moves to dismiss the Complaint, arguing: (1) the Federal Aviation Administration Authorization Act ("FAAAA"), 49 U.S.C. § 14501(c), preempts the state wage law claims, see Def.'s Mem. at 3–9; (2) Plaintiffs lack standing to bring the New Jersey law claims, see id. at 9–10; and (3) Plaintiffs' unjust enrichment claim fails because a contract governs the relationship of the parties, see id. at 11–12. On October 24, 2016, Plaintiffs filed a response, opposing the motion. See Pls.' Opp'n to Def.'s Mot. to Dismiss ("Pls.' Opp'n"), ECF No. 19. Defendant filed a reply seven days later. See Def.'s Reply in Supp. of Its Mot. to Dismiss ("Def.'s Reply"), ECF No. 25. Both parties filed notices of supplemental authority and opposition responses thereto in the intervening period. See ECF Nos. 28–35.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States , 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin , 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ; Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc. , 140 F.3d 478, 483 (3d Cir. 1998).

Although a complaint need not contain detailed factual allegations, "a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, such that it is "plausible on its face." See id. at 570, 127 S.Ct. 1955 ; see also Umland v. PLANCO Fin. Serv., Inc. , 542 F.3d 59, 64 (3d Cir. 2008). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). While "[t]he plausibility standard is not akin to a ‘probability requirement’ ... it asks for more than a sheer possibility." Id.

III. DISCUSSION

Plaintiffs allege that Defendant misclassified them as independent contractors when they should have been classified as Defendant's employees under applicable state law. See Compl. at ¶¶ 2, 16. Plaintiffs also allege the following:

• Count I: Defendant violated the Illinois Wage Payment and Collection Act ("IWPCA"), 820 Ill. Comp. Stat. 115/9, by making unlawful deductions from Plaintiffs' wages, see id. at ¶ 37;• Count II: Defendant violated the New Jersey Wage Payment Law ("NJWPL"), N.J. Stat. §§ 34:11–4.2, 24:11–4.4, by failing to pay Plaintiffs wages due and subjecting them to unlawful wage deductions, seeid. at ¶ 44;

• Count III: Defendant violated New Jersey Wage and Hour Law ("NJWHL"), N.J. Stat. § 34:11–5a(4), by failing to pay Plaintiffs overtime premiums for hours worked over 40 hours per week, seeid. at ¶ 52; and

• Count IV: Defendant was unjustly enriched by classifying Plaintiffs as independent contractors, which forced Plaintiffs to pay for work-related expenses that should have been provided by Defendant, see id. at ¶¶ 54–56.

Plaintiffs argue their New Jersey law claims in the alternative to their Illinois law claim. See id. at ¶ 2. The Court, therefore, must first consider which law applies in the instant case where the parties agreed to a New Jersey choice-of-law clause in their contracts.¹ The Court will then consider Defendant's federal preemption argument and Plaintiffs' unjust enrichment claim.

A. Choice of Law

"Ordinarily, when parties to a contract have agreed to be governed by the laws of a particular state, New Jersey courts will uphold the contractual choice if it does not violate New Jersey's public policy." Instructional Sys., Inc. v. Computer Curriculum Corp. , 130 N.J. 324, 341, 614 A.2d 124 (1992). New Jersey has adopted the Restatement (Second) of Conflicts of Laws § 187, "which provides that the law of the state chosen by the parties will apply, unless either: (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which would be the state of the applicable law in the absence of an effective choice of law by the parties." See id. at 342, 614 A.2d 124. New Jersey clearly has a substantial relationship to the parties because Defendant is its citizen and the first exception, therefore, does not apply.

The second exception, however, applies in the instant case. The IWPCA applies to Illinois employees and Illinois employers. See 820 Ill. Comp. Stat. 115/1. The statute's "evident purpose is to protect employees in Illinois from being stiffed by their employers ...." See Glass v. Kemper Corp. , 133 F.3d 999, 1000 (7th Cir. 1998) (citations omitted) (emphasis original). Courts have interpreted this purpose to mean that Illinois public policy disallows IWPCA claims brought by out-of-state employees against Illinois employers or claims by Illinois employees against out-of-state employers. See id. ; Khan v. Van Remmen, Inc. , 325 Ill.App.3d 49, 258 Ill.Dec. 628, 756 N.E.2d 902, 913 (2001).

The extraterritorial application of the NJWPL and NJWHL is less clear; however, it is well settled that "New Jersey law does not regulate conduct outside the state." See D'Agostino v. Johnson & Johnson, Inc. , 133 N.J. 516, 539–40, 628 A.2d 305 (1993). The few courts that have considered the issue have all held "that the NJWPL does not apply to employees based outside of New Jersey." See Overton v. Sanofi–Aventis U.S., LLC , No. 13-cv-5535, 2014 WL 5410653, at *5–6 (D.N.J. Oct. 23, 2014) (citing multiple cases from various state and federal courts and finding the reasoning therein persuasive that the NJWPL does not apply to out-of-state employees) (emphasis original). This Court agrees.

Given the public policy interests against extraterritorial application of both the Illinois and New Jersey statutes, the Court finds that the IWPCA is the proper statute to apply in this case where Illinois workers are claiming violations of wage laws in connection to conduct occurring within Illinois. The Court, therefore, will not enforce the choice-of-law clauses in the parties' contracts and instead apply Illinois law. Accordingly, the Court will GRANT Defendant's motion with respect to the New Jersey wage law claims and Counts II and III of the Complaint are DISMISSED with prejudice.

B. Federal Preemption

The IWPCA provides "employees with...