905 F.3d 127 (3rd Cir. 2018), 17-2346, Lupian v. Joseph Cory Holdings LLC
|Citation:||905 F.3d 127|
|Opinion Judge:||CHAGARES, Circuit Judge.|
|Party Name:||Alejandro LUPIAN; Juan Lupian; Jose Reyes; Effrain Lucatero; Isaias Luna, individually and on behalf of those similarly situated v. JOSEPH CORY HOLDINGS LLC, Appellant|
|Attorney:||Adam C. Smedstad [ARGUED], Andrew J. Butcher, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Christopher J. Eckhart, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Peter F. Berk, Genova Burns, Counsel for Appellant Harold L. Lichten [ARGUED], Michael N. Turi, Esq., Lichten & Liss-Riordan, P.C...|
|Judge Panel:||Before: CHAGARES, SCIRICA, and COWEN, Circuit Judges.|
|Case Date:||September 27, 2018|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Argued: February 7, 2018
[Copyrighted Material Omitted]
On Appeal from the United States District Court for the District of New Jersey, (D.C. No. 2:16-cv-05172), District Judge: Hon. William J. Martini
Adam C. Smedstad [ARGUED], Andrew J. Butcher, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Christopher J. Eckhart, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Peter F. Berk, Genova Burns, Counsel for Appellant
Harold L. Lichten [ARGUED], Michael N. Turi, Esq., Lichten & Liss-Riordan, P.C., Shanon J. Carson, Camille Fundora, Alexandra K. Piazza, Sarah R. Schalman-Bergen, Berger & Montague, P.C., Counsel for Appellees
Adina H. Rosenbaum, Allison M. Zieve, Public Citizen Litigation Group, Counsel for Amicus Curiae Public Citizen, Inc.
Before: CHAGARES, SCIRICA, and COWEN, Circuit Judges.
CHAGARES, Circuit Judge.
Alejandro Lupian, Juan Lupian, Isaias Luna, Jose Reyes, and Efrain Lucatero (collectively, "the Drivers") are professional delivery drivers who separately contracted to provide equipment and services to Joseph Cory Holdings LLC ("Joseph Cory"), a motor carrier and property broker. The Drivers filed a class action complaint alleging that Joseph Cory deducted wages from their paychecks without obtaining contemporaneous consent in violation of the Illinois Wage Payment and Collection Act ("IWPCA"), 820 Ill.Comp.Stat. 115/1-115/15. Joseph Cory moved to dismiss, arguing that the Federal Aviation Administration Authorization Act of 1994 ("FAAAA"), Pub. L. No. 103-305, 108 Stat. 1569, 1606, 49 U.S.C. § § 14501-06, preempts the IWPCA. The District Court, inter alia, denied Joseph Corys motion, holding that the FAAAA did not preempt the Drivers IWPCA claims. For the reasons that follow, we will affirm the District Courts order.
The contracts between the Drivers and Joseph Cory purported to establish that the Drivers would work as independent contractors, although the Drivers claim the realities of their relationship made them Joseph Corys employees under the IWPCA. The contracts expressly permitted Joseph Cory to take "[c]hargebacks" for any expense or liability that the Drivers had agreed to bear — "expenses [that] shall be deducted from the amount of [the Drivers] compensation." Appendix ("App.") 44, 50. Joseph Cory deducted these expenses — including costs for "insurance, any related insurance claims, truck rentals, ... uniforms," and "damaged goods" — from the Drivers paychecks without obtaining contemporaneous consent. App. 20.
The Drivers filed a lawsuit against Joseph Cory in the United States District Court for the District of New Jersey, claiming, inter alia, that Joseph Corys practice of deducting wages from their paychecks and those of similarly situated employees without contemporaneous consent
violated the IWPCAs wage-deduction provision, 820 Ill.Comp.Stat. 115/9.1 The Drivers complaint alleged a putative class action under the Class Action Fairness Act of 2005 ("CAFA"), Pub. L. No. 109-2, 119 Stat. 4(codified in scattered sections of 28 U.S.C.), in which the Drivers would be the named plaintiffs. Joseph Cory moved to dismiss the IWPCA claims under Federal Rule of Civil Procedure 12(b)(6), arguing that the FAAAA preempted the IWPCA. The District Court denied Joseph Corys motion to dismiss, holding that, on its face, the IWPCAs connection to the FAAAAs subject matter was too attenuated to trigger preemption. Lupian v. Joseph Cory Holdings, LLC, 240 F.Supp.3d 309, 317 (D.N.J. 2017).2
The District Court certified its order for an interlocutory appeal under 28 U.S.C. § 1292(b), and we granted Joseph Corys petition to appeal the certified interlocutory order.3
Joseph Cory moved to dismiss the Drivers IWPCA claim based on federal preemption. This Court conducts plenary review of the grant or denial of a motion to dismiss based on preemption. Rosenberg v. DVI Receivables XVII, LLC, 835 F.3d 414, 418 (3d Cir. 2016). Facts alleged in the complaint are accepted as true for purposes of the motion. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
Preemption is an affirmative defense that the defendant has the burden to prove. In re Asbestos Prods. Liab. Litig. (No. VI), 822 F.3d 125, 133 n.6 (3d Cir. 2016). Therefore, Joseph Cory has the burden to demonstrate that the Drivers state-law claims under the IWPCA are preempted. To prevail on a Rule 12(b)(6) motion to dismiss based on an affirmative defense,4 as Joseph Cory seeks to do here, a defendant must show that "the defense is apparent on the face of the complaint and documents relied on in the complaint." Bohus v. Restaurant.com, Inc., 784 F.3d 918, 923 n.2 (3d Cir. 2015) (quoting Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) ); see also Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007); Leveto v. Lapina, 258 F.3d 156, 161 (3d Cir. 2001). Put another way, dismissal is appropriate under Rule 12(b)(6) only when
The doctrine of preemption is derived from the Supremacy Clause of Article IV of the Constitution, which provides that "the Laws of the United States ... shall be the supreme Law of the Land." U.S. Const. art. VI. Thus, state law "which interferes with or is contrary to federal law, must yield." Free v. Bland, 369 U.S. 663, 666, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962). There are three types of federal preemption: field preemption, implied conflict preemption, and — as is relevant here — express preemption. See Kurns v. A.W. Chesterton Inc., 620 F.3d 392, 395 (3d Cir. 2010). Express preemption requires a analysis of whether "[s]tate action may be foreclosed by express language in a congressional enactment." Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001).
When a federal statute contains a provision preempting state law claims that pertain to "areas of traditional state regulation" or police power, we apply a presumption against preemption. Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005); see also N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). Areas of traditional state regulation or police power include regulation of "the employment relationship to protect workers in the State" such as regulation of "minimum and other wage laws." DeCanas v. Bica, 424 U.S. 351, 356, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976), superseded by statute on other grounds as recognized in Arizona v. United States, 567 U.S. 387, 404, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012); see also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987) ("[P]re-emption should not be lightly inferred in this area, since the establishment of labor standards falls within the traditional police power of the State."). The Supreme Court in City of Columbus v. Ours Garage & Wrecker Service, Inc., considered another issue under the FAAAA preemption clause and applied this presumption against preemption, noting that its "[p]reemption analysis start[s] with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. " 536 U.S. 424, 438, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) ). To discern Congresss purpose, we look first to the plain language employed in the statutory provision at issue,6 and, if necessary, the statutory structure as a whole,
Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977), as well as our "understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law," Medtronic, Inc., 518 U.S. at 486, 116 S.Ct. 2240.
Prior to 1978, the interstate airline industry in the United States was tightly regulated by the federal government. See Federal Aviation Act of 1958, Pub. L. No. 85-726, 72 Stat. 731(codified at 49 U.S.C. § § 1.01 et
seq. (repealed) ); see also Taj Mahal Travel, Inc. v. Delta Airlines, Inc., 164 F.3d 186, 190 (3d Cir. 1998). Congress determined in 1978 that both consumers and the...
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