Cherelli v. Instore Grp., LLC

• Citation: 513 F.Supp.3d 187
• Decision Date: 11 January 2021
• Docket Number: CIVIL ACTION NO. 18-10717-DPW
• Parties: Karen CHERELLI, Individually and on Behalf of All Other Persons Similarly Situated, Plaintiff, v. The INSTORE GROUP, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

513 F.Supp.3d 187

Karen CHERELLI, Individually and on Behalf of All Other Persons Similarly Situated, Plaintiff,

v.The INSTORE GROUP, LLC, Defendant.

CIVIL ACTION NO. 18-10717-DPW

United States District Court, D. Massachusetts.

Filed January 11, 2021

Brook S. Lane, Hillary A. Schwab, Fair Work P.C., Boston, MA, for Plaintiff.

Benjamin P. Fryer, Pro Hac Vice, D. Jared Nobles, Jr., Pro Hac Vice, Sarah H. Negus, Pro Hac Vice, Moore & Van Allen PLLC, Charlotte, NC, Christopher B. Kaczmarek, Littler Mendelson, Boston, MA, for Defendant.

MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, UNITED STATES DISTRICT JUDGE

Plaintiff Karen Cherelli belatedly brought this separate, duplicative lawsuit in state court against Defendant InStore Group, LLC ("InStore") seeking damages for her alleged misclassification under Massachusetts wage and hour laws as an "independent contractor" – rather than as a statutory "employee". Ms. Cherelli seeks to become the sole representative of a class of similarly situated plaintiffs — "vendor associates" — who worked for InStore in Massachusetts.

This action is redundant of one earlier filed directly in this Court where Ms. Cherelli appears to have been an unnamed putative class member and now — because of action that I have taken today in that case — has become one of two named class representatives for a class I have certified. See Hogan v. InStore Group, LLC , No. 17-CV-10027-DPW, 512 F.Supp.3d 157 (D. Mass. Jan. 8, 2021) (" Hogan litigation"). As was earlier alleged in the Hogan litigation, Ms. Cherelli here contends that InStore, by treating vendor associates as independent contractors (rather than as statutory employees), has violated provisions of Mass. Gen. Laws ch. 149 and Mass. Gen. Laws ch. 151.

I. BACKGROUND

Ms. Cherelli filed this action in Massachusetts state court on February 12, 2018, and InStore removed the matter to this Court on April 13, 2018, based on federal diversity jurisdiction. The Hogan litigation, a putative class action raising identical claims, was already pending before me. Hogan (D. Mass. filed Jan. 6, 2017) (No. 17-CV-10027-DPW) (alleging violations of Massachusetts wage and hour law against InStore on behalf of a putative class of "retail associates").¹

Counsel for Mr. Hogan – initially the lone named plaintiff and putative class representative in the Hogan litigation – had moved on November 17, 2017 to amend the complaint to add Ms. Cherelli as a named class representative. The motion to amend the complaint in the Hogan litigation came five months before the filing of this duplicative action in state court by Ms. Cherelli through the same counsel.

Ms. Cherelli does not explain why she belatedly initiated a state court lawsuit redundant of the action already pending in federal court. But the reason is transparent. She and her counsel have been engaged in a benighted forum shopping initiative. This action is offered up as a hostage to fortune in the hope of pursuing litigation involving the putative class in state rather than federal court.

Today, I granted Mr. Hogan's motion to amend his complaint to add Ms. Cherelli as a named plaintiff in the earlier filed case. As a result, the two duplicative actions before me now also share Ms. Cherelli as a named Plaintiff.

Ms. Cherelli seeks to have me remand this case to state court on the basis that I lack federal subject matter jurisdiction because InStore cannot show there is a sufficient amount in controversy to satisfy diversity jurisdiction requirements. InStore argues that it properly removed Ms. Cherelli's Complaint to federal court based on Ms. Cherelli's foreseeable attorney's fees.

II. DISCUSSION

A. Diversity Jurisdiction

InStore removed this case from state court to federal court under basic federal diversity jurisdiction, which requires complete diversity between the parties and that "the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a).² The parties dispute only whether the jurisdictional amount in controversy has been met.

Usually, the sum "demanded in good faith in the initial pleading shall be deemed to be the amount in controversy." 28 U.S.C. § 1446(c)(2). However, where the plaintiff's cause of action "permits recovery of damages in excess of the amount demanded," the defendant may calculate a different amount in controversy in its notice of removal. 28 U.S.C. § 1446(c)(2)(A)(ii).

If removal is disputed, the defendant must present evidence to establish the asserted amount in controversy by a "reasonable probability," which is "for all practical purposes identical to the preponderance standard." Amoche v. Guar. Tr. Life Ins. Co. , 556 F.3d 41, 43, 50 (1st Cir. 2009). The district court must then determine, "by the preponderance of the evidence, that the amount in controversy exceeds" the statutory amount before the basis for removal is established. 28 U.S.C. § 1446(c)(2)(B).

Ms. Cherelli calculates her wage-related damages as $4,732.22 and says she incurred expenses of $3,629.31 that were not reimbursed by InStore. In total, she claims $8,361.53 in such damages, which – after mandatory trebling under Mass. Gen. Laws chs. 149 and 151 – would come to $25,084.59.

InStore argues that I should add Ms. Cherelli's prospective attorney's fees in calculating the amount in controversy. Ms. Cherelli responds that only attorney's fees actually incurred prior to removal can be considered.

While attorney's fees are "[n]ormally ... excluded from the amount-in-controversy determination," Spielman v. Genzyme Corp. , 251 F.3d 1, 7 (1st Cir. 2001), a district court may consider potential attorney's fees as part of the amount-in-controversy calculation when "a statute mandates or allows the payment of such fees," Dep't of Rec. & Sports of P.R. v. World Boxing Ass'n , 942 F.2d 84, 89 (1st Cir. 1991) (quoting Velez v. Crown Life Ins. Co. , 599 F.2d 471, 474 (1st Cir. 1979) ).

However, a district court may only consider attorney's fees "to the extent reasonabl[y] " estimated. Id. at 90. The circuits are split on the question of whether trial courts may include prospective attorney's fees in their "reasonable" estimates. Compare Fritsch v. Swift Transp. Co. of Ariz., LLC , 899 F.3d 785, 794 (9th Cir. 2018) ("[A] court must include future attorneys’ fees recoverable by statute or contract when assessing whether the amount-in-controversy requirement is met."), and Faltermeier v. FCA US LLC , 899 F.3d 617, 621 (8th Cir. 2018) (same), with Smith v. Am. Gen. Life & Accident Ins. Co., Inc. , 337 F.3d 888, 896–97 (7th Cir. 2003) ("[P]ost-filing attorney's fees cannot count toward the amount in controversy requirement because federal jurisdiction exists, it at all, at the time of filing.").

The First Circuit has yet to rule on the question. See generally Mitchell v. Select Comfort Retail Corp. , No. 20-CV-10110-DJC, 2020 WL 4049895, at *3 (D. Mass. July 20, 2020) (observing that whether post-removal fees may be considered is an open question in the First Circuit). District judges within the First Circuit have come to differing opinions. Compare Barbuto v. Advantage Sales & Mktg., LLC , 148 F. Supp. 3d 145, 148 (D. Mass. 2015) ("Fees that have not yet been incurred cannot be said to be in controversy at the time of removal."), with Raymond v. Lane Constr. Corp. , 527 F. Supp. 2d 156, 163 (D. Me. 2007) ("A rule that treats attorney's fees differently from any other category of damage for purposes of ascertaining the amount of the ‘matter in controversy’ draws no support from the language of the [removal] statute.").

I need not wander into this jurisdictional thicket because, even if prospective attorney's fees could be considered in a "reasonable" estimate, this case should be dismissed as the later of two actions that duplicate each other.³ Larger concerns of proper judicial administration counsel in favor of disposing of this case on these alternative grounds, see generally Fed. R. Civ. P. 1 (the Federal Rules "should be construed, administered, and employed by the [district] court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding"), without devoting time and resources needlessly to resolve a difficult and fact-intensive jurisdictional issue that has generated differing treatments among trial judges within this Circuit, and more generally among the appellate courts of other circuits as well.

B. Duplicative Dismissal

A plaintiff has no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant. Rather, long standing First Circuit case law establishes that the "pendency of a prior pending action in the same federal court is ground for abatement of the second action." Sutcliffe Storage & Warehouse Co. v. United States , 162 F.2d 849, 851 (1st Cir. 1947) (quoting 1 MOORE'S FEDERAL PRACTICE 237). In such a circumstance, a district court may dismiss the later complaint, stay proceedings in the later action until judgment is entered, or consolidate the actions. Id.

Federal Rule of Civil Procedure 42(a) provides that a district court "may" consolidate "actions involving a common question of law or fact" pending before it. Fed. R. Civ. P. 42(a). The district court must first, of course, determine "whether the two proceedings involve a common party and common issues of fact or law." Seguro de Servicio de Salud v. McAuto Sys. Grp., Inc. , 878 F.2d 5, 8 (1st Cir. 1989). If so, the trial court has "broad discretion in weighing the costs and benefits of consolidation to decide whether that procedure is appropriate." Id.

The purpose of consolidating actions is to promote convenience and efficiency. See Pino-Betancourt v. Hosp. Pavia Santurce , 928 F. Supp. 2d 393, 395 (D.P.R. 2013). Other considerations include the prospect that consolidation will "promote the aims of all the parties [and] economize time and effort without circumscribing the opportunity for...