CRST Expedited, Inc. v. Swift Transp. Co. of Ariz., LLC
| Decision Date | 04 June 2019 |
| Docket Number | No. 17-cv-25-CJW-KEM,17-cv-25-CJW-KEM |
| Parties | CRST EXPEDITED, INC, Plaintiff, v. SWIFT TRANSPORTATION CO OF ARIZONA, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
TABLE OF CONTENTS
This matter is before the Court on the parties' cross motions for summary judgment. (Docs. 127, 138). CRST Expedited ("plaintiff") moves for partial summary judgment, and Swift Transportation ("defendant") moves for complete summary judgment. Each party timely resisted the other party's motion (Docs. 146, 159), and each party timely filed a reply in support of its own motion (Docs. 154, 167). The Court heard oral argument on the motions on April 11, 2019. (See Doc. 168). For the following reasons, plaintiff's motion (Doc. 127) is granted in part and denied in part, and defendant's motion (Doc. 138) is granted in part and denied in part.
Plaintiff and defendant are both commercial trucking companies that provide freight-hauling services throughout the country. To operate a semi-trailer, an individual must possess a commercial driver's license ("CDL"). (Docs. 130-1, at 2; 146-1, at 2). The trucking industry, however, is facing a shortage of licensed drivers. (Docs. 130-1,at 1-2; 146-1, at 2). Plaintiff operates a driver training program that allows individuals to obtain their CDLs. (Docs. 130-1, at 2; 146-1, at 2). When individuals enroll in the training program, plaintiff advances the costs of transportation to the training site, lodging, drug tests, physicals, and tuition for the program. (See Docs. 130-1, at 2; 146-1, at 2). These advances are ultimately to be repaid to plaintiff either through a reduced rate of pay until the debt has been satisfied, or through a lump sum payment to plaintiff, as is explained below. (Docs. 140-1, at 8-9; 159-1, at 18, 20).
Before training commences, each trainee signs a Pre-Employment Agreement. (Docs. 43, at 2-3; 146-1, at 5; see, e.g., Doc. 159-9, at 242-46). The training program consists of four phases (Docs. 140-1, at 6; 159-1, at 10), and upon completion of the first two phases, those students who are hired by plaintiff sign a Driver Employment Contract ("Driver Contract") (Docs. 140-1, at 12; 159-1, at 26). The Driver Contracts contain either an eight-month or a ten-month restrictive term, during which time the driver-signatory is prohibited from driving for one of plaintiff's "competitors."1 (Docs. 130-2, at 51-52; 140-1, at 12; 159-1, at 28). If a driver is discharged or leaves employment before the restrictive term ends, the driver cannot work for any "CRST competitor" during the remainder of the restrictive term.2 (Docs. 130-2, at 51-52; 140-1, at 16; 159-1, at 38-39). In addition, a driver who leaves employment before his restrictive term ends is charged $6,500, regardless of the amount of time remaining on his restrictive term.3 (Docs. 140-1, at 16; 159-1, at 38-39; see also, e.g., Doc. 130-2, at 52 ()). Plaintiff asserts that if a driver repays the $6,500, he is released from the contract. (Doc. 159-1, at 39).
Plaintiff brought suit alleging that defendant has actively recruited and continues to actively recruit plaintiff's drivers, even though those drivers remain within the restrictive terms of their Driver Contracts. (Doc. 43, at 4). Specifically, plaintiff asserts that defendant is aware that the drivers at issue4 remain within the restrictive terms of their contracts, and that defendant's conduct of actively recruiting its drivers is the cause of the drivers leaving plaintiff to drive for defendant. (Id., at 5-10). By hiring drivers who obtained their CDL at plaintiff's expense, plaintiff asserts that defendant is able to gain the advantage of hiring licensed commercial truck drivers without undertaking theexpense of training those drivers. (Id., at 6-7). Based on these allegations, plaintiff brought claims for intentional interference with contract, intentional interference with prospective economic advantage, and unjust enrichment. (Id., at 5-8). Plaintiff also seeks permanent injunctive relief "enjoining [defendant] from any further or continued interference with [plaintiff's] prospective economic advantage and/or contracts with its drivers . . .." (Id., at 8-10).
An essential element of plaintiff's tortious interference with contract claim is that the contracts with the drivers were valid. See Gen. Elec. Capital Corp. v. Commercial Servs. Grp., Inc., 485 F. Supp. 2d 1015, 1025 (N.D. Iowa 2007) (citations omitted). Plaintiff's motion for summary judgment requests only that the Court find that the contracts were valid and that the Court "eliminate all affirmative defenses addressing that element." (Doc. 130, at 3). Defendant's motion seeks complete summary judgment as to each of plaintiff's claims. (Doc. 138).
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). When asserting that a fact is undisputed or is genuinely disputed, a party must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials." FED. R. CIV. P. 56(c)(1)(A); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Alternatively, a party may "show[ ] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." FED. R. CIV. P. 56(c)(1)(B). More specifically, "[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." FED. R. CIV. P. 56(c)(2).
A fact is "material" if it "might affect the outcome of the suit under the governing law . . .." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (citation omitted). "An issue of material fact is genuine if it has a real basis in the record," Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citation omitted), or "when a reasonable jury could return a verdict for the nonmoving party on the question," Wood v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (internal quotation marks and citation omitted). Evidence that presents only "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), or evidence that is "merely colorable" or "not significantly probative," Anderson, 477 U.S. at 249-50, does not make an issue of fact genuine. In sum, a genuine issue of material fact requires "sufficient evidence supporting the claimed factual dispute" that it "require[s] a jury or judge to resolve the parties' differing versions of the truth at trial." Id. at 249 (citation and internal quotation marks omitted).
The party moving for summary judgment bears "the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue." Hartnagel, 953 F.2d at 395 (citation omitted). Once the moving party has met this burden, the nonmoving party must go beyond the pleadings and by depositions, affidavits, or other evidence designate specific facts showing that there is a genuine issue for trial. See Mosley v. City of Northwoods, Mo., 415 F.3d 908, 910 (8th Cir. 2005).
In determining whether a genuine issue of material fact exists, courts must view the evidence in the light most favorable to the nonmoving party, giving that party the benefit of all reasonable inferences that can be drawn from the facts. Tolan v. Cotton, 572 U.S. 650, 651 (2014); Matsushita, 475 U.S. at 587-88 (citation omitted); see also Reed v. City of St. Charles, Mo., 561 F.3d 788, 790 (8th Cir. 2009) (...
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