In re Fedex Ground Package System Inc.

• Decision Date: 13 December 2010
• Docket Number: Cause No. 3:05–MD–527 RM.No. MDL–1700.
• Parties: In re FEDEX GROUND PACKAGE SYSTEM, INC., EMPLOYMENT PRACTICES LITIGATION.This Document Relates to: All Cases.
• Court: U.S. District Court — Northern District of Indiana

758 F.Supp.2d 638

In re FEDEX GROUND PACKAGE SYSTEM, INC., EMPLOYMENT PRACTICES LITIGATION.This Document Relates to: All Cases.

Cause No. 3:05–MD–527 RM.No. MDL–1700.

United States District Court, N.D. Indiana, South Bend Division.

Dec. 13, 2010.

OPINION and ORDER

ROBERT L. MILLER, JR., District Judge.

The court today addresses all outstanding motions for summary judgment and disposes of all other pending cases in this FedEx Multidistrict Litigation docket. In August, this court granted FedEx's motion for summary judgment in the Kansas case and ordered the parties to file five-page supplementary briefs for each of the outstanding class cases addressing why the outcome in those cases should be the same as or different from Kansas.

The court incorporates here the background and findings of fact contained in its Kansas decision and assumes the reader's familiarity with the contents of that decision and other substantive decisions in this MDL litigation. See generally Op. and Ord., 734 F.Supp.2d 557 (N.D.Ind.2010) [Doc. No. 2097] ¹ (“ Kansas Decision ”).² The court applies the summary judgment standard set forth in the Kansas Decision, 734 F.Supp.2d at 583–584.

When appropriate, the court will incorporate its reasoning from the Kansas decision. The reasoning for each of today's dispositions is provided state by state in alphabetical order and, for ease of reference, an appendix at the end of this opinion and order summarizes today's dispositions.

I. General Introduction

Before turning to the specifics of today's decisions, the court addresses some common themes arising from the parties' briefs in these FedEx MDL cases and offers some general comments that might help to understand these decisions.

A. These MDL Decisions Won't Preclude Most Future Litigation Concerning Employment Status of FedEx Ground Drivers.

The plaintiff drivers in these FedEx MDL cases have entered into independent contractor agreements with FedEx Ground to provide package delivery services. Generally, the drivers seek determinations that they are employees under the various states' laws and they seek reimbursement of business expenses and backpay for overtime and other wages. The nationwide character of this litigation makes it a truly unique set of cases, unlike anything that has appeared in the cases cited in the parties' briefs.

Employment status questions typically arise when someone is physically harmed—either a third party or a worker. Courts developed the common law right to control test to determine whether an employer had reserved enough control over a worker to justify holding the employer liable for the worker's tortious conduct towards a third party. Modern statutes have extended worker's compensation protection to employees, sometimes using the common law right to control approach and sometimes broadly redefining the term “employee” to include a larger group of workers than the common law test would have included.

Today's cases don't involve physical harm to third parties or to the plaintiffs. Some of the states considered today have wage statutes that recognize the harm of illegal methods of paying wages to workers, such as not paying overtime, deducting business expenses from employees' wages, and the like. Cases involving these wage statutes often involve state agencies seeking to penalize wayward employers and to vindicate workers' statutorily created rights or the state's statutory rights to collect employment taxes. Though it is less common, workers also may vindicate their rights in private causes of action by seeking to have a court declare that they are employees instead of independent contractors. In other states lacking these statutes—and in all the states in this MDL litigation—there remains these MDL plaintiffs' generalized effort to be reclassified as employees so as to shift the balance of rights and duties in the working arrangement between themselves and FedEx: the plaintiff drivers then would have fewer duties and increased rights (but likely also decreased entrepreneurial opportunities with FedEx and decreased gross pay) and FedEx would face increased duties.

Beyond the substantive character of these claims, the procedural uniqueness of these cases—an MDL proceeding consisting of class actions—is particularly noteworthy because this procedural posture has substantially limited the scope of evidence available to this court to decide the drivers' generalized employment status question. Under the procedural posture of these cases, this court has considered evidence common to the drivers' relationships with FedEx on a nationwide basis: the Operating Agreement and generally applicable Policies and Procedures. As a condition of class certification, the court excluded particularized evidence of actual control between FedEx and the drivers. This condition was appropriate to satisfy the commonality requirement for class certification, to satisfy the commonality and judicial economy considerations motivating the consolidation of these cases in an MDL court, and to address the very nature of these plaintiffs' generalized claims.

The cases' substantive nature and procedural posture might limit the preclusive effect of this court's decisions in these cases. These decisions aren't expected to preclude injured persons from seeking respondeat superior liability or worker's compensation. Such personal injury cases would surely involve the review of much extrinsic and individualized evidence of a particular driver's relationship with FedEx. Today's decisions also don't address what the outcomes of these cases might be if the classes were defined differently.³

B. The Procedural Posture of These Cases Limits the Scope of Evidence Reviewed.

In their supplemental briefs, the drivers have complained at times that the court “refused” to consider extrinsic evidence of FedEx's actual conduct towards them. The cases' procedural posture limits the court to considering evidence truly common across the nation: the Operating Agreement and generally applicable Policies and Procedures. These cases might or might not come out differently under a different procedural posture allowing wider scope for review of extrinsic and particularized evidence, but that situation is not before the court today.⁴

The drivers' characterization of the court's use of evidence, after the court indulged their strategy of coming before an MDL court as classes, isn't well-taken. To disagree with the court's rulings is fair (and is a matter better handled through a motion to reconsider or an appeal), but to say the court “refused” to do something when the court accepted the drivers' own arguments on the matter isn't accurate.⁵ The parties have heaped numerous insults upon each other's arguments and reasoning in their various briefs, and the court has patiently overlooked their excursions into the land of uncivil arguments, exaggerations, and mischaracterizations (and the court has avoided wasting time on listing citations to all the foul balls the parties pitched in their arguments); the court is less patient with mischaracterizations of its own efforts to rule fairly on the issues in this litigation.

The drivers have known at least since this court's first order granting class certification that the scope of evidence would, under the approach taken by the drivers, be limited to the Operating Agreement and generally applicable Policies and Procedures. See generally Op. and Ord., Mar. 25, 2008, 273 F.R.D. 424, 2008 WL 7764456 [Doc. No. 1119]. In July 2005, the drivers argued to the Judicial Panel on Multidistrict Litigation in Denver that their cases were appropriate for MDL centralization and that they could satisfactorily litigate their case based on common evidence. The drivers' ensuing briefs seemed to indicate that they were perfectly comfortable with, and felt they could win their case based on, the use of common evidence. The court tried to remind the drivers that their cases would be decided on the basis of common evidence. See, e.g., Op. and Ord., 662 F.Supp.2d 1069, 1104 n. 5 (N.D.Ind.2009) [Doc. No. 1770] (“The court notes that the plaintiffs may have indicated a desire to introduce anecdotal evidence to support their claims in this action. If the plaintiffs intend to introduce anecdotal evidence of FedEx's actual exercise of control to support their claims, they should inform the court immediately because this may require reevaluation of class certification.”); Ord., Apr. 22, 2008 [Doc. No. 1152].

As the court stated in the Kansas Decision:

The court sets forth the facts from the perspective of what control FedEx has the right to exercise over its drivers and not necessarily what control FedEx actually exercises on a daily basis. While FedEx managers might exercise more control than what is retained in the Operating Agreement and commonly applicable policies and procedures, the class was certified on the basis of right to control, not actual exercise of control. The plaintiffs reiterated to this court during class certification that they could show right to control by reliance solely on the Operating Agreement and applicable policies and procedures and wouldn't go beyond those documents to prove their case. In short, the issue for today's purposes is what control FedEx had the right to exert pursuant to the parties' contractual relationship.

* * *

FedEx might actually exercise more control than authorized, but as explained, the court is limited to determining whether FedEx retained the right to control. The court relies on the policies and procedures to the extent they show how FedEx implemented its authority as retained by the Operating Agreement.

Kansas Decision, 734 F.Supp.2d at 560, 589.

C. Collateral Estoppel Issue

The California court of appeals affirmed the Estrada trial court's decision finding FedEx Single Work Area (SWA) drivers to be employees. Estrada v. FedEx Ground Package Sys., Inc., 154 Cal.App.4th 1, 64 Cal.Rptr.3d 327...