Portillo v. Nat'l Freight, Inc., Civil Action No. 15-7908 (JBS/KMW)

• Court: United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
• Citation: 169 F.Supp.3d 585
• Docket Number: Civil Action No. 15-7908 (JBS/KMW)
• Parties: John F. Portillo, Rafael Suarez, Martin Duran, German Bencosme, Edin Vargas, Luis A. Hernandez, Josue Paz, and Alvaro Castaneda, individually and on behalf of all others similarly situated, Plaintiffs, v. National Freight, Inc. and NFI Interactive Logistics, Inc., Defendants.
• Decision Date: 15 March 2016

169 F.Supp.3d 585

John F. Portillo, Rafael Suarez, Martin Duran, German Bencosme, Edin Vargas, Luis A. Hernandez, Josue Paz, and Alvaro Castaneda, individually and on behalf of all others similarly situated, Plaintiffs,
v.
National Freight, Inc. and NFI Interactive Logistics, Inc., Defendants.

Civil Action No. 15-7908 (JBS/KMW)

United States District Court, D. New Jersey.

Signed March 15, 2016

169 F.Supp.3d 588

Alexandra K. Piazza, Esq., Shanon J. Carson, Esq., Sarah Schalman-Bergen, Esq., BERGER & MONTAGUE PC, 1622 Locust Street, Philadelphia, PA 19103 and Harold Lichten, Esq., Thomas Fowler, Esq., Lichten & Liss-Riordan, P.C., 729 Boylston Street, Suite 2000, Boston, MA 02116 and James W. Simpson, Jr., Esq., Law Offices of James W. Simpson, Jr. P.C., 100 Concord Street, Suite 3B, Framingham, MA 01702, Counsel for Plaintiffs.

Robert H. Bernstein, Esq., James N. Boudreau, Esq., Mark D. Lurie, Esq., GREENBERG TRAURIG LLP, 500 Campus Drive, Suite 400, Florham Park, NJ 07932, Counsel for Defendants.

OPINION

SIMANDLE, Chief Judge:

This case presents interesting issues regarding the timing of the removability of a class action upon the jurisdictional grounds of “minimal diversity” under the Class Action Fairness Act of 2005, and especially 28 U.S.C. §§ 1446(b)(1) and (b)(3) which create two periods of time for such a removal to federal court.

From approximately 2009 to 2014, Plaintiffs John F. Portillo, Rafael Suarez, Martin Duran, German Bencosme, Edin Vargas, Luis A. Hernandez, Josue Paz, and Alvaro Castaneda (hereinafter, “Plaintiffs”) performed deliveries to Trader Joe's stores throughout the Commonwealth of Massachusetts on behalf of Defendants National Freight, Inc. and NFI Interactive Logistics, Inc. (hereinafter, “NFI” or “Defendants”). (See Compl. at ¶¶ 1, 6-13.) During this period, however, Plaintiffs claim that Defendants misclassified them as independent contractors rather than employees and made unlawful deductions from their wages, in violation of Massachusetts General Law c. 149, §§ 148, 148B (hereinafter, “section 148”). (See id. at ¶¶ 1, 14, 18-48.)

As a result, Plaintiffs brought claims in the New Jersey Superior Court on behalf of themselves and other similarly situated delivery drivers. Upon completion of the parties' briefing on Defendants' motion to dismiss (and on the eve of the state court return date), Defendants removed this action under the expanded diversity provisions of the Class Action Fairness Act of 2005 (hereinafter, “CAFA”), Pub. L. No. 109-2, 119 Stat. 4 (2005) (codified in scattered sections of Title 28 of the United States Code), and Plaintiffs' pending motion to remand followed. [See Docket Item 4.]

In seeking to remand, Plaintiffs challenge Defendants' removal on timeliness grounds, and on the basis that their Notice of Removal fails to sufficiently demonstrate that this action meets the jurisdictional amount in controversy requirement under CAFA. (See generally Pls.' Br. at 3-8; Pls.' Reply at 3-12.) On the issue of timeliness, Plaintiffs claim that the allegations of their Complaint, viewed through the lens of Defendants' own records at the time of filing, provided ample information

169 F.Supp.3d 589

from which to divine an arguable basis for federal CAFA jurisdiction within the removal windows of 28 U.S.C. § 1446(b). (See generally Pls.' Br. at 3-5; Pls.' Reply at 10-12.) As a result, they submit that Defendants' tardy removal—128 days after receipt of Plaintiffs' Complaint—plainly exceeded the 30-day requirement of 28 U.S.C. §§ 1446(b)(1) and (b)(3). (See generally Pls.' Br. at 3-5; Pls.' Reply at 10-12.) In addition, Plaintiffs claim that Defendants' Notice of Removal falls far short of establishing jurisdiction under CAFA, because it provides little more than a “baseless, blind ‘guestimate’ ” that this action meets the jurisdictional amount in controversy (of $5,000,000).¹ (Pls.' Br. at 5-8; Pls.' Reply at 3-10.)

Defendants, by contrast, take the position that Plaintiffs' submissions during the state court proceedings failed to sufficiently tip them off to federal CAFA jurisdiction. (See Defs.' Opp'n at 3-6, 10-11.) Rather, Defendants claim that they only learned that this action satisfied the CAFA requirements through their own internal investigation into Plaintiffs' allegations, and submit that they promptly removed this action upon receipt of these independently uncovered jurisdictional facts. (See id. at 7-11.) In addition, Defendants state that their Notice of Removal, together with their supplemental declaration on damages,² easily satisfies their burden of demonstrating that the amount in controversy here exceeds the $5,000,000 threshold under CAFA. (See id. at 11-14.)

CAFA dramatically expanded the role of the federal judiciary in class action litigation, and expressed a clear preference for qualifying class actions to be entertained in federal forums. In view of the breadth of CAFA, this case calls upon the Court to consider the time clocks for removal under 28 U.S.C. §§ 1446(b)(1) and (b)(3), as well as the showing necessary to meet the removal requirements under CAFA.

More specifically, and as applied here, the Court must examine whether the Complaint contained sufficient notice to trigger CAFA's jurisdiction, thus launching the first thirty-day period for removal under 28 U.S.C. § 1446(b)(1). If not, the Court must determine whether Defendants' removal runs afoul of the thirty-day period for removal under 28 U.S.C. § 1446(b)(3), which is triggered by a defendant's receipt of a litigation document demonstrating sufficient jurisdictional facts to make the matter removable under CAFA. If neither of these periods has been triggered, as Defendants suggest, the issue becomes whether the case can be removed based on Defendants' discovery of their own documents that demonstrate, for the first time, that CAFA jurisdiction is present, including minimal diversity, numerosity of over 100 class members, and at least $5,000,000 in dispute.

169 F.Supp.3d 590

For the reasons that follow, this Court concludes that Defendants properly removed this action following their independent discovery of jurisdictional facts satisfying CAFA's requirements, and that Defendants have shown that this action meets the amount in controversy requirement. Plaintiffs' motion to remand will, accordingly, be denied. The Court finds as follows:

1. Factual and Procedural Background .³ The Complaint alleges that Defendants provide transportation, logistics, and distribution services to national grocery chains, including Trader Joe's stores in Massachusetts, Rhode Island, Connecticut, New York, New Jersey, and Virginia.⁴ (See Compl. at ¶¶ 18-19.) In order to provide these delivery services, Defendants utilize “employee drivers” as well as drivers classified as “independent contractors,” like Plaintiffs. (Id.) Despite the labeling of this arrangement, however, Plaintiffs claim that Defendants treated their “independent contractors” in many respects the same as their “employee drivers,” by (1) requiring them to comply with all of Defendants' “written and unwritten policies,” (2) imposing fixed work schedules, (3) precluding them from performing outside delivery services, and (4) subjecting them to pay deductions for delivery issues, certain costs, and/or insurance premiums.⁵ (Id. at ¶¶ 22-24, 30-35.) In other words, Plaintiffs allege that Defendants “controlled nearly every aspect” of Plaintiffs' work, as if they acted as fulltime employees. (Id. at ¶ 34.)

2. In light of these circumstances, on June 22, 2015, Plaintiffs filed a Class Action Complaint in New Jersey Superior Court, “ ‘on behalf of [a]ll individuals who [Defendants] classified as independent contractors while performing deliveries on behalf of Defendants to Trader Joe's stores in the Commonwealth of Massachusetts during the applicable limitations period,’ ” and asserting claims for violations of section 148 of Massachusetts' General Law, unjust enrichment, and quantum meruit. (Notice of Removal at ¶ 4 (citation omitted).) Although dressed in different terms, each claim advances, in essence, Plaintiffs' position that Defendants required Plaintiffs (and their proposed class) to effectively operate as employed drivers, yet deprived them of the financial rewards, benefits, and statutory protections appurtenant to that employment status. (See generally Compl.)

3. Following Defendants' receipt of Plaintiffs' Complaint on June 30, 2015, Defendants did not initially seek to remove the matter to federal court; instead, Defendants moved to dismiss Plaintiffs' Class Action Complaint on August 15, 2015, arguing that the Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. § 14501(c)(1) (hereinafter, the “FAAAA”), preempted the Massachusetts' state law wage claims at issue. (Notice of Removal at ¶ 6; see also Ex. A to the Notice of Removal.) In other words, the 30-day removal period, if triggered by the contents of the Complaint, would have elapsed on July 30, 2015, about two weeks

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before Defendants moved to dismiss in Superior Court.

4. Seventeen days after the parties completed the briefing on Defendants' dismissal motion (and 128 days after Defendants received service of Plaintiffs' Complaint),⁶ Defendants filed a...