Situated v. American Eagle Express Inc. D

• Decision Date: 07 June 2010
• Docket Number: Civil Action No. 10-211 (JBS/AMD).
• Citation: 716 F.Supp.2d 361
• Parties: Mohamed ABUSHALIEH and Frank Samuels on behalf of themselves and all others similarly situated, Plaintiffs, v. AMERICAN EAGLE EXPRESS, Inc. d/b/a AEX Group, Defendant.
• Court: U.S. District Court — District of New Jersey

716 F.Supp.2d 361

Mohamed ABUSHALIEH and Frank Samuels on behalf of themselves and all others similarly situated, Plaintiffs,

v.AMERICAN EAGLE EXPRESS, Inc. d/b/a AEX Group, Defendant.

Civil Action No. 10-211 (JBS/AMD).

United States District Court,D. New Jersey.

June 7, 2010.

Joseph A. Osefchen, Esq., Philip Stephen Fuoco, Esq., The Law Firm of Philip Stephen Fuoco, Haddonfield, NJ, R. Andrew Santillo, Esq., The Winebrake Law Firm, LLC, Dresher, PA, for Plaintiffs.

Thomas A. Linthorst, Esq., Scott E. Ross, Esq., Morgan, Lewis & Bockius LLP, Princeton, NJ, for Defendant.

OPINION

SIMANDLE, District Judge:

This matter is presently before the Court on a motion by Defendant American Eagle Express Inc. (“AEX”) to dismiss Plaintiff's action under the “first-filed” rule ¹ [Docket Item 20]. The pending motion presents two questions. First, the Court must determine whether the first-filed rule is applicable to two consecutively filed putative collective actions under the Fair Labor Standards Act (“FLSA”), where the named plaintiffs are different but both sets of plaintiffs seek to represent the same group of AEX delivery drivers. The Court finds, for the reasons expressed below, that the first-filed rule does apply to these two actions. Second, the Court must decide the appropriate remedy-dismissal, stay, or transfer. As will be discussed, the Court will transfer this action to the Eastern District of Pennsylvania (“EDPA”), where the first-filed case, along with another related action, is currently pending.

I. BACKGROUNDA. The Sherman Case (E.D. Pa. Civ. No. 09-575(JS))

On February 10, 2009, Elizabeth Sherman, on behalf of herself and all others similarly situated, filed suit in the Eastern District of Pennsylvania, pursuant to the Pennsylvania Wage Payment and Collection Law, 43 Pa. Cons.Stat. §§ 260.1-.45, and the Pennsylvania Minimum Wage Act, 43 Pa. Cons.Stat. §§ 333.101-.115. Sherman is a delivery driver for AEX and argues that AEX improperly misclassifies delivery drivers as “independent contractors,” when they are truly “employees” under both common and statutory law. She brings all claims as a class action pursuant to Rule 23, Fed.R.Civ.P., representing “All individuals who worked as American Eagle delivery drivers in Pennsylvania, between February 10, 2006 and the present who were designated by defendant as ‘independent contractors.’ ” (Sherman Compl. ¶ 9.) The Sherman action seeks injunctive and declaratory relief, and damages.

B. The Spellman Case (E.D. Pa. Civ. No. 10-1764(MMB), previously D.D.C. Civ. No. 09-1666(RMC))

On September 1, 2009, eleven AEX delivery drivers, lead by Clinton Spellman, brought suit in the District of the District of Columbia, seeking relief under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, the Maryland Wage and Hour Law, Md. Code Ann. [Lab. & Empl.] §§ 3-415, 3-420, the Maryland Wage Payment and Collections Law, Md. Code Ann. [Lab. & Empl.] §§ 3-501 to -509, the District of Columbia Minimum Wage Act, D.C.Code §§ 32-1001 to -1015, and the District of Columbia Wage Payment and Wage Collection Act, D.C.Code §§ 32-1301 to -1310. Like Sherman, the named Spellman plaintiffs argue that AEX improperly labels its delivery drivers as independent contracts, when they are truly employees.

For their FLSA claim, the Spellman plaintiffs seek to represent “All persons who, within the relevant statutory period, served as pick up and delivery drivers (couriers) for AEX.” (Spellman Am. Compl. ¶ 9.) The amended complaint further alleges that “Named-Plaintiffs, the class, and the subclasses drive or drove delivery vehicles of less than 10,001 pounds gross vehicle weight while employed by AEX.” ( Id. ¶ 30.) The Spellman plaintiffs also ask for the creation of two separate subclasses, pursuant to Rule 23, Fed.R.Civ.P., for their Maryland and District of Columbia statutory claims. They seek declaratory, injunctive, and monetary relief.

On March 11, 2010, the Spellman plaintiffs moved to change venue to the EDPA, principally because of the pendency of the Sherman action. On April 9, 2010, Judge Collyer granted that motion stating, among other things

Defendant does not, and in this Court's opinion, cannot, seriously contest that it is in the interest of judicial economy to have both cases litigated in the same court insofar as they arise out of the same policy or practice of Defendant that is alleged to have violated applicable wage-and-hour laws and present the same legal issue-whether the couriers are “employees” subject to the wage-and-hour laws or “independent contractors” exempt therefrom.

(D.D.C. Civ. No. 09-1666, Docket Item 50.) The Spellman action has since been transferred to the Eastern District of Pennsylvania, where it has not yet been coordinated or consolidated with the Sherman action.

C. The Present Action

On January 14, 2010, Plaintiffs brought this collective action under the FLSA, arguing that AEX misclassifies delivery drivers as independent contractors instead of employees. They seek to represent “All individuals who worked as delivery drivers for AEX between January 15, 2007 and the present, who as part of their job duties for AEX drove delivery vehicles with a gross vehicle weight of 10,000 lbs. or less.” (Abushalieh Am. Compl. ¶ 10.) The amended complaint also states, “The collective action group for whose benefit this action is brought numbers several hundred AEX delivery drivers in, inter alia, New Jersey, Pennsylvania, Maryland, and Delaware who drive delivery vehicles with a gross vehicle weight of 10,000 lbs. or less and who each work under the same uniform AEX policies, practices and conditions outlined herein.” ( Id. ¶ 13.) The Abushalieh plaintiffs seek declaratory, injunctive, and monetary relief.

On February 17, 2010, Defendant filed the present motion, asking that the Court dismiss this action under the “first-filed rule,” based on the earlier Spellman action. Plaintiffs opposed arguing that (1) the first-filed rule may not apply to these circumstances because the named plaintiffs are different, (2) if the first-filed rule applies, Sherman is the first filed-case, and (3) the appropriate remedy if the first-filed doctrine is applicable is to transfer this case to the Eastern District of Pennsylvania.

After the parties finished briefing, Plaintiffs informed the Court that the District Court for the District of Columbia had transferred Spellman to the Eastern District of Pennsylvania [Docket Item 32]. The Court asked the parties to confer regarding the possibility of transferring this action to the EDPA to join Spellman and Sherman, but neither party consented to the transfer. Both parties asked the Court to resolve this motion, with Defendant preferring that the Court dismiss this case, while Plaintiffs expressed concerns about coordinating opt-in collective actions with opt-out class actions.

II. DISCUSSIONA. The “First-Filed” Rule

The first-filed rule is based on the principle that “ ‘in all cases of federal concurrent jurisdiction, the court which first has possession of the subject must decide it.’ ” EEOC v. University of Pennsylvania, 850 F.2d 969, 971 (3d Cir.1988) (citing Crosley Corp. v. Hazeltine Corp., 122 F.2d 925, 929 (3d Cir.1941)). To be applicable,

the later-filed case must be “truly duplicative of the suit before the court.” [

Smith v. SEC, 129 F.3d 356, 361 (6th Cir.1997) ]. That is, “the one must be materially on all fours with the other.... The issues must have such an identity that a determination in one action leaves little or nothing to be determined in the other.” Id.

Grider v. Keystone Health Plan Cent., Inc., 500 F.3d 322, 334 n. 6 (3d Cir.2007) (select internal punctuation and citation omitted).

“The first-filed rule encourages sound judicial administration and promotes comity among federal courts of equal rank.” EEOC, 850 F.2d at 971. The Third Circuit explained

It is of obvious importance to all the litigants to have a single determination of their controversy, rather than several decisions which if they conflict may require separate appeals to different circuit courts of appeals. No party has a vested right to have his cause tried by one judge rather than by another of equal jurisdiction.... The party who first brings a controversy into a court of competent jurisdiction for adjudication should, so far as our dual system permits, be free from the vexation of subsequent litigation over the same subject matter. The economic waste involved in duplicating litigation is obvious. Equally important is its adverse effect upon the prompt and efficient administration of justice. In view of the constant increase in judicial business in the federal courts and the continual necessity of adding to the number of judges, at the expense of the taxpayers, public policy requires us to seek actively to avoid the waste of judicial time and energy.

Crosley, 122 F.2d at 930.

As to the issues presented by the three related cases, the parties agree that the present case and the Spellman case raise virtually the identical FLSA claim and seek the same relief. The Court agrees. Both the Spellman and Abushalieh plaintiffs maintain that AEX has violated the FLSA by falsely classifying delivery drivers as “independent contractors,” even though AEX exercises significant control over these drivers making them not truly independent. (Abushalieh Am. Compl. ¶¶ 30-96; Spellman Am. Compl. ¶ 33.) To the extent that Spellman seeks additional relief under state statutes, it is clear that its FLSA fully encompasses the action pending before this Court; they are mirror images of each other. A determination in Spellman would leave nothing to be determined in this action.

Plaintiffs argue that their claims are also sufficiently similar to the Sherman case so that, if the first-filed rule is applicable at all, the Sherman case is truly the first-filed. ² On this, the Court disagrees. Though the factual allegations may be similar, the Sherman plaint...