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Portillo v. National Freight, Inc.

United States District Court, D. New Jersey

June 11, 2018

JOHN F. PORTILLO, et al., individually and on behalf of all others similarly situated, Plaintiffs,
v.
NATIONAL FREIGHT, INC., et al., Defendants.

          Alexandra Koropey Piazza, Esq. Camille Fundora, Esq. BERGER & MONTAGUE, P.C. Attorneys for Plaintiffs.

          Robert H. Bernstein, Esq. GREENBERG TRAURIG LLP Christiana Lynn Signs, Esq., Attorneys for Defendants.

          OPINION

          JEROME B. SIMANDLE, U.S. DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiffs John F. Portillo, Rafael Suarez, Martin Duran, German Bencosme, Edin Vargas, Luis A. Hernandez, Josue Paz, and Alvaro Castaneda ("Plaintiffs") bring this putative class action case against two New Jersey corporations, Defendants National Freight, Inc., and NFI Interactive Logistics, Inc. ("NFI" or "Defendants"). Plaintiffs are truckers from Pennsylvania and Rhode Island who claim that they performed deliveries to Trader Joe's stores throughout many East Coast states on behalf of Defendants, but Defendants erroneously classified them as independent contractors rather than employees, thereby taking unlawful deductions from their wages. [See Compl. at ¶¶ 1, 6-14, 18-48.] Plaintiffs claim Defendants are liable for violations of the Massachusetts Wage Act (Count I, ¶¶ 51-62), unjust enrichment (Count II, id. ¶¶ 63-72), and in quantum meruit (Count III, id. ¶¶ 73-77), but they seek to amend their pleadings to assert that New Jersey law should govern this dispute.

         Pending before the Court is Plaintiffs' Motion for Declaratory Relief that New Jersey law applies to Plaintiffs' claims [Docket Item 78]. Defendants filed a Response in Opposition [Docket Item 79], and Plaintiffs filed a Reply [Docket Item 82]. Plaintiffs subsequently filed two submissions directing the Court's attention to supplemental authority [Docket Items 86 and 92]. Oral argument on this issue was held on October 25, 2017 [Docket Item 88]. For the reasons discussed below, the Court finds, pursuant to a choice-of-law analysis, that New Jersey law should be applied to all of Plaintiffs' claims, as New Jersey has the most significant relationship with the claims, parties, and relationships at issue here.

         Defendant's Motion for Summary Judgment [Docket Item 66] and Plaintiff's Motion for Leave to File an Amended Complaint [Docket Item 68], also pending before the Court, are dismissed without prejudice; the parties have leave to re-file these motions (or modified versions thereof applying New Jersey law, at their respective elections) pursuant to the schedule previously set in this matter.

         II. BACKGROUND[1]

         A. Factual Background

         Defendants provide transportation, logistics, and distribution services for companies, including Trader Joe's (a grocery store chain). [Docket Item 79 at 9.] Both are incorporated in New Jersey and have their principal places of business in New Jersey. Id.

         Each Plaintiff drove for Defendants under a written contractual agreement, providing delivery services to Trader Joe's stores. Id. Defendants claim that each Plaintiff served as an independent contractor. Id. at 9-22. Plaintiffs claim that each Plaintiff was required to sign a contract with NFI, called an "Independent Contractor Operating Agreement, " [Docket Item 78-1 at 7] which states as follows:

23. GOVERNING LAW AND FORUM. This Agreement shall be interpreted in accordance with, and governed by, the laws of the United States and, of the State of New Jersey, without regard to the choice-of-law rules of New Jersey or any other jurisdiction. THE PARTIES AGREE THAT ANY CLAIM OR DISPUTE ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE STATE OR FEDERAL COURTS SERVING CUMBERLAND OR CAMDEN COUNTY, NEW JERSEY. CARRIER AND CONTRACTOR HEREBY CONSENT TO THE JURISDICTION AND VENUE OF SUCH COURTS.

         ("ICOA Provision") [Docket Item 78-2 at 8.]

         Defendants state that the Plaintiffs' contracts differed slightly, as follows:

1. Plaintiff Bencosme, who owned his own company, Bencosme Enterprises, entered that company into a "Lessor and Lease Operating Agreement" with NFI, which stated in relevant part: "J. GOVERNING LAW. This Agreement shall be governed by laws of the State of New Jersey, both as to interpretation and performance." ("LLOA Provision") [Docket Item 66-24 at 6. ]
2. Plaintiff Castaneda entered into the Independent Contractor Operating Agreement with the ICOA Provision. [Docket Item 66-25 at 7.]
3. Plaintiff Duran's agreements contained the ICOA Provision. [Docket Items 66-26 at 7; 66-27 at 7.]
4. Plaintiff Hernandez's agreement contained the ICOA Provision. [Docket Item 66-28 at 8.]
5. Plaintiff Paz separately entered into a Lessor and Lease Operating Agreement with NFI Logistics in 2009 and an Independent Contractor Operating Agreement in 2013. [Docket Item 79 at 16.] The former contained the LLOA Provision [Docket Item 66-29 at 6] and the latter contained the ICOA Provision [Docket Item 66- 30 at 18.]
6. Plaintiff Portillo entered into a Lessor and Lease Operating Agreement with NFI Logistics in 2009, which contained the LLOA Provision. [Docket Item 66- 31 at 6.]
7. Plaintiff Suarez entered into a Lessor and Lease Operating Agreement containing the LLOA Provision. [Docket Item 66-32 at 6.]
8. Plaintiff Vargas entered into a Lessor and Lease Operating Agreement containing the LLOA Provision. [Docket Item 66-33 at 6.]

         [Docket Item 79 at 9-21.]

         Plaintiffs Bencosme, Duran, Hernandez, Portillo, and Vargas are Rhode Island residents. Id. at 9-20. Plaintiffs Bencosme, Portillo, and Vargas all own their own trucking companies, each incorporated in Rhode Island (although Plaintiff Portillo's company now primarily does business in North Carolina). Id. at 9-22.

         Plaintiffs Castaneda, Paz, and Suarez are Pennsylvania residents, although Plaintiff Castaneda lived in Rhode Island from 2009 to 2015. Id. at 12-20. Plaintiff Suarez owns his own trucking company, which was incorporated in Pennsylvania in 2016. Id. at 19.

         Each of the named Plaintiffs delivered to Trader Joe's stores in at least nine (and as many as eleven) different states (including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Virginia), as well as the District of Columbia. Id. at 11-22.

         Each Plaintiff made deliveries from a Trader Joe's warehouse located in Nazareth, Pennsylvania, to the above locations. Plaintiff Duran also made deliveries from a Trader Joe's warehouse located in Hatfield, Pennsylvania. Id. Defendants had office space and employees in the Nazareth location, and several Plaintiffs noted that they would interact with Defendants' employees at that location to discuss problems, receive schedules, communicate with dispatchers, or pick up documents. Id. Several Plaintiffs also noted that, after they made their deliveries, they would return to the warehouse in Pennsylvania. Id. at 14-22.

         Plaintiffs aver that Defendants "employ[] a large number of workers in New Jersey, having a significant number of warehouses and facilities there, in addition to [their] corporate headquarters. In addition, [they] maintain[] significant operations in Pennsylvania, many near Nazareth, and employ[] a large number of people in Pennsylvania. Finally, according to its website, Trader Joe's has twelve stores in New Jersey, twenty stores in Massachusetts, and ten stores in Pennsylvania." [Docket Item 78-1 at 14-15 (internal citations omitted).]

         In response to the Court's questions at oral argument, Defendants averred (and Plaintiffs agree, for purposes of this motion) that Plaintiffs would return a trip sheet to a Payroll or Logistics Coordinator employed by Defendants and located in Nazareth, PA at the conclusion of each trip; that employee would document the receipt of the trip sheet in Defendants' transportation management system and generate a "batch collect" for that driver every one or two days; that employee would then inform the Driver Payroll Department (located in Voorhees, NJ) that the batch collect is complete; the Driver Payroll Department would perform spot-checks for accuracy and then inform the Accounts Payable Department (located in Cherry Hill, NJ), who would generate paychecks for drivers and use either direct-deposit or postal mail to transmit the paychecks to the drivers. [Docket Item 89 ¶¶ 1-5.] Drivers with questions about their pay would "typically" first approach a Logistics and/or Payroll Coordinator in the Nazareth Location and (if their questions were not answered) then would be directed to reach out "to the My-NFI service center, a toll-free call center staffed in Voorhees, NJ." Id. ¶ 6.

         B. Procedural Background

         Plaintiffs initially filed the complaint in New Jersey Superior Court and pled a violation of the Massachusetts Wage Act, G.L. c. 149, § 148, as well as Massachusetts common law claims for unjust enrichment and quantum meruit. [Docket Item 1-3 at ¶¶ 40-48.] After the Court denied Plaintiffs' motion to remand [Docket Item 12], Defendants moved to dismiss on the grounds that the Federal Aviation Administration Authorization Act of 1994 preempted the Massachusetts Wage Law [Docket Item 13]; the Court denied this motion in part and granted it in part, allowing the Massachusetts law claims to proceed in large part. [Docket Items 48 & 49.]

         Subsequent litigation revealed a choice-of-law question pertaining to the substantive claims in this case, and Magistrate Judge Karen M. Williams ordered Defendants to file their motion related to the choice-of-law issue. [Docket Item 65.] Defendants then filed a Motion for Summary Judgment on Choice-of-Law Issue [Docket Item 66], and an accompanying Statement of Facts [Docket Item 67].

         In response, Plaintiffs filed a motion for leave to amend the complaint [Docket Item 68] to plead "violations of the New Jersey Wage Payment Law ('NJWPL'), N.J. Stat. § 34:11-4.1 et seq., as well as unjust enrichment and quantum meruit claims under New Jersey common law, in the alternative to their claims under Massachusetts law." [Docket Items 68-1 at 5.] After those motions were filed, the Court held a telephone conference to address the posture in which the choice-of-law question was best presented. [Docket Items 74-76.]

         Ultimately, the Court ordered that Defendants' Motion for Summary Judgment and Plaintiffs' motion to amend "be held in abeyance pending determination of the choice of law issues" and ordered Plaintiffs to "file a motion for determination of choice of law as to each claim plaintiffs are choosing to assert" and convening oral argument on the subject. [Docket Item 77.]

         Plaintiffs then filed the instant Motion for Declaratory Relief on the choice-of-law issue [Docket Item 78]. Oral argument on the choice-of-law issue was held on October 25, 2017 [Docket Item 88]. Plaintiffs subsequently submitted additional authority to the Court's attention [Docket Items 86; 92].

         III. ...


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