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Schwann v. FedEx Ground Package System, Inc.

United States District Court, D. Massachusetts

September 20, 2017

CLAYTON SCHWANN, et al., Plaintiffs,



         I. Introduction

         Numerous plaintiffs originally filed this lawsuit against Defendant FedEx Ground Package System, Inc. (“FedEx”), although at this stage in the litigation only one plaintiff, Clayton Schwann (“Schwann”), remains. Count I alleged a violation of the Massachusetts Independent Contractor Law, Mass. Gen. L. c. 149 §148B (“Independent Contractor Law” or “§ 148B”), and Count II alleged a violation of the Massachusetts Wage Law, Mass. Gen. L. c. 149 §§148, 150 (“Wage Law”). D. 1. Schwann also originally brought a claim for unjust enrichment, Count III, but that claim was resolved on an earlier motion for summary judgement, D. 102. Schwann first moved for summary judgment on July 31, 2012 based on liability under the Independent Contractor Law. D. 30. Specifically, Schwann asked the court to find that, as a matter of law, he was an employee of FedEx because FedEx could not meet prongs 2 or 3 of the three-pronged Independent Contractor Law. Id. at 8-10. After an extensive procedural history, including two summary judgment decisions issued by a different judge in this district, review by the First Circuit where prong 2 of the Independent Contractor Law was held to be preempted by federal law and the granting of a motion for reassignment, the case landed before this Court. D. 168. Schwann's supplemental brief suggested that prongs 1 and 3 of the Independent Contractor Law were now ripe for review. See D. 174. As conceded by Schwann's counsel at the motion hearing and as discussed before fully below, however, only prong 3 of the Independent Contractor Law is ripe. For the reasons stated below, the Court DENIES Schwann's motion for summary judgement as to prong 3. D. 68.

         II. Standard of Review

         Summary judgment is appropriate when the record reveals “no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The evidence submitted in support of the motion must be considered in the light most favorable to the nonmoving party, drawing all reasonable inferences in its favor, Navarro v. Pfizer Corp., 261 F.3d 90, 94 (1st Cir. 2001), but only “to the extent supportable by the record, ” Scott v. Harris, 550 U.S. 372, 381 n.8 (2007).

         As to issues on which the nonmoving party has the burden of proof at trial, the moving party “need do no more than aver ‘an absence of evidence to support the nonmoving party's case.'” In re Varrasso, 37 F.3d 760, 763 n.1 (1st Cir. 1994) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)); see Meuser v. Fed. Express Corp., 564 F.3d 507, 515 (1st Cir. 2009); Ingram v. Brink's, Inc., 414 F.3d 222, 228-29 (1st Cir. 2005). “Once the moving party avers an absence of evidence to support the non-moving party's case, the non-moving party must offer ‘definite, competent evidence to rebut the motion.'” Meuser, 564 F.3d at 515 (quoting Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991)); see Hannon v. Beard, 645 F.3d 45, 49 (1st Cir. 2011) (explaining that “[a] genuine issue of material fact can be created only by materials of evidentiary quality”); Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) (stating that summary judgment cannot be defeated by relying on “conclusory allegations, improbable inferences, and unsupported speculation”). If the nonmoving party cannot “produce evidence on which a reasonable finder of fact, under the appropriate proof burden, could base a verdict for it . . . the motion must be granted.” Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 94 (1st Cir. 1996).

         III. Factual Background

         The facts of this case have been outlined extensively in previous court orders. See, e.g., D. 65. As such, only the undisputed facts relevant to this motion are recounted here. FedEx is a federally registered motor carrier licensed by the United States Department of Transportation engaged in the business of providing package delivery services to its customers throughout the country, including in the Commonwealth of Massachusetts. D. 69 ¶ 1; D. 72 ¶ 1. Schwann worked for FedEx as a package pick-up and delivery driver in Massachusetts. D. 69 ¶¶ 2-11. As a condition for working for FedEx, Schwann signed an “Operating Agreement” (“OA”), D. 69-13, which laid out various stipulations that governed the working relationship between FedEx and Schwann and classified Schwann as an independent contractor. See D. 69 ¶ 12; D. 72 ¶ 4. Schwann was required to use his own vehicle for pick-up, transportation and delivery services. D. 72 ¶ 2. Under the OA, FedEx retained the ability to dictate the “identifying colors, logos, numbers, marks and insignia” of the vehicles. D. 69-13 § 1.5. The OA further stipulated that while Schwann could “use the Equipment for other commercial or personal purposes, ” he was to do so “with the understanding that all such identifying numbers, marks, logos and insignia will be removed or masked (by paper or plastic overlay) when the Equipment is so used.” Id. Moreover, pursuant to the OA, Schwann was forbidden from using his vehicle for any other purposes other than the carriage of FedEx packages while acting in the service of FedEx. Id. § 1.4.

         The OA provided Schwann the exclusive right to perform his delivery services in one or more Primary Service Areas (“PSA”), or routes, and recognized “a proprietary interest by Contractor in the customer accounts in his/her Primary Service Area . . . .” Id. § 5.3. Nonetheless, the OA granted FedEx the authority to “reconfigure” a driver's service area upon five days' written notice “with the result that customers previously served by the Contractor are reassigned.” Id. In structuring the means by which he delivered packages within his PSA, Schwann could “with the consent of FedEx Ground and consistent with the capacity of the terminal serviced by [each Plaintiff], own and operate more than one vehicle, with any such additional vehicles to be driven by qualified operators employed by [Plaintiffs] . . . .” Id. § 2.1. Additionally, the OA granted Schwann the ability to “employ or provide person(s) to assist [him] in performing the obligations specified by this Agreement.” Id. § 2.2. In other words, pursuant to the OA, Schwann could-at least conceivably-deliver his assigned packages himself, hire his own workers to make the deliveries or structure his delivery system somewhere in between the two (i.e. delivering some packages while hiring others to deliver the rest).

         IV. Procedural History

         Schwann was originally a member of a lawsuit filed against FedEx in 2005 based on the same claims present in this case. See D. 65 at 1-2. That case, Sheehan v. FedEx Ground Package Sys., Inc., No. 05-10936 (D. Mass. filed May 6, 2005), was transferred by the Multidistrict Litigation (“MDL”) Panel to the Northern District of Indiana where it was consolidated for pretrial purposes with a number of similar cases brought against FedEx. D. 65 at 2. The transferee judge in the Northern District of Indiana ultimately denied the Sheehan plaintiffs' motion for class certification and the case was remanded back to this district. Order Lifting Stay of Cond. Remand Order, No. 05-00527 (N.D. Ind. Sept. 24, 2010) (Doc No. 2213). Subsequently, the Sheehan case was settled. D. 65 at 2. The instant case was then brought in 2011 on behalf of the drivers who did not settle for a variety of reasons (“Original Plaintiffs”). D. 1. The remaining Original Plaintiffs filed their first motion for summary judgment on July 31, 2012. D. 30. This motion asked the court (Stearns, J.) to find that they were employees, rather than independent contractors, under prongs 2 and 3 of the Independent Contractor Law. Id. Prong 1 was not briefed. Id. Judge Stearns dismissed this motion without prejudice pending the resolution of a class certification issue. See D. entry dated November 2, 2012.

         After Judge Stearns denied the motion to certify class in April 2013, D. 65, the parties both renewed their motions for summary judgment. D. 68; D. 70. Again, Original Plaintiffs' motion only asked the court to determine whether they were employees under prongs 2 and 3 of the Independent Contractor Law. D. 68. FedEx also filed a motion for summary judgment, arguing, inter alia, that Original Plaintiffs' claims were preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). D. 70. On July 3, 2013, the Court denied FedEx's motion on Counts I and II, finding no FAAAA preemption, and granted it as to Count III (unjust enrichment). D. 102. Finding that Original Plaintiffs did not work outside FedEx's “usual course of business” under prong 2 of § 148B, the Court granted summary judgment in their favor as to Count I. Id. at 16. Because the three prongs of the Independent Contractor Law are conjunctive-meaning a worker is deemed an employee if any one prong is not met-the Court did not reach the merits of prong 3. Id. at 17.

         After subsequent litigation on the damages recoverable under the Massachusetts Wage Act (Count II), Judge Stearns certified questions on damages to the Supreme Judicial Court of Massachusetts. D. 125. Prior to the scheduled oral argument before the Supreme Judicial Court, however, the First Circuit issued its decision in Massachusetts Delivery Ass'n (“MDA”) v. Coakley, 769 F.3d 11 (1st Cir. 2014), which cast doubt upon Judge Stearns' earlier ruling that prong 2 of § 148B was not preempted by the FAAAA. Consequently, he requested supplemental briefing “to address both the impact of the MDA decision, as well as Original Plaintiffs' contention that they are entitled to summary judgment on the third prong of 148B.” D. 137. For the first time, over two years after their initial summary judgment filing, Original Plaintiffs argued in their supplemental brief that the court could also grant summary judgment as to prong 1. D. 138 at 10.

         In light of MDA, Judge Stearns ruled that prong 2 was preempted by the FAAAA. D. 149. He also decided that prong 2 was not severable from prongs 1 and 3. Id. at 4-5. As such, he did not address the merits of Original Plaintiffs' argument concerning either of the other prongs and granted summary judgment in favor of FedEx on all counts. Id. Original Plaintiffs appealed the ruling to the First Circuit, D. 155, which affirmed that prong 2 of ยง 148B was preempted by the FAAAA, but reversed as to the holding that prong 2 was not severable from prongs 1 and 3 and remanded the case back to the district court as to those two prongs. D. ...

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