Thomas Chapman v. Yellow Cab Cooperative, et al
Filed opinion of the court by Judge Easterbrook. AFFIRMED. Frank H. Easterbrook, Circuit Judge; Michael S. Kanne, Circuit Judge and David F. Hamilton, Circuit Judge. [6884421-1]  [17-1758]
United States Court of Appeals
For the Seventh Circuit
THOMAS EDWARD CHAPMAN,
YELLOW CAB COOPERATIVE and ALI MOHAMED,
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 15-CV-533-JPS — J.P. Stadtmueller, Judge.
SUBMITTED OCTOBER 23, 2017 — DECIDED NOVEMBER 16, 2017
Before EASTERBROOK, KANNE, and HAMILTON, Circuit
EASTERBROOK, Circuit Judge. Dennis Edwards owns a taxicab in Milwaukee. Yellow Cab Cooperative refers business
to his cab; other arrangements between Edwards and Yellow
Cab are not in the record. Edwards leased the cab to Parashu
Giri, who subleased some of the time to Thomas Chapman.
Apparently Giri and Chapman shared the cab so that it
could be in service much of the day. Chapman received fares
and tips from passengers, paid rent to Giri, and kept the difference; he did not pay anything to Yellow Cab or receive
anything from it.
Chapman contends in this suit under the Fair Labor
Standards Act that this arrangement makes him an “employee” of Yellow Cab. He alleges that, after he complained
about not receiving the minimum wage, Ali Mohamed, the
President of Yellow Cab, told Giri that Chapman was “fired”
(in other words, would not be dispatched to passengers who
called Yellow Cab seeking a ride). Giri then terminated the
sublease. Chapman submits that Mohamed’s action violates
the Act’s antiretaliation clause, 29 U.S.C. §215(a)(3).
District Judge Randa dismissed all of Chapman’s other
theories and directed him to file a new complaint. 2016 U.S.
Dist. LEXIS 23166 (E.D. Wis. Feb. 24, 2016). The amended
complaint was assigned to Judge Stadtmueller, who concluded that Chapman “must provide more detailed and
thorough allegations before the claim can be permitted to
proceed.” 2016 U.S. Dist. LEXIS 163586 at *8 (E.D. Wis. Nov.
28, 2016). The judge stated that the complaint had not discussed all of the “factors” identified in Secretary of Labor v.
Lauritzen, 835 F.2d 1529, 1534 (7th Cir. 1987), as potentially
relevant to the distinction between an employee and an independent contractor. Because “Chapman’s allegations, even
construed liberally, do not address these factors” (2016 U.S.
Dist. LEXIS 163586 at *12), the judge ordered Chapman to file
yet another complaint. The final version was filed and dismissed with prejudice. 2017 U.S. Dist. LEXIS 49309 (E.D. Wis.
Mar. 31, 2017). The judge stated that Chapman still had not
addressed all of the factors mentioned in Lauritzen and by
the Supreme Court in decisions such as Bartels v. Birmingham, 332 U.S. 126, 130 (1947).
To the extent the district court demanded that complaints
plead facts—not only facts that bear on the statutory elements of a claim, but also facts that bear on judicially established standards—it was mistaken. Ever since their adoption
in 1938, the Federal Rules of Civil Procedure have required
plaintiffs to plead claims rather than facts corresponding to
the elements of a legal theory. See Fed. R. Civ. P. 8. Old
code-pleading and fact-pleading systems were abandoned.
See Bartholet v. Reishauer A.G. (Zürich), 953 F.2d 1073 (7th Cir.
1992). Because complaints need not identify the applicable
law, see Johnson v. Shelby, 135 S. Ct. 346 (2014); Skinner v.
Switzer, 562 U.S. 521, 530 (2011), it is manifestly inappropriate for a district court to demand that complaints contain all
legal elements (or factors) plus facts corresponding to each.
It is enough to plead a plausible claim, after which “a
plaintiff ‘receives the benefit of imagination, so long as the
hypotheses are consistent with the complaint’”. Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 563 (2007) (citation omitted).
A full description of the facts that will prove the plaintiff’s
claim comes later, at the summary-judgment stage or in the
pretrial order. So both the Supreme Court and this court
have held when rejecting contentions that Rule 8 as understood in Twombly requires fact pleading. See Erickson v. Pardus, 551 U.S. 89 (2007); Swanson v. Citibank, N.A., 614 F.3d 400
(7th Cir. 2010). See also, e.g., Swierkiewicz v. Sorema N.A., 534
U.S. 506, 510–11 (2002) (Rule 8 does not call for the pleading
of all facts required to prevail). Twombly cited Swierkiewicz
with approval, see 550 U.S. at 555–56, 563, 569–70. So did
Johnson, 135 S. Ct. at 347, and Skinner, 562 U.S. at 530.
Perhaps the district court meant to do no more than rely
on the plausibility standard of Twombly and Ashcroft v. Iqbal,
556 U.S. 662 (2009). Chapman’s claim seems implausible because it does not allege any direct dealings between himself
and Yellow Cab. Instead it alleges that Edwards owns the
taxi, that Edwards leases the taxi to Giri, and that Giri subleased it to Chapman. Many decisions, of which Callahan v.
Chicago, 813 F.3d 658 (7th Cir. 2016), is an example, hold that
one does not become an “employee” of an entity several
steps removed in a chain of business relations just because
that entity’s decisions may have some effect on income.
Although Chapman’s claim as presented does not seem
plausible, the district court did not reject it on that ground—
and a desire for plausibility would not be enough to require
a complaint to contain facts matching all statutory “elements” and judicial “factors,” for Twombly and its successors
disparage such demands. Perhaps, however, we should understand the district court’s order as one under Rule 12(e):
A party may move for a more definite statement of a pleading to
which a responsive pleading is allowed but which is so vague or
ambiguous that the party cannot reasonably prepare a response.
The motion must be made before filing a responsive pleading
and must point out the defects complained of and the details desired. If the court orders a more definite statement and the order
is not obeyed within 14 days after notice of the order or within
the time the court sets, the court may strike the pleading or issue
any other appropriate order.
Rule 12(e), rather than a judicial demand for fact pleading, is
the right way to ask plaintiffs to lay out details that enable
the defendants to respond intelligently and the court to handle the litigation effectively. See Airborne Beepers & Video, Inc.
v. AT&T Mobility LLC, 499 F.3d 663, 665 (7th Cir. 2007). Giv-
ing the district court the benefit of the doubt, we treat its order as one under Rule 12(e).
If Chapman had responded to that order with additional
details, and the district court still had dismissed the complaint for failure to plead facts matching “elements” or “factors,” we would be obliged to reverse. Rule 12(e) cannot be
used to turn federal civil procedure into a fact-pleading or
code-pleading system. But Chapman did not respond with a
plausible claim. He not only failed to provide additional details but also insisted that, because Yellow Cab affected or
controlled his driving through the chain of leases starting
with Edwards, then Yellow Cab must be his employer. That
approach, equating regulatory authority with employment,
was rejected in Callahan. By disobeying the district court’s
order, while adding a legal theory, Chapman made his claim
less plausible. Rule 12(e) authorizes the district court to enter
any “appropriate order” when the plaintiff does not comply,
and after Chapman’s multiple failed efforts to frame a plausible claim the most appropriate order was the one the district court employed—dismissal with prejudice.
Chapman’s brief on appeal presents new allegations that
make his claim of an employment relation seem stronger.
But the place and time to make those allegations was in the
district court, in response to the judge’s order. A plaintiff
who disobeys an order from a district judge cannot hope to
have his case revived by attempting belated compliance in
the court of appeals.
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