CRST Expedited, Inc v. Swift Transportation Co, Inc

Filing 203

ORDER denying 180 Motion to Certify Questions to the Iowa Supreme Court; granting in part, denying in part, and denying in part as moot 183 Motion for Clarification and/or Reconsideration. See text of Order for details. Signed by Judge CJ Williams on 6/28/2019. (SAM)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION
CRST EXPEDITED, INC,
Plaintiff,

No. 17-cv-25-CJW-KEM

vs.
SWIFT TRANSPORTATION CO OF
ARIZONA, LLC,

MEMORANDUM OPINION
AND ORDER

Defendant.
____________________
TABLE OF CONTENTS
I.

BACKGROUND.................................................................. 2

II.

MOTION FOR RECONSIDERATION AND/OR CLARIFICATION . 5
A.
B.

III.

Reconsideration .......................................................... 6
Clarification .............................................................. 14

MOTION FOR CERTIFICATION ........................................... 15
A.
B.

IV.

“Unenforceability” ...................................................... 18
Restatement (Third) of Torts: Liability for Economic Harm. 21

CONCLUSION ................................................................... 23
This matter is before the Court on Swift Transportation’s (“defendant”) Motion

for Clarification and/or Reconsideration of the Court’s Order Applying Iowa Law to All
250 Driver Contracts at Issue (Doc. 183), and on defendant’s Motion to Certify Questions
Pursuant to Iowa Code Section 684A.1 and 684A.2 (Doc. 180). CRST Expedited, Inc.
(“plaintiff”) timely resisted both motions (Docs. 187, 188), and the Court entertained

oral argument on the motions on June 25, 2019. For the following reasons, defendant’s
Motion for Clarification and/or Reconsideration of the Court’s Order Applying Iowa Law
to All 250 Driver Contracts at Issue (Doc. 183) is granted in part, denied in part, and
denied in part as moot. Defendant’s Motion to Certify Questions Pursuant to Iowa
Code Section 684A.1 and 684A.2 (Doc. 180) is denied.
I.

BACKGROUND

On June 4, 2019, this Court entered its Order on the parties’ cross motions for
summary judgment. CRST Expedited, Inc. v. Swift Transp. Co. of Az., LLC, No. 17-cv25-CJW-KEM, 2019 WL 2358407 (N.D. Iowa June 4, 2019) (“Swift”). Defendant’s
current motions both relate, in certain ways, to the Court’s summary judgment ruling.
The Court will not repeat the entirety of its summary judgment analysis in this Order and
will, instead, summarize the relevant points and highlight the relevant issues. The
following facts are excerpted from the Court’s summary judgment Order:
Plaintiff and defendant are both commercial trucking companies that
provide freight-hauling services throughout the country. To operate a semitrailer, an individual must possess a commercial driver’s license (“CDL”).
(Docs. 130-1, at 2; 146-1, at 2). The trucking industry, however, is facing
a shortage of licensed drivers. (Docs. 130-1, at 1-2; 146-1, at 2). Plaintiff
operates a driver training program that allows individuals to obtain their
CDLs. (Docs. 130-1, at 2; 146-1, at 2). When individuals enroll in the
training program, plaintiff advances the costs of transportation to the
training site, lodging, drug tests, physicals, and tuition for the program.
(See Docs. 130-1, at 2; 146-1, at 2). These advances are ultimately to be
repaid to plaintiff either through a reduced rate of pay until the debt has
been satisfied, or through a lump sum payment to plaintiff, as is explained
below. (Docs. 140-1, at 8-9; 159-1, at 18, 20).
. . . [T]hose [trainees] who are hired by plaintiff sign a Driver
Employment Contract (“Driver Contract”) (Docs. 140-1, at 12; 159-1, at
26). The Driver Contracts contain either an eight-month or a ten-month
restrictive term, during which time the driver-signatory is prohibited from
driving for one of plaintiff’s “competitors.” (Docs. 130-2, at 51-52; 1401, at 12; 159-1, at 28). If a driver is discharged or leaves employment

2

before the restrictive term ends, the driver cannot work for any “CRST
competitor” during the remainder of the restrictive term. (Docs. 130-2, at
51-52; 140-1, at 16; 159-1, at 38-39). In addition, a driver who leaves
employment before his restrictive term ends is charged $6,500, regardless
of the amount of time remaining on his restrictive term. (Docs. 140-1, at
16; 159-1, at 38-39; see also, e.g., Doc. 130-2, at 52 (a representative
Driver Contract that contains a $6,500 liquidated damages provision)).
Plaintiff asserts that if a driver repays the $6,500, he is released from the
contract. (Doc. 159-1, at 39).
Plaintiff brought suit alleging that defendant has actively recruited
and continues to actively recruit plaintiff’s drivers, even though those
drivers remain within the restrictive terms of their Driver Contracts. (Doc.
43, at 4). Specifically, plaintiff asserts that defendant is aware that the
drivers at issue remain within the restrictive terms of their contracts, and
that defendant’s conduct of actively recruiting its drivers is the cause of the
drivers leaving plaintiff to drive for defendant. (Id., at 5-10). By hiring
drivers who obtained their CDL at plaintiff’s expense, plaintiff asserts that
defendant is able to gain the advantage of hiring licensed commercial truck
drivers without undertaking the expense of training those drivers. (Id., at
6-7). Based on these allegations, plaintiff brought claims for intentional
interference with contract, intentional interference with prospective
economic advantage, and unjust enrichment. (Id., at 5-8). Plaintiff also
seeks permanent injunctive relief “enjoining [defendant] from any further
or continued interference with [plaintiff’s] prospective economic advantage
and/or contracts with its drivers . . ..” (Id., at 8-10).
An essential element of plaintiff’s tortious interference with contract
claim is that the contracts with the drivers were valid. See Gen. Elec.
Capital Corp. v. Commercial Servs. Grp., Inc., 485 F. Supp. 2d 1015,
1025 (N.D. Iowa 2007) (citations omitted). Plaintiff’s motion for summary
judgment requests only that the Court find that the contracts were valid and
that the Court “eliminate all affirmative defenses addressing that element.”
(Doc. 130, at 3). Defendant’s motion seeks complete summary judgment
as to each of plaintiff’s claims. (Doc. 138).
Id., at *1-2 (footnotes omitted). The Court ultimately granted summary judgment in
defendant’s favor as to the tortious interference with prospective economic advantage
claim and plaintiff’s request for injunctive relief. The Court granted partial summary

3

judgment in defendant’s favor on the unjust enrichment claim, and the Court granted
partial summary judgment in plaintiff’s favor in finding the contracts valid.
The Court applied Iowa law in assessing the validity of the 250 contracts at issue
here. 1 Id., at *3. In seeking to establish the invalidity of the contracts at summary
judgment, defendant argued, in relevant part, that the non-competition provisions
contained in the Driver Contracts were not supported by a protectable interest and that
the lack of a protectable interest rendered the contracts void ab initio. See id., at *9
(summarizing defendant’s contract validity arguments). The Court determined that it
need not reach the issue of whether the contracts were supported by a protectable interest
because the Court found that if the contracts did lack a protectable interest, the contracts
would be rendered voidable, not void. 2 Id., at *13. Thus, under the Court’s analysis in
its summary judgment Order, the non-existence of a protectable interest would not have
been dispositive.
Relying on its argument that the non-competition provisions are not supported by
a protectable interest, defendant now asks this Court to certify a question to the Iowa
Supreme Court that would address the legal effect of a lack of a protectable interest. (See
Doc. 180, at 1). Defendant also requests that the Court certify a second question that
pertains to the type of interference that should be considered improper under a tortious
interference with contract claim. (Id.).

1

Defendant now contests the Court’s application of Iowa law. This issue is discussed more fully
in connection with defendant’s motion for reconsideration and/or clarification.

2

The Court has, on multiple recent occasions, held that if a contract is rendered voidable, as
opposed to void, that contract may still form the basis for a tortious interference claim, so long
as the contract has not been avoided by a contracting party. See Swift, 2019 WL 2358407, at
*7-8 (collecting authority distinguishing between contracts that are void and those that are
voidable).

4

The questions for which defendant seeks certification do not form the basis for
defendant’s motion for reconsideration and/or clarification.3

The motion for

reconsideration and/or clarification is narrow and asks the Court 1) to engage in a conflict
of laws analysis to determine which body of law to apply in determining the validity of
each of the contracts at issue, 2) hold that laws of states other than Iowa apply to the
majority of the contracts for purposes of determining the validity of the contracts, 3) alter
or amend the summary judgment Order consistent with whether any or all of the contracts
would be invalid under a body of law other than Iowa’s, and/or 4) clarify and/or
reconsider whether the Court will apply Iowa law to determine the validity of all of the
contracts at trial. (Doc 183-1).
The motion for certification, on the other hand, pleads that the questions that are
the subject of the motion “go directly to some of [defendant’s] defenses in this case and
its anticipated jury instructions.” (Doc. 180, at 1). 4 Thus, defendant has not moved for
reconsideration of the Court’s summary judgment Order based on the answers that
defendant anticipates the Iowa Supreme Court would give to the questions for which
defendant seeks certification. In other words, defendant’s motion for reconsideration
largely seeks retrospective relief while the motions for clarification and for certification
seek only prospective relief.

The Court will first address defendant’s motion for

reconsideration and/or clarification before turning to the motion for certification.
II.

MOTION FOR RECONSIDERATION AND/OR CLARIFICATION

Defendant’s motion for reconsideration and/or clarification requests that the Court

3

Although defendant’s motion is more properly characterized as a motion for relief from
judgment or order, defendant refers to the motion as one for reconsideration, and the Court will
do so as well.
4

Defendant does not explain which defenses or anticipated jury instructions would implicate the
answers to the questions for which defendant seeks certification.

5

“alter or amend the [summary judgment Order] under Federal Rule of Civil Procedure
59(e),” and/or “grant [defendant] relief from the judgment under Rule 60(b)(6).” (Doc.
183-1, at 7).

Specifically, defendant “moves the Court for clarification and/or

reconsideration of its [summary judgment Order] as it related to the application of Iowa
law to the validity of the majority of the Driver Contracts at issue.” (Doc. 183, at 1).
Defendant contends that the Court should engage in a conflict of laws analysis and apply
a different body of law in assessing the validity of certain contracts. (Doc. 183-1, at 911). Under those governing bodies of law, defendant argues, the contracts would be void
ab initio. (Id., at 13-26). Defendant also seeks clarification as to whether the Court will
apply Iowa law at trial in assessing the validity of any or all of the contracts. (Id., at 10,
26-27).
A.

Reconsideration

Federal Rule of Civil Procedure 59(e) addresses the Court’s authority to alter or
amend a judgment. Rule 60(b), on the other hand, addresses the Court’s authority to
“relieve a party . . . from a final judgment, order, or proceeding . . ..” The Eighth
Circuit Court of Appeals has addressed the relevant Rule to consider when a litigant seeks
“reconsideration” of a non-final order, such as an order that grants summary judgment
only in part, thus leaving a portion of the case to be resolved at a later time. 5
The Federal Rules of Civil Procedure do not account for “motions to
reconsider.”
“However, we have determined that motions for
reconsideration are ‘nothing more than Rule 60(b) motions when directed
at non-final orders.’” Elder-Keep v. Aksamit, 460 F.3d 979, 984 (8th Cir.
2006) (quoting Anderson v. Raymond Corp., 340 F.3d 520, 525 (8th Cir.
2003)). The [plaintiffs’] motion to reconsider was directed at a non-final
summary judgment order because that order resolved only part of their
5

Although plaintiff indicates the potential applicability of Federal Rule of Civil Procedure 54(b),
the Court finds it unnecessary to consider whether Rule 54 is applicable here. (See Doc. 187,
at 5 n.1). Defendant has not moved under Rule 54, and the Eighth Circuit has directly addressed
motions to reconsider that are brought under the same procedural posture as is present here.

6

dispute with [defendant]. Auto Servs. Co. v. KPMG, LLP, 537 F.3d 853,
856 (8th Cir. 2008) (“[A]n order dismissing fewer than all claims or parties
is generally not a final judgment.”). Therefore, we consider the [plaintiffs’]
motion to reconsider as we would a Rule 60(b) motion. . . .
Nelson v. Am. Home Assurance Co., 702 F.3d 1038, 1043 (8th Cir. 2012) (parenthetical
alteration in original) (citation to internal footnote omitted).

Because the Court’s

summary judgment Order disposed of only a portion of this case, the Court’s summary
judgment Order was a non-final order, and Rule 60(b) governs defendant’s motion for
reconsideration. Id.
Denial of a Rule 60(b) motion is reviewed for abuse of discretion. Id. “Such a
motion is to be granted only in exceptional circumstances requiring extraordinary relief.”
Id. (citation and internal quotation marks omitted). A motion for reconsideration should
not “‘serve as the occasion to tender new legal theories for the first time.’” Edeh v.
Equifax Info. Servs., LLC, Civ. No. 12-1301 (JNE/FLN), 2013 WL 1173920, at *1 (D.
Minn. Mar. 20, 2013) (quoting Hagerman v. Yukon Energy Corp., 839 F.2d 407, 414
(8th Cir. 1988)).
Defendant’s motion for reconsideration argues that various non-Iowa bodies of
law are applicable to determine the validity of certain contracts. Defendant does not
specifically identify all of the contracts it contends should be governed by a body of law
other than Iowa’s. (See Doc. 183-1, at 12-26). Defendant had the opportunity to make
this argument at the summary judgment stage, and defendant declined to do so. As the
Court noted in its summary judgment Order, defendant indicated in its summary judgment
briefing “that other states’ laws may be applicable in determining the validity of the
contracts,” but “defendant d[id] not substantiate this argument or otherwise request that
the Court engage in a conflict of laws analysis.” Swift, 2019 WL 2358407, at *3. The
Court, thus, did not engage in a conflict of laws analysis and, instead, applied Iowa law
to all issues. Id.

7

Defendant now substantiates, to a degree, its argument that other states’ laws
should apply to determine the validity of the contracts and that, under those states’ laws,
certain contracts should be found invalid. In doing so, defendant addresses both prongs
of its argument, turning first to Iowa’s conflict of laws principles to argue in favor of
applying the laws of other states, then addressing the substance of each of those bodies
of law to assert that those laws would mandate a finding of invalidity as to the relevant
contracts. (Id., at 11-26). In addressing the second prong of its argument, defendant
identifies certain groups of contracts by the driver-signatory’s state of residence and
applies the law of that state to those contracts. 6 (Id.).
In its summary judgment briefing, defendant did not address either prong of its
argument, nor did defendant identify, in any fashion, which contracts defendant now
contends should be governed by a body of law other than Iowa’s. In resisting plaintiff’s
motion for summary judgment, defendant included a footnote purporting to reserve
defendant’s conflict of laws argument:
As [defendant] has noted in multiple filings and pleadings, [plaintiff] has
contracts with drivers from all over the country. Many states where the
Drivers reside require application of their own law when interpreting or
enforcing a non-compete, often for public policy reasons. [Defendant] does
not concede or waive the argument that other states’ laws apply for purposes
of assessing the validity of the Driver Contracts, as every state disfavors
non-competes and requires them to be supported by consideration, a
protectable interest, and [be] reasonable in scope. [Defendant] is willing to
submit additional authority on these points if the Court so desires.
(Doc. 146, at 6 n.1). When the Court pressed defense counsel during oral argument

6

For instance, defendant asserts that eighteen contracts should be governed by Alabama law.
(Doc. 183-1, at 17). Defendant does not, however, identify which eighteen contracts,
specifically, should be governed by Alabama law. Instead, defendant asserts that the contracts
of the eighteen drivers who “reside in Alabama” should be governed by Alabama law. (Id., at
17-18).

8

about why defendant did not fully brief the conflict of laws issue previously, counsel
candidly admitted that defendant believed the Court would rule in its favor under
defendant’s interpretation of Iowa law, so did not think it necessary to argue in favor of
applying the laws of other states. (Doc. 201, at 18-20).
This purported reservation of the argument “that other states’ laws apply for
purposes of assessing the validity of the [contracts]” is nothing more than a skeletal
assertion that, at some future point, defendant may find it prudent to argue in favor of
applying other states’ laws. Indeed, defendant did not go so far as to actually advance
the argument that the Court should apply other states’ laws. Defendant merely noted the
possibility of applying other states’ laws. Such an assertion is insufficient to preserve
defendant’s ability to argue this point. See United States v. Dunkel, 927 F.2d 955, 956
(7th Cir. 1991) (“A skeletal ‘argument,’ really nothing more than an assertion, does not
preserve a claim. Especially not when the brief presents a passel of other arguments, as
[defendant’s] did. Judges are not like pigs, hunting for truffles buried in briefs.” (internal
citation omitted)) (cited with approval in Larson v. Nutt, 34 F.3d 647, 648 (8th Cir.
1994)).
Neither is defendant’s offer to “submit supplemental authority on these points”
sufficient to preserve defendant’s arguments. An argument is deemed waived if not
timely raised. See In re Miell, No. C 09-112-MWB, 2009 WL 2590515, *4 n.2, 5 (N.D.
Iowa Aug. 19, 2009) (collecting cases). To properly preserve the argument, defendant
should have explained at the summary judgment stage why the laws of certain
jurisdictions should apply in assessing the validity of the contracts, and defendant should
have explained why each contract subject to those bodies of law should have been found
invalid. Defendant did neither and, thus, has waived that argument.
Finally, the sampling of extra-jurisdictional cases that defendant cited in its

9

affirmative motion for summary judgment 7 and in resisting plaintiff’s motion for
summary judgment are insufficient to invoke the conflict of laws issue. In its resistance
to plaintiff’s motion for summary judgment, defendant cited to authority from Florida,
Kansas, Tennessee, and Arkansas, but defendant did not explain why this Court should
apply the laws of any of those states, nor did defendant apply those laws to any specific
contract to argue in favor of a finding of invalidity. (See Doc. 146, at 5-6, 6 n.1, 9, 10).
Even now, defendant does not argue that the law of either Kansas or Tennessee
should be applied to any of the contracts. (See generally Doc. 183-1). Further, defendant
now argues, for the first time, that the laws of California, Oklahoma, Alabama, Georgia,
Illinois, Louisiana, New York, North Carolina, and Wisconsin may apply to certain
contracts. (See generally id.). In its summary judgment briefing, defendant did not
mention the laws of any of these states. (See generally Doc. 146). Defendant, instead,
chose to survey the laws of a small number of jurisdictions apparently with the hope that
the Court would, sua sponte, undertake a conflict of laws analysis, in the event that the
Court did not hold the contracts invalid under Iowa law. By taking such a generalized
approach, defendant did not adequately raise the conflict of laws issue. The Court thus
finds that it was wholly proper to apply the law of the forum in which this Court sits.
See Wolgin v. Simon, 722 F.2d 389, 391 (8th Cir. 1984) (“A federal court exercising
jurisdiction solely on the basis of diversity of citizenship must apply the substantive law
of the forum in which it sits.” (citation omitted)). For these reasons, defendant’s motion
for reconsideration is denied.
Even if the Court had been inclined to engage in a conflict of laws analysis sua
sponte, it is unclear whether the summary judgment record contains sufficient information

7

In its summary judgment Order, the Court more fully addressed the cases defendant cited in its
affirmative motion for summary judgment. See Swift, 2019 WL2358407, at *11-12. The Court
will not repeat that discussion here.

10

for the Court to reach the same conclusions as defendant in terms of which contracts
defendant contends should be governed by which states’ laws. For instance, each of the
contracts contains two blank lines, one of which is for the driver-signatory’s signature,
and the other of which is for plaintiff’s corporate representative’s signature. (See, e.g.,
Doc. 130-2, at 53). Beneath the driver-signatory’s signature line, there are four blank
lines to be filled out. (E.g., id.). One line is for “Name.” (E.g., id.). There is little
doubt that this line is for the driver-signatory to print his name. Beneath those lines are
three blank lines for “Address,” “City, State,” and “Zip Code.” (E.g., id.). One could
easily interpret these blank lines as being for the driver-signatory to indicate his home
address. The parties have not informed the Court, however, whether any or all of the
driver-signatories actually indicated their home address, as opposed to some other
address.
If the Court had assumed that each address indicated reflected the driversignatory’s home address, and that the address indicated was the relevant address to
consider in determining the driver-signatory’s “home” 8 state, the Court would have
drawn conclusions of material fact. Perhaps those conclusions would have been proper,
but the parties did not address whether those were the correct addresses for the Court to
consider, which left the Court unable to determine whether each driver’s “home” state

8

In now addressing the conflict of laws issue, defendant argues that a driver-signatory’s state of
“residence” is relevant. (See Doc. 183-1, at 17-27 (arguing in favor of the application of a
certain state’s body of law based on whether a driver “resides” in that state)). The Court finds
it unnecessary to determine whether a driver-signatory’s “residence” is applicable to the conflict
of laws inquiry. Instead of referring to the drivers’ states of “residency,” as defendant has done,
the Court will refer to the drivers’ “home” states in addressing defendant’s arguments. The
Court declines to refer to the drivers’ states of “residency” because the information the Court
has is inadequate to determine whether a driver was truly a resident of a certain state. The Court
also notes that defendant uses the present tense when referring to the drivers’ “residences.”
(Id.). This creates confusion as to the date defendant contends is relevant in determining a
driver’s “residence.”

11

was genuinely in dispute. In the absence of a request to do so, the Court did not attempt
to ascertain each driver-signatory’s “home” state in an attempt to engage in a conflict of
laws analysis.
Even if the Court had drawn these conclusions, it is unclear whether the Court
would have reached the same conclusions that defendant now reaches as to which body
of law governs which contracts. In defendant’s motion for reconsideration, defendant
identifies, by name, nineteen drivers whose contracts contain choice of law provisions
selecting either Florida, California, or Oklahoma law.

(Doc. 183-1, at 12 n.1-3).

Defendant then goes on to assert that 139 other contracts have Iowa choice of law
provisions that should not be enforced because “none of [those 139 drivers] resides in
Iowa.” (Id., at 16). Defendant then asserts that a specific number of drivers “reside” in
each of twelve states. (See, e.g., id., at 17). Based on this information, defendant urges
the Court to reject the Iowa choice of law provisions and, instead, apply the laws of each
driver’s state of “residence” to determine the validity of the contracts whose driversignatories “reside” in that state. (E.g., id., at 17-18). Defendant concludes that each
of the 139 contracts is invalid under the laws of the applicable state.

Aside from

identifying those nineteen drivers whose contracts contain a Florida, California, or
Oklahoma choice of law provision, defendant does not identify, by name or other
identifier, which contracts defendant argues are subject to which state’s body of laws.
Defendant includes a single citation to “Driver Contracts, Exhibit B,” following
the assertion that “none of these drivers resides in Iowa.” (Doc. 183-1, at 16). Exhibit
B to defendant’s motion for reconsideration is comprised of driver contracts. From this
citation, the Court assumes that defendant gleaned its assessment of the drivers’ residency
from the addresses indicated on the contracts themselves. This is, however, far from
clear. Perhaps the Court could scour the summary judgment record and, by process of
elimination, determine which drivers defendant contends are residents of which state and,

12

thereby, examine those drivers’ contracts to determine whether the contracts contain an
Iowa choice of law provision. From there, perhaps the Court could attempt to analyze
whether those choice of law provisions should be enforced. The Court’s analysis would,
however, almost certainly be flawed based on the limited information the Court had at
the summary judgment stage and the limited information the Court has even now.
For instance, in arguing that the Court should not apply the Iowa choice of law
provisions, defendant addresses only one portion of the relevant inquiry. Iowa conflict
of laws principles, in relevant part, “‘permit[ ] the parties to agree on the law to be
applied to the contract in most cases so long as it does not override the public policy of
a state having a materially greater interest in the transaction.’” Pro Edge, L.P. v. Gue,
374 F. Supp. 2d 711, 737 (N.D. Iowa 2005) (quoting Joseph L. Wilmotte & Co. v.
Rosenman Bros., 258 N.W.2d 317, 328 (Iowa 1977)). For each driver who lives in a
state other than Iowa but signed a contract with a choice of law provision, defendant
argues that the driver’s state of residence has “a materially greater interest [than Iowa]
in the determination of the particular issue.” (See Doc. 183-1, at 16). Defendant asserts
that “Iowa does not have a substantial interest in [the determination of the enforceability
of restrictive covenants against non-Iowa residents].” (Id., at 17). Defendant does not
explain how it reaches this conclusion. 9
Plaintiff is headquartered in Iowa, and Iowa has an interest in ensuring that its
citizen entities engage in lawful behavior. If the contracts are, as defendant argues,
unenforceable, unconscionable, or otherwise void or voidable, Iowa has an interest in
addressing plaintiff’s use of those contracts. This is only one of many considerations that

9

In arguing in favor of applying the Florida, California, and Oklahoma choice of law provisions,
defendant asserts that “Iowa does not have a fundamental policy regarding restrictive covenants.”
(Doc. 183-1, at 13). This inquiry goes to the issue of whether Iowa has a public policy on
restrictive covenants and does not address whether Iowa’s interest in the transactions is greater
than those of Florida, California, and Oklahoma.

13

defendant has failed to address. Defendant’s discussion of why other states have “a
materially greater interest in the determination of the particular issue[s]” is, thus, of little
benefit because defendant does not address the full extent of Iowa’s interest in the
restrictive covenants. (See Doc. 183-1, at 16).
Finally, the scant information the Court has does not enable the Court to determine
which facts may be relevant in determining which states may have a greater interest in
the transactions than does Iowa. In support of its argument, defendant only addresses
purported states of residence. Defendant does not explain why other facts may be
irrelevant to the conflict of laws analysis, nor does defendant explain why it argues that
the states of residence for the driver-signatories have a greater interest in the transactions
than Iowa, which is home to the other party to the contracts. Consequently, the Court is
unable to determine whether any state, including the thirteen states defendant references
in its motion to reconsider, truly has a materially greater interest than Iowa in the
transactions at issue. Even on the record now before the Court, defendant’s pleadings
are insufficient to permit the Court to engage in an accurate and complete conflict of laws
analysis. For these reasons, to the extent defendant’s Motion for Clarification and/or
Reconsideration (Doc. 183) seeks reconsideration of the Court’s summary judgment
Order, that motion is denied. 10
B.

Clarification

Defendant also seeks clarification that the Court “will apply other states’ laws to
evaluating the validity and enforceability” of the contracts at trial. (Doc. 183, at 2). To
10

Defendant asserts that because the Court has yet to render a final Order, the Court has greater
discretion to grant defendant’s motion for reconsideration than the Court would have if a final
order had issued. (Doc. 183-1, at 8). Regardless of whether the Court has greater discretion in
this case, the Court would deny the motion to reconsider because defendant failed to substantively
address the conflict of laws issue in its summary judgment briefing. Even now, defendant’s
analysis is lacking, which further convinces the Court that it is proper to deny the motion to
reconsider.

14

the limited extent defendant seeks clarification of the Court’s summary judgment Order,
defendant’s motion is granted. The Court denies, however, defendant’s request for
“clarification” that the Court will apply other states’ laws at trial.
In its summary judgment Order, the Court held as follows:
Plaintiff’s motion for partial summary judgment seeks, in part, to
establish the existence of valid contractual relationships with the drivers.
The Court finds that plaintiff is entitled to summary judgment to the extent
plaintiff’s motion seeks to establish that the Driver Contracts, and the
restrictive covenants contained therein, are valid. Plaintiff’s motion is
granted to this limited extent. Plaintiff is not, however, entitled to a finding
that plaintiff had valid contracts with the drivers for the drivers’ continued
employment because . . . the drivers were at-will employees.
Swift, 2019 WL 2358407, at *15 (emphasis in original). The Court granted summary
judgment in plaintiff’s favor as to the validity of the contracts. The validity of the
contracts has been established, and the validity of the contracts is not a triable issue.
Thus, it is unnecessary to address whether the Court will apply other states’ laws to this
issue at trial because the issue will not arise. To the extent defendant’s motion for
clarification (Doc. 183) seeks a ruling that the validity of the contracts remains to be
determined, the motion is denied, and to the extent the motion seeks to establish that the
Court will apply other states’ laws in assessing the validity of the contracts at trial, the
motion is denied as moot.
III.

MOTION FOR CERTIFICATION

The Iowa Supreme Court “may answer questions of law certified to it by . . . a
United States district court . . . when requested by the certifying court, if there are
involved in a proceeding before it questions of law of [the State of Iowa] which may be
determinative of the cause then pending in the certifying court and as to which it appears
to the certifying court there is no controlling precedent in the decisions of the appellate
courts of this state.” IOWA CODE § 684A.1 (2018). “Whether a federal district court

15

should certify a question of state law to the state’s highest court is a matter committed to
the discretion of the district court.” Catipovic v. Peoples Cmty. Health Clinic, Inc., 239
F. Supp. 2d 917, 922 (N.D. Iowa 2003) (citations and internal quotation marks omitted).
Accord Babinski v. Am. Family Ins. Grp., 569 F.3d 349, 353 (8th Cir. 2009). “[F]ederal
courts have a duty to address matters of state law, even when that law is unsettled.” Jung
v. Gen. Cas. Co. of Wis., 651 F.3d 796, 801 (8th Cir. 2011) (citation omitted).
Defendant requests that the Court certify two separate questions to the Iowa
Supreme Court:
1. Does the lack of a protectable or legitimate business interest in a restrictive
covenant or non-compete agreement render the agreement or its non-compete
provision void as a matter of law under Iowa law?
2. Would the Iowa Supreme Court adopt the Restatement (Third) of Torts[:
Liability for Economic Harm] § 16 and apply it to tortious interference with
contract claims, particularly as it relates to the requirement that the tortfeasor
“approach” the contracting employee for purposes of establishing impropriety?
(Doc. 180, at 1).
Defendant’s motion to certify was brought only after this Court granted partial
summary judgment in plaintiff’s favor, and defendant’s motion only addresses issues on
which the Court ruled against defendant. See Swift, 2019 WL 2358407, at *7 (rejecting
defendant’s arguments under the Restatement (Third) of Torts: Liability for Economic
Harm), *9-11 (interpreting Iowa law to mean that even if the contracts at issue are
unsupported by a protectable interest, those contracts would be rendered voidable, not
void, and, thus, could still form the basis for liability under plaintiff’s tortious
interference with contract claim).
The practice of requesting certification after an adverse judgment has been
entered should be discouraged. Otherwise, the initial federal court decision
will be nothing but a gamble with certification sought only after an adverse
decision. Once a question is submitted for decision in the district court, the

16

parties should be bound by the outcome unless other grounds for reversal
are present. Only in limited circumstances should certification be granted
after a case has been decided. See, e.g., In re Complaint of McLinn, 744
F.2d 677, 681 (9th Cir. 1984) (party should not be allowed a “second
chance at victory” after district court has decided issue”); Harris v. KarriOn Campers, Inc., 640 F.2d 65, 68 (7th Cir. 1981) (certification after case
is tried would only prolong litigation).
Perkins v. Clark Equip. Co., Melrose Div., 823 F.2d 207, 210 (8th Cir. 1987). See also
Jung, 651 F.3d at 801 (The Eighth Circuit Court of Appeals “generally do[es] not allow
certification after a case has been decided.” (citation omitted)).
Defendant had every opportunity to move for certification at numerous points
throughout this litigation, but defendant declined to do so. Instead, defendant waited
until after the Court ruled in plaintiff’s favor on certain issues to pursue the certification
avenue. The timing and substance of defendant’s motion to certify indicate that defendant
now seeks certification because defendant is dissatisfied with this Court’s ruling adverse
to defendant’s interests. The motion was filed nine days after the Court entered its
summary judgment Order (see Swift, 2019 WL 2358407 & Doc. 180), and, as to the first
issue, is premised entirely on the Court’s determination that “under Iowa law, a noncompetition clause that is not reasonably necessary does not, alone, serve to void either
the non-competition clause or the contract as a whole” (Doc. 180-1, at 4 (citing Swift,
2019 WL 2358407, at *10)).
The issues upon which defendant rests its motion for certification were not raised
by the Court sua sponte. Thus, defendant cannot properly argue that it was unaware of
the potential applicability of certification until after the Court issued its summary
judgment Order. Instead, defendant, in its affirmative motion for summary judgment,
implicated both issues that now form the basis for the motion to certify.

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A.

“Unenforceability”

In its motion for summary judgment, defendant included a subsection entitled
“Non-competes unsupported by a protectable interest are void.” (Doc. 140, at 26-30).
In that subsection, defendant cited to numerous cases that stand for the proposition that
non-competition provisions that are not supported by a protectable interest are rendered
“void and unenforceable.” (Id., at 26 (citing Spectrum Creations, L.P. v. Carolyn Kinder
Int’l, LLC, No. SA-05-CV-750-XR, 2008 WL 416264, at *66 (W.D. Tex. Feb. 13,
2008)), 27 n.7-8 (citing GPS Indus., LLC v. Lewis, 691 F. Supp. 2d 1327 (M.D. Fla.
2010); Rebsamen Ins. v. Milton, 269 Ark. 737, 744 (Ark. Ct. App. 1980)); 30 (citing In
re Maxxim Med. Grp., Inc., 434 B.R. 660, 684 (M.D. Fla. 2010))). The cases defendant
cited in its motion for summary judgment illustrate the lack of clarity as to whether a
contract that is unenforceable carries the same legal ramifications as one that is void.
Thus, defendant raised the issue of whether the lack of a protectable interest would render
a contract void, as opposed to unenforceable.
Not only did defendant raise the issue, but defendant highlighted the issue by
alleging deficiencies in this Court’s past treatment of the issue in a companion case.
Specifically, defendant stated as follows:
“In [CRST v. TransAm, No. C16-52-LTS, 2018 WL 3738017 (N.D.
Iowa July 31, 2018)], the [C]ourt did not analyze whether the Driver
Contract is necessary to protect a protectable interest, simply observing that
“arguments as to whether the restrictive covenants . . . are necessary to
protect CRST’s business [ ] fall under the ‘voidable contract’ theory.” 2018
WL 3738017, at *11. Respectfully, the TransAm [C]ourt’s position on this
issue is not fully developed or consistent with governing law, though the
[C]ourt likely did not address it due to the paucity of the arguments on this
issue in the TransAm record. . . .
(Doc. 140, at 27 n.8 (omissions in original)). In contesting the sufficiency of the Court’s
prior treatment of the issue, defendant impliedly requested that the Court address the

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issue again and that, in doing so, the Court more fully develop its analysis.
Finally, defendant went beyond asking the Court to elaborate upon its previous
determination that “arguments as to whether the restrictive covenants . . . are necessary
to protect CRST’s business [ ] fall under the ‘voidable contract’ theory.” (Id. (alteration
in original) (citing CRST v. TransAm, 2018 WL 3738017, at *11)). Defendant directly
advocated in favor of the conclusion that the lack of a protectable interest would render
a contract facially invalid instead of unenforceable. (Id. (“Whether or not there is a
protectable interest goes to the validity of the restrictive covenant on its face, not simply
to whether it is enforceable. GPS Indus., 691 F. Supp. 2d 1327.”)). This is the exact
issue the Court addressed in its summary judgment Order. See Swift, 2019 WL 2358407,
at *9 (“If a non-competition provision is not reasonably necessary, it is ‘unenforceable.’
. . . The Court finds that the use of the term ‘unenforceable,’ as opposed to ‘void,’ is
intentional. The Iowa Supreme Court has repeatedly recognized the distinction between
contracts that are unenforceable versus those that are void.” (citations omitted)).
In affirmatively moving for summary judgment, defendant must have been aware
of the potential benefit of seeking an answer to the first question. Defendant litigated the
legal effect of the lack of a protectable interest and, in doing so, defendant cited to cases
from several different jurisdictions, including Iowa. None of the cases issuing from an
Iowa state or federal court, 11 however, are cited for the proposition that a restrictive
covenant that is unsupported by a protectable interest would be void. Indeed, the cases
that defendant relied on in support of its motion for summary judgment speak in terms of
enforceability of non-competition clauses.12

11

The Court notes that although some of the cases defendant cited in its motion for summary
judgment applied the law of a different forum, the only cited cases that applied Iowa law issued
from an Iowa state or federal court.
12

Defendant cited: Dan’s Overhead Doors & More, Inc. v. Wennermark, No. 06-1049, 2007

19

That Iowa caselaw addresses enforceability of non-competition clauses, instead of
validity, should have made readily apparent to defendant the potential issue of whether
an unenforceable non-competition clause is necessarily void. Additionally, defendant’s
motion for summary judgment cited numerous non-Iowa cases holding that an improper
non-competition clause renders the clause—or the contract as a whole—“void and
unenforceable.” (See Doc. 140, at 26, 27 n.7, 30 (emphasis added)). Iowa, however,
has not adopted the same “void and unenforceable” terminology. The juxtaposition of
the Iowa terminology using “unenforceable,” against other jurisdictions’ use of “void
and unenforceable” should have highlighted for defendant the issue of whether Iowa
considers “unenforceable” contracts to be “void.”
Moreover, the Court finds it probative that defendant relied on Iowa law in
addressing the standard for determining enforceability but turned to the law of other
jurisdictions to support defendant’s argument that an unenforceable non-competition
provision is void. The Court has already noted its inability “to find any Iowa state court
decision, Iowa federal court decision, or Eighth Circuit Court of Appeals decision . . .
holding that an improper non-competition provision would render a contract—or the non-

WL 1486133, at *2 (Iowa Ct. App. May 23, 2007), which states: “In deciding whether to enforce
a restrictive covenant in an employment agreement, Iowa courts apply a three-pronged test . . ..”
(emphasis added) (Doc. 140, at 26-28); Ag Spectrum Co. v. Elder, 191 F. Supp. 3d 966, 971
(S.D. Iowa 2016), which discusses Iowa law on whether to enforce non-competition clauses (id.,
at 27); IOwa Office Supply, Inc. v. Access Techs., Inc., No. EQCV150495, 2013 WL 6511495,
at *4 (Iowa Dist. Ct. Feb. 22, 2013), which contains an entire section addressing “enforceability”
of non-competition agreements (id.); Brux, Inc. v. Zimmerman, No. LACV074484, 2014 WL
1924617, at *11 (Iowa Dist. Ct. Mar. 10, 2014), which suggests that unenforceable contracts
remain valid until invalidated by court order, and stating that “[c]ontracts that contravene public
policy will not be enforced” (id.); Iowa Glass Depot, Inc. v. Jindrich, 338 N.W.2d 376, 382
(Iowa 1983), which addresses validity of restrictive covenants but speaks of when restraints will
be enforced against employees and recounting an instance in which the Iowa Supreme Court
“refused to enforce the covenant on the basis that the restriction was unreasonable” (emphasis
added) (id.).

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competition provision alone—void.” Swift, 2019 WL 2358407, at *10. One possible
reason for defendant’s reliance upon the law of other jurisdictions is that defendant,
likewise, was unable to find any Iowa law holding that an improper non-competition
provision would render the provision void. The lack of Iowa authority should, again,
have alerted defendant to the potential benefit of seeking guidance from the Iowa Supreme
Court on what it means for a non-competition provision to be “unenforceable.” As noted
above, defendant should have become aware of this when researching and drafting its
motion for summary judgment, if not sooner.
In raising the unenforceability issue, defendant’s motion for summary judgment
cited to a number of cases. The Court discussed and rejected every case defendant relied
on in support of its argument that the lack of a protectable interest would render a contract
void.

See id., at *11-13.

Thus, the first issue upon which defendant now seeks

certification was raised by defendant, was thoroughly litigated by defendant, was fully
addressed by this Court in response to defendant’s arguments, and the Court ultimately
rejected defendant’s position. Defendant’s request for certification at this stage is an
attempt to seek reconsideration of certain portions of the Court’s summary judgment
Order that are adverse to defendant. As set forth above, dissatisfaction with a court’s
decision is not an appropriate basis upon which to seek certification. Perkins, 823 F.2d
at 210.
B.

Restatement (Third) of Torts: Liability for Economic Harm

Defendant also argues that this Court should certify a question to the Iowa Supreme
Court inquiring as to whether that court would adopt Section 16 of the Restatement (Third)
of Torts: Liability for Economic Harm and, specifically, “as it relates to the requirement
that the tortfeasor ‘approach’ the contracting employee for purposes of establishing
impropriety.” (Doc. 180, at 1). Defendant points, more specifically, to comment l of
Section 16, which instructs: “If the plaintiff claims that the defendant induced a breach

21

of contract by another, the defendant’s knowledge of the existing contract is necessary
but not sufficient to support liability. The plaintiff must also show that the defendant
initiated the breach.” Illustration 26 to comment l, which defendant relies on heavily, is
as follows:
Employee of Company approaches Rival and asks for a job. Rival knows
that Employee has a five-year contract with Company; Rival does not see
how Employee can honor that contract and work for Rival at the same time.
Rival nevertheless offers Employee a job. Employee accepts the job and
breaks his contract with Company. Company does not have a claim against
Rival under this Section because Rival did not induce Employee to break
his contract with Company. The result would be otherwise if Rival had
approached Employee to recruit him.
In moving for summary judgment, defendant offered this same theory and urged
the Court to adopt the Restatement (Third) of Torts: Liability for Economic Harm. (See
Doc. 140, at 15-24). The Court rejected that argument, having already established an
inability “to find any Iowa caselaw adopting the Restatement (Third) of Torts: Liability
for Economic Harm, which is still in draft form and has yet to be officially published.”
Swift, 2019 WL 2358407, at *7. Defendant did not argue that should the Court decline
to adopt the Restatement (Third) of Torts: Liability for Economic Harm, the Court should
certify the issue of whether to adopt the Restatement (Third) of Torts: Liability for
Economic Harm to the Iowa Supreme Court. Defendant asked the Court to certify this
question only after the Court declined to adopt defendant’s argument. As with the first
question, defendant’s failure to bring its motion to certify the second question until after
an adverse ruling issued is improper. Perkins, 823 F.2d at 210.
In short, although defendant’s choice to bring its motion to certify may have been
spurred by this Court’s summary judgment Order, certification did not become a
potentially relevant issue as to either of defendant’s questions because of this Court’s
summary judgment Order.

Rather, defendant should have recognized the potential

22

relevance of the certification issue in researching and drafting its motion for summary
judgment, if not sooner. Thus, the Court views defendant’s motion as having been
brought as a result of an unfavorable ruling on issues that were thoroughly litigated by
the parties and addressed by the Court. Defendant’s motion is not the result of legal
issues that the Court raised sua sponte. For these reasons, defendant’s motion for
certification (Doc. 180) is denied.
IV.
For

the

stated

reasons,

CONCLUSION
defendant’s

Motion

for

Clarification

and/or

Reconsideration of the Court’s Order Applying Iowa Law to All 250 Driver Contracts at
Issue (Doc. 183) is granted in part, denied in part, and denied in part as moot.
Defendant’s Motion to Certify Questions Pursuant to Iowa Code Section 684A.1 and
684A.2 (Doc. 180) is denied.
IT IS SO ORDERED this 28th day of June, 2019.

___________________________
C.J. Williams
United States District Judge
Northern District of Iowa

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