Schwann et al v. Fedex Ground Package System, Inc.

Filing 149

Judge Richard G. Stearns: ORDER entered. re 70 MOTION for Summary Judgment filed by Fedex Ground Package System, Inc., 68 MOTION for Summary Judgment on Liability Under the Massachusetts Independent Contractor Law filed b y Muchirahondo Phinnias, Thomas Leduc, Jeff Baylies, Temistocles Santos, Lawrence Adams, James Duggan, Eric Vitale, Ramon Heleodoro, Robert Sangster, Clayton Schwann. "FedEx's motion for summary judgment is ALLOWED on all Counts. Plaintiff's motion for summary judgment on Count I is DENIED. The Clerk will enter judgment for FedEx and close the case."(RGS, int2)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 11-11094-RGS
CLAYTON SCHWANN, THOMAS LEDUC, RAMON HELEODORO, JAMES
DUGGAN, ERIC VITALE, PHINNIAS MUCHIRAHONDO, TEMISTOCLES
SANTOS, LAWRENCE ADAMS, JEFF BAYLIES, AND ROBERT
SANGSTER
v.
FEDEX GROUND PACKAGE SYSTEM, INC.
SUPPLEMENTAL MEMORANDUM AND ORDER
ON THE PARTIES’ CROSS MOTIONS FOR
SUMMARY JUDGMENT
February 5, 2015
Stearns, D.J.
In light of the First Circuit’s recent decision in Massachusetts
Delivery Ass’n v. Coakley, 769 F.3d 11 (1st Cir. 2014) (MDA), and having
considered the parties’ supplemental briefing, the court withdraws its July
3, 2013 Order in so far as it granted summary judgment in favor of
plaintiffs on Count I (wrongful classification of pick-up and delivery drivers
as independent contractors in violation of Mass. Gen. Laws Ch. 149, §
148B 1).

Under section 148B, a worker is properly classified as an
independent contractor if the employer can show that
1

In MDA, a case virtually identical to this one in its relevant respects,
the First Circuit rejected the view I shared with Judge Casper that the
Federal Aviation Administration Authorization Act (FAAAA) did not
preempt the second prong of §148B. The FAAAA expressly preempts state
laws “related to a price, route, or service of any motor carrier . . . with
respect to the transportation of property.” 49 U.S.C. § 14501(c) (1). The
First Circuit repudiated the reasoning that, as statute of general
applicability, section 148B did not directly implicate the transportation of
property, and thus, any indirect impact on FedEx’s price, routes, and
services was too attenuated to trigger preemption. See MDA, 769 F.3d at
18-20 (rejecting the Massachusetts Attorney General’s proposed categorical
rule that “background” labor laws are exempt from preemption).
With respect to “transportation of property,” the First Circuit
squarely held that because “[s]ection 148B governs the classification of the
couriers for delivery services[,] [i]t potentially impacts the services the
(1) the individual is free from control and direction in
connection with the performance of the service, both under his
contract for the performance of service and in fact; and
(2) the service is performed outside the usual course of the
business of the employer; and,
(3) the individual is customarily engaged in an independently
established trade, occupation, profession or business of the
same nature as that involved in the service performed.
2

delivery company provides, the prices charged for the delivery of property,
and the routes taken during this delivery. The law clearly concerns a motor
carrier’s ‘transportation of property.’” Id. at 23.
The First Circuit did not decide whether the second prong of section
148B actually “related to a price, route, or service of [a] motor carrier”
because the district court in that case did not rely on this prong in its
decision. Id. at 22. However, the First Circuit emphasized that “a statute’s
‘potential’ impact on carriers’ prices, routes, and services can be sufficient if
it is significant, rather than tenuous, remote, or peripheral.” Id. at 21.
Empirical evidence in this regard is not necessary, and “courts [may] look[]
to the logical effect that a particular scheme has on the delivery of services
or the setting of rates.” Id. Such “logical effect can be sufficient even if
indirect.” Id.
Looking to such logical (if indirect) effects, the application of section
148B to FedEx and other similar motor carriers would unquestionably have
an impact on “price, route[s], [and] services” by in effect proscribing the
carrier’s preferred business model. As another court observed,
[e]limination of independent contractors, as defined by
common law or statutes in neighboring states, triggers a
number of other labor laws, such as to make this law more than
simply a wage law. It becomes an outline of how a business
must be structured, an overhaul of any motor carrier business
model attempting to meet customer demand through flexible
3

design. As here, a complete overhaul of a motor carrier’s
business model is disruptive to the carriage itself and falls
within the scope of conduct the FAAAA intended to prevent.
Compliance with Massachusetts’s independent contractor law
fundamentally alters the essence of [defendant]’s business
model that relies on independent contractors who can make ondemand deliveries required by market forces and modern
customer demand.
Sanchez v. Lasership, Inc., 937 F. Supp. 2d 730, 743 (E.D. Va. 2013).
Plaintiffs contend that even if the second prong of section 148B is
preempted, they would nonetheless prevail at summary judgment on the
basis of the third prong. However, as FedEx points out, the preempted
prong is not severable from the statute as a whole. Under Massachusetts
law, severability is determined by looking to legislative intent.
“Where a statutory provision is unconstitutional, if it is in its
nature separable from the other parts of the statute, so that they
may well stand independently of it, and if there is no such
connection between the valid and the invalid parts that the
[legislative body] would not be expected to enact the valid part
without the other, the statute will be held good, except in that
part which is in conflict with the Constitution.” Mayor of
Boston v. Treasurer & Receiver Gen., 384 Mass. 718, 429 []
(1981) (citation omitted). On the other hand, “[i]f the court is
unable to know whether the Legislature would have enacted a
particular bill without the unconstitutional provision, it will not
sever the unconstitutional provision, but will strike the entire
statute.” Id.
Ackerley Commc’ns of Massachusetts, Inc. v. City of Cambridge, 135 F.3d
210, 215 (1st Cir. 1998). Here, section 148B is a conjunctive test – that is,
an employer must meet its burden as to each prong to properly classify a
4

worker as an independent contractor. The court has no way of knowing
whether the Legislature (had it had at the time the statute was enacted the
benefit of the MDA decision) would have chosen to rewrite the statute less
restrictively to consist of only the first and third prongs. Thus, the entire
statute must be treated as preempted.
Moreover, enforcing prongs one and three of section 148B against
motor carriers would end the same – the “price, route[s], [and] services”
offered by motor carriers would be impacted by forbidding the preferred
business model. This is the result the FAAAA’s preemption provision is
meant to prevent, that is to say, “the regulatory authority retained by the
states [is] not ‘to be used as a guise for continued economic regulation as it
relates to prices, routes or services.’” United Parcel Serv., Inc. v. FloresGalarza, 318 F.3d 323, 337 (1st Cir. 2003), quoting H.R. Conf. Rep. No.
103-677 at 84 (1994).
Because section 148B is preempted as applied to motor carriers like
FedEx, summary judgment is allowed in favor of FedEx on Count I.
Because Count II (alleged violation of the Massachusetts Wage Law) is
premised on liability under Count I, summary judgment is also allowed in
favor of FedEx on this Count.

5

ORDER
FedEx’s motion for summary judgment is ALLOWED on all Counts.
Plaintiff’s motion for summary judgment on Count I is DENIED. The Clerk
will enter judgment for FedEx and close the case.
/s/ Richard G. Stearns
__________________________
UNITED STATES DISTRICT JUDGE

6