PORTILLO et al v. NATIONAL FREIGHT, INC. et al
Filing
94
OPINION. Signed by Judge Jerome B. Simandle on 6/11/2018. (dmr)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
JOHN F. PORTILLO, et al.,
individually and on behalf of
all others similarly situated,
Plaintiffs,
HONORABLE JEROME B. SIMANDLE
Civil Action
No. 15-7908(JBS/KMW)
v.
OPINION
NATIONAL FREIGHT, INC., et
al.,
Defendants.
APPEARANCES:
Alexandra Koropey Piazza, Esq.
Camille Fundora, Esq.
BERGER & MONTAGUE, P.C.
1622 Locust St.
Philadelphia, PA 19103
Attorneys for Plaintiffs
Robert H. Bernstein, Esq.
GREENBERG TRAURIG LLP
500 Campus Drive, Suite 400
P.O. Box 677
Florham Park, NJ 07932
--and—
Christiana Lynn Signs, Esq.
GREENBERG TRAURIG LLP
Two Commerce Sq.
2001 Market St.
Philadelphia, PA 19107
Attorneys for Defendants
SIMANDLE, District Judge:
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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
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[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.
BACKGROUND1
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.
1
For purposes of adjudicating Plaintiffs’ motion to apply New
Jersey law, the Court looks to the exhibits to the pending
motions filed by the parties, and notes disputes as they arise.
3
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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.]
4
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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 6630 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 6631 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,
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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).]
6
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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
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Act, G.L. c. 149, § 148, as well as Massachusetts common law
claims for unjust enrichment and quantum meruit. [Docket Item 13 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
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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].
ANALYSIS
The Court must assess which body of law applies to the
Plaintiffs’ claims in this action.
A. Contractual Choice-of-Law Provision
Plaintiffs argue that New Jersey law applies because the
choice-of-law provisions in their contracts designate New Jersey
law as the relevant and applicable body of law. Because the
Court does not read the provisions so broadly, the Court
disagrees that their contracts compel selection of New Jersey
substantive law, but acknowledges that the New Jersey choice-of9
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law provision will be an important factor in applying the “most
significant relationship” test as required by New Jersey’s
choice-of-law jurisprudence.
The Court looks to New Jersey law to determine whether the
contractual choice-of-law provisions apply to Plaintiffs’ noncontractual claims. The Third Circuit has stated: “We . . . turn
to New Jersey choice-of-law rules to determine what state’s
substantive contract law governs the interpretation of the
Agreements’ forum selection clauses, since this diversity action
originated in a New Jersey federal district court.” Collins v.
Mary Kay, Inc., 874 F.3d 176, 183 (3d Cir. 2017).2 The Court
believes the Third Circuit would do the same to interpret a
choice-of-law provision. In Collins, the court found that New
Jersey choice-of-law doctrine would mandate that the choice-oflaw designated in the underlying contract--there, Texas--should
provide the substantive contract law for interpreting the forum
selection clause. Id. at 184. Here, the Court analogously uses
New Jersey’s substantive principles of contract interpretation.
2
The Court has jurisdiction over this matter pursuant to the
Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d) et seq.
CAFA jurisdiction requires only minimal diversity of
citizenship. See 28 U.S.C. § 1332(d)(2)(A). Nevertheless,
jurisdiction pursuant to § 1332(d) is diversity jurisdiction,
and a choice-of-law analysis, applying New Jersey’s choice-oflaw jurisprudence, is appropriate. See Landsman & Funk PC v.
Skinder-Strauss Assocs., 640 F.3d 72, 92 (3d Cir. 2011)(“Since
plaintiffs have met § 1332(d)’s requirements, the District
Courts can exercise diversity jurisdiction over their claims.”)
10
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“Ordinarily, when parties to a contract have agreed to be
governed by the laws of a particular state, New Jersey courts
will uphold the contractual choice if it does not violate New
Jersey’s public policy.” Instructional Systems, Inc. v. Computer
Curriculum Corp., 130 N.J. 324, 341 (1992). New Jersey applies
Section 187 of the Restatement (Second) of Conflicts of Laws,
which provides that the law of the state chosen by the
parties will apply, unless either:
(a)
the chosen state has no substantial relationship
to the parties or the transaction and there is no
other reasonable basis for the parties’ choice,
or
(b)
application of the law of the chosen state would
be contrary to a fundamental policy of a state
which has a materially greater interest than the
chosen state in the determination of the
particular issue and which * * * would be the
state of the applicable law in the absence of an
effective choice of law by the parties.
Id. at 342 (citing Restatement (Second) of Conflicts of Laws
§ 187).
“Procedurally, the first step is to determine whether an
actual conflict exists.” P.V. ex rel. T.V. v. Camp Jaycee, 197
N.J. 132, 143 (2008). Here, Plaintiffs have conceded that such a
conflict may indeed exist, as New Jersey and Massachusetts use
the ABC test to determine employment status, “Pennsylvania uses
a ‘right to control’ test which looks at a variety of factors.
See Sherman v. AEX, 2012 WL 748400, at *11 (E.D.Pa. 2012).”
[Docket Item 78-1 at 22.]
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Here, the parties appear to agree that the choice-of-law
provisions in both the ICOA Provision and the LLOA Provision
(electing for the application of New Jersey law) are enforceable
pursuant to § 187 [Docket Items 66-1 at 15-17 (Defendants
arguing contractual choice-of-law provisions electing New Jersey
law apply to bar quasi-contract unjust enrichment and quantum
meruit claims); 82 at 13 (Plaintiffs pointing out Defendants’
apparent concession on this issue)]; they disagree, however, as
to the scope of those provisions and whether they reach the
claims pled (or seeking to be pled) by Plaintiffs.
The Court will, thus, proceed to the second step and assess
the scope of the choice-of-law provisions at issue here to
determine whether they apply to Plaintiffs’ claims.
Again, the relevant language of the ICOA Provision states
that “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.” The LLOA Provision states: “This Agreement shall
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be governed by laws of the State of New Jersey, both as to
interpretation and performance.”
Plaintiffs seek to hold Defendants liable for 1) a state
statutory claim for, essentially, misidentifying employees as
independent contractors; 2) a state common-law claim for unjust
enrichment (arising out of that misidentification); and 3) state
common-law quantum meruit (arising out of the same). The primary
question before the Court, then, is whether the ICOA Provision
and the LLOA Provision govern those claims, necessitating the
application of New Jersey law to those claims.
Plaintiffs argue that “courts around the country confirm
that an enforceable contractual choice of law provision may
apply not just to contract claims, but to related statutory
claims arising out of the contract.” [Docket Item 78-1 at 1516.] In response, Defendants argue that this is only so when the
language of the choice-of-law provision is broader than the
language at issue here. [Docket Item 79 at 27-31.] The Court
agrees with Defendants and finds that the ICOA Provision is
drafted narrowly and, by its terms, does not apply to any and
all disputes arising out of the contracts, but rather only to
“interpretation” of the “Agreement.” The Court reads the LLOA
Provision, similarly, to require the application of New Jersey
law to questions of interpretation and performance of the
agreement, and not to related claims that do not arise directly
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from the interpretation or the performance (or non-performance)
of the Lessor and Lease Operating Agreement. Ultimately, the
Court concludes, the statutory wage claim premised on
misclassification does not arise from the interpretation of the
contracts, and the contractual choice-of-law provision does not
control.
“New Jersey follows several general rules in the
construction of contracts. The most fair and reasonable
interpretation imputing the least hardship on either of the
contracting parties should be adopted so that neither will have
an unfair or unreasonable advantage over the other. Tessmar v.
Grosner, 23 N.J. 193, 201 (1957). But the court will not make a
different or better contract than the parties themselves have
seen fit to enter into, and all parts of the writing will be
given effect if possible. Washington Construction Co. v.
Spinella, 8 N.J. 212, 217-18 (1951). Finally, where there is
ambiguity, the words are construed against the drafter. Bullowa
v. Thermoid Co., 114 N.J.L. 205, 215 (1935).” In re Community
Med. Ctr., 623 F.2d 864, 866 (3d Cir. 1980).
While no direct controlling precedent is on all fours with
the instant set of facts, the Court will analyze several
analogous cases, wherein courts have addressed the scope of
contractual choice-of-law provisions.
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In Banek Inc. v. Yogurt Ventures U.S.A., Inc., the Sixth
Circuit assessed the scope of a choice-of-law provision in a
franchise agreement that stated, “This Agreement was made and
entered into in the State [of] Georgia and all rights and
obligations of the parties hereto shall be governed by and
construed in accordance with the laws of the State of Georgia.”
6 F.3d 357, 359 (6th Cir. 1993). The court found that the
provision was “sufficiently broad so as to cover plaintiff’s
claims of fraud and misrepresentation. Had these claims only
been tangentially related to the franchise relationship, we
would be much more inclined to find the choice of law provision
not applicable. The claims of fraud and misrepresentation that
plaintiff has asserted here are directly related to the
franchise agreement.” Id. at 363. The relative textual breadth
of this contractual provision (covering, as it does “all rights
and obligations of the parties”) varies from the provisions at
issue here, however.
In Nat’l Seating and Mobility Inc. v. Parry, a federal
district court determined that a “choice-of-law provision should
not be construed narrowly” under California choice-of-law rules.
No. C 10-02782 JSW, 2012 WL 2911923, at *4 (N.D. Cal. July 16,
2012). There, the court cited with approval a California case
holding that a “‘valid choice-of-law clause, which provides that
a specified body of law “governs” the “agreement” between the
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parties encompasses all causes of action arising from or related
to that agreement, regardless of how they are characterized,
including tortious breaches of duties emanating from the
agreement or the legal relationship it creates.’” Id. (quoting
Nedlloyd Lines B.V. v. Superior Court, 834 P.2d 1148, 1155 (Cal.
Sup. Ct. 1992)). The district court concluded that a choice-oflaw provision stating, “[T]his Agreement shall be governed by,
and construed in accordance with, the laws . . . of the State of
Tennessee” was “broad enough to encompass the breach of
contract, the tort claims, and the UCL claim.” Nat’l Seating,
2012 WL 2911923 at *2, *5.3 This contractual language more
closely mirrors the language of the LLOA and ICOA provisions.
3
See also Zaklit v. Global Linguist Solutions, No. 1:14-cv314(JCC/JFA), 2014 WL 3109804, at *11 (E.D.Va. July 8,
2014)(“Under these circumstances, it would be unreasonable to
conclude that a rational employer like GLS would intend that the
laws of multiple jurisdictions would apply to a single
controversy having its origin in a single, contract-based
relationship. The only reasonable inference [of the larger
‘Governing Law’ paragraph containing a forum-selection clause
designating the same jurisdiction as the choice-of-law
provision] is that the parties intended to provide for an
efficient and businesslike resolution of possible future
disputes by choosing a single forum and a single body of law to
govern all claims, irrespective of where the events giving rise
to those claims occurred. Had the parties wished to exclude
causes of action arising in tort or by statute from the coverage
of their agreement, they may have done so, but they should have
reflected that intent in their contract. There is no evidence of
such intent in this case, and thus the choice-of-law provision
must be found to apply not only to Plaintiffs’ contract claims,
but also to any tort and statutory claims that ‘arise under’ the
parties’ contractual relationship”)(internal quotations and
citations omitted); Risinger v. SOC LLC, 936 F. Supp. 2d 1235,
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However, further research reflects that California’s
choice-of-law rules may reflect an approach that reads choiceof-law provisions more broadly than other jurisdictions would in
like circumstances. See Dinan v. Alpha Networks, Inc., 957 F.
Supp. 2d 44, 52-55 (D. Maine 2013)(“One line of authority-reflected in New York and Pennsylvania law--construes choice of
law provisions narrowly and limits them to claims arising out of
the contract; a second line of authority--reflected in
California law--extends contractual choice of law provisions to
all claims arising out [of] or related to the contract”),
vacated on other grounds, 764 F.3d 64 (1st Cir. 2014); Panthera
Rail Car LLC v. Kasgro Rail Corp., 985 F. Supp. 2d 677, 690-96
(W.D. Pa. 2013)(describing jurisdictions’ different approaches).
In contrast, the Third Circuit has stated in a nonprecedential opinion that a fairly narrow choice-of-law
provision stating “this agreement will be governed by, and
construed and enforced in accordance with, the laws of
Pennsylvania” “is narrowly drafted to encompass only the
underlying merger agreement itself, and not necessarily the
1249 (D. Nev. 2013)(Agreement with clause stating “This
Agreement shall be governed and interpreted in accordance with
the laws of the State of Nevada” “contemplates that the parties
expected to be ‘governed by’ Nevada’s law. As there is no
qualifying language, or apparent exceptions, to this term,
disputes arising from the agreement are to be adjudicated under
the guise of Nevada law”).
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entire relationship” between the contracting parties. Black Box
Corp. v. Markham, 127 F. App’x 22, 25 (3d Cir. 2005)(internal
alterations omitted). While Black Box is non-precedential, it is
instructive. The court noted that “several courts have construed
similarly worded choice of law provisions in a manner that
limits their application to the underlying agreement itself, and
not to related fraud or non-contractual claims.” Id. at 25-26
(citing Jiffy Lube Int’l, Inc. v. Jiffy Lube of Pennsylvania,
848 F. Supp. 569 (E.D.Pa. 1994); Coram Healthcare Corp. v.
Aetna, 94 F. Supp. 2d 589 (E.D.Pa. 1999); Benchmark Elec., Inc.
v. J.M. Huber Corp., 343 F.3d 719, 726 (5th Cir. 2003); Green
Leaf Nursery v. E.I. DuPont De Nemours, 342 F.3d 1292, 1300-01
(11th Cir. 2003); Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir.
1996). See also Roberts v. C.R. England, Inc., 318 F.R.D. 457,
491-92 (D. Utah 2017)(language stating “This Agreement shall be
interpreted under the laws of the United States and the State of
Utah” does “not contain broadening language such as ‘arising out
of’ or ‘relating to’ the subject matter of the agreements”
and
is properly considered “narrow”; therefore, choice-of-law
provision “appl[ies] only to issues of contractual
interpretation” and not to statutory claim under Utah Business
Opportunity Disclosure Act).
Plaintiff urges that the ICOA and LLOA Provisions should be
held to be more similar to those provisions that are construed
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broadly, because they both state that the agreements shall be
“governed” by New Jersey law. [Docket Items 92 at 1 n.1; 78-1 at
15-22 (citing Nat’l Seating, 2012 WL 2911923 at *3-*8; Medimatch
v. Lucent Technologies, 120 F. Supp. 2d 842, 861-62 (N.D. Cal.
2000)(assertion of California’s Unfair Competition Law statutory
claim precluded by contractual provision stating that
“construction, interpretation and performance of this Agreement
shall be governed by the local laws of the State of New
Jersey”)).] However, the Third Circuit in Black Box held a
provision containing precisely that language (i.e., “governed
by”) to be “narrowly drafted” and not to cover the entire
relationship between the parties.4 See also Palladin Partners v.
Gaon, No. 05-cv-3305 (WJM), 2006 WL 2460650, *16-*16 n.4 (D.N.J.
Aug. 22, 2006)(provision reading “This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York applicable to contracts made in New York by
persons domiciled in New York and without regard to its
4
But see Sullivan v. Sovereign Bancorp, Inc., No. Civ.A. 995990, 2001 WL 34883989, *5-*6 (D.N.J. Jan. 19, 2001)(choice-oflaw provision stating “This Agreement shall be governed by and
construed in accordance with the domestic internal law
(including the law of conflicts of law) of the Commonwealth of
Pennsylvania” is “sufficiently broad to encompass contractrelated tort claims such as fraudulent inducement”), aff’d, 33
F. App’x 640, 642 (3d Cir. 2002)(“the district court correctly
concluded that the breadth of the choice of law provision in the
Agreement is ‘broad and all-encompassing.’ Accordingly, it
encompasses all tort claims that may arise from the
Agreement”)(internal citations omitted).
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principles of conflict of laws” is “not so broad as to cover
Plaintiffs’ common-law tort claims”).
This can be contrasted with the Third Circuit’s holding in
Crescent Intern, Inc. v. Avatar Communities, Inc., where the
court found that a plaintiff’s “claims of RICO violation, fraud,
unfair competition and tortious interference” were within the
scope of a forum selection clause because, although “only one of
Crescent’s claims is based on a breach of contract theory, all
of them involve allegations arising out of the agreement
implicating its terms.” 857 F.2d 943, 944 (3d Cir. 1988).5
This Court concludes that New Jersey principles of
statutory interpretation would counsel a narrow reading of the
choice-of-law provision, in keeping with the approach sanctioned
by the Third Circuit in Black Box; such an approach is warranted
where the claims at issue do not, in the words of Crescent,
“implicat[e the] terms” of the contract.
Other courts have directly addressed the substantive
question presented here, i.e., whether a statutory claim that
employees were misidentified as independent contractors under
5
The Court notes that the Crescent Court also stated that “[t]he
narrow interpretation suggested by Crescent would permit
avoiding a forum selection clause by simply pleading noncontractual claims in cases involving the terms of a contract
containing the parties’ choice of forum.” Id. at 945. However,
here, the gravamen of Plaintiffs’ claims does not center on the
terms of the contract, but rather on the nature and conditions
of the work Plaintiffs performed for Defendants.
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state labor laws is properly considered to be subject to a
contractual choice-of-law provision, and answered that question
in the negative.6
The Third Circuit has not definitively addressed this
issue, but the Court finds Moon v. Breathless Inc., 868 F.3d
6
See Soto v. Diakon Logistics (Delware), Inc., No. 08-cv-33L(AJB), 2010 WL 3420779, *5 (S.D. Cal. Aug. 30, 2010)(noting
that “choice-of-law provision applies to the claims arising
under the Service Agreement. Although the agreement may be
considered, the issue whether Plaintiffs and putative class
members are independent contractors or employees is not
determined by the Service Agreement. Accordingly, the choice-oflaw clause does not apply.”); Quinonez v. Empire Today, LLC, No.
C 10-02049 WHA, 2010 WL 4569873, *3 (N.D. Cal. Nov. 4,
2010)(“Neither party contests that plaintiff is classified as an
independent contractor in the contract between the parties, so
the interpretation of the contract is not at issue. Rather, the
question is whether in classifying plaintiff, and others like
him, as an independent contractor defendant has violated the
law. Thus, the proper analytical exercise in resolving this
action does not turn on the Subcontractor Installation
Agreement. The forum-selection clause does not apply to this
action”)(emphasis in original)(citing Narayan v. EGL, Inc., 616
F.3d 895, 899 (9th Cir. 2010)(“While the contracts will likely
be used as evidence to prove or disprove the statutory claims,
the claims do not arise out of the contract, involve the
interpretation of any contract terms, or otherwise require there
to be a contract”)); Ossenbruggen v. Cowan Systems, LLC, No. 1510529-GAO, 2016 WL 1183447, *2-*3 (D. Mass. Mar. 28,
2016)(finding that Maryland law would likely exclude wage claims
from coverage of choice-of-law provision); Reynolds v. City
Exp., Inc., No. SUCV201002655D, 2014 WL 1758301, *5 (Sup. Ct.
Mass. Jan. 8, 2014)(misclassification claims “are beyond the
scope of the agreements” and are not covered by choice-of-law
provision); . But see Continental Airlines, Inc. v. Mundo Travel
Corp., 412 F. Supp. 2d 1059, 1065 (E.D. Cal. 2006)(citing
Nedlloyd, 3 Cal. 4th at 463-470)(finding that choice-of-law
provision containing phrase “governed by” should be construed
broadly, under California choice-of-law rules, to cover all
causes of action arising from or related to the contract).
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209, (3d Cir. 2017), instructive. There, the court was required
to determine the scope of an arbitration clause and naturally
looked to the language of the clause itself for guidance. Id. at
216. The court found that the provision at issue applied only to
contract-based claims and not to related statutory claims
because the provision contained limiting language that
“point[ed] to disputes related to the agreement at issue,”
citing (and analogizing to and distinguishing) Martindale v.
Sandvik, Inc., 173 N.J. 76 (2002); Garfinkel v. Morristown
Obstetrics & Gynecology Assocs., P.A., 168 N.J. 124 (2001); and
Atalese v. U.S. Legal Svcs. Grp., L.P., 219 N.J. 430 (2014).
Moon, 868 F.3d at 217. The Third Circuit noted that determining
the scope of the arbitration clause required the court to
“decide what the arbitration provision says” but resolution of
“separate wage-and-hour claims” required the court “to determine
what the Appellant does”; for that reason, the wage-and-hour
claims could not fairly be said to arise out of the agreement.
Id. at 218. The defendant argued that the plaintiff’s “claim
that she should be treated as an employee actually arises ‘under
the Agreement’ because it refers to [her] as an ‘independent
contractor[]’”; however, the court found that “[d]espite the
contract’s employment provision, Moon’s claims still arise under
the FLSA and New Jersey statutes, not the agreement itself.” Id.
at 218 (emphasis in original; citation omitted).
22
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Plaintiffs claim that “the interpretation of the agreement
will be intrinsic to the employment status analysis . . . since
a central factor in determining employment status is the
employer’s right to . . . direct the work of the workers. . . .
Determining whether NFI has retained the right to control
Plaintiffs’ work will necessarily require the analysis of the
terms and effects of the Independent Contractor Operating
Agreements.” [Docket Item 82 at 15-16 n.7.] While the Court
agrees that the terms of the Agreements will be relevant to this
analysis, it is not persuaded that the terms will be intrinsic,
inextricable, or otherwise indispensably intertwined with the
employee/independent contractor analysis. In other words, the
statutory wage claims comprising the gravamen of Plaintiffs’
suit may certainly involve the relationship of the parties but
require neither interpretation of, nor governance by, the ICOA
or the LLOA. Accordingly, the Court cannot afford the choice-oflaw provisions regarding interpretation or performance of the
agreement the broad and conclusive construction urged by
Plaintiffs extending to statutory wage claims not addressed in
or connected to the agreement.
The Court is mindful of Plaintiffs’ argument that, in these
other cases, courts have found the statutory or tort claims to
fall outside the coverage of contractual choice-of-law
provisions where it was the defendant, as drafter of the
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contract, who was seeking to enforce the choice-of-law provision
against a plaintiff who sought to press alternative state law
claims. [Docket Item 82 at 13-14.] Plaintiffs submit that, in
this more unusual circumstance, where they are simply
acquiescing to a broad construction of the choice-of-law
provision that was drafted by employers and presented to them
for their acceptance, that choice (and the desired breadth
thereof by the Plaintiffs as the non-drafters) should simply be
respected by this Court. See also Taylor v. Eastern Connection
Operating, Inc., 465 Mass. 191, 195 n.8 (2013)(“Here, there is
no concern that the choice-of-law clause was forced upon the
party now resisting it, as the defendant, the party that drafted
the choice-of-law clause, is now attempting to disclaim it,
rather than to enforce it. . . . Any concern over unequal
bargaining power in the underlying negotiation would suggest
that the clause should be enforced, rather than
discarded.”)(citing American Ins. Co. v. Frischkorn, 173 F.
Supp. 2d 415, 519 (S.D.W.Va. 2001)(“inequitable” and “unjust”
for defendant to “attempt to forsake their own choice-of-law
clause simply because it benefits the opposing parties to the
Agreement”)).
The intended breadth of the parties’ contractual choice-oflaw provisions presents a close question. Nevertheless,
Plaintiffs’ analysis does not seem to be in keeping with
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principles of contractual interpretation under New Jersey law
this Court is obliged to apply to determine the scope of the
choice-of-law provision; nor is such an approach how other
courts have, in the main, analytically addressed this issue.
Again, the Court notes the relatively unusual posture of this
motion, where Plaintiffs, despite being non-drafters, advocate
for a broad construction of the choice-of-law provision, and it
is the Defendant-drafters who would have it applied only
narrowly. But this posture is not dispositive, and the Court is
persuaded that the Third Circuit, as well as New Jersey courts,
would deem the ICOA Provision to be narrow and not apply to
wage-and-hour claims premised on misclassification, as they do
not directly arise out of, nor are inextricably intertwined
with, see Narayan v. EGL, Inc., 616 F.3d 895, 898-99 (9th Cir.
2010), the agreement containing the choice-of-law provision.
While the LLOA Provision dictates that the Agreement shall
be governed by New Jersey law not only as to interpretation but
also as to performance, the Court also finds that it cannot
fairly be said, for the reasons discussed above, that the
statutory claims (premised on the alleged misclassification)
arise from questions of the “performance” of the Lessor and
Lease Operating Agreement. Cf. D’Avignon v. Nalco Company, No.
SACV 14-834-JLS (DFMx), 2015 WL 11438553, *7 (C.D. Cal. June 30,
2015)(choice-of-law provision that “facially applie[d] only to”
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“the validity, interpretation, construction and performance of
the Employment Agreement” did not cover claim that employer
failed to provide the plaintiff with his full personnel file, in
violation of Cal. Labor Code § 1198.5, because personnel file
claim did “not relate to the validity, interpretation,
construction, or performance of the Employment Agreement and
therefore does not fall within the scope of the choice-of-law
provision”)(emphasis added); Fairmont Supply Co. v. Hooks
Indus., Inc., 177 S.W.3d 529, 534-36 (Tx. Ct. App. 2005).
Accordingly, though the question is close, the Court finds
that the parties’ contractual choice-of-law provision is not
phrased sufficiently broadly to apply to the non-contractual
claims asserted here.
B. Statutory Wage Claims and Quasi-Contract Claims
Given the Court’s finding that the contractual choice-oflaw provisions do not dispositively dictate the choice of New
Jersey law pertaining to Plaintiffs’ statutory wage claims, the
Court will continue with the choice-of-law analysis under New
Jersey law.
“New Jersey has adopted ‘the most significant relationship’
test set out in the Restatement (Second) of Conflict of Laws.
P.V. ex rel. T.V. v. Camp Jaycee, 197 N.J. 132 (2008). . . .
With an actual conflict [between the laws of the potentially
26
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relevant states], courts must . . . determine, by reference to
the Restatement, which state has the most significant
relationship to the case and parties. Id. at 461.” Grandalski v.
Quest Diagnostics, Inc., 767 F.3d 175, 180 (3d Cir. 2014). “The
Second Restatement assessment takes place on an issue-by-issue
basis. It is qualitative, not quantitative.” Camp Jaycee, 197
N.J. at 143. “[I]n balancing the relevant elements of the most
significant relationship test” courts should “apply the law of
the state that has the strongest connection to the case.” Id. at
155.
Statutory wage claims have been construed as tort claims.
See Melia v. Zenhire, Inc., 462 Mass. 164, 176-77
(2012)(collecting cases under New York choice-of-law rules
construing statutory wage claims with regard to choice-of-law
principles for torts). Under such an analogy, a court therefore
looks to Sections 145 and (by reference) 6 of the Restatement.
Section 145 states:
(1)
(2)
The rights and liabilities of the parties with
respect to an issue in tort are determined by the
local law of the state which, with respect to
that issue, has the most significant relationship
to the occurrence and the parties under the
principles stated in § 6.
Contacts to be taken into account in applying the
principles of § 6 to determine the law applicable
to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the
injury occurred,
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(c)
the domicil, residence, nationality, place
of incorporation and place of business of
the parties, and
(d) the place where the relationship, if any,
between the parties is centered.
These contacts are to be evaluated according to
their relative importance with respect to the
particular issue.
Section 6 states that factors “relevant to the choice of
the applicable rule of law include
(a)
(b)
(c)
(d)
(e)
(f)
(g)
the needs of the interstate and international
systems,
the relevant policies of the forum,
the relevant policies of other interested states
and the relative interests of those states in the
determination of the particular issue,
the protection of justified expectations,
the basic policies underlying the particular
field of law,
certainty, predictability and uniformity of
result, and
ease in the determination and application of the
law to be applied.
Here, because the injury complained of by Plaintiffs was
pecuniary in nature, it is best understood as having occurred
where each Plaintiff resides; this is in contrast to the place
where the conduct causing the injury (i.e., the
misclassification of Plaintiffs as independent contractors and
the attendant withholding of money that would have been owed to
them had they been correctly classified as employees) can be
said to have occurred, which is likely Defendants’ headquarters,
as the center of their business operations, in New Jersey.
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Accordingly, factors (2)(a) and (2)(b) are fairly understood as
being subsumed within factor (2)(c) of § 145.
The Plaintiffs live in Rhode Island and Pennsylvania. Some
of the Plaintiffs have incorporated in Rhode Island and some in
Pennsylvania. Both Plaintiffs and Defendants concede that
Plaintiffs carried out deliveries in, inter alia, Pennsylvania,
Rhode Island, New Jersey, and Massachusetts (as well as other
states, and the District of Columbia). This factor, then, is
variable as to each Plaintiff, who are best conceptually located
(under the circumstances) within their state of residence.
Defendant, by contrast, is clearly conceptually located in New
Jersey (although the Court notes that it can also fairly be said
to have one of its relevant “places of business” in Pennsylvania
in office space within the Trader Joe’s warehouse, as well).
The Court therefore turns to Section 145(2)(d), the place
where the relationship between the parties is centered. Here,
the relationship between the parties includes the ICOA or LLOA
agreements discussed above, each drafted in New Jersey by the
New Jersey corporate defendant; to the extent the parties’ legal
relationship springs from those New Jersey agreements, the
relationships center in New Jersey. In DaSilva v. Border
Transfer of MA, Inc., the district court was obliged to resolve
the question of “whether the Massachusetts Wage Act would apply
to a driver who signed a contract with Border Transfer (a
29
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Michigan corporation headquartered in Tennessee that operates in
Massachusetts) through a Rhode Island corporate entity to
delivery goods from a Massachusetts facility to a mix of
Massachusetts and out-of-Massachusetts customers.” No. 16-11205,
2017 WL 5196382, *6 (D. Mass. Nov. 9, 2017). Citing Dow v.
Casale, 989 N.E.2d 909 (Mass. 2013) for an analogous analysis,
the court found “that because the proposed class members’ [i.e.,
the truck drivers who made deliveries] relationship with Border
Transfer centered on the Westwood[, Massachusetts] facility,
where they met every morning to get instructions, Massachusetts
wage law applies even to drivers from out of state who spent
much of their time delivering out of state” and found that the
MWA would apply to all members of the proposed class. Id.
Here, the Court finds that the relationship between
Plaintiffs and Defendants is of two faces: the contractual
relationship is centered in New Jersey and the physical
interface of work performance is in Pennsylvania. While
Plaintiffs made deliveries throughout several states, interacted
with Defendants while Defendants held their primary place of
business in New Jersey, and felt the effects of their work
within their own domicils, they all reported to work for
Defendants in Pennsylvania and had their primary face-to-face
interactions with Defendants through Defendants’ Pennsylvania
place of business and Pennsylvania-based employees. On the other
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hand, the parties’ legal, contractual relationship was centered
in New Jersey, as Plaintiffs (who knowingly took on the highly
mobile work of truck-driving) chose to enter into contracts with
a New Jersey corporation, with its principal place of business
in New Jersey, and understood the Defendants to wish to apply
New Jersey law to contractual disputes--regardless of their own
states of residence. In short, the centers of the parties’
relationship under Section 145(2)(d) are both Pennsylvania and
New Jersey, and we move to consider other factors.
As Plaintiffs’ remaining claims for unjust enrichment and
quantum meruit are best understood as quasi-contract claims, the
Court again applies New Jersey’s “most significant relationship”
test and finds § 221 of the Restatement instructive. It
provides:
(1)
(2)
In actions for restitution, the rights and
liabilities of the parties with respect to the
particular issue are determined by the local law
of the state which, with respect to that issue,
has the most significant relationship to the
occurrence and the parties under the principles
stated in § 6.
Contacts to be taken into account in applying the
principles of § 6 to determine the law applicable
to an issue include:
(a) the place where a relationship between the
parties was centered, provided that the
receipt of enrichment was substantially
related to the relationship,
(b) the place where the benefit or enrichment
was received,
(c) the place where the act conferring the
benefit or enrichment was done,
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(d)
(e)
the domicil, residence, nationality, place
of incorporation and place of business of
the parties, and
the place where a physical thing, such as
land or a chattel, which was substantially
related to the enrichment, was situated at
the time of the enrichment.
These contacts are to be evaluated according to their
relative importance with respect to the particular issue.
Restatement (Second), § 221.
Many of these factors echo those analyzed above. The Court
previously found that the physical relationship between the
parties was centered in Pennsylvania and the legal relationship
in New Jersey, where Plaintiffs reported for work and interacted
with Defendants’ employees; the alleged unjust enrichment
relates to the work Plaintiffs performed for Defendants. The
benefit or enrichment is best understood as having been received
in New Jersey (Defendants’ primary place of business and place
of incorporation), as that is where Defendants would have
withheld and retained the portion of Plaintiffs’ wages at issue.
The acts conferring the benefit were Plaintiffs’ making of
deliveries, which, as discussed above, took place in multiple
states as well as Washington, D.C., none of which is the
dominant state for deliveries. Each driver, however, performs
deliveries to New Jersey stores, and such work is not merely
incidental or fortuitous. The domiciles, residences, and places
of business of the parties are all the same in this analysis as
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they were above. No physical thing (e.g., land or chattel)
appears to be directly relevant to the unjust enrichment claim
here, and so is effectively irrelevant to the Court’s analysis.
Accordingly, the only additional factor from § 221 that aids in
the Court’s analysis of relevant contacts is that Defendants’
place of business ought to be weighted more heavily, as that is
where the benefit was received, which again points to New
Jersey.
Turning then, to the larger issues implicated by § 6, the
Court notes the parties’ arguments.
In general, Defendants argue that the interests of each
Plaintiff’s state of residence (as the location where that
Plaintiff paid taxes and where, if that Plaintiff had a
corporation, that Plaintiff’s corporation paid taxes) are
paramount, as those states meant for their wage laws to protect
members of their respective communities and those states may
also be able to collect back-taxes if Plaintiffs are ultimately
successful. [Docket Item 79 at 35-46.] In the alternative,
Defendants note that the relationship between Plaintiffs and
Defendants was centered in Pennsylvania and argue that
application of Pennsylvania law would be appropriate. Id.
In support of their argument that New Jersey law does not
apply, Defendants analogize to Overton v. Sanofi-Aventis U.S.,
LLC, No. 13-5535 (PGS), 2014 WL 5410653, *5-*6 (D.N.J. Oct. 23,
33
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2014). In that case, the court ruled that the New Jersey Wage
Payment Law does not apply to employees who live and work
outside of New Jersey, even if the employer is based in New
Jersey, based on a line of cases holding that the NJWPL did not
apply to plaintiffs who did not work in New Jersey. Id. at *5.
The court noted that the reasoning of those cases was “in line
with the governmental interest analysis governing New Jersey’s
choice of law determinations[,]” citing Veazey v. Doremus, 103
N.J. 244, 247-48 (1986), as “[t]he states where these plaintiffs
lived and worked would have the greatest interest in their
treatment as employees.
Plaintiffs argue that the fact that Defendants are
headquartered in New Jersey, although perhaps not dispositive on
its own, when taken into account along with “the significant
amount of work that the Plaintiffs performed in New Jersey,
along with the [parties’ agreement to] New Jersey choice-of-law
and forum selection provisions, quite clearly pushes New Jersey
law over the threshold.” [Docket Item 82 at 17.] Plaintiffs
argue, in the alternative, that either Pennsylvania or
Massachusetts law applies if New Jersey does not” but that the
Court should “reject” Defendants’ “unfounded argument that Rhode
Island law applies to some Plaintiffs while Pennsylvania law
applies to others. Such a conclusion is illogical considering
that the Plaintiffs performed the exact same work, out of the
34
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exact same location, performing deliveries in largely the same
states. There is not reason Pennsylvania law would govern some
of the Plaintiffs’ claims but not others.” Id. at 20. Treating
Plaintiffs’ states of residence as effectively dispositive is
not warranted, Plaintiffs contend. Id. at 19.
In support of their argument that New Jersey has the most
significant relationship and that its law should apply,
Plaintiffs cite Flecker v. Statue Cruises, LLC, wherein the
Superior Court of New Jersey, Hudson County, found that, while
“all of the Class Members spend a considerable amount of their
working time in New York,” “New Jersey has a significant
relation to the occurrence and parties involved in this matter”
because “[d]espite the fact that ten of twelve vessels are
registered in New York and that defendants have a guest services
and ticket office within the State of New York, the defendants’
primary office is located in New Jersey; defendants withhold New
Jersey payroll taxes from all employees regardless of whether
the employee resides in New Jersey or New York, and each
employees’ work does, in part, take place in New Jersey.” 444
N.J. Super. 1, 21-22 (Law Div. 2013)(citing, inter alia,
“Zanfardino v. E-Sys., Inc., 652 F. Supp. 637, 639-40 (S.D.N.Y.
1987)(applying law of state where . . . employment contract was
negotiated, defendant’s main offices were, and termination
decision was made, even though employee worked elsewhere)”).
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Finally, Section 221 of the Restatement contemplates the
relevance of contract choice-of-law principles for some
restitution actions: “When the enrichment was received in the
course of the performance of a contract between the parties, the
law selected by application of the rules of §§ 187-188 will
presumably govern one party’s rights in restitution against the
other. The applicable law will be that chosen by the parties if
they have made an effective choice under the circumstances
stated in § 187.” Restatement (Second) of Conflict of Laws,
§ 221, cmt. d.
The Court does note, however, Defendants’ arguments for
application of New Jersey law in their previously-filed motion
for summary judgment as to the Massachusetts claims [Docket Item
66-1]: distinguishing Dow v. Casale, 989 N.E.2d 909, 914 (Mass.
App. Ct. 2013), Defendants stated,
NFI entered into contracts with Plaintiffs (or
Plaintiffs’ companies), but not in Massachusetts. And
according to those contracts, it is New Jersey law -not Massachusetts -- that governs. . . . In
determining whether a state wage statute applies to
individuals who work in more than one state, other
factors become more important than the situs of the
work, factors including (1) the citizenship of the
defendants, (2) the defendants’ principal place of
business, (3) contractual choice of law provisions,
(4) plaintiffs’ contact information and
representations regarding their places of work, (5)
the state from which the paychecks in dispute are
issued, and (6) the location of the defendant’s
employees with whom the plaintiffs communicated.
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[Docket Item 66-1 at 12-13 (citing Dow, 989 N.E.2d at 914).]
Those latter enumerated factors point to New Jersey. Defendants
also argue that § 187 applies to Plaintiffs’ quasi-contract
claims, and the LLOA and ICOA provisions’ choice of New Jersey
law accordingly applies to those claims. [Docket Item 66-1 at
15-16.] This is so because, Defendants argue, “New Jersey has a
substantial relationship to the parties and the action in that
both NFI Defendants are incorporated in New Jersey and
headquartered there. Moreover, the parties explicitly agreed
that New Jersey law governs their relationship. Accordingly, the
Court should enforce New Jersey law, as the parties’ contracts
dictate.” Id. at 16. Again, these same factors militate toward
New Jersey.
The last four factors of Restatement (Second) § 6, supra-namely, §§ 6(d), (e), (f) and (g)--all point to selection of New
Jersey law. The protection of justified expectations [§ 6(d)]
requires looking no further than the ICOA and LLOA agreements
wherein these parties selected New Jersey law to govern the
agreements; it would be difficult for anyone to suggest that the
application of New Jersey law to the present non-contractual
disputes was beyond the parties’ expectations. The basic
policies underlying the statutory wage claim field of law
[§ 6(e)] is not as strong a vector toward New Jersey, but
nonetheless gives New Jersey law as strong a claim as the
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Plaintiffs’ domicile in determining wages and hours for work
performed in a multitude of states for the New Jersey
contractor/employer; New Jersey’s interest in fair payment of
wages by a New Jersey employer, as well as regulating all New
Jersey resident employers equally in their statutory wage
requirements, again suggests selection of New Jersey. Certainty,
predictability, and uniformity of result [§ 6(f)] suggest that,
where feasible and just, the law should direct workers and their
employers to a single source whereby employees can be treated
equally and participants can plan accordingly, again pointing
toward selection of New Jersey law rather than multiple states’
laws based upon distinctions not essential to the actual work
being done. Finally, ease of determination and application
[§ 6(g)] of New Jersey law is supported by the parties’
identification of New Jersey in their contractual choice-of-law
and forum-selection clauses; it is not a major step to enlarge
the parties’ choice for contractual disputes to the noncontractual wage claims presented here. It should not, in the
normal course of such arrangements, require over-the-road
truckers and their contractor to hire talented attorneys to
figure out, over the course of months, what law governs such
fundamental wage-and-hour issues.
The Court is persuaded that New Jersey has the most
significant relationship to the parties, the working
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relationships, and the claims at issue in this case. While the
question is a close one, the Court is mindful of the following
factors. First, Defendants are the more sophisticated party and
the drafters of the contract; they elected to be bound (with
regard to contract claims) by New Jersey law and to bind the
drivers to New Jersey law with regard to such claims, and
Plaintiffs also seek to apply New Jersey law. This is the
unusual case where Plaintiffs seek to bind the drafters of the
contract to the choice-of-law stated therein. While the Court,
as discussed above, does not find that the scope of that
provision encompasses the Plaintiffs’ claims literally and
directly, the Court does note that giving effect to the
reasonable expectations of the parties to a contract is one of
the important factors in a choice-of-law analysis under the
Restatement. Here, it appears fair to presume that Plaintiffs
and Defendants reasonably expected New Jersey law to apply to
the bulk of their disputes and contracted for that outcome.
Second, the nature of Plaintiffs’ work was highly mobile
and not based in any other state more significantly so as to
grant that state the most significant interest under the
Restatement’s analysis. While the Plaintiffs’ states of
residence have an interest in the proper payment of wages to
their citizens, it appears to be without question that
Plaintiffs knowingly took on a business opportunity that was
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inherently of an interstate nature, with the Rhode Island
Plaintiffs traveling, e.g., to Pennsylvania to pick up their
shipments and deliver them all over the Eastern Seaboard. No
Plaintiff’s work was primarily performed in his own state of
residence.
Third, while the center of the relationship between the
parties in physical terms appears to be in Pennsylvania at the
warehouse interface, as that is where Plaintiffs interacted with
Defendants on the most regular basis, that does not lead to the
conclusion that Pennsylvania has the most significant interest
in light of all other factors. This would seem to bind
Defendants to abiding by the wage laws of any state in which it
has, effectively, a satellite office that serves as a home-base
to drivers, when Defendants’ operations are primarily in New
Jersey and Plaintiffs and Defendants reasonably sought to apply
New Jersey law to their contractual claims, as discussed above.
Finally, the Court notes that Plaintiffs did perform a
significant portion of their work in New Jersey. This is not the
case where Plaintiffs seek the protection of New Jersey state
wage and employment laws for people who avowedly never worked in
New Jersey.
While this case presents complex issues, the Court is
persuaded that New Jersey has the most significant interest in
these particular circumstances. Accordingly, the Court finds,
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pursuant to a choice-of-law analysis under the Restatement and
Camp Jaycee, that New Jersey law applies to Plaintiffs’ claims.
CONCLUSION
For the foregoing reasons, the Court will grant Plaintiffs’
motion for a declaratory judgment that New Jersey law applies.
The accompanying Order will be entered.
June 11, 2018
DATE
s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge
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