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Lee v. Golf Transp., Inc.

Michael LEE, et al., Plaintiffs

v.

GOLF TRANSPORTATION, INC., et al., Defendants.

CIVIL ACTION NO. 3:21-CV-01948

Signed November 7, 2023

Attorneys and Law Firms

Corey S. Suda, Edward J. Ciarimboli, Fellerman & Ciarimboli Law, P.C., Kingston, PA, Michael J. O’Neill, The ONeill Firm, Newtown Square, PA, Marc S. Rosenberg, Rosenberg Law, Bala Cynwyd, PA, for Plaintiffs Michael Lee, Anderson Bastone.

Joseph R. Fowler, Samuel Garson, Fowler Hirtzel McNulty & Spaulding, LLP, Philadelphia, PA, for Defendants Golf Transportation, Inc., JP Logistics, Inc.

Wade D. Manley, Johnson, Duffie, Stewart & Weidner, Lemoyne, PA, for Defendant O’Connor Trucking, Inc.

Diane B. Carvell, Gary N. Stewart, Rawle & Henderson, LLP, Harrisburg, PA, for Defendant Coyote Logistics, LLC.

(MEHALCHICK, M.J.)1

MEMORANDUM

KAROLINE MEHALCHICK, Chief United States Magistrate Judge

*1 Before the Court is a motion for summary judgment filed by Defendant Coyote Logistics, LLC (“Coyote”) on June 2, 2023. (Doc. 123).2 This consolidated action arises out of two wrongful death and survival actions filed by Plaintiffs Michael Lee as Administrator of the Estate of Raven Lee and Anderson Bastone as Administrator of the Estate of Chaz Bastone (collectively, “Plaintiffs”). (Doc. 55). On November 16, 2021, Plaintiff Lee filed a wrongful death and survival action against Defendants Golf Transportation, Inc. (“Golf”), JP Logistics, O’Connor Trucking, Inc. (“O’Connor”), UNFI Transport LLC, and United National Foods Inc. (“UNFI”). (Doc. 1). On April 28, 2022, Lee filed an amended complaint adding Coyote as a new Defendant. (Doc. 29). On June 3, 2022, Plaintiff Bastone file a wrongful death and survival action against Golf, JP Logistics, O’Connor, UNFI Transport LLC, UNFI, and Coyote. Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. On October 4, 2022, the Court consolidated these actions and ordered that all future filings shall be filed in 3:21-CV-01948. (Doc. 55).

Both complaints allege that on October 7, 2020, Plaintiffs’ decedents, Raven E. Lee and Chaz Bastone, were killed in a motor vehicle accident involving a tractor-trailer driven by Greg Leksowski (“Leksowski”). (Doc. 29); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. Coyote filed an answer to Lee’s amended complaint on May 31, 2022, and an answer to Bastone’s complaint on October 10, 2022. (Doc. 36; Doc. 58). On June 2, 2023, Defendant Coyote moved for summary judgment. (Doc. 123). On July 21, 2023, the parties appeared before the Court for oral argument on the motions for summary judgment. For the following reasons, Coyote’s motion for summary judgment will be granted, and JP Logistics’ motion for summary judgment will be denied.

I. Factual Background3

*2 Coyote is authorized by the Federal Motor Carrier Safety Administration (“FMCSA”) to operate as a Registered Property Broker pursuant to a license issued to Number MC-561135-B. (Doc. 124, ¶ 10; Doc. 124-1; Doc. 124-2). Coyote contracted with co-Defendant Golf, a motor carrier licensed by the FMCSA, to operate as a for-hire motor carrier pursuant to authority issued in DOT Number 2945959 (MC-997153). (Doc. 124, ¶ 11; Doc. 124-3). Golf did not have broker authority. (Doc. 124, ¶ 12; Doc. 124-3, at 3).

In the Carrier Agreement, Coyote is referred to as “BROKER,” and Golf is referred to as “CARRIER.” (Doc. 124, ¶¶ 13-14; Doc. 124-3, at 4-5). Coyote and Golf Transportation agreed, in relevant part, as follows:

1. SCOPE OF WORK. BROKER agrees to cause freight to be tendered to CARRIER, and CARRIER agrees to pick up, transport, and deliver such freight and provide all such services as BROKER shall request on all freight tendered by BROKER as set forth in a Load Confirmation Sheet (the “Services”). CARRIER warrants and agrees that all freight tendered to it by BROKER pursuant to this Agreement shall only be transported by CARRIER on, in or with equipment owned by CARRIER or leased to CARRIER under a lease having a duration of more than thirty (30) days and operating under CARRIER’s operating authorities. CARRIER shall not, in any manner, subcontract, broker, or tender to any third party for transportation any freight tendered to CARRER by BROKER for transportation pursuant to this Agreement, except to the extent CARRIER uses the services of an owner/operator and provided that the owner/operator is providing such transportation services and operating equipment duly authorized under CARRIER’s operating authority. In addition to other remedies conferred by this Agreement, any violation of this article shall act as a bar to CARRIER’s right to collect payment for any shipment handled in a manner which violates this article.

5. CARRIER WARRANTIES AND REPRESENTATIONS TO BROKER AND ITS CUSTOMERS.

CARRIER warrants and represents the following: …

D. CARRIER will provide, operate, and maintain in satisfactory and safe working condition all motor vehicles, trailers and equipment necessary to perform Services pursuant to this Agreement. CARRIER will (i) provide all necessary and fully qualified drivers, (ii) ensure that each driver is suitably trained for operation of vehicles and other equipment ….

13. MISCELLANEOUS.

A. Independent Contractor. It is understood and agreed that CARRIER is an independent contractor and not an agent, joint venture, owner-operator, or employee of BROKER. CARRIER has the sole and exclusive direction and control over the manner in which CARRIER and its employees, contractors, or others perform Services. Such individuals shall be considered employees or representatives of CARRIER only and shall be subject to employment, discharge, discipline, and control solely and exclusively by CARRIER, which shall be fully responsible for their acts. It is acknowledged and agreed that BROKER has no control of any kind over CARRIER or its operations, employees, drivers, or equipment. BROKER is not and will not be responsible for any debts, liabilities, or obligations incurred by CARRIER in the performance of its business. CARRIER assumes full responsibility for all commissions, salaries, insurance, taxes, pensions, and benefits of CARRIER’s agents, contractors, sub-contractors, and/or employees in connection with CARRIER’s performance pursuant to this Agreement.

(Doc. 124, ¶ 15; Doc. 124-3, at 5-6, 17).

*3 On September 24, 2020, Coyote tendered Load 20787152 to Golf consisting of Pick-Up Numbers 5838948 and 5839071. (Doc. 124, ¶ 16; Doc. 124-4). UNFI was the consignee, or customer, who retained Coyote to arrange for the transportation of Load 20787152. (Doc. 124, ¶ 17; Doc. 124-5). Golf agreed to pick up Load 20787152 at Pacific Foods in Wilsonville, Oregon and deliver Load 20787152 to UNFI-Montgomery in Montgomery, New York. (Doc. 124, ¶ 18; Doc. 124-4). Plaintiffs specifically denied that Exhibit ‘D’ was the controlling Rate Confirmation contract between Golf and Coyote for the subject load, submitting that there were three Rate Confirmation sheets provided to Golf by Coyote for the Subject Load. (Doc. 149, ¶¶ 18-19; Doc. 149-2, Leite Depo. Tr. 79:7-12, Oct. 12, 2022). The Rate Confirmation for Load 20787152 specifically stated: “THIS LOAD SHALL NOT BE DOUBLE BROKERED.” (Doc. 124, ¶ 19; Doc. 124-4, at 4). A portion of Load 20787152, consisting of Pick-Up/Order Number 5838948, was picked up September 30, 2020. (Doc. 124, ¶ 20; Doc. 124-5). Coyote and the Plaintiffs dispute whether Golf was placed in any sort of “do not use” status by Coyote, but do agree that Golf had been placed in “pending” status while it investigated allegations of violations of transloading. (Doc. 149, ¶¶ 20-22b; Doc. 149-4; Doc. 146, ¶¶ 20-22).

According to the Bill of Lading, the Load consisting of Pick-Up/Order Number 5838948 (“Subject Load”) was property consisting of soup. (Doc. 124, ¶ 21; Doc. 124-5). The Subject Load was picked up by “Victor Bordo GOLF.” (Doc. 124, ¶ 22; Doc. 124-5, at 1). The corporate representative of Golf, Mark Myslek, agreed that Victor Bordo picked up Load 20787151 on behalf of Golf. (Doc. 124, ¶ 23; Doc. 124-6, Myslek Depo. Tr. 26:4-27:19, Oct. 27, 2022). Neither Golf nor Myslek know who Victor Bordo is. (Doc. 124, ¶ 24; Doc. 124-6, Myslek Depo. Tr. 26:4-27:19, Oct. 27, 2022; Doc. 124-7, at 12).

Golf does not know what motor carrier picked up Load 20787152. (Doc. 124, ¶ 25; Doc. 124-7, at 8). Golf does not know how Load 20787152 got from Wilsonville, Oregon to Chicago. (Doc. 124, ¶ 26; Doc. 124-6, Myslek Depo. Tr. 94:4-6, Oct. 27, 2022). Golf does not know what tractor and trailer picked up Load 20787152 in Wilsonville, Oregon. (Doc. 124, ¶ 27; Doc. 124-6, Myslek Depo. Tr. 94:7-8, Oct. 27, 2022). Myslek explained that when a load was brokered to Golf by Coyote, he would frequently have Yanas Transport pick up that load and sign the Bill of Lading for Golf without Coyote’s knowledge. (Doc. 124, ¶ 28; Doc. 125-6, Myslek Depo. Tr. 31:10-32:5, Oct. 27, 2022). Myslek testified that nobody told Coyote about using another carrier to pick up loads for Golf and that there was no reason for Coyote to know about it. (Doc. 124, ¶ 29; Doc. 124-6, Myslek Depo. Tr. 32:1-5, Oct. 27, 2022). Myslek testified that he assumed that Coyote was not aware that third party carriers were picking up loads that had brokered to Coyote to Golf. (Doc. 124, ¶ 30; Doc. 124-6, Myslek Depo. Tr. 32:11-23, Oct. 27, 2022). Myslek also testified that he believed double brokering was common in the industry and that he did not know whether Coytoe was aware that he was double brokering loads to other, third-party carriers. (Doc. 149, ¶ 30; Doc. 124-6, Myslek Depo. Tr. 32:11-23, Oct. 27, 2022). In violation of the Carrier Agreement and the Rate Confirmation, Golf permitted Load 20787152 to be delivered by O’Connor. (Doc. 124, ¶ 31; Doc. 124-7, at 18-19).

*4 The driver of the truck involved in the accident was Leksowski. (Doc. 124, ¶ 32; Doc. 124-6, Myslek Depo. Tr. 115:6-9, Oct. 27, 2022). Leksowski was not employed by Coyote, but was an independent contractor of O’Connor. (Doc. 124, ¶¶ 33-34; Doc. 124-6, Myslek Depo. Tr. 115:12-13, Oct. 27, 2022; Doc. 124-8, Leksowski Depo. Tr. 16:20-17:2, Oct. 27, 2022; Doc. 124-9, at 8). It was in the course and scope of his employee and/or agency relationship with O’Connor that Leksowski was driving the commercial motor vehicle at the time of the accident. (Doc. 124, ¶ 35; Doc. 124-10, at 4). O’Connor, as the motor carrier who employed Leksowski, produced the driver file, including the application of employment for Leksowski. (Doc. 124, ¶ 36; Doc. 124-9, at 6; Doc. 124-11, at 5). Leksowski was not employed by Golf at the time of the accident, testified that he has never worked for Golf, and further testified that he had never heard of any company called “Coyote Logistics.” (Doc. 124, ¶¶ 37-39; Doc. 124-8, Leksowski Depo. Tr. 10:24-11:4, 77:2-8, 101:21-25, Oct. 27, 2022; Doc. 124-12, at 5-6).

The truck driven by Leksowski was not owned by Coyote. (Doc. 124, ¶ 40;). The Volvo tractor driven by Leksowski was owned by O’Connor, not Coyote. (Doc. 124, ¶¶ 40-41; Doc. 124-9, at 6; Doc. 124-13, Walsh Depo. Tr. 17:4-10, Oct. 12, 2022; Doc. 124-14; Doc. 124-6, Myslek Depo. Tr. 115:18-20, Oct. 27, 2022). O’Connor was the Motor Carrier operating the Volvo tractor at the time of the accident was O’Connor. (Doc. 124, ¶ 42; Doc. 124-14, at 4; Doc. 124-15; Doc. 124-16). The Bill of Lading, which remains with the load until delivery, identified ‘Golf’ as the motor carrier responsible for the transport of Load 20787153. (Doc. 149, ¶¶ 41-42; Doc. 124-5).

The registered owner of the Wabash National trailer attached to the tractor that Leksowski was driving was JP Logistics, not Coyote. (Doc. 124, ¶¶ 43-44; Doc. 124-15, at 2; Doc. 124-8, Leksowski Depo. Tr. 47:20-22, 97:11-14, Oct. 27, 2022; Doc. 124-6, Myslek Depo. Tr. 115:21-116:1, Oct. 27, 2022). When Gulf received the rate confirmation for the Subject Load, Golf did not tell Coyote that the load would be transported by O’Connor. (Doc. 124, ¶ 45; Doc. 124-6, Myslek Depo. Tr. 118:3-9, Oct. 27, 2022). Golf, not Coyote, double brokered the Subject Load. (Doc. 124, ¶ 46; Doc. 124-7, at 20-21).

Coyote did not dispatch the Volvo driven by Leksowski at the time of the subject accident. (Doc. 124, ¶ 48; Doc. 124-7, at 26). Coyote did not exercise any control over dispatching of the Volvo driven by Leksowski at the time of the subject accident. (Doc. 124, ¶ 49; Doc. 124-7, at 27). Golf did not tell Coyote that Leksowski would deliver Load 20787152. (Doc. 124, ¶ 50; Doc. 124-7, at 28). Leksowski was not driving under Golf’s motor carrier authority at the time of the subject accident. (Doc. 124, ¶ 51; Doc. 124-7, at 29). Leksowski was not selected by Coyote to deliver Load 20787152. (Doc. 124, ¶ 52; Doc. 124-7, at 30). Golf identified the driver as “Ted” and did not tell Coyote that the driver assigned to the Subject Load was Leksowski. (Doc. 124, ¶ 53; Doc. 124-17, Jordan Depo. Tr. 78:10-13, Oct. 10, 2022; Doc. 124-18, Hahn Depo. Tr. 74:18-75:12, Jan. 16, 2023). Coyote did not learn about this accident until October 21, 2020, approximately two weeks after it occurred. (Doc. 124, ¶ 54; Doc. 124-17, Jordan Depo. Tr. 99:19-100:4, Oct. 10, 2022).

II. Standard of Review

Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment should be granted only if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute of material fact is “genuine” if the evidence “is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In deciding a summary judgment motion, all inferences “should be drawn in the light most favorable to the non-moving party, and where the non-moving party’s evidence contradicts the movant’s, then the non-movant’s must be taken as true.” Pastore v. Bell Tel. Co. of Pa., 24 F.3d 508, 512 (3d Cir. 1994).

*5 A federal court should grant summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000). The Court need not accept mere conclusory allegations, whether they are made in the complaint or a sworn statement. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). In deciding a motion for summary judgment, the court’s function is not to make credibility determinations, weigh evidence, or draw inferences from the facts. Anderson, 477 U.S. at 249, 106 S.Ct. 2505. Rather, the court must simply “determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

“Although the party opposing summary judgment is entitled to the ‘benefit of all factual inferences in the court’s consideration of a motion for summary judgment, the nonmoving party must point to some evidence in the record that creates a genuine issue of material fact.’ ” Velentzas v. U.S., No. 4: 07-CV-1255, 2010 WL 3896192, at *7 (M.D. Pa. Aug. 31, 2010) (quoting Goode v. Nash, 241 F. App’x 868, 869 (3d Cir. 2007)) (citation omitted); see also Beenick v. LeFebvre, 684 F. App’x 200, 206 (3d Cir. 2017) (stating the purpose of requiring parties to cite to particular parts of the record in their briefs about a motion for summary judgment is to “assist the court in locating materials buried in a voluminous record”) (quoting Fed. R. Civ. P. 56(c)(1)(A)). The opposing party “cannot rest solely on assertions made in the pleadings, legal memorandum, or oral argument.” Velentzas, 2010 WL 3896192, at *7 (quoting Goode, 241 F. App’x at 869). If the non-moving party “fails to make a showing sufficient to establish the existence of an element essential to [the non-movant’s] case, and on which [the non-movant] will bear the burden of proof at trial,” Rule 56 mandates the entry of summary judgment because such a failure “necessarily renders all other facts immaterial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Jakimas v. Hoffmann–La Roche, Inc., 485 F.3d 770, 777 (3d Cir. 2007).

III. Discussion

Coyote submits that Plaintiffs’ claims against it are preempted by the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501(c)(1). (Doc. 125, at 19). Alternatively, Coyote argues that Plaintiffs’ claims against Coyote in Counts III, IV, VI, and XI, and claim for punitive damages should be dismissed with prejudice as a matter of law. (Doc. 125, at 39-54). In opposition, Plaintiffs argue that the FAAAA does not preempt their claims against Coyote because prevailing authority confirms that the FAAAA does not preempt state law negligence claims. (Doc. 137, at 10-28). In addition, Plaintiffs submit that genuine issues of material fact exist which preclude the entry of summary judgment. (Doc. 137, at 28-40).

A. Federal Aviation Administration Authorization Act Preemption

The Supremacy Clause of the United States Constitution provides that federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. If a state law “conflicts with, or frustrates, federal law, the former must give way.” CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 663, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993). The law recognizes three types of federal preemption: express preemption, field preemption, and conflict preemption. See Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). “Preemption is an affirmative defense that the defendant has the burden to prove.” Lupian v. Joseph Cory Holdings LLC, 905 F.3d 127, 130 (3d Cir. 2018).

*6 Congress passed the Motor Carrier Act of 1980, 94 Stat. 793, to “deregulate” the interstate truck shipping industry by replacing a patchwork of state regulations with a federal regime. See Rowe v. New Hampshire Motor Transp. Ass’n, 552 U.S. 364, 368, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008). In 1994, Congress added to this federal regime by passing the FAAAA to deregulate the trucking industry and preempt state trucking regulations. Rowe, 552 U.S. at 368, 128 S.Ct. 989. The FAAAA expressly provides preemption of state regulation of the trucking industry, 49 U.S.C. § 14501(c). That provision provides, in relevant part:

a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier … or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.4

49 U.S.C.A. § 14501(c)(1); see Rowe, 552 U.S. at 368, 128 S.Ct. 989.

Several exceptions then follow. See 49 U.S.C. § 14501(c)(2), (3), (5). Relevant here, the “safety” exception in § 14501(c)(2)(A) provides that express preemption:

shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization.

49 U.S.C. § 14501(c)(2)(A).

The overarching goal of preemption pursuant to the FAAAA is to avoid situations where “state requirements could easily lead to a patchwork of state service-determining laws, rules and regulations.” Rowe, 552 U.S. at 373, 128 S.Ct. 989. Congress broadly disallowed state laws that impede its deregulatory goals, but it made a specific carveout for laws within a state’s “safety regulatory authority … with respect to motor vehicles,” even though such laws may burden interstate commerce. See City of Columbus v. Ours Garage & Wrecker Service, Inc., 536 U.S. 424, 441, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002) (observing that “a State could, without affront to the statute, pass discrete, nonuniform safety regulations” because the Act’s preemption provision in § 14501(c)(1) and its safety exception in § 14501(c)(2)(A) achieve different goals). The Supreme Court has outlined the following four guiding principles for applying preemption pursuant to the FAAAA:

(1) state enforcement actions having a connection with, or reference to carrier rates, routes, or services are preempted; (2) preemption may occur even if a state law’s effect on rates, routes, or services is only indirect; (3) with respect to preemption in this context, it makes no difference whether a state law is consistent or inconsistent with federal regulation; and (4) preemption occurs at least where state laws have a significant impact related to Congress’s deregulatory and preemption-related objectives.

*7 Rowe, 552 U.S. at 370, 128 S.Ct. 989 (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383-84, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)) (interpreting identical provision in Airline Deregulation Act of 1978, 49 U.S.C. § 1305(a)(1)) (quotation marks omitted).

The scope of the federal preemption pursuant to the FAAAA is understood as having a “broad preemptive purpose,” Morales, 504 U.S. at 383, 112 S.Ct. 2031 (interpreting an identical provision of the Airline Deregulation Act), and encompasses even state laws that only have an indirect effect on the price, route, or service of a motor carrier. Rowe, 552 U.S. at 370, 128 S.Ct. 989 (explaining that interpretations of the Airline Deregulation Act directly apply to the FAAAA). To be “related to” broker services, the state law in question need only have a “connection with, or reference to” these services. Rowe, 552 U.S. at 370, 128 S.Ct. 989 (emphasis removed) (quoting Morales, 504 U.S. at 384, 112 S.Ct. 2031). A state law may be preempted even if the law’s effect on broker services “is only indirect.” Rowe, 552 U.S. at 370, 128 S.Ct. 989 (quoting Morales, 504 U.S. at 386, 112 S.Ct. 2031). For example, in Dan’s City Used Cars, Inc. v. Pelkey (“Dan’s City”), 569 U.S. 251, 261, 133 S.Ct. 1769, 185 L.Ed.2d 909 (2013), the Supreme Court concluded that the term “transportation” in the FAAAA even includes the storage and handling of goods when those services are “related to the movement” of property. Courts have even found that the FAAAA preempts not only state statutes and administrative regulations, but also state law-based private claims, such as negligence, conversion, and breach of bailment, because such claims fall under the “other provisions with the force of law” language of the provision. See, e.g., Alpine Fresh, Inc. v. Jala Trucking Corp., 181 F.Supp.3d 250, 257 (D.N.J. 2016) (dismissing breach of bailment and negligence claims because the FAAAA expressly preempts these state common law claims); AMG Res. Corp. v. Wooster Motor Ways, Inc., No. 15-3716, 2019 WL 192900, at *4 (D.N.J. Jan. 4, 2019) (finding that state common law claims, including those for conversion and negligence, are preempted by the FAAAA), aff’d, 796 F. App’x 96 (3d Cir. 2020); Smith v. Comair, Inc., 134 F.3d 254 (4th Cir. 1998); Lopez v. Amazon Logistics, Inc., 458 F.Supp.3d 505, 512 (N.D. Tex. 2020); Deerskin Trading Post, Inc. v. United Parcel Service of America, Inc., 972 F. Supp. 665, 672 (N.D. Ga. 1997).

The FAAAA’s scope does have some limits. The Supreme Court held that the phrase “with respect to the transportation of property” in Section 14501(c)(1) “massively limits the scope of preemption ordered by the FAAAA.” Dan’s City, 569 U.S. at 261, 133 S.Ct. 1769 (quotation omitted). Thus, “it is not sufficient that a state law relates to the ‘price, route, or service’ of a motor carrier in any capacity; the law must also concern a motor carrier’s ‘transportation of property.’ ” Dan’s City, 569 U.S. at 261, 133 S.Ct. 1769. And Title 49 defines “transportation,” in relevant part, to include “services related to the movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.” 49 U.S.C. § 13102(23)(B).

*8 The FAAAA will not preempt state laws that merely affect carrier prices, routes, or services in a “tenuous, remote, or peripheral [ ] manner.” Rowe, 552 U.S. at 371, 128 S.Ct. 989. Additionally, the FAAAA contains a few narrow statutory exceptions, where preemption will not occur. See Siaci Saint Honore v. M/V Northern Jubilee, No. 21CV08570 (EP) (JSA), 2022 WL 16948966, at *3 (D.N.J. Nov. 14, 2022). Lastly, courts have consistently found that the FAAAA does not preempt routine breach of contract claims because they only seek enforcement of “privately ordered obligations” and as such do not amount to state-imposed laws, rules, or other provision having the effect of law. See American Airlines, Inc. v. Wolens, 513 U.S. 219, 228-29, 233, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995) (concluding that a breach of contract claim was not preempted, in the context of the Airline Deregulation Act, which the FAAAA’s language mirrors and courts interpret similarly, because “[a] remedy confined to a contract’s terms simply holds parties to their agreements”); see also Hartford Fire Ins. Co. v. Dynamic Worldwide Logistics, Inc., No. 17-553, 2017 WL 3868702, at *3 (D.N.J. Sept. 5, 2017) (declining to dismiss breach of contract claim because the FAAA does not preempt routine breach of contract claims) (citations omitted).

A fact-specific approach to determine whether a claim is preempted by the FAAAA is consistent with the plain language of Section 14501(c)(1), “which necessarily contains the best evidence of Congress’ pre-emptive intent.” Gauthier v. Hard to Stop LLC, No. 6:20-CV-93, 2022 WL 344557, at *7 (S.D. Ga. Feb. 4, 2022) (quoting Dan’s City, 569 U.S. at 260, 133 S.Ct. 1769).

Section 14501(c)(1) expressly provides, in relevant part, that states shall not “enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law related to a price, route, or service of … any … broker … with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1) (emphasis added). It is well-established that the phrase “other provisions having the force and effect of law” includes common law rules. See Northwest, Inc. v. Ginsberg, 572 U.S. 273, 281–82, 134 S.Ct. 1422, 188 L.Ed.2d 538 (2014) (noting that common law rules are frequently called “provisions” and clearly have the “force and effect of law”); Gillum [v. High Standard, LLC], 2020 WL 444371, at *3 [(W.D.Tex. Jan. 27, 2020)] (noting that courts “share an understanding that common law negligence claims embody state laws that may be preempted” by the FAAAA); see also Hodges v. Delta Airlines, Inc., 44 F.3d 334, 336 (5th Cir. 1995) (“Laws of general applicability, even those consistent with federal law, are preempted if they have the ‘forbidden significant effect’ on rates, routes or services.”) (citing Morales, 504 U.S. at 386, 112 S.Ct. 2031). Indeed, “[a]voiding the creation of … ‘state enforced rights’ is part of the reason the Supreme Court has held that state law tort actions [may be] preempted” by the ADA. Deerskin, 972 F. Supp. at 673 (citing Morales, 504 U.S. at 388, 112 S.Ct. 2031). Therefore, negligence claims against brokers are preempted by Section 14501(c)(1) when their subject matter is “related to” the broker’s services and concerns the transportation of property. See id. at 672 (“[A] state law tort action against a carrier, where the subject matter of the action is related to the carrier’s prices, routes, or services, is a state enforcement action having a connection with or reference to a price, route, or service of any motor carrier … for purposes of the FAAAA … Accordingly, any such state law tort action is preempted by the FAAAA.”) (emphasis added). As indicated above, a claim is “related to” the services of a broker when it has a “connection with, or reference” thereto. See Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 370, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008) (quoting Morales, 504 U.S. at 384, 112 S.Ct. 2031). Such a connection exists where a claim has a “significant impact” on a broker’s services. Id. at 375. A “broker” is a person “selling, providing, or arranging for, transportation by motor carrier for compensation.” 49 U.S.C. § 13102(2). While the term “services” is not expressly defined, the term “transportation” is defined to include “services related to [the movement of passengers or property], including arranging for, receipt, delivery, … and interchange of passengers and property.” 49 U.S.C. § 13102(23)(B). Additionally, the Eleventh Circuit has stated that “ ‘services’ generally represent a bargained-for or anticipated provision of labor from one party to another.” Branche, 342 F.3d at 1256; see id. at 1256–59 (adopting the broad definition of “services” set forth by the Fifth Circuit Court of Appeals in Hodges, 44 F.3d at 336). Therefore, Section 14501(c)(1) preempts negligence claims which are sufficiently connected to or have a significant impact on brokers’ core bargained-for services: arranging for the transportation of property. See Ga. Nut Co. v. C.H. Robinson Co., No. 17 C 3018, 2017 WL 4864857, at *3 (N.D. Ill. Oct. 26, 2017) (“[S]ervices of a freight broker … are focused on arranging how others will transport the property; these services, therefore, fall within the scope of the FAAAA preemption.”); see also Finley v. Dyer, No. 3:18-CV-78-DMB-JMV, 2018 WL 5284616, at *5 (N.D. Miss. Oct. 24, 2018) (“[A] negligence claim is ‘related to’ a ‘service’ when the claim is centered on or derives from a bargained-for or anticipated provision of labor from a broker or other protected carrier.”) (internal quotations omitted).

Gauthier, 2022 WL 344557, at *7.

*9 At issue in the instant matter is whether the FAAAA preempts Plaintiffs’ personal injury claims against Coyote, the broker who selected a motor carrier for transportation of property. Neither the Supreme Court nor the Third Circuit have addressed this specific issue of whether such claims against brokers are preempted by the FAAAA, and “[f]ederal district courts are sharply divided on how to apply these guiding principles.” Loyd v. Salazar, 416 F.Supp.3d 1290, 1295 (footnote omitted).

In Bedoya v. American Eagle Express Inc., the Third Circuit observed that the FAAAA preemption occurs where a state law has a “direct” and “significant” effect on the “price, route, or service” of interstate transportation. 914 F.3d 812, 823 (3d Cir. 2019). The plaintiffs in Bedoya were drivers for the defendant, which was a “logistics company that provides delivery services to various medical organizations.” The drivers brought suit pursuant to New Jersey’s Wage Payment Law and Wage and Hour Law, alleging that they were misclassified as independent contractors. Bedoya, 914 F.3d at 815-16. The defendants moved for judgment on the pleadings, arguing that the FAAAA preempted the plaintiffs’ state law claims, but the district court found no preemption and denied the motion. Bedoya, 914 F.3d at 816. The Third Circuit upheld the district court’s decision, splitting its analysis of the New Jersey law into two parts. First, the analysis includes a determination of whether the challenged state law has a direct impact on prices, routes or services by examining whether the law: “(1) mentions a carrier’s prices, routes, or services; (2) specifically targets carriers as opposed to all businesses; and (3) addresses the carrier-customer relationship rather than non-customer-carrier relationships (e.g., carrier-employee).” Bedoya, 914 F.3d at 821-23 (citations omitted). The Third Circuit explained that when examining the third factor, courts should look to the challenged state law and determine if the regulation is geared towards “resource inputs” (labor, capital, and technology) or “product outputs” (services provided by the motor carrier industry). Bedoya, 914 F.3d at 821-22. “The FAAAA’s focus on prices, routes, and services shows that the statute is concerned with the industry’s production outputs, and seeks to protect them from state regulation.” Bedoya, 914 F.3d at 821. “The motor carrier industry’s output—the service it provides—is the ‘transportation of property from origin to destination.’ ” Montoya v. CRST Expedited, Inc., 404 F.Supp.3d 364, 401 (D. Mass. 2019) (citing Bedoya, 914 F.3d at 821). “Although state laws that regulate industry inputs—labor, capital, and technology—‘may impact costs and may in turn affect prices charged and services provided to customers,’ the FAAAA does not preempt these kinds of regulations and laws.” Montoya, 404 F.Supp.3d at 401 (citing Bedoya, 914 F.3d at 821).

*10 At the second step of the analysis, a court should determine whether the challenged law’s indirect impact on prices, routes, or services is significant or not. Bedoya, 914 F.3d at 822. If the law has a significant impact on the services a motor carrier provides, then the law should be preempted by the FAAAA. The Bedoya court explained that:

To assess whether a law has a significant effect on a carrier’s prices, routes, or services, courts should consider whether: (1) the law binds a carrier to provide or not provide a particular price, route, or service; (2) the carrier has various avenues to comply with the law; (3) the law creates a patchwork of regulation that erects barriers to entry, imposes tariffs, or restricts the goods a carrier is permitted to transport; and (4) the law existed in one of the jurisdictions Congress determined lacked laws that regulate intrastate prices, routes, or services and thus, by implication, is a law Congress found not to interfere with the FAAAA’s deregulatory goal.

Bedoya, 914 F.3d at 823.

In Ciotola v. Star Transp. & Trucking LLC, the district court relied on Bedoya and held that a plaintiff’s claims, which involved a negligent hiring claim asserted against a freight broker for failing “to exercise reasonable care in hiring, supervision, retaining, and entrusting” a motor carrier, were not preempted by the FAAAA. Ciotola v. Star Transp. & Trucking LLC, 481 F.Supp.3d 375, 388 (M.D. Pa. 2020). Specifically, the district court determined that the FAAAA does not preempt negligence claims against brokers because “Pennsylvania’s common-law duty of ordinary care does not mention or target a motor carrier’s prices, routes, or services.” 481 F.Supp.3d at 387-88. In reaching this conclusion, the court found that “Plaintiff’s claims boil down to imposing a duty of ordinary and reasonable care upon [freight brokers]” and explained that “although Pennsylvania’s tort law may have some negative financial consequences for a broker or carrier, it is not preempted by the FAAAA. Pennsylvania’s tort law is a part of the backdrop of laws that all businesses must follow.” Ciotola, 481 F.Supp.3d at 388-390; citing Adames v. May Furniture, Inc., 2019 WL 8937042, *8-9 (M.D. Pa. 2019).5

Common law tort claims such as those brought against Coyote in this case “fall comfortably within the language of the [ ] preemption provision” that, by its terms, “applies to state ‘law[s], regulation[s], or other provision[s] having the force and effect of law.’ ” Northwest, 572 U.S. at 281-82, 134 S.Ct. 1422 (alterations in original) (citation omitted). Thus, the first preemption requirement is easily met. The parties also agree that Coyote is a “broker” as the FAAAA defines it. See 49 U.S.C. § 13102(2); accord 49 C.F.R. § 371.2(a). Coyote does not suggest that Plaintiffs’ claims relate to the “price” or “route” of a broker, arguing only that those claims relate to a broker’s “service.” See 49 U.S.C. § 14501(c)(1).

Although in Ciotola the Court held that the FAAAA does not preempt state law tort claims against brokers, other courts treat FAAAA preemption as a fact-intensive inquiry which depends on the nature of the plaintiff’s allegations and the underlying claims alleged. See, e.g., Gauthier, 2022 WL 344557, at *6 (finding plaintiff’s negligent hiring claim against broker is within scope of FAAA preemption because it is “related to” broker’s services); Bailey v. Bell-Rich Transp., LLC, No. 3:19-CV-461, 2020 WL 3440585, at *6 (M.D. Fl. June 23, 2020) (“To determine whether the FAAAA preempts a plaintiff’s claims, courts look to the allegations in the plaintiff’s complaint, especially the specific causes of action asserted and the role alleged to have been played by the defendant in the shipping transaction in question.”). Courts in the Seventh and Eleventh Circuit have held that Section 14501(c)(1) preempts negligence-based claims against brokers or motor carriers when the subject matter is sufficiently “related to” their prices, routes, or services.

*11 Most recently, in Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453, 457–58 (7th Cir. 2023), the Seven Circuit determined that the plaintiff’s negligent hiring claims against a broker-defendant in selecting a motor carrier to transport freight on its behalf were expressly preempted because the claim “has much more than a tenuous, remote, or peripheral relationship to broker services;” “[t]he relationship is direct;” and “subjecting a broker’s hiring decisions to a common-law negligence standard would have significant economic effects.” Ye, 2023 WL 4567097, at 4. The Seventh Circuit explained:

In our view, enforcement of such a claim—and the accompanying imposition of liability—would have a significant economic effect on broker services. By recognizing common-law negligence claims, courts would impose in the name of state law a new and clear duty of care on brokers, the breach of which would result in a monetary judgment. This is exactly what [plaintiff] seeks here against [broker-defendant]. To avoid these costly damages payouts, [broker-defendant] and other brokers would change how they conduct their services—for instance, by incurring new costs to evaluate motor carriers. Then, by changing their hiring processes, brokers would likely hire different motor carriers than they would have otherwise hired without the state negligence standards. Indeed, that is the centerpiece of [plaintiff]’s claim: that [broker-defendant] should not have hired [motor carrier].

Ye, 2023 WL 4567097, at 4.

The Ye court further explained that this conclusion is consistent with the decision of two other circuit courts. Ye, 2023 WL 4567097, at 4 (citing Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016, 1024 (9th Cir. 2020)), cert. denied, ––– U.S. ––––, 142 S. Ct. 2866, 213 L.Ed.2d 1090 (2022) (“[A] claim that imposes an obligation on broker at the point at which they arrange for transportation by motor carrier has a ‘connection with’ broker services.”); Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261, 1267 (11th Cir. 2023) (“[T]he FAAAA makes plain that [the plaintiff’s] negligence claims relate to a broker’s services.”).

In Aspen Am. Ins. Co. v. Landstar Ranger, Inc., the Eleventh Circuit considered a negligent hiring claim against a freight broker where the plaintiff hired a broker to transport cargo and the broker mistakenly gave the plaintiff’s cargo to an entity pretending to be a motor carrier, who then stole the plaintiff’s cargo. 65 F.4th at 1267. The plaintiff was reimbursed by its insurance company, who in turn brought a state tort claim against the broker for its negligent selection of the thieving motor carriers. Aspen, 65 F.4th at 1267. The broker-defendant argued that the FAAAA preempted the insurance company’s negligent hiring claim. Aspen, 65 F.4th at 1264-65. The Eleventh Circuit held that negligent hiring claims against brokers are expressly preempted by § 14501(c)(1) under the Supreme Court’s broad reading of “related to.” Aspen, 65 F.4th at 1268 (citing Morales, 504 U.S. at 386, 112 S.Ct. 2031). Selecting a carrier to transport shipments, according to Aspen, “is precisely the brokerage service that” a negligence hiring claim against a freight broker challenges: the broker’s “allegedly inadequate selection of a motor carrier to transport … shipment.” Aspen, 65 F.4th at 1267. An allegation of negligence “against a transportation broker for its selection of a motor carrier to transport property in interstate commerce” relates to a freight broker’s “core transportation-related services.” Aspen, 65 F.4th at 1268. Accordingly, the Eleventh Circuit held that a plaintiff’s state-law negligent hiring claim against a freight broker is preempted—according to ordinary preemption principles—by § 14501(c)(1) of the FAAAA.

*12 Several years ago, in Miller v. C.H. Robinson Worldwide, Inc., the Ninth Circuit considered two key features of the generally applicable common law claim: where in the chain of the defendant’s business the law acted to compel a certain result (e.g., consumer or workforce) and what result it is compelling (e.g., a certain wage, non-discrimination, or a specific system of delivery). Miller, 976 F.3d at 1024 (citing California Trucking Ass’n v. Su, 903 F.3d 953, 966 (9th Cir. 2018), cert. denied, ––– U.S. ––––, 139 S. Ct. 1331, 203 L.Ed.2d 567 (2019)). The Miller court found that the selection of motor carriers is one of the core services of brokers, meaning the negligent hiring claim interferes not in the background of the business but rather at the point at which the broker arranges for transportation, where it is directly connected with broker services. However, it determined that that negligence claims against brokers, to the extent that they arise out of motor vehicle accidents, have the requisite “connection with” motor vehicles and as such, the safety exception applies. As such, the negligence claims against brokers were not preempted by the FAAAA. Miller, 976 F.3d at 1025-31.

Here, Plaintiffs’ claims allege: Coyote is vicariously liable for the conduct of Leksowski (Count III);6 Coyote negligently and/or recklessly hired, supervised, retained, and selected Leksowski (Count IV);7 Coyote negligently entrusted O’Connor “to ship its freight when it knew or should have known that O’Connor has a propensity for engaging in unsafe practices and hiring dangerous and poorly trained drivers such as Mr. Leksowski” (Count VI);8 and all Defendants, including Coyote, engaged in a joint venture (Count IX).9 (Doc. 29); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. As a broker, Coyote offers services in the form of “selling, providing, or arranging for, transportation by motor carrier for compensation.” 49 U.S.C. § 13102(2) (defining “broker”).

*13 Coyote submits that Plaintiffs’ claims against it are preempted by the FAAAA because the claims all relate, have a connection with, or reference the services provided by Coyote as a broker who “arranges, or offers to arrange, the transportation of property by an authorized motor carrier.” (Doc. 125, at 22-23; Doc. 147, at 9). Coyote further argues that the claims are preempted because they focus on the output of services provided by Coyote as a broker, namely the process of arranging for transportation of the Subject Load by a motor carrier, Golf. (Doc. 125, at 29). Directing the Court’s attention to the Federal Motor Carrier Safety Regulations (“FMCSRs”), which provide that a motor carrier is responsible to ensure that only a qualified driver is driving a commercial motor vehicle, Coyote avers that allowing Plaintiffs’ claims to proceed would impose new services upon brokers that do not have to be performed under the FMCSRs. (Doc. 125, at 30; Doc. 147, at 13).

Plaintiffs respond that their state law negligence claims arising from personal injury traffic accidents are unrelated to the services of a broker and, therefore, are outside the scope of FAAAA preemption. (Doc. 137, at 12). For support, Plaintiffs rely on Mann v. C.H. Robinson Worldwide, Inc., 2017 WL 3191516, at *7 (W.D. Va. July 27, 2017). (Doc. 137, at 13). Mann addresses “complete preemption” while the instant case concerns “ordinary preemption.” Mann, 2017 WL 3191516, at *5-8. Unlike ordinary preemption, complete preemption is a “narrowly drawn jurisdictional rule for assessing federal removal jurisdiction when a complaint purports to raise only state law claims.” Geddes v. Am. Airlines, Inc., 321 F.3d 1349, 1353 (11th Cir. 2003). Thus, whether the FAAAA completely preempts tort claims against brokers has no bearing on whether Plaintiffs’ claims against Coyote are within the scope of Section 14501(c)(1). See Mann, 2017 WL 3191516, at *7 (“[W]hether a claim relates to a ‘price, route, or service[ ]’ is an inquiry that can turn on the underlying facts of the specific causes of action.”). Based on the analysis of the allegations supporting Plaintiffs’ negligence claims above, the Court finds that Plaintiffs’ claims, as alleged, relate to Coyote’s services as a broker and concern the transportation of property.

Plaintiffs also urge the Court to adopt the holding in Ciotola v. Star Transportation & Trucking, LLC. (Doc. 137, at 13). As noted, supra, the court in Ciotola concluded that “Plaintiff’s claims boil down to imposing a duty of ordinary and reasonable care upon [freight brokers].” Ciotola, 481 F.Supp.3d at 388. This is not the case here. Plaintiffs allege that Coyote breached duties owed by freight brokers, not the general public, which go beyond the duty to exercise reasonable care and relate directly to brokerage services. (Doc. 29); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. For example, Count VI states: “Defendants had a duty to use due care in choosing a careful and competent driver;” “a duty to ensure that it had appropriate hiring practices that put competent drivers behind the wheel;” “a duty to ensure that it had appropriate policies in place to ensure that its drivers did not violate FMCSA regulations;” and “a duty to entrust the Volvo and Wabash to an attentive and skilled driver.” (Doc. 29, ¶¶ 110, 120, 121, 123); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. These duties go beyond the common law duty of ordinary care, and it is an oversimplification to characterize them as such.

Applying the two-part analysis described in Bedoya, the Court finds that Plaintiffs’ state law negligence claims in Counts III, IV, VI, and IX are preempted because imposing Pennsylvania’s common-law negligence liability upon Coyote would directly target and significantly impact the broker’s services. First, unlike an industry input, such as labor, capital, and technology, which may impact prices charges and services provided to customers, Plaintiffs’ claims directly focus on Coyote’s output—to arrange for transportation by hiring a motor carrier to transport shipments. See Montoya, 404 F.Supp.3d at 401 (citing Bedoya, 914 F.3d at 821). Plaintiffs’ claims focus on the core service provided by Coyote because they are based entirely upon Coyote’s decision to select Golf as the motor carrier to transport the Subject Load. See Ye, 2023 WL 4567097, at *4; Aspen, 65 F.4th at 1268; Miller, 976 F.3d at 1024. Second, Plaintiffs’ claims have a significant impact on Coyote’s service with respect to the transportation of property because the claims seek to enforce a duty of care related to how Coyote, the broker, arranges for a motor carrier to transport shipments, the service. See Creagan v. Wal-Mart Transportation, LLC, 354 F.Supp.3d 808, 813 (N.D. Ohio 2018). Application of the negligence law would require Coyote to perform additional services, such as hiring, retaining, and supervising a qualified driver in driving a commercial motor vehicle, which would in turn subject Coyote to a patchwork of laws throughout the county; impose compliance with new regulations; carry a substantial financial consequence; and expose brokers to additional liability. See Bedoya, 914 F.3d at 823. Therefore, the Court finds that enforcing laws upon a broker for vicarious liability, for negligent hiring/supervision/retention/selection/entrustment of a driver, and for joint venture would have a significant direct impact upon the services rendered by a broker and hinder the objectives of the FAAAA. Accordingly, the Court finds that Plaintiffs’ claims against Coyote are preempted under the FAAAA.

B. The Safety Regulation Exception

*14 Plaintiffs next submit that even if their negligence claims fall within the scope of Section 14501(c), they are not preempted because they fall within the “safety regulation exception” in Section 14501(c)(2)(A). (Doc. 137, at 14). As noted above, the safety exception in § 14501(c)(2)(A) provides that laws within a state’s “safety regulatory authority … with respect to motor vehicles” are not preempted. For Plaintiffs’ claims to fall within the safety exception, (1) the negligence standard must constitute an exercise of Pennsylvania’s “safety regulatory authority,” and (2) that authority must have been exercised “with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A).10

Regarding the first part of the safety exception, Plaintiffs contend “Congress’ clear purpose in § 14501(c)(1) is to regulate economics, and the ‘safety regulatory authority of a state’ encompasses personal injury tort claims for purposes of § 14501(c)(2)(A).” (Doc. 137, at 14); see, e.g., Miller, 976 F.3d a 1026-27; Aspen, 65 F.4th at 1268-70. In opposition, Coyote argues that Plaintiffs’ claims, which are common-law provisions, are not part of a state regulatory scheme regulating the activity of freight brokers. (Doc. 125, at 36-37). The Court declines to address this issue, finding that Plaintiffs’ claims fail to satisfy the second half of the safety exception. In short, the Court finds that a common law negligence claim enforced against a broker is not a law that is “with respect to motor vehicles.”

The Supreme Court has broadly interpreted “with respect to” to mean “concern[s],” but specifically limited the exception laws to those that concern “motor vehicles.” See Dan’s City, 569 U.S. at 261, 133 S.Ct. 1769 (quoting Ours Garage, 536 U.S. at 449, 122 S.Ct. 2226 (Scalia, J., dissenting)). In Ye, the Seventh Circuit determined that the safety exception does not apply to a plaintiff’s negligence claims against a freight broker after conducting the following statutory analysis:

We first recognize Congress’s express use in § 14501(c)(2)(A) of a statutorily defined term—“motor vehicles.” By limiting the safety exception to apply to state laws “with respect to motor vehicles,” Congress narrowed the scope of the exception to those laws concerning a “vehicle, machine, tractor, trailer, or semitrailer … used on a highway in transportation.” 49 U.S.C. § 13102(16) (defining “motor vehicle”). We see no mention of brokers in the safety exception itself or in Congress’s definition of motor vehicles, which suggests that such claims may be outside the scope of the exception’s plain text. See Dan’s City Used Cars, 569 U.S. at 261–62, 133 S.Ct. 1769 (concluding that a state’s law was not “with respect to transportation of property” under § 14501(c)(1) where it concerned post-towing storage, which does not constitute “transportation” as defined in § 13102(23)(B)).

*15 Looking beyond the clause containing the safety exception, § 14501(c)(2)(A) goes on to preserve a state’s authority “to impose highway route controls or limitations based on the size or weight of a motor vehicle or the hazardous nature of the cargo” and to regulate motor carriers’ “insurance requirements.” Notice the specificity throughout § 14501(c)(2)(A): after broadly preempting state laws related to the prices, routes, and services of brokers and motor carriers in § 14501(c)(1), Congress carefully excepted state laws for motor vehicle safety, cargo loads, and motor carrier insurance.

Now notice what is missing from § 14501(c)(2)(A)—any reference to brokers or broker services. While it listed broker services in § 14501(c)(1)’s express preemption provision, Congress declined to expressly mention brokers again in reference to states’ safety authority. Reading further, we see the same omission of brokers from § 14501(c)(2)’s other savings provisions for “intrastate transportation of household goods” and “tow truck operations.” Id. § 14501(c)(2)(B), (C).

Remember, too, that § 14501(c) sets forth federal authority over “Motor Carriers of Property”—not brokers—so Congress’s inclusion of brokers in one subsection and exclusion in another suggests that the omission was intentional. See Rotkiske v. Klemm, ––– U.S. ––––, 140 S. Ct. 355, 361, 205 L.Ed.2d 291 (2019) (“Atextual judicial supplementation is particularly inappropriate when, as here, Congress has shown that it knows how to adopt the omitted language or provision.”). Congress could have chosen to save state safety laws enforced “with respect to motor carriers and brokers,” but it did not. We hesitate to read broker services into parts of the statute where Congress declined to expressly name them, especially when it contemplated them elsewhere within the same statutory scheme. See id. at 360–61 (“It is a fundamental principle of statutory interpretation that ‘absent provision[s] cannot be supplied by the courts.’ ” (alteration in original) (quoting Antonin Scalia & Bryan Garner, Reading Law: The Interpretation of Legal Texts 94 (2012))).

Congress’s omission of brokers from the exceptions to § 14501(c)(1)’s preemptive sweep is even more pronounced when we take a step back and examine other provisions within § 14501. What most stands out is § 14501(b), titled “Freight Forwarders and Brokers.” In § 14501(b)(1) Congress directly addressed state regulation of brokers by prohibiting states from enacting or enforcing laws “relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker.” Following this broad preemption provision, however, Congress did not include a safety exception—another telling omission given that Congress included safety exceptions to the parallel preemption provisions for motor carriers of property (at issue here) and motor carriers of passengers. See id. § 14501(a)(2), (c)(2)(A). Here, too, Congress’s decision not to write a safety exception for the broker-specific preemption provision indicates a purposeful separation between brokers and motor vehicle safety.

Ye, 2023 WL 4567097, at 5-6.

Therefore, the Seventh Circuit concluded that the safety exception “requires a direct link between a state’s law and motor vehicle safety,” the court found “no such direct link between negligent hiring claims against brokers and motor vehicle safety.” Ye, 2023 WL 4567097, at 5-6. Notably, the Ninth Circuit “dr[e]w the line where Congress did—at state safety regulations directly related to ‘motor vehicles.’ ”11 Ye, 2023 WL 4567097, at 7.

*16 Similarly, the Eleventh Circuit concluded that the “phrase ‘with respect to motor vehicles’ limits the safety exception’s application to state laws that have a direct relationship to motor vehicles.” Aspen, 65 F.4th at 1271 (emphasis in original). Using the canons of construction to avoid redundancy and surplusage, the court examined the definitions of “broker” and “motor carrier” under the FAAAA and observed that, by definition, only a motor carrier can “provide motor vehicle transportation for compensation.” Aspen, 65 F.4th at 1271 (citing 49 U.S.C. §§ 13102(2), 13102(14)). The court also noted that a “motor vehicle” is a “vehicle, machine, tractor, trailer or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.” Aspen, 65 F.4th at 1271-72 (citing 49 U.S.C. § 13102(16)). Consequently, the court explained that in cases of negligent hiring claims against brokers, regardless of whether the injury is lost property or bodily injury, “a mere indirect connection between state regulations and motor vehicles will not invoke the [Act]’s safety exception.” Aspen, 65 F.4th at 1272. Therefore, the Eleventh Circuit concluded that the plaintiff’s negligence claims against a freight broker were preempted and the safety exception did not save those claims. Aspen, 65 F.4th at 1272.

Here, Plaintiffs allege that Coyote was “negligent in entrusting O’Connor to ship its freight when it knew or should have known that O’Connor has a propensity for engaging in unsafe practices and hiring dangerous and poorly trained drivers such as Mr. Leksowski.” (Doc. 29, ¶ 117); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. In addition, Plaintiffs assert that “Coyote knew or should have known that Defendant O’Connor had an unsafe history in performing services as a motor carrier ….” (Doc. 29, ¶ 118); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. Plaintiffs rely on the Ninth Circuit’s decision in Miller, 976 F.3d 1016 . (Doc. 137, at 21-22). In Miller, the plaintiff sought to recover damages from a freight broker that he alleged was negligent in hiring an unsafe motor carrier whose driver caused a highway accident leaving the plaintiff a quadriplegic. Miller, 976 F.3d at 1020. As noted above, the court determined that selection of a motor carrier strikes at the core function of a broker and while state negligence laws do not specifically dictate brokers’ services, they nevertheless impose “an obligation on brokers at the point at which they arrange for transportation by [a] motor carrier,” and thus “related to” brokers’ services. Miller, 976 F.3d at 1024-25. At the same time, the court found that the claims were saved by the safety exception, interpreting “with respect to motor vehicles” broadly to support exemption of state laws with an indirect link to motor vehicles, including negligent hiring claims against brokers. Miller, 976 F.3d at 1030-31. “If criminal history disclosure requirements for tow truck drivers have the requisite ‘connection with’ motor vehicles, then negligence claims against brokers that arise out of motor vehicle accidents must as well: Neither directly regulates motor vehicles, but both promote safety on the road.” Miller, 976 F.3d at 1030. Coyote retorts that “if the safety exception persevered all claims related to motor vehicles, as urged by … Miller, all preempted claims would then be ‘saved by the exception.’ ” (Doc. 125, at 37) (citing Creagan, 354 F.Supp.3d at 814).

The Court finds that Plaintiffs’ claims are not saved from FAAAA preemption by the safety exception. The plain language of the exception does not mention common law tort claims or brokers’ services in selecting motor carriers, whereas the words “law” and “broker” are expressly included in the general preemption provision. Compare 49 U.S.C. § 14501(c)(2)(A), with § 14501(c)(1). A “broker” is “a person … that … sell[s], provid[es], or arrang[es] for, transportation by motor carrier for compensation,” 49 U.S.C. § 13102(2), and a “motor carrier,” in turn, is “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). A “broker,” by definition, may not provide motor vehicle transportation for compensation; only a “motor carrier” may perform that task. See 49 U.S.C. § 13102(2) (A “broker” is “a person, other than a motor carrier”) (emphasis added); 49 C.F.R. § 371.2(a) (“Motor carriers … are not brokers within the meaning of this section when they arrange … the transportation of shipments which they … have accepted … to transport.”). Finally, a “motor vehicle” is “a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.” 49 U.S.C. § 13102(16). In light of these definitions, a claim against a broker is necessarily one step removed from a “motor vehicle” because the “definitions make clear that … a broker … and the services it provides have no direct connection to motor vehicles.” Miller, 976 F.3d at 1031 (Fernandez, J., concurring in part and dissenting in part). Therefore, Plaintiffs’ claims do not concern the regulation of motor vehicle safety because Coyote, a broker, and the services it provides, arranging transportation of shipments by a motor carrier, have no direct connection to motor vehicles. See Aspen, 65 F.4th at 1272.

*17 Next, similar to the facts in Ye, Plaintiff’s allegations “mirror practical realities: [Coyote] does not own or operate motor vehicles like [Golf or O’Connor] does.” Ye, 2023 WL 4567097, at 6. Considering the connection between Coyote as a broker and motor vehicle safety requirements necessitates an additional “link” to connect the alleged chain of events: Coyote’s negligent hiring of Golf resulted in Golf’s double brokering of the Subject Load to O’Connor, which resulted in O’Connor’s negligent entrustment of a motor vehicle to a negligent driver, Leksowski, who, in turn, caused a collision that resulted in Lee’s and Bastone’s deaths. (Doc. 29); Bastone v. Golf Transportation, Inc., No. 3:22-CV-00878, ECF No. 1. This additional step prevents Plaintiffs’ negligence claims against Coyote from falling within the FAAAA’s safety exception in § 14501(c)(2)(A). The FAAAA’s text “makes clear that Congress views motor vehicle safety regulations separately and apart from those provisions imposing obligations on brokers,” such that the connection between a broker hiring standard and motor vehicles is “too attenuated to be saved under § 14501(c)(2)(A).” Ye, 2023 WL 4567097, at 6 (“And this separateness counsels a reading of ‘with respect to motor vehicles’ that requires a direct connection between the potentially exempted state law and motor vehicles. Any other construction would expand the safety exception’s scope without a clear, text-based limit.”).

Therefore, the Court finds that Plaintiffs’ claims against Coyote are preempted by the FAAAA and are not saved by the safety exemption of 49 U.S.C. § 14501(c)(2)(A). Accordingly, Coyote’s motion for summary judgment is GRANTED and Plaintiffs’ claims against Coyote are DISMISSED with prejudice.

IV. Conclusion

For the foregoing reasons, Coyote’s motion for summary judgment is GRANTED. (Doc. 123).

An appropriate Order follows.

All Citations

Footnotes

  1. The parties have consented to proceed before the undersigned United States Magistrate Judge pursuant to Fed. R. Civ. P. 73 and 28 U.S.C. § 636(c). (Doc. 27).  
  2. On the same date, Defendant JP Logistics, Inc. (“JP Logistics”) also filed a motion for summary judgment (Doc. 126). As the Court has been notified that the claims against Defendant JP Logistics, Inc. have been resolved, that motion will be denied as moot.  
  3. This factual background is taken from Coyote’s statement of material facts and accompanying exhibits. (Doc. 124). Pursuant to Local Rule 56.1, Plaintiffs provided their responses to Coyote’s statement of facts and provided accompanying exhibits. (Doc. 149). Where Plaintiffs dispute facts and supports those disputes in the record, as required by Local Rule 56.1, those disputes are noted. Pursuant to Local Rule 56.1, the Court accepts as true all undisputed material facts supported by the record. Where the record evinces a disputed fact, the Court will take notice. In addition, the facts have been taken in the light most favorable to Plaintiffs as the non-moving parties, with all reasonable inferences drawn in their favor.  
  4. See 49 U.S.C. § 13102(2) (“broker” means a person “selling, providing, or arranging for, transportation by motor carrier for compensation”), § 13102(23) (“transportation” includes “a motor vehicle … or equipment of any kind related to the movement of passengers or property” and “services related to that movement, including arranging for, receipt, delivery, … and interchange of passengers and property”); see also Loyd v. Salazar, 416 F.Supp.3d 1290, 1297 n.9 (W.D. Ok. 2019) (“[plaintiff] raises a claim of express preemption, which occurs when the language of the federal statute reveals an express congressional intent to preempt state law.” (citations omitted)).
  5. In Adames, the court recommended denying a motion for summary judgment, finding that movant was a shipper, and not a motor vehicle carrier or a broker, and therefore FAAA preemption was not applicable. Adames, 2019 WL 8937042, at *9 (M.D. Pa. 2019).  
  6.  To establish vicarious liability, “a plaintiff must show that the employee’s conduct: (1) is of a kind and nature that he is employed to perform; (2) occurs substantially within the authorized time and space limits designated by his employer; and (3) is driven by a desire to serve the employer.” Schloss v. Sears Roebuck & Co., No. CIV.A. 04-CV-2423, 2005 WL 433316, at *2 (E.D. Pa. Feb. 24, 2005) (citing Costa v. Roxborough Mem’l Hosp., 708 A.2d 490, 493 (Pa. Super. Ct. 1998)).  
  7. To establish a claim for negligent/reckless in hiring, retention, and supervising a plaintiff must show that an employer was “negligent or reckless ‘in the employment of improper persons or instrumentalities in work involving risk of harm to others; … in the supervision of the activity; or … in permitting, or failure to prevent, negligent or other tortious conduct by persons, whether or not his servants or agents, upon premises or with instrumentalities under his control.’ ” Doe v. Liberatore, 478 F. Supp. 2d 742, 760 (M.D. Pa. 2007) (citing R.A. ex rel. N.A. v. First Church of Christ, 748 A.2d 692, 697 (Pa. Super. Ct. 2000)). See also Doe v. Schneider, 667 F. Supp. 2d 524, 531 (E.D. Pa. 2009). If this can be shown, then “an employer is subject to liability for harm resulting from his employee’s conduct.” Doe, 478 F. Supp. 2d at 760 (citing R.A. ex rel. N.A., 748 A.2d at 697).  
  8. To prevail on a negligent entrustment claim in the instant context, a plaintiff must show that the defendant “(1) permitted [a third party], (2) to operate its [trailer], and (3) that [the defendant] knew or should have known that [the third party] intended to or was likely to use the [trailer] in such a way that would harm another.” Fakes v. Terry, No. 15-CV-01574, 2018 WL 1382513, at *5 (W.D. Pa. Mar. 19, 2018) (citing Knecht v. Balanescu, 2017 WL 4573796 (M.D. Pa. 2017)); see Whetstone v. Malone Bussing Servs., No. 2:19-CV-00071, 2019 WL 1459022, at *2-3 (W.D. Pa. Apr. 2, 2019).  
  9. A joint venture requires that: “1) each party must make a contribution of capital, materials, services or knowledge; 2) profits must be shared; and 3) there must be a joint proprietary interest in and right of mutual control over the subject matter of the enterprise.” Ciotola, 481 F.Supp.3d at 387 (quoting Beavers v. West Penn Power Co., 436 F.2d 869, 873 (3rd Cir. 1971)). Once a party satisfies the test for a joint venture, the torts committed by one joint adventurer may be imputed upon other joint adventurers. See Beavers, 436 F.2d at 873; Friedman v. Wilson Freight Forwarding Co., 181 F. Supp. 327, 329 (W.D. Pa. 1960).  
  10. Plaintiffs submit that the Court should adopt the Miller court’s application of the safety exception to personal injury claims against a freight broker, suggesting that the Supreme Court affirmed that decision by denying the petition for a writ of certiorari. (Doc. 137, at 18). According to Plaintiffs, the Supreme Court invited the Solicitor General to file an amicus curiae brief on October 4, 2021, “expressing the views of the United States” before deciding the broker’s petition for writ of certiorari. (Doc. 137, at 18-19). The Solicitor General authored an amicus curiae brief, on behalf of the United States, concluding that in Miller, “[t]he Court of Appeals correctly applied the FAAAA’s safety exception.” (Doc. 137-8, at 7). Plaintiffs aver that that since the Supreme Court denied the broker-defendant’s writ of certiorari 34 days after the Solicitor General submitted its brief, the Supreme Court was “satisfied with the United States’ embracing Miller.” (Doc. 137, at 21). Conversely, Coyote explains that the denial of certiorari was the typical one sentence opinion that “[p]etition for writ of certiorari to the United States Court of Appeals for the Ninth Circuit denied.” (Doc. 147, at 14). The Court agrees with Coyote that the Supreme Court’s denial of a writ of certiorari “does not constitute a ruling on the merits,” Knight v. Florida, 528 U.S. 990, 990, 120 S.Ct. 459, 145 L.Ed.2d 370 (1999), or “signify that the Court necessarily agrees with the decision (much less the opinion) below.” Kennedy v. Bremerton Sch. Dist., ––– U.S. ––––, 139 S. Ct. 634, 635, 203 L.Ed.2d 137 (2019).  
  11. The Ye court further explained that “[l]ooking beyond § 14501 to the other provisions of Title 49 further reinforces our narrow reading of the phrase ‘with respect to motor vehicles’ in § 14501(c)(2)(A)’s safety exception.” Ye, 2023 WL 4567097, at 7 (citing FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (“[A] reviewing court should not confine itself to examining a particular statutory provision in isolation [because] [t]he meaning … of certain words or phrases may only become evident when placed in context.”); Sackett v. EPA, 598 U.S. 651, 143 S. Ct. 1322, 1338, 215 L.Ed.2d 579 (2023) (considering the broader context of the Clean Water Act to derive the meaning of “wetlands” in one provision of the Act (citing Brown & Williamson Tobacco, 529 U.S. at 132, 120 S.Ct. 1291))).  

© 2023 Thomson Reuters. No claim to original U.S. Government Works.  

End of Document

Piquion v. Amerifreight Sys. LLC,

United States District Court for the Northern District of Illinois, Eastern Division

November 21, 2023, Decided; November 22, 2023, Filed

No. 22 C 5690

Reporter

2023 U.S. Dist. LEXIS 209009 *; 2023 WL 8113379

MICHAEL GABRIEL PIQUION, 9+1 TRUCKING LLC, FORTY6 CLICKS TRANSPORTATION LLC, KC&R ENTERPRISE LLC, JAMES WILLIAMS, and RONALD FERGUSON, Plaintiffs, v. AMERIFREIGHT SYSTEMS LLC, AF SYSTEMS LLC, VALTRANS EXPRESS, INC., and RUMEN VALNEV, Defendants.

Counsel:  [*1] For Michael Gabriel Piquion, Plaintiff: Caryn Cecelia Lederer, LEAD ATTORNEY, Hughes Socol Piers Resnick Dym, Ltd., Chicago, IL; Emily Rees Brown, Hughes Socol Piers Resnick Dym, Chicago, IL; Christopher J Wilmes, Hughes Socol Piers Resnick & Dym, Ltd., Chicago, IL.

For Forty6 Clicks Transportation LLC, Plaintiff: Christopher J Wilmes, Hughes Socol Piers Resnick & Dym, Ltd., Chicago, IL.

For KC&R Enterprise LLC, Ronald Ferguson, James Williams, Plaintiffs: Caryn Cecelia Lederer, Hughes Socol Piers Resnick Dym, Ltd., Chicago, IL.

For Amerifreight Systems LLC, AF Systems LLC, Rumen Valnev, Defendants: Ivo V. Tchernev, LEAD ATTORNEY, Law Offices Of Jacobson & Tchernev, Ltd., Floor 2, Chicago, IL.

For Valtrans Express, Inc., Defendant: Ivo V. Tchernev, LEAD ATTORNEY, Law Offices Of Jacobson & Tchernev, Ltd., Floor 2, Chicago, IL; Caryn Cecelia Lederer, Hughes Socol Piers Resnick Dym, Ltd., Chicago, IL.

Judges: Virginia M. Kendall, United States District Judge.

Opinion by: Virginia M. Kendall

Opinion


MEMORANDUM OPINION AND ORDER

Plaintiffs Michael Gabriel Piquion, James Williams, Ronald Ferguson, 9+1 Trucking LLC, and Forty6 Clicks Transportation LLC, each hauled cargo for Amerifreight Systems LLC or AF Systems LLC as truck [*2]  owner-operators or company drivers. KC&R Enterprise LLC did so indirectly through its agreement with a third party. Piquion also contracted with Amerifreight’s truck-leasing affiliate, Valtrans Express, Inc. In this lawsuit, Plaintiffs bring claims under the Truth-in-Leasing Act (TILA), 49 U.S.C. § 14704, and Truth-in-Leasing regulations, 49 C.F.R. §§ 376 et seq.; the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 ILCS 505/1 et seq.; the Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/1 et seq.; and for breach of contract. Defendants now move to dismiss or compel arbitration. (Dkt. 76). For the reasons below, the motion to compel arbitration is denied; the motion to dismiss is granted in part and denied in part.


BACKGROUND


A. Piquion, Forty6 Clicks, and 9+1 Trucking v. Amerifreight

Amerifreight Systems and AF Systems (together, “Amerifreight”), both federally licensed motor carriers based in Illinois, transport goods for customers by contracting with truck owner-operators or lease operators. (Dkt. 68 ¶¶ 1, 18-19). Through an Independent Contractor Equipment Lease Agreement (the “Equipment Lease”), Michael Gabriel Piquion, who is a Georgia resident, Forty6 Clicks, and 9+1 Trucking each agreed to haul shipments under Amerifreight’s motor-carrier licenses in exchange for a percentage of Amerifreight’s gross revenue from the shipments hauled. (Id. at ¶¶ 2-3, 30-32; Dkt. 68-1 at [*3]  2-28, 46-79).1 During their dealings with Amerifreight, these Plaintiffs each “had the right to exclusive use of their semi-trucks.” (Dkt. 68 ¶ 34).

As to compensation, the Equipment Lease provides:

The rates to be paid for Independent Contractor’s services shall be rates individually negotiated for each bill of lading that is the responsibility of Amerifreight and each such rate shall be memorialized and confirmed on the Daily Trip Sheet; provided, in the event rate is not so memorialized the rate to be paid shall [sic] the rate last paid on such a service, or, if the service has not been previously provided, the rate shall be constructed from comparable rates.

(Dkt. 68 ¶ 31; Dkt. 68-1 at 16, 42, 59, 76). In addition, the Equipment Lease states: “Contractor have [sic] 30 days from date of settlement statement to dispute in writing any charge, discrepancies, deductions, fines, fees, reimbursements, advances, payments, wages, mileage rate(s), or load rate(s). After end [sic] of 30 days, it shall be affirmatively presumed that settlement statement is correct as issued.” (Dkt. 68-1 at 8, 35, 52, 69).

Amerifreight did not negotiate rates with Plaintiffs nor memorialize rates on daily trip sheets. [*4]  (Dkt. 68 ¶ 32). Rather, Amerifreight paid Plaintiffs 88% of the gross revenue from their shipments each week. (Id. at ¶¶ 30, 32-33, 35). Plaintiffs received settlement statements from Amerifreight indicating payment at a rate of “0.88” of revenue from their loads. (Id. at ¶¶ 33, 58; e.g., Dkt. 68-3).2 Amerifreight also advertised on its social-media pages that “[o]wner-operators get 88% from each load” or “[e]arn 88% on each load.” (Dkt. 68 ¶ 29; Dkt. 68-2 at 2, 5).

Plaintiffs allege Amerifreight underreported the gross revenue of its shipments and paid them based on the underreported amounts. (Dkt. 68 ¶¶ 7, 51). At least twice, Piquion learned from third-party brokers that Amerifreight had quoted him shipment prices that were lower than the actual amount that its customers paid. (Id. at ¶ 56). From browsing an online trucking marketplace called the “load board,” Forty6 Clicks’ owner and driver Ronald Ferguson, an Ohio resident, noticed that Amerifreight offered him “significantly lower” load prices than listings for comparable loads. (Id. at ¶¶ 16, 54). In reviewing rate-confirmation sheets that other carriers gave to their drivers, 9+1 Trucking’s driver James [*5]  Williams, also an Ohio resident, noticed “that the load prices were never a round dollar figure.” (Id. at ¶¶ 14, 53). By contrast, Amerifreight “almost always” quoted shipment prices to James Williams as a “round dollar figure, and usually a multiple of $5 or $10.” (Id.)

Amerifreight informed Plaintiffs of their shipments’ gross revenue through phone, text, or email. (Id. at ¶ 39). But Amerifreight refused to give Plaintiffs copies of rated freight bills or brokers’ rate-confirmation sheets for their shipments. (Dkt. 68 ¶¶ 6, 38-39, 53-55). So Plaintiffs could not verify Amerifreight’s actual gross revenue from their shipments nor dispute potential underpayments. (Id. at ¶ 52). Upon terminating their contracts, Plaintiffs lost access to Amerifreight’s online portal hosting their settlement statements. (Id. at ¶ 57).

In an August 2022 demand letter, Piquion requested rate-confirmation sheets for the loads he had hauled for Amerifreight. (Id. at ¶ 40; Dkt. 68-4). Amerifreight declined to send the documents but invited Piquion to review the rate-confirmation sheets and other documents in person at its Illinois headquarters. (Dkt. 68 ¶ 41; Dkt. 68-5). Plaintiffs’ counsel then offered to [*6]  visit Amerifreight’s headquarters to review the documents on Piquion’s behalf. (Dkt. 68 ¶ 42; Dkt. 68-6 at 3-4). But Amerifreight said no, insisting that only Piquion himself could review the documents. (Dkt. 68 ¶ 43; Dkt. 68-6 at 2).


B. KC&R v. Amerifreight

Like the independent-contractor Plaintiffs, non-party West Trucks entered an Equipment Lease with Amerifreight. (Dkt. 68 ¶ 4; Dkt. 68-1 at 29-45). Rather than haul shipments itself, West Trucks leased a semitruck to Plaintiff KC&R in a separate lease-purchase agreement. (Dkt. 68 ¶¶ 5, 44). KC&R paid West Trucks $9,000 down and agreed to drive the semitruck under Amerifreight’s motor-carrier license, hauling loads pursuant to West Trucks’ Lease. (Id. at ¶¶ 5, 44-45). In exchange, West Trucks agreed to pass payments from Amerifreight to KC&R—taking $1,040 per week off the top. (Id. at ¶¶ 5, 46). Both West Trucks and Amerifreight promised to pay KC&R 88% of the revenue from each shipment. (Id. at ¶ 47). Amerifreight dispatched shipments to KC&R, and its dispatchers told KC&R the load prices by phone, email, and text message. (Id. at ¶ 48). KC&R learned from Amerifreight’s dispatchers that Amerifreight paid West Trucks 88% of each shipment’s [*7]  revenue. (Id. at ¶ 49). Because Amerifreight underpaid KC&R, KC&R was “forced to terminate [its] lease-purchase agreement with West Trucks”—losing the money it had paid toward the truck. (Id. at ¶ 50).


C. Piquion v. Valtrans

Piquion has an additional bone to pick with Amerifreight’s truck-leasing affiliate company, Valtrans, also based in Illinois. (Id. at ¶ 20). Through a lease-purchase agreement—separate from his Lease—Piquion leased a semitruck from Valtrans. (Id. at ¶¶ 9, 62). The lease-purchase agreement gave Piquion the option to buy the semitruck after making weekly payments for two and a half years. (Id. at ¶ 9). Piquion paid Valtrans $398.17 per week toward the semitruck, and in September 2021, he paid $15,528.18 toward the remaining balance. (Id. at ¶ 63). On October 29, 2021, Valtrans confirmed in an executed bill of sale that Piquion had paid for the semitruck in full. (Id. at ¶ 65; Dkt. 68-7). Although the bill of sale reflects a sale price of $59,000, a settlement-detail summary shows that Piquion paid Valtrans $65,114 for the truck. (Dkt. 68 ¶ 65 & n.5; Dkt. 68-8). At the time, the truck’s estimated retail and trade-in values were north of $100,000 and $88,000, respectively. [*8]  (Dkt. 68 ¶ 65).

Despite the bill of sale, Valtrans did not transfer the semitruck title to Piquion—promising instead to do so by January 2022 “at the latest.” (Id. at ¶¶ 10-11, 66). For ten months, Valtrans refused Piquion’s repeated requests for the title. (Id.) Only upon receiving the August 2022 demand letter from Plaintiffs’ counsel did Valtrans transfer the title. (Id. at ¶ 11; Dkt. 68-4). As a result of the ten-month delay, Piquion incurred “late registration fees and penalties, lost value of the truck, excess commercial auto insurance premiums, and lost opportunities to drive the truck for a different carrier.” (Dkt. 68 ¶ 11). Since Piquion could not drive the semitruck for other carriers without the title, he continued driving for Amerifreight, whose payments—based on “significantly reduced load prices”—were sometimes too low to cover Piquion’s fuel and maintenance costs. (Id. at ¶ 69). The title-transfer delay prevented Piquion from switching to a less expensive insurance policy than the one Amerifreight required. (Id. at ¶ 70). By the time Piquion received the title, the semitruck’s retail and trade-in values had dropped to around $70,000 and $60,000, respectively. (Id. at [*9]  ¶ 74). In registering the title in his name, the delay between the bill-of-sale date and the title-transfer date triggered late fees and penalties. (Id. at ¶ 75).


D. Piquion, Williams & Ferguson v. Amerifreight & Valnev

At times, Piquion, 9+1 Trucking’s driver James Williams, and Forty6 Clicks’ owner Ferguson worked directly for Amerifreight as company drivers. (Id. at ¶ 79). All three drivers agreed to the Amerifreight Rules and Regulations (the “Company Policy”), which includes policies on safety; maintenance; billing; payroll; penalties, fines, and rewards; and cellphone use. (Dkt. 76-7 at 2-10; Dkt. 76-8 at 2-10; Dkt. 76-9 at 2-10).3 In the payroll section applicable to company drivers, the Company Policy states:

We will hold an Escrow from each driver to cover the costs of unknown expenses, if driver leaves the company. For company driver we will hold $1000.00 Escrow, to be deducted from weekly settlements of $100.00 for 10 weeks. We will return your Escrow 45 days after your last check . . . .

We will deduct Occupational Accident insurance – $30 weekly.

(Dkt. 76-7 at 6; Dkt. 76-8 at 6; Dkt. 76-9 at 6). Various other potential deductions and fines appear throughout the Company Policy, [*10]  including “missing fuel receipt” ($20); “dropped trailer on asphalt” ($100); “changed appointment without Dispatchers permission” ($100); and “miscellaneous tickets” ($100-$500). (Dkt. 76-7 at 3-10; Dkt. 76-8 at 3-10; Dkt. 76-9 at 3-10).

As Amerifreight company drivers, Plaintiffs picked up and dropped off loads in Illinois, earning $0.50 to $0.60 per mile. (Dkt. 68 ¶¶ 80, 82). Amerifreight owned the trucks and equipment Plaintiffs used. (Id. at ¶ 81(a)). Amerifreight also “directed the Plaintiffs on all aspects of their routes, including the times and locations to pick up trailers and loads, the specific routes they took to drive to delivery locations, and the times they were required to arrive at delivery locations.” (Id. at ¶ 81(b); see also, e.g., Dkt. 76-7 at 4 (“The company driver has no right to choose the loads.”)). When Amerifreight paid Plaintiffs, it allegedly deducted, “among other things, escrow, occupational accident insurance, [and] violations, without obtaining their express written authorization.” (Dkt. 68 at ¶ 83). Amerifreight’s owner Defendant Rumen Valnev, an Illinois resident, “had authority over Amerifreight’s policies and practices with regard to paying [*11]  company drivers.” (Id. at ¶¶ 21, 84). Valnev was aware of the deductions from Plaintiffs’ paychecks, and he allowed them to continue. (Id. at ¶ 85).


E. Arbitration Agreements

Separate from the Equipment Lease, Piquion; 9+1 Trucking owner Tracy Williams and driver James Williams; Forty6 Clicks owner Ferguson; KC&R co-owners Deanthony Holman and Demetrius Jones; and West Trucks owner Gueorgui Dimitrov each signed an agreement—titled “Owner Operator & Leased Driver Agreement” (the “Ampersand Version” of the “Driver Agreement”) or “Owner Operator/Leased Driver Agreement” (the “Slash Version”)—containing an arbitration clause. (Dkt. 68 ¶¶ 13-17; Dkt. 76-3 at 2-4; 76-4 at 2-7; Dkt. 76-5 at 2-4; 76-6 at 2-4). The Driver Agreement has three parts. (Dkt. 76-3 at 2-4; Dkt. 76-4 at 2-7; Dkt. 76-5 at 2-4; Dkt. 76-6 at 2-4). In the Ampersand Version, both the independent contractors (Tracy Williams and Dimitrov) and drivers (James Williams, Holman, and Jones) signed Parts 1 and 3. (Dkt. 76-4 at 2, 4, 5, 7; Dkt. 76-5 at 2, 4). But only the drivers signed Part 2. (Dkt. 76-4 at 3, 6; Dkt. 76-5 at 3). In the Slash Version, the independent contractors (Piquion and Ferguson) signed all three parts. (Dkt. [*12]  76-3 at 2, 4; Dkt. 76-6 at 2, 4).

The arbitration clause appears in Part 2:

This agreement shall be governed by the laws of the state of Illinois, both as to interpretation and performance other than injunctive or equitable relief, he parties agree that all matters will be submitted to binding arbitration, and action brought by either of the parties arising out of this agreement shall be commenced and maintained within the jurisdiction of the State of Illinois . . . . Each party is responsible for its own coast [sic] and expenses (including, but not limited to attorney fees and one half of the fees and expenses of the neutral arbitrator) incurred in enforcing its right under the arbitration process. The arbitrators are not empowered to award damages in excess of compensatory damages. . . . If any one or more of the provisions contained in the Agreement [sic] but the Agreement will be enforceable to the extent applicable.

(Dkt. 76-3 at 3; Dkt. 76-4 at 3, 6; Dkt. 76-5 at 3; Dkt. 76-6 at 3). Part 2 also states: “I agree with all conditions of this contract,” and “I agree with all conditions and rules of [Amerifreight].” (Dkt. 76-3 at 3; Dkt. 76-4 at 3, 6; Dkt. 76-5 at 3; Dkt. 76-6 at 3). [*13] 

Part 1 contains the substance of the Driver Agreement. At the outset, it provides that Amerifreight and the “Owner Operator — Independent Contractor” “are entering this independent contract used for the purpose of obtaining driving privileges with [Amerifreight] for” either the “driver for the independent contractor” (Ampersand Version) or the “independent contactor [sic]” (Slash Version). (Dkt. 76-3 at 2; Dkt. 76-4 at 2, 5; Dkt. 76-5 at 2; Dkt. 76-6 at 2). Each driver (Ampersand) or independent contractor (Slash) further agreed:

• that they are “not an employee of [Amerifreight]”;

• that Amerifreight “is not liable for any personal injuries that the driver my [sic] receive while working for” the independent contractor or himself;

• that they are “not entitled to make any claims against the trucking company”;

• to “perform contracted services in good and professional manner”;

• that “[t]here will be no claims from the Leased driver against our Customers for personal injuries,” unless the customer’s employee causes an accident;

• to “read and understand all rules and regulations required by all local, state and federal laws”;

• “if involved in an accident,” to “notify dispatcher no later than [*14]  two hours and present a written accident report within 24 hours following any such accident”;

• “to cooperate with the company regarding” litigation; and

• that they are “responsible for any legal fees, unpaid insurance claims or personal lawsuits.”

(Dkt. 76-3 at 2; Dkt. 76-4 at 2, 5; Dkt. 76-5 at 2; Dkt. 76-6 at 2).

As company drivers, Piquion, Ferguson, and James Williams each signed the Slash Version. (Dkt. 76-7 at 11-13; Dkt. 76-8 at 11-13; Dkt. 76-9 at 11-13).


F. The Present Motion to Dismiss

On October 17, 2022, Piquion sued Amerifreight (both Amerifreight Systems and AF Systems). (Dkt. 1). Subsequent complaints have tacked on the remaining parties and claims. (Dkts. 24, 36, 68). The operative Third Amended Complaint includes five counts. (Dkt. 68). In Count I, the independent-contractor Plaintiffs bring a claim against Amerifreight under the Truth-in-Leasing Act (TILA), 49 U.S.C. § 14704(a)(2). (Id. at ¶¶ 86-98). In Count II, KC&R claims Amerifreight violated the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 ILCS 505/1 et seq. (Id. at ¶¶ 99-119). In Count III, Piquion asserts a breach-of-contract claim against Valtrans. (Id. at ¶¶ 120-25). In Count IV, Piquion brings an ICFA claim against Valtrans and Amerifreight. (Id. at ¶¶ 126-40). And in Count V, Piquion, Williams, and Ferguson claim Amerifreight [*15]  and Valnev made improper deductions from their wages, in violation of the Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/1 et seq. (Id. at ¶¶ 141-46).

Defendants now move to dismiss. (Dkts. 76, 76-1). Their mishmash of arguments falls into three buckets. First, pursuant to Federal Rule of Civil Procedure 12(b)(1), they contend that the Court lacks subject-matter jurisdiction over KC&R’s ICFA claim in Count II. (Dkt. 76-1 at 4). Second, Defendants challenge the sufficiency of Plaintiffs’ claims under Rule 12(b)(6). (Id. at 4-15). Third, in the alternative, Defendants seek to compel arbitration. (Id. at 7-8, 15). The Court will empty the third bucket before the second because the motion to compel arbitration, if successful, could take some of Plaintiffs’ claims off the table. (Spoiler alert: it is not successful.)


DISCUSSION


I. Supplemental Jurisdiction (Count II)

No doubt, the Court has federal-question jurisdiction over the independent-contractor Plaintiffs’ TILA claim and supplemental jurisdiction over their state-law claims for breach of contract and violation of the ICFA. See 28 U.S.C. §§ 1331, 1367(a). Defendants contend, however, that the Court’s supplemental jurisdiction does not extend to KC&R’s ICFA claim against Amerifreight because KC&R itself “does not raise any other federal claims against [Amerifreight].” [*16]  (Dkt. 76-1 at 4).4 Supplemental jurisdiction is not so narrow.

Where there is “an independent basis for federal jurisdiction”—here, federal-question jurisdiction—the Court has “supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). Interpreting the phrase “case or controversy,” “[c]ourts often ask whether the claims share a common nucleus of operative fact.” Prolite Bldg. Supply, LLC v. MW Mfrs., Inc., 891 F.3d 256, 258 (7th Cir. 2018) (citing Houskins v. Sheahan, 549 F.3d 480, 495 (7th Cir. 2008)).

Generally, “a loose factual connection between claims” will suffice. Id. (quoting Ammerman v. Sween, 54 F.3d 423, 424 (7th Cir. 1995)) (cleaned up); see also McCoy v. Iberdrola Renewables, Inc., 760 F.3d 674, 683 (7th Cir. 2014) (approving of supplemental jurisdiction over state-law claims that “arose from a subset of the [federal] antitrust allegations”). Claims against a common defendant do not always pass this test. Compare Prolite, 891 F.3d at 258-59 (holding retailer’s contract claims against a manufacturer could not support supplemental jurisdiction over warranty claims by the retailer’s customers where the manufacturer was the sole commonality), with CNH Indus. Am. LLC v. Jones Lang LaSalle Ams., Inc., 882 F.3d 692, 704 (7th Cir. 2018) (observing that a manufacturer’s contract claims provided supplemental jurisdiction over independent dealerships’ claims under the same contract). Yet, supplemental [*17]  jurisdiction is proper, for example, “when the supplemental claim involves the same parties, contracts, and course of action as the claim conferring federal jurisdiction.” Prolite, 891 F.3d at 258 (collecting cases).

Here, the TILA and ICFA claims have a sufficient factual connection. In the TILA claim in Count I, the independent-contractor Plaintiffs assert that Amerifreight violated the Truth-in-Leasing regulations by refusing to give them copies of rated freight bills. (Dkt. 68 ¶¶ 86-98); see 49 U.S.C. § 14704(a)(2) (providing a cause of action for Truth-in-Leasing-regulation violations); 49 C.F.R. §§ 376.12, 376.12(g) (requiring lessors to provide copies of rated freight bills where “a lessor’s revenue is based on a percentage of the gross revenue for a shipment”). At the heart of Count I is the allegation that “Amerifreight paid Plaintiffs less than they promised to pay them by under-reporting the price of loads Plaintiffs hauled and then paying Plaintiffs the promised 88% of the lower, under-reported price.” (Dkt. 68 ¶ 95).

In the same vein, KC&R’s ICFA claim in Count II asserts that Amerifreight promised to pay KC&R, through West Trucks, 88% of the revenue from KC&R’s shipments hauled, but Amerifreight underpaid KC&R by underreporting gross revenues. [*18]  (Id. at ¶¶ 99-119). Beneath KC&R’s grievance is Amerifreight’s performance under its lease with West Trucks—an agreement that is identical in substance to Amerifreight’s agreements with the independent-contractor Plaintiffs. (See Dkt. 68-1). Moreover, in support of the ICFA unfair-conduct claim, Count II relies on the TILA as a source of public policy.5 Specifically, KC&R alleges that Amerifreight “violated established public policy, including the TILA, by paying KC&R less than their promised percentage of the load revenue.” (Dkt. 68 ¶ 112). Amerifreight further offended public policy “by contracting with West Trucks instead of KC&R”—”intentionally circumventing the lease protections of the TILA.” (Id. at ¶ 111).

At bottom, the claims in Count I and II involve the same conduct by the same defendants, stemming from the same contracts. See Prolite, 891 F.3d at 258. In both claims, Plaintiffs intend to prove that Amerifreight promised its independent contractors 88% of gross revenue, but it paid the independent contractors less than promised by underreporting gross revenues. KC&R’s ICFA claim therefore arises from a critical subset of the TILA allegations. See McCoy, 760 F.3d at 683. The claims do not overlap perfectly, but that is [*19]  not the test. There is an adequate “loose factual connection.” Prolite, 891 F.3d at 258. And the allegations unique to the ICFA claim do not stretch that connection so thin as to break off into a distinct case or controversy. Nor does the Court see any reason to decline to exercise its supplemental jurisdiction at this stage. See 28 U.S.C. § 1367(c). Thus, subject-matter jurisdiction over KC&R’s ICFA claim is proper.


II. Motion to Compel Arbitration

Based on the arbitration clause in the Driver Agreement, Defendants move to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3). (Dkt. 76-1 at 1, 7-8, 15). Yet, “the doctrine of forum non conveniens is the correct procedural mechanism to enforce an arbitration clause.” Rock Hemp Corp. v. Dunn, 51 F.4th 693, 701 (7th Cir. 2022) (quoting Dr. Robert L. Meinders, D.C., Ltd. v. United Healthcare Servs., Inc., 7 F.4th 555, 560 (7th Cir. 2021)) (cleaned up); see also Dr. Robert, 7 F.4th at 561 (observing that the procedural vehicle—Rule 12(b)(3) versus forum non conveniens—”does not impact the substantive analysis”).

The parties agree that Illinois law, including the Illinois Uniform Arbitration Act (IUAA), 710 ILCS 5/1 et seq., governs the enforceability of the arbitration clause here—not the Federal Arbitration Act (FAA). (Dkt. 76-1 at 7-8; Dkt. 84 at 19); see New Prime, Inc. v. Oliveira, 139 S. Ct. 532, 541, 202 L. Ed. 2d 536 (2019) (explaining that the FAA does not cover employment contracts of “workers engaged in interstate commerce,” including truck drivers (quoting 9 U.S.C. § 1)). Yet, since the IUAA and FAA share “common origins,” Illinois courts applying the IUAA “look [*20]  for guidance to federal court decisions interpreting similar provisions of the [FAA].” J & K Cement Constr., Inc. v. Montalbano Builders, Inc., 119 Ill. App. 3d 663, 456 N.E.2d 889, 893, 75 Ill. Dec. 68 (Ill. App. Ct. 1983); see also Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Salvano, 999 F.2d 211, 214 n.3 (7th Cir. 1993) (noting that “federal and Illinois authorities are in accord” on issues of arbitration (quoting N. Ill. Gas Co. v. Airco Indus. Gases, 676 F.2d 270, 274-75 (7th Cir. 1982))).

The IUAA provides:

A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable save upon any such grounds as exist for the revocation of any contract . . . .

710 ILCS 5/1. In assessing the validity and scope of an arbitration agreement, general principles of contract formation apply. Midland Funding, LLC v. Raney, 2018 IL App (5th) 160479, 419 Ill. Dec. 605, 93 N.E.3d 724, 731 (Ill. App. Ct. 2018) (citing Vassilkovska v. Woodfield Nissan, Inc., 358 Ill. App. 3d 20, 830 N.E.2d 619, 623, 294 Ill. Dec. 207 (Ill. App. Ct. 2005)); Gupta v. Morgan Stanley Smith Barney, LLC, 934 F.3d 705, 710-11 (7th Cir. 2019) (citing Gore v. Alltel Commc’ns, LLC, 666 F.3d 1027, 1032 (7th Cir. 2012)). As the party moving to compel arbitration, Amerifreight bears the burden of showing that the arbitration agreement is valid and that the dispute is within the agreement’s scope. Sturgill v. Santander Consumer USA, Inc., 2016 IL App (5th) 140380, 400 Ill. Dec. 472, 48 N.E.3d 759, 767 (Ill. App. Ct. 2016) (citing Hubbert v. Dell Corp., 359 Ill. App. 3d 976, 835 N.E.2d 113, 121, 296 Ill. Dec. 258 (Ill. App. Ct. 2005)).6 Plaintiffs do not dispute the existence of a valid arbitration agreement. Rather, the sticking point is the agreement’s scope.

Under Illinois law, parties “are bound to arbitrate only those issues they have agreed to arbitrate, as shown by the clear language of the agreement and their intentions expressed in that language.” Liu v. Four Seasons Hotel, Ltd., 2019 IL App (1st) 182645, 435 Ill. Dec. 13, 138 N.E.3d 201, 206 (Ill. App. Ct. 2019) (citing Royal Indem. Co. v. Chi. Hosp. Risk Pooling Program, 372 Ill. App. 3d 104, 865 N.E.2d 317, 324, 309 Ill. Dec. 954 (Ill. App. Ct. 2007)). When an arbitration [*21]  clause’s language is broad—covering, for example, “any claim or controversy arising out of this agreement”—and it is not clear whether the dispute is within the agreement’s scope, “the question of substantive arbitrability should initially be decided by the arbitrator.” Donaldson, Lufkin & Jenrette Futures, Inc. v. Barr, 124 Ill. 2d 435, 530 N.E.2d 439, 447-48, 125 Ill. Dec. 281 (Ill. 1988). By contrast, when an arbitration clause is “clearly limited in scope,” a court should resolve the arbitrability question. United Cable Tele. Corp. v. Nw. Ill. Cable Corp., 128 Ill. 2d 301, 538 N.E.2d 547, 550, 131 Ill. Dec. 172 (Ill. 1989) (distinguishing Donaldson).

Where, as here, the parties have multiple agreements—but only one includes an arbitration clause—and the plaintiff’s claims stem from an agreement with no arbitration clause, “the parties can be compelled to arbitrate only if (1) the clause is broad enough to encompass their dispute, or (2) the agreement containing the clause incorporates the other by reference.” Gore, 666 F.3d at 1033 (citing Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 662 (7th Cir. 2002)). Before evaluating the scope of the arbitration clause and the possibility of incorporation by reference, the Court considers the contracts’ functions and their relationship to one another. Rosenblum, 299 F.3d at 663-65.


A. Comparison of the Agreements

Under the Driver Agreement, the drivers agreed to limit Amerifreight’s liability in exchange for driving privileges. This agreement: provides driving privileges to the drivers, whether they [*22]  are employees of independent contractors (Ampersand Version) or owner-operators (Slash Version); announces the drivers’ status as independent contractors; requires the drivers to “perform contracted services in good and professional manner”; distributes risk and limits liability in the event of disputes between drivers and Amerifreight or its customers; and provides for arbitration of disputes “arising out of this agreement.” (Dkt. 76-3 at 2-4; Dkt. 76-4 at 2-7; Dkt. 76-5 at 2-4; Dkt. 76-6 at 2-4).

Separately, through the Equipment Lease, Plaintiffs agreed to lease equipment to Amerifreight and haul shipments under Amerifreight’s motor-carrier licenses in exchange for compensation. The Equipment Lease covers: performance and confidentiality obligations; use, possession, and maintenance of equipment; Plaintiffs’ independent-contractor status; assumption of risk, including insurance and indemnification; assignment; duration, cancellation, and termination; breach; waiver; inability to complete delivery; notices; and most importantly, compensation—the subject of all Plaintiffs’ claims here. (Dkt. 76-3 at 5-21; 76-4 at 8-24; Dkt. 76-5 at 5-21; Dkt. 76-6 at 5-21). Further, the Equipment Lease [*23]  expressly incorporates Schedule A (leased equipment); Schedule B (compensation); Schedule C (insurance); and a Supplement to Equipment Lease Agreement (independent-contractor status). (Dkt. 76-3 at 5, 13-21; Dkt. 76-4 at 8, 16-24; Dkt. 76-5 at 5, 13-21; Dkt. 76-6 at 5, 13-21).

In signing the Company Policy—also distinct from the Driver Agreement—the drivers agreed to perform their work pursuant to Amerifreight’s policies. (Dkt. 76-7 at 2-10; Dkt. 76-8 at 2-10; Dkt. 76-9 at 2-10). Those policies cover safety; maintenance; billing; payroll; penalties, fines, and rewards; and cellphone use. (Dkt. 76-7 at 2-10; Dkt. 76-8 at 2-10; Dkt. 76-9 at 2-10). Relevant to the company-driver Plaintiffs’ IWPCA claims, the Company Policy sets out fines and deductions, including for escrow, insurance, and policy violations. (Dkt. 76-7 at 6, 8-10; Dkt. 76-8 at 6, 8-10; Dkt. 76-9 at 6, 8-10).

Comparing the Equipment Lease and Driver Agreement, they are “are not two sections of the same agreement; they are separate, free-standing contracts.” See Rosenblum, 299 F.3d at 663. The Equipment Lease and Driver Agreement do not refer to one another. Each contract is supported by adequate consideration; neither is missing terms that it must [*24]  borrow from the other. See id. Indeed, the two contracts include some terms which would be superfluous if the agreements were one and the same. See id. The Company Policy likewise stands apart from the Driver Agreement: these agreements do not refer to one another, they are each supported by consideration, and neither contract must borrow terms from the other. See id.

Because the Driver Agreement was “used for the purpose of obtaining driving privileges,” Amerifreight insists that the Driver Agreement’s arbitration clause covers all “claims aris[ing] out of the provision of driving services, i.e., compensation for said services.” (Dkt. 85 at 10). This attempted sleight of hand is unconvincing. Although “obtaining driving privileges” and providing “driving services” are related concepts, they are not the same: driving services flow from the independent contractor to Amerifreight; driving privileges run from Amerifreight to the driver. Nor does the Driver Agreement make any mention of compensation or deductions. Thus, the contracts stand alone. Nothing suggests the parties intended for the Driver Agreement’s dispute-resolution terms to extend to disputes arising from the Equipment Lease [*25]  or Company Policy.


B. Scope of the Arbitration Agreement

Focusing on the arbitration clause, it is not broad enough to reach Plaintiffs’ claims. Appearing in Part 2 of the Driver Agreement, the clause provides:

This agreement shall be governed by the laws of the state of Illinois, both as to interpretation and performance other than injunctive or equitable relief, the parties agree that all matters will be submitted to binding arbitration, and action brought by either of the parties arising out of this agreement shall be commenced and maintained within the jurisdiction of the State of Illinois . . . .

(Dkt. 76-3 at 3; Dkt. 76-4 at 3, 6; Dkt. 76-5 at 3; Dkt. 76-6 at 3 (emphases added)).

By its terms, the clause requires arbitration of disputes arising from the Driver Agreement. Attempting to stretch the arbitration clause further, Amerifreight wrenches the words, “the parties agree that all matters will be submitted to binding arbitration,” from their context. (Dkt. 85 at 10). Sandwiching those words are two references to “this agreement”—limiting the clause’s expanse. The clear language of the arbitration clause does not express an intent to arbitrate any dispute that could ever arise between [*26]  the parties. In this action, Plaintiffs dispute their compensation and wage deductions, on which the Driver Agreement is silent. Applying the arbitration clause to compensation disputes arising from the Equipment Lease or Company Policy “would expand the operation of that clause beyond its express terms and beyond the intent of the parties.” See Rosenblum, 299 F.3d at 664.


C. Incorporation by Reference

Neither the Equipment Lease nor the Company Policy incorporates the Driver Agreement and its arbitration clause by reference. “Mere reference to another contract or document is not sufficient to incorporate its terms into a contract.” Gupta, 934 F.3d at 715 (quoting Rosenblum, 299 F.3d at 666). Rather, “there must be an express intent to incorporate.” Id. (quoting Rosenblum, 299 F.3d at 666). Undercutting any such intent is the Driver Agreement’s introductory sentence, stating that the parties “are entering this independent contract used for the purpose of obtaining driving privileges.” (E.g., Dkt. 76-3 at 2 (emphasis added)). That language reflects the parties’ intent for the Driver Agreement to stand separate from other contracts. See Rosenblum, 299 F.3d at 664-65. The Equipment Lease and Company Policy do not even reference the Driver Agreement—let alone, convey intent to incorporate it.

Resisting that conclusion, [*27]  Amerifreight points to the following language in the Driver Agreement: “I agree with all conditions and rules of [Amerifreight].” (Dkt. 85 at 10). This covenant, Amerifreight argues, shows incorporation because the Equipment Lease “set out the rules and conditions within which the parties operated.” (Id.) That is a stretch. Even if the cited language clearly referenced either the Equipment Lease or the Company Policy, mere reference is not enough. See Rosenblum, 299 F.3d at 665-66. Without express intent to incorporate, the Driver Agreement’s arbitration clause cannot apply to disputes arising from separate contracts.7


III. Failure to State a Claim

To survive a motion to dismiss for failure to state a claim, the complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Kaminski v. Elite Staffing, Inc., 23 F.4th 774, 776 (7th Cir. 2022) (quoting Fed. R. Civ. P. 8(a)(2)). Thus, “a plaintiff must allege ‘enough facts to state a claim that is plausible on its face.'” Allen v. Brown Advisory, LLC, 41 F.4th 843, 850 (7th Cir. 2022) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)). The Court accepts the well-pleaded factual allegations in Plaintiffs’ complaint [*28]  as true, “drawing all reasonable inferences in [their] favor.” Id. (citing W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016)).


A. Truth-in-Leasing Act (TILA) (Count I)

In Count I, the independent-contractor Plaintiffs (Piquion, Forty6 Clicks, and 9+1 Trucking) bring TILA claims against Amerifreight. The Truth-in-Leasing regulations “impose restrictions on lease agreements between motor carriers and owner-operators of trucks.” Brant v. Schneider Nat’l, Inc., 43 F.4th 656, 678 (7th Cir. 2022). These regulations aim “to promote full disclosure between the carrier and owner-operator in the leasing contract, to promote the stability and economic welfare of the independent trucker segment of the motor carrier industry, and to eliminate or reduce opportunities for skimming and other illegal practices.” Id. (quoting 43 Fed. Reg. 29812, 29812 (July 11, 1978)). When a motor carrier violates Truth-in-Leasing regulations, the TILA allows owner-operators to sue for damages. 49 U.S.C. §§ 14102, 14704(a)(2); Brant, 43 F.4th at 678 (citing Owner-Operator Independent Drivers Ass’n v. Mayflower Transit, 615 F.3d 790, 791-92 (7th Cir. 2010)). To state a claim under the TILA, Plaintiffs must allege that (1) Amerifreight violated one or more Truth-in-Leasing regulations, and (2) they suffered damages as a result. Brant, 43 F.4th at 678. Amerifreight challenges Plaintiffs’ claims on both prongs. (Dkt. 76-1 at 5-6).


1. Section 376.12 Violations

Plaintiffs assert that Amerifreight violated 49 C.F.R. § 376.12(g) (and § 376.12‘s introductory language) by failing to provide [*29]  copies of rated freight bills. In pertinent part, § 376.12(g) states:

When a lessor’s revenue is based on a percentage of the gross revenue for a shipment, the lease must specify that the authorized carrier will give the lessor, before or at the time of settlement, a copy of the rated freight bill, or, in the case of contract carriers, any other form of documentation actually used for a shipment containing the same information that would appear on a rated freight bill.

49 C.F.R. § 376.12(g); see also id. at § 376.12 (“The required lease provisions shall be adhered to and performed by the authorized carrier.”). Section 376.12(g)‘s “disclosure requirement protects owner-operators from unscrupulous carriers who might be tempted to hide such information, to underpay for the shipment, and to pocket the difference.” Brant, 43 F.4th at 679.

Initially, Amerifreight argues that 9+1 Trucking is not an “owner-operator” because its owner, Tracy Williams, is not herself a commercially licensed truck driver, while 9+1 Trucking’s driver, James Williams, is not an owner. (Dkt. 76-1 at 6-7). Amerifreight offers neither authority nor reasoning to support its stance. Among other “lease requirements,” § 376.12 provides: “The lease shall be made between the authorized carrier and the owner [*30]  of the equipment.” 49 C.F.R. § 376.12(a). The Truth-in-Leasing regulations define a “lease” as “[a] contract or arrangement in which the owner grants the use of equipment, with or without driver, for a specified period to an authorized carrier for use in the regulated transportation of property, in exchange for compensation.” 49 C.F.R. § 376.2(e) (emphasis added). Section 376.12‘s requirements—including § 376.12(g)—apply regardless of whether the owner-lessor is a driver.

Further, an “owner” is “[a] person (1) to whom title to equipment has been issued, or (2) who, without title, has the right to exclusive use of equipment, or (3) who has lawful possession of equipment registered and licensed in any State in the name of that person.” 49 C.F.R. § 376.2(d). Plaintiffs have adequately alleged that 9+1 Trucking was an owner because it “had the right to exclusive use” of its truck during its dealings with Amerifreight. (Dkt. 68 ¶ 34); see 49 C.F.R. § 376.2(d)(2). Thus, Amerifreight’s position ignores the text of the Truth-in-Leasing regulations and would arbitrarily excise certain owners from TILA’s protections.

Next, Amerifreight argues that it did not violate § 376.12(g) because the Equipment Lease does not base Plaintiffs’ payment on a percentage of gross revenue for their shipments. (Dkt. 76-1 at 5). To [*31]  assess this argument, the Court must interpret the Equipment Lease. In construing contracts under Illinois law,8 courts “aim to ‘ascertain the parties’ intent’ by first consulting ‘the plain and ordinary meaning of the contract language.'” Page v. Alliant Credit Union, 52 F.4th 340, 346 (7th Cir. 2022) (quoting E. Coast Ent. of Durham, LLC v. Hous. Cas. Co., 31 F.4th 547, 550 (7th Cir. 2022)). “If the language of an alleged contract is ambiguous regarding the parties’ intent, the interpretation of the language is a question of fact which a court cannot properly determine on a motion to dismiss.” Kap Holdings, LLC v. Mar-Cone Appliance Parts Co., 55 F.4th 517, 526 (7th Cir. 2022) (quoting Quake Constr., Inc. v. Am. Airlines, Inc., 141 Ill. 2d 281, 565 N.E.2d 990, 994, 152 Ill. Dec. 308 (Ill. 1990)). At this stage, the Court interprets the Equipment Lease with the pleading standard in mind—accepting Plaintiffs’ factual allegations as true and reading the complaint and appended contract documents in Plaintiffs’ favor. 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 737 (7th Cir. 2002).

Against that backdrop, the Equipment Lease’s payment provision states:

The rates to be paid for Independent Contractor’s services shall be rates individually negotiated for each bill of lading that is the responsibility of Amerifreight and each such rate shall be memorialized and confirmed on the Daily Trip Sheet; provided, in the event rate is not so memorialized the rate to be paid shall [sic] the rate last paid on such a service, or, if the service has not been previously provided, the [*32]  rate shall be constructed from comparable rates.

(Dkt. 68 ¶ 31; Dkt. 68-1 at 16, 42, 59, 76).

Amerifreight did not negotiate rates with Plaintiffs, and it did not memorialize rates on daily trip sheets. (Dkt. 68 ¶ 32). Since the rate was “not so memorialized,” under the contract’s plain language, Amerifreight agreed to pay Plaintiffs “the rate last paid” for their services. (See id. at ¶ 31). Amerifreight paid Plaintiffs 88% of the gross revenue from their shipments each week. (Id. at ¶¶ 30, 32-33, 35). Amerifreight also gave Plaintiffs settlement sheets indicating payment at a rate of “0.88” of revenue from their shipments. (Id. at ¶¶ 32-33, 58; e.g., Dkt. 68-3). That rate—88% of gross revenue—according to Plaintiffs, was “the rate last paid on such a service.” (Dkt. 68 ¶ 32; Dkt. 84 at 8).

Amerifreight sees things differently. It contends that the payment rate was “the individually negotiated rate for each bill of lading.” (Dkt. 86 at 2-3). This argument asks the Court to reject Plaintiffs’ allegation that Amerifreight did not memorialize individually negotiated rates in daily trip sheets. (See Dkt. 68 ¶ 32). No dice. At a later stage, Plaintiffs will need to back up their version of [*33]  events. For now, the Court accepts Plaintiffs’ well-pleaded factual allegations as true. See 188 LLC, 300 F.3d at 737. That principle extends to Plaintiffs’ allegation that Amerifreight, in fact, purported to pay them 88% of gross revenue. (Dkt. 68 ¶¶ 32-33). The settlement sheet attached to Plaintiffs’ complaint—which appears to calculate payment at a rate of 88% of the revenue for each shipment (Dkt. 68-3)—supports the reasonable inference that Amerifreight agreed to pay Plaintiffs 88% of the gross revenue from their loads. Although Amerifreight is correct that the word “gross” does not appear on the settlement sheet, (Dkt. 85 at 3), the word “revenue” does. (Dkt. 68-3).

“Revenue” means “[i]ncome from any and all sources”—that is, “gross income or gross receipts.” Revenue, Black’s Law Dictionary (11th ed. 2019); see also City of Dallas v. F.C.C., 118 F.3d 393, 395 (5th Cir. 1997) (“The phrase ‘gross revenue’ has a generally accepted meaning: unless expressly limited by the terms of a statute, regulation or contract, gross revenue means all amounts received from operation of a business, without deduction.”); Stampley, 2016 U.S. Dist. LEXIS 125415, 2016 WL 4905673, at *4. Construing the settlement sheet in Plaintiffs’ favor, “revenue” could plausibly refer to “gross revenue”—especially in context. After calculating 88% of the [*34]  revenues from each trip, the settlement sheet reduces the total earnings by various deductions, (Dkt. 68-3), implying that the values in the “QTY” column corresponding with each trip’s “revenue” describe “all amounts received from [Plaintiffs’ shipments], without deduction.” See City of Dallas, 118 F.3d at 395 (emphasis added).

In its reply brief, Amerifreight objects that Plaintiffs’ reading of “the rate last paid on such a service” contradicts “industry practice” and “just doesn’t make sense.” (Dkt. 85 at 3).9 Even if “the rate last paid” is ambiguous, a motion to dismiss is not the proper vehicle for a factual dispute over how extrinsic evidence may color its meaning. See Kap, 55 F.4th at 526; cf. 188 LLC, 300 F.3d at 738-39 (refusing to resolve whether terms were printed on the reverse side of a contract). All the extrinsic evidence on the record—including the settlement sheet and Amerifreight’s social-media advertisements that “[o]wner-operators get 88% from each load”—supports Plaintiffs’ plausible reading of “the rate last paid on such a service.” (Dkt. 68-3; Dkt. 68-2 at 2, 5). Nothing contradicts the allegation that Amerifreight agreed to pay Plaintiffs a percentage of gross revenue. Amerifreight cannot cut Plaintiffs off at the pass with its unsupported [*35]  say-so on industry custom. Plaintiffs allege further that Amerifreight refused to provide copies of rated freight bills or the equivalent information at or before the time of settlement. (Dkt. 68 ¶¶ 6, 38-39, 53-56, 94); see Brant, 43 F.4th at 678-79. Thus, Plaintiffs’ allegations give rise to a plausible inference that Amerifreight violated §§ 376.12 and 376.12(g).


2. Damages

Plaintiffs also plausibly allege that Amerifreight’s Truth-in-Leasing violation caused damages. Plaintiffs claim that Amerifreight underreported its gross revenue from Plaintiffs’ shipments and paid them a percentage of those deflated amounts. (Dkt. 68 ¶¶ 7, 51). They support the theory with three well-pleaded factual allegations: First, third-party brokers told Piquion that the shipment prices Amerifreight had quoted him were lower than the amounts Amerifreight received from its customers. (Id. at ¶ 56). Second, Ferguson of Forty6 Clicks noticed that, compared to listings for similar loads on the “load board” online trucking marketplace, Amerifreight had quoted him “significantly lower” load prices. (Id. at ¶ 54). Third, 9+1 Trucking driver James Williams observed Amerifreight “almost always” quoted him prices as a “round dollar figure,” while other [*36]  carriers never did. (Id. at ¶ 53). These allegations permit a plausible inference that Amerifreight paid Plaintiffs less than they promised.

Without help from any caselaw, Amerifreight describes Plaintiffs’ allegations as “implausible,” “speculative,” “vague,” “questionable,” “absurd,” “open-ended,” and “void of any indicia of reliability.” (Dkt. 76-1 at 5-6). Rhetoric aside, Amerifreight expects too much at the pleading stage. In isolation, the allegation that Amerifreight underreported its gross revenue would border on speculative. Yet, the remaining factual allegations nudge Plaintiffs’ theory of harm across the plausibility threshold. While Amerifreight faults Plaintiffs for failing to specify which brokers gave Piquion intel about load prices and which load board Ferguson visited, Plaintiffs need not plead their TILA claim with particularity. The absence of detail is not a fatal shortcoming.

Moreover, because Amerifreight refused to give Plaintiffs copies of rated freight bills or brokers’ rate-confirmation sheets, Plaintiffs could not verify Amerifreight’s gross revenue from their shipments. (Dkt. 68 at ¶¶ 6, 38-39, 52-56). Without that information, it is hard to imagine how Plaintiffs [*37]  could state their claim in greater detail. Section 376.12(g) exists for this very purpose: the regulation aims to prevent motor carriers from underpaying drivers while ensuring they are never the wiser. See Brant, 43 F.4th at 679 (“Without [§ 376.12(g)‘s] requirement that this information be made available before settlement, drivers . . . might never know if they were being underpaid.”). Thus, in Brant, the plaintiff stated a TILA claim with less detailed allegations than those here. Cf. id. (plaintiff adequately alleged harm from a § 376.12(g) violation by pleading that (1) the defendant “did not provide Plaintiff . . . with copies of documents from which the rates and charges . . . are computed,” (2) the defendant “underpaid Plaintiff,” and (3) “the failure to disclose the rated freight bill or equivalent information to [the plaintiff] prevented him from contesting the alleged underpayment”).

Despite Amerifreight’s contention, the Equipment Lease’s 30-day dispute window does not prevent Plaintiffs from pleading damages. (See Dkt. 76-1 at 9-10). The Equipment Lease provides: “Contractor have [sic] 30 days from date of settlement statement to dispute in writing any charge, discrepancies, deductions, fines, fees, reimbursements, advances, payments, [*38]  wages, mileage rate(s), or load rate(s). After end [sic] of 30 days, it shall be affirmatively presumed that settlement statement is correct as issued.” (Dkt. 76-3 at 11; Dkt. 76-4 at 14; Dkt. 76-5 at 11; Dkt. 76-6 at 11). In Amerifreight’s view, this clause precludes Plaintiffs from disputing payments under the Equipment Lease because they received settlement statements more than 30 days before contesting Amerifreight’s compliance with the TILA. That view is mistaken.

Amerifreight looks for support in Mervyn v. Atlas Van Lines, Inc., 882 F.3d 680 (7th Cir. 2018), and Stampley v. Altom Transport, Inc., 958 F.3d 580 (7th Cir. 2020). In both Mervyn and Stampley, the Seventh Circuit held that contractual 30-day dispute windows warranted summary judgment for defendant-carriers on plaintiff-owner-operators’ claims for breach of contract and violations of TILA, § 376.12(d).10 Mervyn, 882 F.3d at 684-86; Stampley, 958 F.3d at 586-89. Both cases are readily distinguishable.

To start, the 30-day clauses in Mervyn and Stampley used different language from the clause here. In Mervyn the clause stated: “Financial entries made by [carrier] on payment documents shall be conclusively presumed correct if not disputed by [owner-operator] within 30 days after distribution.” Mervyn, 882 F.3d at 684 (emphasis added). The plain language of that clause created an irrebuttable presumption that barred the carrier from challenging [*39]  the correctness of payment documents beyond the 30-day window. Id. at 684-85 (“Something that is conclusively presumed correct cannot be rebutted.”); see also Presumption, Black’s Law Dictionary (11th Cir. 2019) (defining a “conclusive presumption” or “irrebuttable presumption” as one “that cannot be overcome by any additional evidence or argument because it is accepted as irrefutable proof that establishes a fact beyond dispute”).

In contrast, the 30-day clause here creates an “affirmative[]” presumption. (E.g., Dkt. 76-3 at 11); see also Presumption, Black’s Law Dictionary (11th Cir. 2019) (observing that presumptions generally “shift[] the burden of production or persuasion to the opposing party, who can then attempt to overcome the presumption”); John D. Lawson, The Law of Presumptive Evidence 639 (2d ed. 1899) (“A ‘presumption’ is a rule of law that courts or juries shall or may draw a particular inference from a particular fact or from particular evidence, unless and until the truth of such inference is disproved.”). “Affirmative” does not mean irrebuttable. See Affirmative, Black’s Law Dictionary (11th ed. 2019) (defining “affirmative” as “[s]upporting the existence of certain facts”); see [*40]  also, e.g., Ga. Ry. & Elec. Co. v. City of Decatur, 295 U.S. 165, 171, 55 S. Ct. 701, 79 L. Ed. 1365 (1935) (describing a presumption interchangeably as “affirmative” and “rebuttable”); Horton v. Reliance Standard Life Ins. Co., 141 F.3d 1038, 1041-42 (11th Cir. 1998) (observing that an “affirmative presumption” is rebuttable). To drive the point home, consider how “affirmative” and “conclusive” differently modify the word “evidence”: while conclusive evidence ends an inquiry, affirmative evidence is vulnerable to conflicting evidence. See, e.g., Callanan v. Hurley, 93 U.S. 387, 389-91, 23 L. Ed. 931 (1876) (distinguishing “conclusive evidence” from “affirmative” or “prima facie evidence”); Henderson v. George Wash. Univ., 449 F.3d 127, 138-39, 371 U.S. App. D.C. 173 (D.C. Cir. 2006) (explaining that “affirmative evidence” “is not necessarily conclusive affirmative evidence” (emphasis added)).

Also distinguishable from the present clause, Stampley‘s 30-day clause provided: “[The owner-operator] shall have thirty (30) days from receipt to contest, in writing, the information contained on any rated freight bill or computer-generated document. Following this (30) day period, [the owner-operator] shall waive all rights to contest the validity or accuracy of any/all payments made . . . .” Stampley, 958 F.3d at 587. Effecting a total waiver of any right to contest payment after 30 days, Stampley‘s clause was similar in effect to Mervyn‘s—leaving no room for rebuttal. Id. at 588 (citing Mervyn, 882 F.3d at 684). The clause in the Equipment Lease is not so forceful. It does [*41]  not waive Plaintiffs’ rights. Nor does it create any presumption—affirmative, conclusive, or otherwise—that Plaintiffs received the information Amerifreight owed them under § 376.12(g). Amerifreight’s harsh construction of the 30-day clause thus ignores important features of the clauses that warranted summary judgment in Mervyn and Stampley.

Importantly, in both Mervyn and Stampley, the owner-operators received all the information they needed to dispute payments within the 30-day window. Mervyn, 882 F.3d at 685; Stampley, 958 F.3d at 588. But here, Plaintiffs allege that they did not receive rated freight bills or the equivalent information—a failing at the heart of this case. Nor did the Equipment Lease specify when Plaintiffs would receive rated freight bills, as § 376.12(g) requires. By allegedly withholding rated freight bills and omitting mention from the Equipment Lease of Plaintiffs’ entitlement to the information, Amerifreight ensured that Plaintiffs could not dispute any underpayment. Worse, Plaintiffs allege that Amerifreight misrepresented its gross revenue on settlement sheets. Even Stampley acknowledged that a carrier’s fraud could excuse a failure to contest payment within a contractual 30-day dispute window. Stampley, 958 F.3d at 588-89 & n.5 (“[I]f . . . underlying documents [*42]  were fabricated or altered to mislead [the carrier], that would likely significantly change our analysis.”).

The Seventh Circuit distinguished Stampley along similar lines in Brant, stressing:

Section 376.12(g) is a disclosure mandate that protects owner-operators by requiring that the lease disclose the availability of information useful to ensure the carrier does not shortchange the driver at settlement. The lease must specify when this information is to be made available, and then the carrier must provide it or be in breach of contract. Because [the carrier] did not clarify in the [lease] when this information would be available—i.e., at or before settlement—[the owner-operator] allegedly did not know that one of the significant disclosure protections provided him by the Truth-in-Leasing regulations was being violated.

Brant, 43 F.4th at 679. Although Brant did not involve a 30-day dispute window, its interpretation of § 376.12(g) cautions against a too-expansive reading of Mervyn and Stampley—particularly at the pleading stage. Therefore, the independent-contractor Plaintiffs’ TILA claims survive.


B. Illinois Consumer Fraud Act (ICFA) (Counts II & IV)

In Counts II and IV, KC&R and Piquion claim Amerifreight and Valtrans violated the ICFA. Seeking [*43]  dismissal of the ICFA claims, Defendants argue that KC&R and Piquion are not “consumers” and have failed to allege a “consumer nexus.” (Dkt. 76-1 at 4-5, 8-9; Dkt. 85 at 6-9). The ICFA “protect[s] consumers, borrowers and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices.” McIntosh v. Walgreens Boots Alliance, Inc., 2019 IL 123626, 434 Ill. Dec. 189, 135 N.E.3d 73, 80 (Ill. 2019) (citing Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 775 N.E.2d 951, 960, 266 Ill. Dec. 879 (Ill. 2002)); see also Cmty. Bank of Trenton v. Schnuck Mkts., Inc., 887 F.3d 803, 822 (“Illinois courts have interpreted the ICFA to apply not only in consumer-against-business cases but also in some cases when ‘both parties to the transaction are business entities.'” (quoting L. Offs. of William J. Stogsdill v. Cragin Fed. Bank for Sav., 268 Ill. App. 3d 433, 645 N.E.2d 564, 566-67, 206 Ill. Dec. 559 (Ill. App. Ct. 1995))). To state an ICFA claim, the plaintiff must be a “consumer,” as the Act defines that term, or satisfy the consumer-nexus test by showing a “nexus between the complained of conduct and consumer protection concerns.” Cmty. Bank of Trenton, 887 F.3d at 823 (quoting Athey Prods. Corp. v. Harris Bank Roselle, 89 F.3d 430, 437 (7th Cir. 1996)). Plaintiffs here have done neither.

A “consumer” under the ICFA is “any person who purchases or contracts for the purchase of merchandise not for resale in the ordinary course of his trade or business but for his use or that of a member of his household.” 815 ILCS 505/1(e).11 Attempting to squeeze into this definition, KC&R and Piquion contend that they contracted with Defendants for “dispatching and load-finding services.” (Dkt. 84 at [*44]  9-10). This argument ignores the definition’s critical limitation: a consumer must purchase or contract for services for personal use—not for a business purpose. See, e.g., Lee v. AAA Freight, Inc., 2023 U.S. Dist. LEXIS 76178, 2023 WL 3200255, at *4 (N.D. Ill. May 2, 2023) (plaintiffs were not consumers because they did “not allege that they purchased defendants’ products for their personal use”); Rivers v. Southway Carriers, Inc., 2023 U.S. Dist. LEXIS 145804, 2023 WL 5348809, at *2-3 (N.D. Ill. Aug. 20, 2023) (same). In similar case, Judge Gettleman put it aptly:

If plaintiffs could use their status as independent contractors to argue that they are consumers under the ICFA, then every independent contractor would be a consumer of the benefits of their employment. This is implausible. Plaintiffs contracted with defendants as independent contractors; any benefit that plaintiffs received from defendants’ services, including dispatching, was contemplated by their business relationship.

Lee, 2023 U.S. Dist. LEXIS 76178, 2023 WL 3200255, at *4; cf. Hess v. Kanoski & Assocs., 668 F.3d 446, 454 (7th Cir. 2012) (plaintiff had no viable ICFA claim since he “was an employee, not a ‘consumer'”). Since Plaintiffs did not contract for dispatching services for personal use, they are not consumers.

Nor have Plaintiffs satisfied the consumer-nexus test. “Illinois courts are skeptical of business-v.-business ICFA claims when neither party is actually a consumer in the transaction.” Cmty. Bank of Trenton, 887 F.3d at 823. To show that a defendant’s conduct [*45]  implicates consumer-protection concerns, a plaintiff must plead “(1) that [its] actions were akin to a consumer’s actions to establish a link between [it] and consumers; (2) how defendant’s representations . . . concerned consumers other than [plaintiff]; (3) how defendant’s particular [action] involved consumer protection concerns; and (4) how the requested relief would serve the interests of consumers.” Bonilla v. Ancestry.com Operations Inc., 574 F. Supp. 3d 582, 596 (N.D. Ill. 2021) (quoting Thrasher-Lyon v. Ill. Farmers Ins. Co., 861 F. Supp. 2d 898, 912 (N.D. Ill. 2012)); Brody v. Finch Univ. of Health Scis./The Chi. Med. Sch., 298 Ill. App. 3d 146, 698 N.E.2d 257, 269-70, 232 Ill. Dec. 419 (Ill. App. Ct. 1998).

Plaintiffs assert that “Defendants regularly advertised their owner-operator opportunities on social media aimed at the general market of truck drivers.” (Dkt. 84 at 10; see also Dkt. 68 ¶¶ 29, 102, 104). Yet, the market of commercial truck drivers is not a market of “consumers”; it is a market of potential independent contractors. See Athey, 89 F.3d at 437; see also First Comics, Inc. v. World Color Press, Inc., 884 F.2d 1033, 1039-40 (7th Cir. 1989) (observing that Illinois courts “look beyond the effect of the immediate scheme on the putative victim to determine whether a class of consumers was affected”). Courts in this District routinely reject arguments like Plaintiffs’. See, e.g., Our Pet Project LLC v. Int’l Paper Co., 2023 U.S. Dist. LEXIS 3832, 2023 WL 143224, at *4 (N.D. Ill. Jan. 10, 2023) (finding allegations of conduct directed at business purchasers—rather than consumers—could not support a consumer nexus); Biggers Holdings LLC v. Garcia, 2022 U.S. Dist. LEXIS 138790, 2022 WL 3107617, at *6 (N.D. Ill. Aug. 4, 2022) (“[T]he mere fact that an allegedly deceptive or misleading advertisement [*46]  appears on the Internet is not sufficient to show a consumer nexus. . . . [Plaintiff] must provide some explanation as to why the advertisement was directed to consumers and not just at other business entities.” (citing Onvi, Inc. v. Radius Project Dev., Inc., 2020 U.S. Dist. LEXIS 143283, 2020 WL 4607242, at *5 (N.D. Ill. Aug. 11, 2020))); Tile Unltd., Inc. v. Blanke Corp., 788 F. Supp. 2d 734, 739-40 (N.D. Ill. 2011) (“The complaint alleges only that Defendants’ false representations . . . were directed to Tile Unlimited ‘and other tile installers,’ not to consumers.” (distinguishing Downers Grove Volkswagen, Inc. v. Wigglesworth Imports, Inc., 190 Ill. App. 3d 524, 546 N.E.2d 33, 41, 137 Ill. Dec. 409 (Ill. App. Ct. 1989))). With neither consumers nor a consumer nexus in sight, Piquion’s and KC&R’s ICFA claims fail.


C. Breach of Contract (Count III)

In Count III, Piquion raises a breach-of-contract claim against Valtrans. In Piquion’s telling, which the Court accepts as true, he leased a semitruck from Valtrans through a lease-purchase agreement. Piquion paid off the semitruck in full, triggering Valtrans’s obligation to transfer the title to Piquion. But for ten months, Valtrans refused to do so. Due to that delay, Piquion alleges he incurred “late registration fees and penalties, lost value of the truck, excess commercial auto insurance premiums, and lost opportunities to drive the truck for a different carrier.” (Dkt. 68 ¶ 11, 69, 70, 74-75). These allegations add up to a plausible breach-of-contract claim. See [*47]  Nat’l Collegiate Student Loan Tr. 2007-2 v. Powell, 2022 IL App (2d) 210191, 462 Ill. Dec. 415, 206 N.E.3d 1134, 1142 (Ill. App. Ct. 2022) (“The elements of a breach-of-contract cause of action include the existence of a valid and enforceable contract, performance by the plaintiff, breach of the contract by the defendant, and resultant damages or injury to the plaintiff.” (quotation omitted)); see also, e.g., Grabowski v. Dunkin’ Brands, Inc., 2017 U.S. Dist. LEXIS 201468, 2017 WL 6059966, at *3 (N.D. Ill. Dec. 7, 2017).

In cursory form, Valtrans contends that Piquion has failed to plead damages “with any remote particularity.” (Dkt. 76-1 at 10). Valtrans suggests that Piquion could not have incurred damages from its alleged breach because he “made in excess of $280,000” in 2021. (Id.) Then, in its reply brief, Valtrans suggests that Piquion’s alleged “lost opportunity to drive for another carrier” is “entirely speculative as to whether he would have earned more or less money driving elsewhere.” (Dkt. 85 at 9). Valtrans’s challenge to Piquion’s claim is devoid of support: Valtrans cites only one case (in its reply brief), which says nothing of the pleading standard for damages. (Id. at 9 (citing 1472 N. Milwaukee, Ltd. v. Feinerman, 2013 IL App (1st) 121191, 996 N.E.2d 652, 658-61, 374 Ill. Dec. 957 (Ill. App. Ct. 2013) (upholding trial court’s damages award)). By failing to develop this argument, Valtrans has waived it. See Weinstein v. Schwartz, 422 F.3d 476, 477 n.1 (7th Cir. 2005); Bradley v. Village of University Park, 59 F.4th 887, 897 (7th Cir. 2023); see also Campos v. Cook County, 932 F.3d 972, 976 n.2 (7th Cir. 2019) (“Parties waive arguments which they develop for the first time in a reply brief.” (citation omitted)).

On the merits, [*48]  Valtrans’s argument reflects a fundamental misunderstanding of the pleading standard: for claims “rest[ing] on allegations of deceptive conduct,” Rule 9(b) requires plaintiffs to “plead with particularity the circumstances constituting fraud.” Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 646 (7th Cir. 2019) (quoting Vanzant Hill’s Pet Nutrition, Inc., 934 F.3d 730, 736 (7th Cir. 2019)); Fed. R. Civ. P. 9(b). Piquion need not plead damages—or any other element of his breach-of-contract claim—with particularity. Even if Piquion’s lost-opportunity allegations were “speculative,” Valtrans has not disputed Piquion’s other well-pleaded theories of damages stemming from Valtran’s alleged breach.

Valtrans’s point about Piquion’s 2021 earnings is puzzling. Even if Piquion’s supposed financial success could somehow negate his claim for damages—a dubious position—Valtrans asks the Court to consider whose side of the story seems right. Engaging with this request would flout the pleading standard. See, e.g., Bahena v. Aahil Corp., 2022 U.S. Dist. LEXIS 178800, 2022 WL 4609620, at *3 (N.D. Ill. Sept. 30, 2022) (“The Court cannot at this early stage accept as true facts that are outside the four corners of the pleadings or draw from those facts inferences unfavorable to Plaintiff . . . .” (quoting Brack v. Dart, 2013 U.S. Dist. LEXIS 72670, 2013 WL 2251741, at *3 (N.D. Ill. May 22, 2013))). Accordingly, Piquion’s breach-of-contract claim survives.


D. Illinois Wage Payment and Collection Act (IWPCA) (Count V)

Finally, in Count V, Piquion, Ferguson, and James Williams bring IWPCA claims against Amerifreight [*49]  and Valnev for improper deductions. The IWPCA “provide[s] employees with a cause of action for the timely and complete payment of earned wages or final compensation.” Costello v. BeavEx, Inc., 810 F.3d 1045, 1050 (7th Cir. 2016) (quoting Byung Moo Soh v. Target Mktg. Sys., Inc., 353 Ill. App. 3d 126, 817 N.E.2d 1105, 1107, 288 Ill. Dec. 455 (Ill. App. Ct. 2004)). In pertinent part, “the IWPCA prohibits employers from taking deductions from employees’ wages unless the deductions are ‘(1) required by law; (2) to the benefit of the employee; (3) in response to a valid wage assignment or wage deduction order; [or] (4) made with the express consent of the employee, given freely at the time the deduction is made.'” Id. (quoting 820 ILCS 115/9); Johnson v. Diakon Logistics, Inc., 44 F.4th 1048, 1050 (7th Cir. 2022).

Defendants first argue that the IWPCA does not apply to non-Illinois residents. (Dkt. 76-1 at 11-12). Second, Defendants contend that the challenged deductions were proper. (Id. at 12-14).12 Neither argument is persuasive.


1. Application of the IWPCA to Non-Illinois Residents

The IWPCA “applies to all employers and employees in [Illinois].” 820 ILCS 115/1. In Glass v. Kemper, the Seventh Circuit held that IWPCA does not permit claims by non-Illinois residents who have performed no work in the state. 133 F.3d 999, 1000 (7th Cir. 1998). Driving that conclusion was the Act’s “evident purpose . . . to protect employees in Illinois from being stiffed by their employers.” Id. (citing 820 ILCS 115/14, and Mueller Co. v. Dep’t of Lab., 187 Ill. App. 3d 519, 543 N.E.2d 518, 521, 135 Ill. Dec. 135 (Ill. App. Ct. 1989)). [*50]  Plus, “a state’s attempt to regulate a transaction wholly in foreign commerce would violate the ‘negative’ commerce clause.” Id. at 1001.

Revisiting the IWPCA’s geographic expanse in Adams v. Catrambone, the Seventh Circuit clarified that “nonresidents of Illinois who work in that state for an in-state employer may qualify as employees” under the IWPCA. 359 F.3d 858, 863-64 (7th Cir. 2004) (distinguishing Glass, and reasoning, “if the employee performs his work in Illinois, he is an employee in Illinois”). Adams also leaned on the IWPCA’s purpose: “to protect employees in Illinois from being stiffed by their employers.” Id. at 863 (quoting Glass, 133 F.3d at 1000). Indeed, the IWPCA’s application to nonresidents who work for an in-state employer is so clear, the Adams Court saw no need to look beyond the statute itself. Id. at 864.

More recently, in Watts v. ADDO Management, L.L.C., the Illinois Appellate Court ruled that the IWPCA’s “application is not limited to any specific quantum of work performed in Illinois.” 2018 IL App (1st) 170201, 420 Ill. Dec. 501, 97 N.E.3d 75, 80-82 (Ill. App. Ct. 2018) (citing 56 Ill. Admin. Code § 300.440(d)). Following Watts, several courts in this District have allowed IWPCA claims by employees who worked partially in Illinois. See, e.g., Tsybikov v. Dovgal, 2023 U.S. Dist. LEXIS 103820, 2023 WL 4029823, at *2 (N.D. Ill. June 15, 2023); Prokhorov v. IIK Transp., Inc., 2023 U.S. Dist. LEXIS 54986, 2023 WL 2711599, at *4 (N.D. Ill. Mar. 30, 2023); Yata v. BDJ Trucking Co., 2018 U.S. Dist. LEXIS 111726, 2018 WL 3303290, at *4-5 (N.D. Ill. July 5, 2018). At the pleading stage, plaintiffs “need only plead that they have done some work for an Illinois employer while physically present [*51]  in Illinois.” Cline v. FitzMark Chi., Inc., 2023 U.S. Dist. LEXIS 54998, 2023 WL 2711615, at *6 (N.D. Ill. Mar. 30, 2023) (quoting Niiranen v. Carrier One, Inc., 2022 U.S. Dist. LEXIS 5123, 2022 WL 103722, at *3 (N.D. Ill. Jan. 11, 2022)). Plaintiffs have done so here by alleging that, as company drivers, they picked up and dropped off loads in Illinois. (See Dkt. 68 ¶ 82).

If Plaintiffs did not perform enough work in Illinois to recover under the IWPCA, that is an argument more fitting for a summary-judgment motion. Id. (quoting Niiranen, 2022 U.S. Dist. LEXIS 5123, 2022 WL 103722, at *3); see also Baxi v. Ennis Knupp & Assocs., Inc., 2011 U.S. Dist. LEXIS 99857, 2011 WL 3898034, at *14 (N.D. Ill. Sept. 2, 2011) (“If the facts adduced in discovery indisputably show that Plaintiff did not perform sufficient work in Illinois to warrant coverage under the Wage Act, [the defendant] may raise this argument on summary judgment.”); cf. Cohan v. Medline Indus., Inc., 170 F. Supp. 3d 1162, 1175 (N.D. Ill. 2016) (granting summary judgment for employer on IWPCA claims where the employees spent only a few days per year in Illinois for training).


2. Improper Deductions

Turning to the sufficiency of Plaintiffs’ allegations of improper deductions, their claims pass muster. Plaintiffs allege that Amerifreight made deductions for escrow, occupational accident insurance, and violations of company policies. (Dkt. 68 ¶ 83; see also Dkt. 84 at 7, 20). As Defendants see it, these deductions were all proper because (1) Plaintiffs consented to the deductions; or (2) the deductions benefitted Plaintiffs. (Dkt. 76-1 at 12-14).13

The IWPCA permits deductions [*52]  with the “express written consent of the employee, given freely at the time the deduction is made.” 820 ILCS 115/9(4). According to an Illinois Department of Labor (IDOL) regulation implementing the IWPCA—in effect at the time of the deductions at issue—written consent for ongoing deductions is “given freely” only if the “written agreement provides for [the] period of time [that deductions will occur], provides for the same amount of deduction each period[,] and allows for voluntary withdrawal for the deduction.”14 Balderrama-Baca v. Clarence Davids & Co., 2019 U.S. Dist. LEXIS 35345, 2019 WL 1057193, at *6 (N.D. Ill. Mar. 6, 2019) (quoting 56 Ill. Admin. Code § 300.720(b) (2014)); see Andrews v. Kowa Printing Corp., 217 Ill. 2d 101, 838 N.E.2d 894, 903, 298 Ill. Dec. 1 (Ill. 2005) (explaining that IDOL regulations are “an informed source for guidance when seeking to ascertain the legislature’s intention when the [IWPCA] was enacted” (quotation omitted)).

Nothing in the Company Policy suggests that Plaintiffs could have voluntarily withdrawn from the challenged deductions. (See, e.g. [*53] , Dkt. 76-7 at 3-10). Thus, Plaintiffs’ written consent to deductions for escrow, occupational accident insurance, and policy violations did not suffice under IDOL regulation § 300.720(b) and the IWPCA, § 115/9(4). See Balderrama-Baca, 2019 U.S. Dist. LEXIS 35345, 2019 WL 1057193, at *6; Hill, 2023 U.S. Dist. LEXIS 169807, 2023 WL 6213674, at *15. Attempting to show otherwise, Defendants rely on Bell v. Bimbo Foods Bakeries Distribution, Inc., 2013 U.S. Dist. LEXIS 170063, 2013 WL 6253450 (N.D. Ill. Dec. 3, 2023), and Osorio v. The Tile Shop, LLC, 2016 U.S. Dist. LEXIS 9647, 2016 WL 316941 (N.D. Ill. Jan. 27, 2016). (See Dkt. 76-1 at 13-14). Both cases are distinguishable. In Bell—a summary-judgment decision predating the promulgation of the applicable IDOL regulation—the district court found that the disputed deductions never exceeded the amount the plaintiff had authorized. Bell, 2013 U.S. Dist. LEXIS 170063, 2013 WL 6253450, at *5. Similarly, in Osorio, the district court found that the plaintiff adequately consented to deductions where he “knew exactly how much of each paycheck he would be required to give up.” Osorio, 2016 U.S. Dist. LEXIS 9647, 2016 WL 316941, at *2. Yet, neither Bell nor Osorio discusses § 300.720(b)’s voluntary-withdrawal requirement.

Nor have Defendants established that any of its deductions were for Plaintiffs’ benefit. Defendants argue that the occupational accident insurance deductions benefitted Plaintiffs because, “should an incident occur, Plaintiffs have coverage for lost work and medical expenses.” (Dkt. 76-1 at 14).15 But IDOL regulation § 300.820 authorizes deductions for losses arising from damaged property only with “the employee’s expressed written [*54]  consent.” See 56 Ill. Admin. Code § 300.820; Kolev v. Nat’l Freight, Inc., 2023 U.S. Dist. LEXIS 70204, 2023 WL 3033572, at *7 (D.N.J. Apr. 20, 2023) (refusing to dismiss IWPCA claims over the defendant’s argument that escrow and insurance deductions benefitted the plaintiffs); cf. Balderrama-Baca, 2019 U.S. Dist. LEXIS 35345, 2019 WL 1057193, at *5 (applying similar reasoning to the IDOL regulation governing deductions for uniforms).

At a later stage, it may become clear that certain deductions benefitted Plaintiffs. Cf. Bell, 2013 U.S. Dist. LEXIS 170063, 2013 WL 6253450, at *4 (finding challenged “deductions benefitted [the plaintiff] because they were convenient”—a fact the plaintiff had acknowledged in a deposition). But see See Torres v. Nation One Landscaping, Inc., 2016 U.S. Dist. LEXIS 167232, 2016 WL 7049048, at *5 (N.D. Ill. Dec. 5, 2016) (rejecting administrative convenience alone as a benefit); accord Kolev, 2023 U.S. Dist. LEXIS 70204, 2023 WL 3033572, at *7. But that is not yet clear. Thus, Piquion’s, Ferguson’s, and James Williams’s IWCPA claims survive.


CONCLUSION

For the reasons above, Defendants’ motion to dismiss [76] is granted in part and denied in part. Defendants’ motion to compel arbitration is denied. KC&R’s and Piquion’s ICFA claims in Counts II and IV are dismissed without prejudice for failure to state a claim. Plaintiffs’ remaining claims in Count I (TILA), Count III (breach of contract), and Count V (IWPCA) may move forward consistent with this Opinion. Defendants’ motion to stay oral discovery pending the resolution of their motion to dismiss [88] is denied as moot.

/s/ Virginia [*55]  M. Kendall

Virginia M. Kendall

United States District Judge

Date: November 21, 2023


End of Document


Although Piquion dealt with Amerifreight Systems, and Forty6 Clicks and 9+1 Trucking dealt with AF Systems, Amerifreight Systems and AF Systems “operated interchangeably.” (Dkt. 68 ¶¶ 36-37).

Plaintiffs appended one settlement sheet to their complaint as an example. (Dkt. 68-3). Within the “Taxable Settlement Earnings” section, under the “Item Type” column, there are three entries called “Trip Settlmt (Revenue).” (Id.) Under the next column to the right, “QTY,” there are three corresponding values: “1800,” “1600,” and “3800.” (Id.) Under the “Rate” column, two columns further right, the sheet says “0.8800” three times. (Id.) Finally, two more columns to the right, under the “Amount” column, there are three dollar amounts: “$1,584.00,” “$1,408.00,” and “$3,344.00.” (Id.) Each dollar amount in the Amount column is 88% of the corresponding value in the “QTY” column. (See id.) Below the “Taxable Settlement Earnings” section, the “Settlement Deductions” section totals various deductions, then reduces the total taxable earnings by the total deductions to reach a final settlement amount. (Id.)

On a motion to dismiss, the Court may consider “documents that are central to the complaint and are referred to in it.” O’Brien v. Village of Lincolnshire, 955 F.3d 616, 621-22 (7th Cir. 2020) (quotation omitted); Fosnight v. Jones, 41 F.4th 916, 922 (7th Cir. 2022); see also Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). Attached to Defendants’ motion to dismiss are several contracts which are referenced in and central to Plaintiffs’ operative complaint. These contracts are properly considered at this stage.

KC&R does not invoke diversity jurisdiction, which requires complete diversity of citizenship and an amount in controversy over $75,000. 28 U.S.C. § 1332(a). For two reasons, the Court could not exercise diversity jurisdiction over KC&R’s claim as pleaded. (See Dkt. 68). First, Plaintiffs have not properly alleged diversity of citizenship. An LLC has the citizenship of its members. Qin v. Deslongchamps, 31 F.4th 576, 579 (7th Cir. 2022). Although five parties here are LLCs—KC&R, 9+1 Trucking, Forty6 Clicks, Amerifreight Systems, and AF Systems—the Third Amended Complaint does not sufficiently allege the citizenship of all their members. (See Dkt. 68 ¶¶ 13, 15-19, 21). That makes a complete-diversity determination impossible. Second, even assuming diversity of citizenship, KC&R has not satisfied the amount-in-controversy requirement. To overcome the jurisdictional threshold, KC&R alone must plead damages over $75,000. See Ware v. Best Buy Stores, L.P., 6 F.4th 726, 733 (7th Cir. 2021) (explaining that multiple litigants, in general, cannot reach the amount in controversy by aggregating their claims). Generally, courts accept a plaintiff’s unchallenged, good-faith amount-in-controversy allegation “unless it ‘appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount.'” McMillian v. Sheraton Chi. Hotel & Towers, 567 F.3d 839, 844 (7th Cir. 2009) (quotation omitted). Yet, where a defendant calls the amount in controversy into question, the plaintiff must support its amount-in-controversy allegation with “competent proof.” Id. (quotation omitted). Here, KC&R alleges it lost payments toward the truck—a $9,000 down payment plus $1,040 per week for an unspecified number of weeks—and it received some amount less than promised for its shipments. (Dkt. 68 ¶¶ 44, 50, 117-19). KC&R has not attached a total dollar figure to its injuries. Although Defendants have challenged the amount in controversy, (Dkt. 76-1 at 4), KC&R has not offered any proof—”competent” or otherwise—that its damages exceed $75,000. See McMillian, 567 F.3d at 844.

To determine whether conduct is unfair under the ICFA, courts consider, among other factors “whether the practice offends public policy.” Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 647 (7th Cir. 2019) (quoting Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 775 N.E.2d 951, 961, 266 Ill. Dec. 879 (Ill. 2002)).

A burden of proof is a matter of substantive, rather than procedural, law, so it is the rule of decision in the Court’s application of Illinois contract law. See USA Gymnastics v. Liberty Ins. Underwriters, Inc., 46 F.4th 571, 580 (7th Cir. 2022) (citing Rompsen Mortg. Ltd. P’ship v. BGC Holdings LLC — Arlington Place One, 20 F.4th 359, 369 (7th Cir. 2021)); Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938).

Plaintiffs raise three further arguments opposing arbitration: (1) 9+1 Trucking, Forty6 Clicks, and KC&R did not sign the Driver Agreement; (2) the arbitration clause is substantively unconscionable; and (3) Piquion cannot afford to arbitrate. (Dkt. 84 at 21-25). The Court need not reach these arguments. The Court also notes that Defendants have not pointed to any arbitration agreement between Piquion and Valtrans.

In their arguments on the Equipment Lease’s meaning, the parties both rely on Illinois law. (Dkt. 84 at 7-9; Dkt. 85 at 2-3). At least one court in this District, taking a cue from caselaw interpreting employee benefit plans under the Employee Retirement Income Security Act, has interpreted a similar lease under federal common law. See Owner-Operator Indep. Drivers Ass’n v. Bulkmatic Transp. Co., 503 F. Supp. 2d 961, 967 (N.D. Ill. 2007) (“[B]ecause this lease must comply with the federal regulations applicable to authorized motor carriers as set forth in 49 C.F.R. § 376.12, this Court finds that it should be construed in accordance with federal common law and general rules of contract interpretation.” (citing Grun v. Pneumo Abex Corp., 163 F.3d 411, 419 (7th Cir. 1998))). But see Stampley v. Altom Transp., Inc., 2016 U.S. Dist. LEXIS 125415, 2016 WL 4905673, at *2 n.3 (N.D. Ill. Sept. 15, 2016) (“There is no authority in this circuit supporting federal preemption in interpreting the terms of a contract concerning motor-carrier leases.” (citing Walker v. Trailer Transit, Inc., 824 F.3d 688, 689 (7th Cir. 2016)); Mervyn v. Nelson Westerberg, Inc., 76 F. Supp. 3d 715, 721 (N.D. Ill. 2014) (applying state law). There is no indication that the applicable law will make a difference here. See Bullwinkel v. New England Mut. Life Ins. Co., 18 F.3d 429, 431 (7th Cir. 1994) (“Federal common law rules of contract interpretation parallel equivalent state rules.” (quotation omitted)). So for now, the Court assumes without deciding that Illinois law applies.

Amerifreight elaborates, without authority, that “the rate last paid on such a service” “accounts for situations where the carrier themselves has to calculate the linehaul rate, as not all loads have corresponding neat prices on their bills of lading. When a carrier has a contracted line with a shipper, for example, it is the carrier’s responsibility or the broker, to calculate and bill the shipper.” (Id. at 3-4).

10 Section 376.12(d) provides: “The amount to be paid by the authorized carrier for equipment and driver’s services shall be clearly stated on the face of the lease or in an addendum which is attached to the lease.” 49 C.F.R. § 376.12(d). Plaintiffs have not alleged a violation of this Truth-in-Leasing regulation.

11 A “person” may be a natural person or business entity, id. § 505/1(c), and “merchandise” includes services, id. § 505/1(b).

12 In Defendants’ brief supporting the motion to dismiss, they suggest that the IWPCA claims against Amerifreight and Valnev rise and fall together. (See Dkt. 76-1 at 15 (“To the extent that the Plaintiffs do not have a cause of action against [Amerifreight], their claim also fails against . . . [Valnev].”)). For the first time on reply, however, Defendants contend that Plaintiffs’ allegations about Valnev’s authority over Amerifreight policies are deficient. (Dkt. 85 at 14). That argument is waived as underdeveloped. See Weinstein, 422 F.3d at 477 n.1; Campos, 932 F.3d at 976 n.2.

13 As an afterthought, Defendants suggest without support that some deductions were “tailored to promulgate the regulations of the Federal Motor Carrier Safety Administration.” (Dkt. 76-1 at 14). In their reply, they similarly contend that some deductions were “intended to promulgate [Department of Transportation] regulations.” (Dkt. 85 at 17). To the extent Defendants mean to imply that some deductions were “required by law,” see 820 ILCS 115/9(1), the argument is waived as underdeveloped. See Weinstein, 422 F.3d at 477 n.1; Campos, 932 F.3d at 976 n.2.

14 An amended version of § 300.720(b) became effective in March 2023, providing:

When a deduction is to continue over a defined duration of time and the written agreement provides for that defined duration of time and provides for the same amount of deduction each pay period, the agreement shall be considered to be given freely at the time the deduction is made. No agreements for a defined duration of time shall last longer than six months.

56 Ill. Admin. Code § 300.720(b) (2023). Although neither side takes a clear position on the issue, the current version of the regulation likely does not apply retroactively. See Perry v. Dep’t of Fin. & Prof. Reg., 2018 IL 122349, 423 Ill. Dec. 848, 106 N.E.3d 1016, 1027 (Ill. 2018) (observing that the absence of clear legislative intent creates a presumption against retroactive application of statutes). The Court therefore assumes without deciding that the 2014 version of § 300.720 applies, since it was in effect at the time of the alleged improper deductions. See Hill v. Cargo Runner Co., 2023 U.S. Dist. LEXIS 169807, 2023 WL 6213674, at *15 (N.D. Ill. Sept. 23, 2023) (applying 2014 version of § 300.720(b)). Even if the 2023 version has retroactive effect, the Company Policy provides for some deductions with no “defined duration of time” or that could apply inconsistently between pay periods. See 56 Ill. Admin. Code § 300.720(b) (2023). Regardless of which version applies, therefore, Plaintiffs have alleged ongoing deductions without adequate written consent.

15 For the first time on reply, Defendants suggest that the escrow deductions were also for Plaintiffs’ benefit. (Dkt. 85 at 15-16). That argument comes too late, and so, is waived. See Campos, 932 F.3d at 976 n.2.

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