Lubinski v. Hub Group Trucking, Inc., 634 Fed. Appx. 587 (6th Cir. April 1, 2016).

Plaintiff filed a complaint in the Northern District of Illinois on behalf of current and former Illinois delivery drivers, alleging violations of the Illinois Wage Payment and Collection Act and unjust enrichment of the defendant, Hub Group Trucking (“HGT”).

Plaintiff entered into an “Independent Contractor and Equipment Lease Contract” to provide delivery services for HGT.  He asserted that HGT misclassified its delivery drivers as independent contractors and failed to compensate them adequately. He also alleged that HGT was unjustly enriched by the misclassification because HGT avoided paying for “work-related expenses, including but not limited to the purchase or lease of vehicles meeting HGT’s specifications, all costs of operating, insuring and maintaining those vehicles, and related expenses,” which the independent contractors were then forced to take on themselves.

Plaintiff asserted that federal subject matter jurisdiction existed pursuant to CAFA. He claimed complete diversity existed between the parties since he was an Illinois citizen and HGT was not; he asserted that HGT was incorporated in Delaware, with headquarters in Tennessee.

HGT filed motion to dismiss complaint arguing that the parties’ contractual choice-of-law provision required Tennessee law to be applied. Thus, Plaintiff could not bring a claim under the Illinois law. Second, HGT asserted that the parties had an express contract that barred plaintiff’s claim for unjust enrichment. The District Court agreed and dismissed the plaintiff’s claims with prejudice.

Plaintiff then appealed to the Sixth Circuit, arguing that he was mistaken about HGT’s state citizenship and that HGT was actually an Illinois company. Accordingly, since there was no diversity of citizenship and no subject matter jurisdiction, plaintiff asserted that the District Court’s decision against him was null and void.

HGT responded that it was a separately incorporated, wholly owned subsidiary of Hub Group Inc., which is headquartered in Illinois, but the plaintiff did not sue Hub Group Inc., he sued only HGT. However, HGT did not offer any evidence or even assert that its headquarters (or principal place of business) were in Tennessee. Instead, HGT insisted that because the plaintiff “admitted” in his complaint that HGT was headquartered in Tennessee, that was enough to establish diversity and rebut the jurisdiction challenge.

The Sixth Circuit did not agree that the plaintiff’s pleading was an “admission,” or that it held any weight, since HGT filed its motion to dismiss in lieu of an answer. Accordingly, the Sixth Circuit concluded that the District Court properly based its decision on the pleadings alone, since there was no discovery and little opportunity to admit evidence into the record. The Sixth Circuit took issue with the fact that HGT offered nothing to satisfy its burden of establishing federal jurisdiction, other than setting forth its “untenable theory” that the plaintiff “admitted” HGT’s Tennessee citizenship stating that fact in his complaint.

Accordingly, the Sixth Circuit remanded the action to the district court to consider the relevant facts and admit the evidence necessary to determine the question of federal subject matter jurisdiction.

– Melissa Broussard Carroll