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Costello v. BeavEx, Inc.

United States Court of Appeals for the Seventh Circuit

September 18, 2015, Argued; January 19, 2016, Decided

Nos. 15-1109 & 15-1110


 [*1047]  KANNE, Circuit Judge. BeavEx, Inc. is a same-day delivery service that enlists 104 couriers to carry out its customers' orders throughout the state of Illinois. By classifying its couriers as  [*1048]  independent contractors instead of employees, BeavEx is not subject to several state and federal employment laws, including ] the Illinois Wage Payment and Collection Act ("IWPCA"), 820 ILCS 115, which, among other things, prohibits an employer from taking unauthorized deductions from its employees' wages. Plaintiffs, and the putative class, were or are individual couriers who allege that they should have been classified as employees of BeavEx for purposes of the IWPCA, and accordingly, any deductions taken from their wages were done so illegally. Complicating Plaintiffs' position is ] the Federal Aviation Administration Authorization Act of 1994 ("FAAAA"), 49 U.S.C. § 14501(c)(1), which expressly preempts any state law that is "related to a price, route, or service of any motor carrier." BeavEx contends that the FAAAA [**3]  preempts the IWPCA, making any deductions it withheld from its couriers' wages valid.

The district court held that the FAAAA does not preempt the IWPCA and so denied BeavEx's motion for summary judgment. At the same time, the district court denied Plaintiffs' motion to certify the class but granted their motion for partial summary judgment, holding that Plaintiffs are employees under the IWPCA. This interlocutory appeal presents for our review the question of whether the FAAAA preempts the IWPCA and whether the district court properly denied class certification. For the following reasons, we affirm the district court's denial of BeavEx's motion for summary judgment, and we vacate its denial of class certification and remand for further proceedings.

I. Background

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810 F.3d 1045 *; 2016 U.S. App. LEXIS 862 **; 166 Lab. Cas. (CCH) P36,412; 25 Wage & Hour Cas. 2d (BNA) 1681; 93 Fed. R. Serv. 3d (Callaghan) 949

THOMAS COSTELLO, MEGAN BAASE KEPHART, and OSAMA DAOUD, on behalf of themselves and all other persons similarly situated, known and unknown, Plaintiffs-Appellees/Cross-Appellants, v. BEAVEX, INCORPORATED, Defendant-Appellant/Cross-Appellee.

Subsequent History: Later proceeding at BeavEx, Inc. v. Costello, 137 S. Ct. 267, 196 L. Ed. 2d 16, 2016 U.S. LEXIS 5211 (U.S., Oct. 3, 2016)

US Supreme Court certiorari denied by BeavEx, Inc. v. Costello, 2017 U.S. LEXIS 4154 (U.S., June 26, 2017)

Prior History:  [**1] Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12 CV 7843 — Virginia M. Kendall, Judge.

Costello v. Beavex Inc., 303 F.R.D. 295, 2014 U.S. Dist. LEXIS 42767 (N.D. Ill., Mar. 31, 2014)


preempted, couriers, district court, class certification, preemption, airline, routes, prong, state law, employees, customers, prices, motor carrier, deductions, merits, carrier's, predominate, regulates, purposes, wages, independent contractor, classified, delivery, remote, second prong, transportation, partial summary judgment, significant impact, individualized, quotation

Labor & Employment Law, Wage & Hour Laws, Assignments & Deductions, Business & Corporate Compliance, Common Carrier Duties & Liabilities, Transportation Law, Carrier Duties & Liabilities, Constitutional Law, Supremacy Clause, Federal Preemption, Civil Procedure, Appeals, Standards of Review, De Novo Review, Scope & Definitions, Definition of Employees, Independent Contractors, Carrier Duties & Liabilities, Rates & Tariffs, Transportation Law, Air & Space Transportation, Airline Deregulation Act, Preemption, Definition of Employers, Standards of Review, Labor & Employment Law, Scope & Definitions, Abuse of Discretion, Special Proceedings, Class Actions, Certification of Classes, Appellate Review, Notice of Class Action, Content of Notice, Opt Out Provisions, Prerequisites for Class Action, Adequacy of Representation, Numerosity, Typicality, Commonality, Predominance, Disability & Unemployment Insurance, Unemployment Compensation, Eligibility, Employment Relationships