United States Court of Appeals

For the First Circuit

No. 22-1365

MATHEUS PLAZZI; JOSHUA PRESCOTT; TULIO BRITO COSTA,

Plaintiffs, Appellants,

v.

FEDEX GROUND PACKAGE SYSTEM, INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Denise J. Casper, U.S. District Judge]

Before

Barron, Chief Judge,

Lynch and Gelpí, Circuit Judges.

Shannon Liss-Riordan, with whom Harold L. Lichten, Michelle 

Cassorla, Zachary Rubin, and Lichten & Liss-Riordan, P.C. were on 

brief, for appellants.

Brian T. Ruocco, with whom Frederick R. Yarger and Wheeler 

Trigg O'Donnell LLP were on brief, for appellee.

October 20, 2022
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LYNCH, Circuit Judge. Matheus Plazzi, Joshua Prescott, 

and Tulio Brito Costa ("Plaintiffs") worked as delivery drivers 

for Eloah Delivery ("Eloah"), a service provider for FedEx Ground 

Package System, Inc. ("FedEx"). Plaintiffs allege that their 

supervisor told them he was withholding part of their weekly pay 

for tax remittance to federal and state tax authorities. They 

further allege that Eloah never sent the deducted amounts to those 

tax authorities. Plaintiffs claim that Eloah's actions 

constituted theft of their wages in violation of the Massachusetts 

Wage Act, Mass. Gen. Laws ch. 149, § 148 et seq. ("Wage Act"). 

They seek restitution for all unpaid wages, as well as treble 

damages and other relief.

On October 13, 2021, Plaintiffs sued FedEx in Middlesex 

County Superior Court, alleging as their sole count a violation of 

the Wage Act. After FedEx invoked diversity jurisdiction and 

removed the action to federal court, the district court dismissed 

the case, holding that Plaintiffs' claim was statutorily barred 

and that Plaintiffs lacked Article III standing. Plazzi v. FedEx 

Ground Package Sys., Inc., No. 21-cv-12130, 2022 WL 1104586, at 

*2-4 (D. Mass. Apr. 13, 2022).

Because Plaintiffs have failed to plead a concrete 

injury, we affirm the district court's holding that they lack 

standing. But instead of dismissing the case, we remand to the 
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district court to determine whether remand to state court is 

appropriate.

I.

A.

When reviewing the dismissal of a complaint for lack of 

Article III jurisdiction, and when reviewing the grant of a motion 

to dismiss for failure to state a claim, "we take as true all wellpleaded facts in the plaintiffs' complaint . . . and draw all 

reasonable inferences therefrom in the plaintiffs' favor." Alphas 

Co. v. William H. Kopke, Jr., Inc., 708 F.3d 33, 36 (1st Cir. 2013)

(quoting Fothergill v. United States, 566 F.3d 248, 251 (1st Cir. 

2009)); see also Legal Sea Foods, LLC v. Strathmore Ins. Co., 36 

F.4th 29, 34 (1st Cir. 2022).

Plaintiffs previously worked as delivery drivers for 

Eloah Delivery, a service provider for FedEx. When Plaintiffs'

supervisor, Felipe Souze Prado, paid Plaintiffs their weekly 

wages, he informed them that he was withholding taxes equaling 

twenty-three percent of their weekly gross pay. Plaintiffs 

believed this withholding would be remitted to the government to 

satisfy their state and federal income tax liabilities. They do 

not dispute that this figure was an appropriate estimate of their 

income tax liabilities.

Contrary to what Prado told Plaintiffs, however, Eloah 

never remitted the twenty-three percent withholding to state and 
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federal tax authorities. Additionally, Eloah never sent 

Plaintiffs their 2020 W-2 forms, even after Plaintiffs contacted 

Prado to request them.

B.

On October 13, 2021, Plaintiffs sued FedEx in Middlesex 

County Superior Court, alleging that FedEx violated their rights 

under the Massachusetts Wage Act. Plaintiffs sought restitution 

for the withheld wages, as well as treble damages and other relief.1 

Although Plaintiffs alleged that they never received their W-2 

forms, they did not claim any separate damages from this omission.

FedEx invoked diversity jurisdiction and removed the 

action to federal court. After removal, FedEx filed a motion to 

dismiss, arguing that (1) Plaintiffs' Wage Act claim was 

statutorily barred by state and federal law, and (2) Plaintiffs

lacked Article III standing.2

Agreeing with FedEx on both issues, the district court 

granted the motion and dismissed the case. First, the court held 

that state and federal statutes barred Plaintiffs' Wage Act claim. 

Both the Internal Revenue Code and Massachusetts law, explained 

1 Plaintiffs claim that even if the withheld wages must 

ultimately be paid to tax authorities, Plaintiffs should be awarded 

two-thirds of the treble damages, as well as other relief.

2 FedEx also argued that it was not liable for Prado's or 

Eloah's actions because FedEx was not Plaintiffs' statutory 

employer. The district court did not reach this argument, so we 

do not consider it on appeal.
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the court, provide that only the government -- not employees -- can 

hold employers liable for failure to remit withheld wages to tax 

authorities. Second, the court held that Plaintiffs lacked Article 

III standing. The court reasoned that because Plaintiffs had "no 

legal right to their [wages] withheld [for] taxes" and "received 

credit on their individual tax liabilities for the amounts 

withheld," Plaintiffs had failed to allege an injury in fact.

Plaintiffs timely filed this appeal.

II.

We review de novo the district court's determination 

that Plaintiffs lacked Article III standing. ITyX Sols. AG v. 

Kodak Alaris, Inc., 952 F.3d 1, 9 (1st Cir. 2020). Our review of 

the grant of a motion to dismiss for failure to state a claim is 

also de novo. Legal Sea Foods, 36 F.4th at 34.

To establish standing, Plaintiffs "must show [(1)] that 

[they] suffered an injury in fact that is concrete, particularized, 

and actual or imminent; [(2)] that the injury was likely caused by 

the defendant; and [(3}] that the injury would likely be redressed 

by judicial relief." TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 

2203 (2021) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 

560–61 (1992)). "Article III standing requires a concrete injury 

even in the context of a statutory violation." Id. at 2205 

(quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016)). To be 

"concrete," the injury in fact must be "real, and not abstract." 
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Id. at 2204 (quoting Spokeo, 578 U.S. at 340). Plaintiffs have 

failed to plead such an injury.

Plaintiffs allege their cause of action arises under 

Section 150 of the Massachusetts Wage Act. That section provides 

a cause of action to employees for treble damages for violations 

of the Wage Act, after first filing a complaint with the 

Massachusetts Attorney General. Mass. Gen. Laws ch. 149, § 150. 

The purpose of the Wage Act is "to prevent the unreasonable 

detention of wages." Melia v. Zenhire, Inc., 967 N.E.2d 580, 587

(Mass. 2012) (quoting Bos. Police Patrolmen's Ass'n v. City of 

Bos., 761 N.E.2d 479, 481 (Mass. 2002)). The Wage Act, among other 

provisions, requires employers to pay all employees their "wages 

earned" within a fixed time after each pay period. Mass. Gen. 

Laws ch. 149, § 148. Employers may withhold wages for limited 

purposes, including for state and federal tax remittance. Id.

§ 150A.

For the reasons explained below, we hold that Plaintiffs 

lack Article III standing because state and federal statutes make 

clear that wages withheld for taxes belong to the government and 

not to employees. These statutes are separate from the Wage Act. 

As to each of federal law and state law, two different statutory 

provisions compel this result.

First, federal and Massachusetts laws shield employers 

from liability to nongovernment actors for nonpayment of wages 
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withheld for taxes. At the federal level, the Internal Revenue 

Code requires that "every employer making payment of wages shall 

deduct and withhold upon such wages a tax," 26 U.S.C. § 3402(a)(1), 

and further provides that although the "employer shall be liable 

[to the government] for the payment of the tax," id. § 3403, the 

employer "shall not be liable to any person for the amount of any 

such payment," id. (emphasis added). These provisions ensure that 

an "employer is not liable to an employee for complying with its 

legal duty to withhold tax [under 26 U.S.C. § 3402]." Schagunn v. 

Gilland, 617 F. App'x 814, 814 (9th Cir. 2015) (alteration in 

original) (quoting Bright v. Bechtel Petrol., Inc., 780 F.2d 766, 

770 (9th Cir. 1986)).

The Massachusetts tax statute contains parallel 

provisions. See Mass. Gen. Laws ch. 62B, § 2 ("Every employer 

making payment to employees . . . shall deduct and withhold a tax 

upon such wages . . . ."); id. § 10 ("An employer shall be liable 

for the payment of the tax . . . and shall not be liable . . . to 

any person for the amount of any such payment."). These provisions 

directly track the language and effect of the Internal Revenue 

Code. See In re Nash Concrete Form Co., 159 B.R. 611, 615 (D. 

Mass. 1993) ("The language of Mass. Gen. Laws ch. 62B, § 2 . . . 

tracks the language of Section 3402(a)(1) of the Internal Revenue 

Code. No reason exists . . . for the Massachusetts Legislature to 

provide a less effective means by which the Commonwealth might 
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collect taxes withheld on its behalf than Congress provided the 

United States.").

Second, federal and Massachusetts laws provide that once 

wages are withheld by employers for remittance to tax authorities, 

those sums are not property of the employees, but rather are held 

"in trust" for the government. At the federal level, the Internal 

Revenue Code specifies that "[w]henever any person is required to 

collect or withhold any internal revenue tax from any other person 

and to pay over such tax to the United States, the amount of tax 

so collected or withheld shall be held to be a special fund in 

trust for the United States." 26 U.S.C. § 7501(a); see also Slodov

v. United States, 436 U.S. 238, 242-45 (1978) (listing various 

ways the IRS can procure payment of these "trust fund taxes," but 

not mentioning private enforcement).

Again, the Massachusetts tax statute contains a parallel 

provision. See Mass. Gen. Laws ch. 62B, § 5 ("Any sum 

withheld . . . shall be considered to be held in trust for the 

commonwealth."). We reject any contention that the Massachusetts 

statute has a different effect than the federal one. See In re 

Nash, 159 B.R. at 615 (finding that Mass. Gen. Laws ch. 62B, § 5 

"is intended to replicate the effect of its counterpart in the 

federal code, 26 U.S.C. § 7501").

The unambiguous text of these tax statutes dictates that 

only the relevant governments -- not the employees -- suffer an 
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injury when an employer fails to remit wages withheld for taxes to 

tax authorities. This conclusion also aligns with traditional 

principles of trust law. See Restatement (Second) of Trusts § 200 

cmt. b (Am. L. Inst. 1959) ("Neither the settlor nor his heirs or 

personal representatives, as such, can maintain a suit against the 

trustee . . . ."); Restatement (Third) of Trusts § 94 cmt. d(2) 

(Am. L. Inst. 2012) ("Settlor, as such, lacks standing."). 

Accordingly, Plaintiffs lack Article III standing.

Plaintiffs argue that the tax statutes are inapposite 

because Eloah "never in fact withheld any wages . . . [but] instead 

stole their wages." This proposition -- that the amounts in 

question do not constitute a "withholding" -- lacks legal 

foundation. Plaintiffs cannot rely solely on the fact that the 

sums were never remitted to tax authorities, because doing so would 

render superfluous the above statutes which describe that exact 

situation. And Plaintiffs fail to identify any authority requiring 

employers to undertake special procedures before deducted amounts

can constitute a "withholding." See Slodov, 436 U.S. at 243 

("There is no general requirement that the withheld sums be 

segregated from the employer's general funds . . . [or] deposited 

in a separate bank account . . . ."); In re Nash, 159 B.R. at 615 

(noting that an employer cannot avoid the trust nature of these 

withheld sums "simply by refusing to segregate the funds"). 

Further, Plaintiffs do not dispute that twenty-three percent of 
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their gross wages was an appropriate estimate of their income tax 

liabilities, and they acknowledge that their supervisor 

represented to them that the wages were being withheld for tax 

remittance. The deducted amounts thus constitute wages withheld 

for taxes, and the above tax statutes apply.

Plaintiffs next argue that under the plain language of 

26 U.S.C. § 3403 and Mass. Gen. Laws ch. 62B, § 10, an employer is 

not insulated from employee suits for wages withheld for taxes 

unless the employer actually makes "payment" to the IRS. The 

Supreme Court has rejected this argument as to federal taxes, 

noting that "[o]nce net wages are paid to the employee, the taxes 

withheld are credited to the employee regardless of whether they 

are paid by the employer, so that the IRS has recourse only against 

the employer for their payment." Slodov, 436 U.S. at 243 (emphasis 

added); see also 26 U.S.C. § 1462 ("[A]ny amount of tax so withheld 

shall be credited against the amount of income tax as computed in 

[the income recipient's] return.").3 The argument fails as to 

state taxes as well. See Mass. Gen. Laws ch. 62B, § 9 ("The amount 

deducted and withheld as tax . . . upon the wages of any employee 

shall be allowed as a credit to the recipient of the income against 

3 Plaintiffs allege that they were not "paid all of their 

gross wages," but never allege that they were not paid the net

wages owed to them. And although Plaintiffs claim they "may have 

stood to receive a tax refund had their wages not been stolen," 

they never allege that an actual refund owed to them remains unpaid 

by the government.
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the tax imposed thereon."). Because the employee receives credit 

for the withheld amounts, the employee is not injured by the 

employer's failure to remit to the government: only the government 

is out of pocket.4

Plaintiffs' remaining arguments for standing are 

unavailing. First, they assert that the "wage theft" might "impact 

their Social Security benefits." Plaintiffs do not explain this 

argument, so we deem it waived. United States v. Zannino, 895 

F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to in a perfunctory 

manner, unaccompanied by some effort at developed argumentation, 

are deemed waived.").5 Second, although Plaintiffs never received 

their W-2 forms, they have not alleged that this omission hampered 

their ability to file tax returns, reduced the amount of any tax 

4 Plaintiffs' allegations differ markedly from those in 

Iannuccillo v. Comm'r of Revenue, 10 N.E.3d 671, 2014 WL 2807329

(Mass. App. Ct. 2014) (unpublished table decision). In 

Iannuccillo, the employee argued that "because his employer failed 

to withhold taxes," the employee could not be liable to the 

government. Id. at *1. The court rejected this argument, holding 

that tax authorities could still assess taxes upon the employee's 

"gross receipts." Id. at *2. Iannuccillo thus stands solely for 

the proposition that if an employer fails to deduct any sums from 

an employee's gross wages, the employee is still subject to tax 

enforcement. Here, in contrast, Plaintiffs acknowledge that Eloah 

already deducted amounts from their gross wages. Unlike the 

employee in Iannuccillo, Plaintiffs thus receive credit for the 

amounts withheld, so the government's sole recourse is against 

their employer.

5 For the same reason, we deem waived Plaintiffs' 

contention that they should be afforded additional discovery to 

determine whether they are subject to other adverse tax 

consequences.
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refund they received, or caused any other concrete injury. 

Finally, Plaintiffs claim standing based on the Wage Act's 

imposition of strict liability and mandatory treble damages upon 

offending employers. But regardless of whether the Wage Act 

supports Plaintiffs' cause of action, the possibility of a remedy 

is not alone sufficient to confer standing. See TransUnion, 141 

S. Ct. at 2205 ("[T]his Court has rejected the proposition that 'a 

plaintiff automatically satisfies the injury-in-fact requirement 

whenever a statute grants a person a statutory right and purports 

to authorize that person to sue to vindicate that right.'" (quoting 

Spokeo, 578 U.S. at 341)).6

Because Plaintiffs cannot recover wages withheld for 

taxes, and because they have failed to allege any other concrete 

injury, they lack Article III standing.

III.

The parties failed to address to the district court, or 

to us, an issue which we have identified under First Circuit 

precedent as to the appropriate disposition of this case upon a 

ruling that we lack Article III jurisdiction.

6 Reuter v. City of Methuen, 184 N.E.3d 772 (Mass. 2022), 

does not affect our analysis. In Reuter, the plaintiff received 

her pay three weeks late, id. at 774, resulting in possible injury 

because "prompt payment of all wages owed is necessary for 

employees who often live paycheck to paycheck," id. at 777. No 

such injury is present here, where Plaintiffs' claim is based on 

nonpayment of withheld amounts of which statutes foreclose 

recovery.
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In any case removed from a state court, "[i]f at any 

time before final judgment it appears that the district court lacks 

subject matter jurisdiction, the case shall be remanded." 28 

U.S.C. § 1447(c). We have previously held that § 1447(c) 

"unambiguously precludes federal courts from reaching the merits 

of a removed case when it lacks [sic] subject matter jurisdiction 

over the dispute." Mills v. Harmon L. Offs., P.C., 344 F.3d 42, 

45 (1st Cir. 2003). Under the "literal words" of § 1447(c), if a 

federal district court determines that the plaintiff in a removed 

action lacks standing, the court typically must remand to state 

court due to a lack of Article III jurisdiction. See Me. Ass'n of 

Interdependent Neighborhoods v. Comm'r, Me. Dep't of Hum. Servs., 

876 F.2d 1051, 1054 (1st Cir. 1989) (ordering remand to state court 

for lack of standing); see also, e.g., Ladies Mem'l Ass'n v. City 

of Pensacola, 34 F.4th 988, 993-94 (11th Cir. 2022) (same); Collier

v. SP Plus Corp., 889 F.3d 894, 897 (7th Cir. 2018) (per curiam)

(same); Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1033 (8th 

Cir. 2014) (same); Int'l Primate Prot. League v. Adm'rs of Tulane 

Educ. Fund, 500 U.S. 72, 87-89 (1991) (ordering remand to state 

court for other lack of subject matter jurisdiction); Mills, 344 

F.3d at 45-46 (same); Hudson Sav. Bank v. Austin, 479 F.3d 102, 

108-09 (1st Cir. 2007) (similar).
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As neither party has addressed this issue (either on 

appeal or before the district court),7 we deem it premature to 

decide whether remand to state court is required here. Rather, we 

remand the action to the district court to order supplemental 

briefing on whether remand to state court is appropriate.

IV.

For the foregoing reasons, we vacate the district 

court's judgment and remand with instructions to conduct 

supplemental briefing on whether to remand the action to state 

court. Costs are awarded to FedEx Ground Package System, Inc.

7 FedEx argues that Plaintiffs "also lacked standing to 

sue in Massachusetts state court." This contention would be more 

suitably raised in the Massachusetts courts, if remand to state 

court is deemed appropriate. Cf. Me. Ass'n of Interdependent 

Neighborhoods, 876 F.2d at 1055 ("Maine procedural law is a matter 

for the Maine state courts to decide."). We note that judicial 

resources could likely have been spared if FedEx had raised this 

argument in state court rather than removing the action. See

Collier, 889 F.3d at 897 (noting that the defendant's "dubious 

strategy [of removing the case and then seeking dismissal based on 

Article III standing] has resulted in a significant waste of 

federal judicial resources, much of which was avoidable").