Opinion ID: 3216103
Heading Depth: 2
Heading Rank: 1

Heading: Fluegel v. FedEx Ground Package Sys., Inc.

Text: On April 20, 2005, a group of FedEx delivery drivers, represented by Defendants, filed a putative class action law‐ suit against FedEx in the Northern District of Illinois. Fluegel v. FedEx Ground Package Sys., Inc., No. 1:05‐cv‐02326, (N.D. Ill. dismissed Sept. 17, 2012). Their key allegation was that FedEx had misclassified them as independent contractors, thereby denying them protections under the Illinois Wage Payment and Collection Act (“IWPCA”), 820 ILCS 115/1 et seq. No. 15‐1538 3 Later that year, Fluegel was consolidated with other cases in a multidistrict litigation (“MDL”) proceeding in the Northern District of Indiana. In Fluegel, the MDL court de‐ nied class certification but granted partial summary judg‐ ment in favor of the plaintiffs, holding that they were em‐ ployees under the IWPCA. In re Fedex Ground Package Sys., Inc. Emp. Practices Litig., 2010 WL 2243246 at  (N.D. Ind. 2010). In the fall of 2010, the MDL court remanded Fluegel to the Northern District of Illinois, and litigation on the case continued. On July 20, 2011, Rocha joined the Fluegel action. His re‐ tainer agreement with Defendants expressly limited the scope of Defendants’ representation because he was pursu‐ ing other claims against FedEx on behalf of Arize 11, with separate representation by Johnson (his spouse). The reten‐ tion agreement also affirmed Rocha’s “absolute right to ac‐ cept or reject any settlement” with FedEx negotiated by De‐ fendants. By 2012, over 100 additional plaintiffs had joined the Fluegel action. In April 2012, the parties in Fluegel agreed to mediation. A month later, on May 25, 2012, the parties noti‐ fied the court that they had reached a tentative settlement. Soon after, Defendants were notified by Rocha, through Johnson, that he would object to the settlement if it required release of his Arize 11 claims. On June 5, 2012, Defendants explained in a letter to Ro‐ cha the material terms of the proposed settlement, including the total settlement amount, each individual plaintiff’s por‐ tion, and attorney’s fees. Furthermore, this letter stated that for the settlement, FedEx required “from every Plaintiff a release of all claims against FedEx both individually and on 4 No. 15‐1538 behalf of any associated corporation.” This letter concluded by reiterating Rocha’s ability to make the final determination of whether to join the settlement. Throughout the summer of 2012, on multiple occasions, Defendants discussed with Ro‐ cha the proposed settlement terms, including the required release of all claims by Rocha and Arize 11 against FedEx. The parties in Fluegel filed a joint motion to approve the settlement agreement, and on August 7, 2012, the district court approved it. On September 10, 2012, Johnson filed a notice of appear‐ ance as counsel for Rocha in Fluegel. On September 14, 2012, Defendants filed a motion to withdraw as counsel for Rocha, and on September 17, 2012, the district court granted this motion, stating, “Ms. Johnson has informed Plaintiffs’ Coun‐ sel on behalf of Mr. Rocha, that she does not oppose their withdrawal from representation of Mr. Rocha.” Also on Sep‐ tember 17, 2012, the Fluegel court dismissed the case with prejudice for all named plaintiffs except Rocha, whose case was voluntarily dismissed without prejudice. Defendants confirmed that Rocha would not have to pay any attorney’s fees or other expenses. B. Rocha’s Lawsuits against FedEx in Federal and State Court On October 30, 2012, Rocha and Arize 11, represented by Johnson, filed a 518‐paragraph, 16‐count complaint against FedEx and numerous FedEx executives, which included al‐ legations of violations of the Racketeer Influenced and Cor‐ rupt Organizations Act (“RICO”), the Sherman and Clayton Acts, and Illinois law. Rocha eventually amended the com‐ No. 15‐1538 5 plaint to 17 counts. In response, FedEx filed a motion to dismiss. The district court dismissed Rocha’s amended complaint on January 17, 2014, finding it to be “an egregious violation of Rule 8(a).” Rocha, 15 F. Supp. 3d at 805 (internal quotation omitted). The dismissal of Rocha’s amended complaint was without prejudice, and Rocha was granted leave to file an amended federal complaint if he “can address the funda‐ mental deficiencies set forth in this opinion in no more than 300 clear paragraphs that are not repetitive, speculative, or conclusory.” Id. at 813. The court suggested, alternatively, that Rocha “proceed in state court instead of trying to estab‐ lish federal jurisdiction for this dispute where none may ex‐ ist.” Id. On January 16, 2015, Rocha and Arize 11, represented by Johnson, filed a complaint in state court against FedEx, alleg‐ ing breach of contract, fraud, promissory estoppel, Illinois statutory violations, conspiracy to defraud and aiding and abetting of fraud, unjust enrichment, and conversion. Rocha v. FedEx Corp., No. 2015‐L‐00506 (Ill. Cir. Ct. filed Jan. 16, 2015). This action is still ongoing. C. Rocha’s Lawsuit against Defendants Before filing his state‐court complaint against FedEx, on June 27, 2014, Rocha brought the present action by way of an amended complaint against Defendants, claiming breach of contract, breach of fiduciary duties, fraud, and violation of the Illinois Consumer Fraud and Deceptive Business Practic‐ es Act (“ICFA”), and legal malpractice. Defendants moved to dismiss this lawsuit for failure to state a claim, pursuant to Rule 12(b)(6). 6 No. 15‐1538 Over the next several months, the court held multiple hearings in which it repeatedly asked Rocha to provide evi‐ dence on what it deemed to be a dispositive issue—to show that his Fluegel claims against FedEx were not viable at the time that he substituted Johnson for Defendants as his coun‐ sel. Rocha failed to make such a showing, and on February 11, 2015, the district court granted Defendants’ motion and dismissed Rocha’s amended complaint with prejudice. In doing so, the court found that Rocha had chosen to be ex‐ cluded from the 2012 Fluegel settlement. (Sent. Tr. 9–10, Feb. 11, 2015.) Then, the court ruled that under Illinois law, “Rocha los‐ es as a matter of law, not of fact. The flaw that I think exists here is non‐curable, and that is that there is no showing and no potential showing of a but‐for cause when, as here, the claims are viable, were viable.” (Id. 13.) The court concluded by stating that “your claim against FedEx in the State Court system, … you are entitled to do that … I make no comment on that.” (Id. 16.) Rocha’s appeal followed.