PRATTER, District Judge.
Plaintiffs here are a purported class of individuals who have worked as skycaps at U.S. Airways terminals in Pennsylvania. Skycaps are the aviation equivalent of the railroad redcaps: porters who assist passengers checking luggage at the entrance of the terminal. The Plaintiffs in this case are or have been employed by Prime Flight Aviation Services ("Prime Flight"), which is one of the two defendants in this case. US Airways is the other.
In 2005, U.S. Airways began charging its passengers a $2 fee, collected by skycaps,
On March 26, 2009, U.S. Airways filed a Motion to Dismiss each of the four counts against it (Docket No. 20). For the reasons discussed below, the Court will deny the Motion as to Counts I, II and IV of the Complaint, and will grant the Motion as to Count III.
This Court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2). The Plaintiffs are citizens of Pennsylvania; US Airways is a Delaware corporation headquartered in Tempe, Arizona; and Prime Flight is an Ohio corporation headquartered in Nashville, Tennessee.
For the purposes of this Motion to Dismiss, facts alleged in the Complaint are considered to be true. Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). On that basis, the facts are as follows:
Plaintiffs allege that skycaps have traditionally received "most" of their compensation in the form of tips provided by airline passengers (Complaint, ¶ 2). When U.S. Airways initiated its $2-per-bag curbside check-in fee in 2005, "skycaps' compensation. . . decreased dramatically, as few passengers [were] willing to pay additional tips on top of this charge" (id. at ¶ 3). Plaintiffs assert that "[m]any passengers believe the $2 charge is paid to the skycaps," and argue that both U.S. Airways and Prime Flight have "knowingly profited off of this misunderstanding" (id. at ¶ 4). Indeed, Plaintiffs characterize the fee as direct misappropriation of tip revenue, since it functions, in practice, as a requirement that the skycaps remit to U.S. Airways "a large portion of the tips they receive[ ] from patrons in order to cover [the] mandatory per bag fee" (id. at ¶ 21).
Plaintiffs further claim that as the skycaps' tip income decreased, "many skycaps' compensation fell below minimum wage"— a fact that the Defendants intentionally obscured by "forc[ing the skycaps] to over-report their tips to appear as though they were making minimum wage" (id. at ¶ 5). In addition, the Defendants allegedly "forced [the skycaps] to work through their meal breaks," and skycaps "did not receive compensation for work performed off-the-clock and/or overtime compensation for work performed in excess of forty hours per week" (id. at ¶ 6).
On February 3, 2009, the Plaintiffs filed a complaint against U.S. Airways and Prime Flight in the Philadelphia County Court of Common Pleas. Several weeks later, the Defendants removed the case to this Court. The gravamen of the Complaint is that the Defendants violated Pennsylvania's minimum wage law and deprived the Plaintiffs of tips and other compensation to which they were legally entitled.
Count I claims that the Plaintiffs and proposed class members were "tipped employees," as defined in 34 Pa.Code. § 231.1, and that Defendants violated Section 4(a) of the Pennsylvania Minimum Wage Act ("PMWA"), 43 P.S. § 333.104(a), by "paying [tipped] employees a wage that was less than the [minimum] wage in effect under Section 4 of the Act, and by depriving [these] employees of tips to which they had a legal entitlement and which should have otherwise been credited towards the employees' hourly wages" (id. ¶ 36).
Because the Plaintiffs allege that the Defendants were unjustly enriched, Plaintiffs argue that they are entitled to the common law remedy of quantum meruit (literally, "as much as he has deserved"), which in this case would include any wages and overtime compensation not paid to Plaintiffs in violation of Pennsylvania law. They also seek "interest, attorneys' fees, costs and expenses, and equitable, restitutionary, and injunctive relief" (id. ¶ 17), as well as "any other relief as the Court may determine is appropriate" (id. ¶ 40). Notably, the Complaint does not specify what kind of injunctive relief the Plaintiffs are hoping to receive.
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Conley, 355 U.S. at 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), in order to "give the defendant fair notice of what the. . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley, 355 U.S. at 47, 78 S.Ct. 99). While a complaint need not contain detailed factual allegations, the plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citations omitted). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level. . . ." Id. (citations omitted).
In making such a determination, courts "must only consider those facts alleged in the complaint and accept all of those allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994) (citing Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)); Twombly, 550 U.S. at 555-556, 127 S.Ct. 1955. The Court must also accept as true all reasonable inferences that may be drawn from the allegations, and view facts and inferences in the light most favorable to the non-moving party. Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). The Court, however, need not accept
In ruling on a motion to dismiss, the Court may consider the allegations contained in the complaint, exhibits attached to the complaint, matters of public record, and records of which the Court may take judicial notice. See Tellabs v. Makor Issues & Rts., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).
US Airways has moved to dismiss the entire Complaint on several grounds. First, it argues that each of Plaintiffs' claims is preempted by federal law under the Airline Deregulation Act of 1978 ("ADA"), 49 U.S.C.S. § 40101, et seq. US Airways also argues that the Plaintiffs' two statutory claims should be dismissed because Plaintiffs have failed to allege that U.S. Airways is a joint employer; and that the Plaintiffs' two common law claims should be dismissed because Plaintiffs have failed to state a claim for tortious interference or unjust enrichment. The Court will address each of U.S. Airways' arguments in turn.
"In deciding whether a federal law preempts a state statute, our task is to ascertain Congress's intent in enacting the federal statute at issue." Shaw v. Delta Air Lines, 463 U.S. 85, 95, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). Courts begin the preemption analysis with a presumption that Congress did not intend to supplant state law—and this presumption is heightened where federal law is said to bar state action in fields of traditional state regulation. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654-655, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). In such matters, state law is only preempted if Congress's intent to supercede state power is "clear and manifest." City of Columbus v. Ours Garage and Wrecker Service, Inc., 536 U.S. 424, 438, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002).
In determining Congress's preemptive intent, the Court must focus on the "plain wording" of the allegedly preemptive statute. Sprietsma v. Mercury Marine, 537 U.S. 51, 62, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002). Yet, in appropriate circumstances, courts may also consider the "structure and purpose of the statute as a whole." Medtronic, Inc. v. Lohr, 518 U.S. 470, 486, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Such purpose is most reliably revealed by the statute's text, but it can also be exposed "through the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers and the law." Id.
As the ADA's name suggests, its purpose was to deregulate the airline industry and promote "efficiency, innovation, and low prices" through "maximum reliance on competitive market forces." Morales, 504 U.S. at 378, 112 S.Ct. 2031. In order to prevent states from interfering with the new regime, Congress included in the ADA a preemptive provision, which would "ensure that the States would not undo federal deregulation with regulation
The Supreme Court has described the preemptive purpose of the ADA as "broad," Morales, 504 U.S. at 383, 112 S.Ct. 2031, and has held that Congress intended for the statute to preempt all state laws "having a connection with, or reference to" airline prices, routes, and services.
No court in the Third Circuit has yet applied the Supreme Court's "significant effects" test to the relationship between the ADA and state law claims like those brought by the skycaps in this case. However, three federal judges in Massachusetts, each considering similar claims brought by skycaps, have arrived at three different conclusions regarding the preemptive effect of the ADA as applied to claims brought under the Massachusetts Tips Law ("MTL"), Mass. Gen. Laws ch. 149, § 152A, which requires payments intended as tips to be remitted to service employees,
In an early ruling in Brown, Judge Gertner actually found that the skycaps' state law claims were not preempted by the ADA. See Brown, 656 F.Supp.2d at 247. Six months later, however, she reconsidered her opinion, citing not only Travers— which had been decided in the interim— but also the case of Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008), in which the Supreme Court applied the "significant effects" test and held that a federal statute modeled on the ADA preempted Maine laws regulating the delivery of tobacco products.
In revisiting her initial preemption opinion, Judge Gertner interpreted Rowe as having emphasized that "courts should not imply broad exceptions to the preemption provision for areas of traditional state concern"—including employment law. Brown, 656 F.Supp.2d at 251 (citing Rowe, 552 U.S. at 372-373, 128 S.Ct. 989). She conducted a "significant effects" analysis, and held that the claims would have a significant effect on an airline service, viz., curbside baggage checking:
Id. at 251 (citing Travers, 2009 WL 2242391 at *2-3, 2009 U.S. Dist. LEXIS 63699 at *7-9).
Judge Gertner based her original, preTravers preemption ruling in Brown on the authority of Judge Young's first preemption ruling in DiFiore v. American Airlines, 483 F.Supp.2d 121 (D.Mass.2007), in which the Court held that American Airlines had failed to overcome the heightened presumption against preemption that exists in areas of traditional state regulation. Brown, 656 F.Supp.2d at 247 (citing
Like Judge Gertner, Judge Young concluded that the skycaps' state law claims did not have a "forbidden significant effect" on prices. Id. at 26, n. 7. Unlike Judge Gertner, he held that these claims also had no such effect on services. Judge Young characterized the airline's method of collecting the fee as "a crass attempt to snooker the public into parting with the fee under the guise of a tip (which most travelers were accustomed to paying) rather than upfront competition with other airlines as to this aspect of unbundling." Id. at 25. And he argued that modifying or doing away with this "sneaky" and "disingenuous" practice would not prevent the airline from offering a $2-per-bag curbside check-in service in essentially its current form, since there are other reasonable means by which the fee might be charged:
To be sure, the Travers, Brown and DiFiore opinions have no binding authority here, but they are instructive, particularly taken as a group. In each of those cases, skycaps brought a claim pursuant to a state law which has no direct analogue in the two provisions of the PMWA under which Plaintiffs have filed claims in this case.
The ADA does not preempt all state employment claims against airlines. See, e.g., Gary v. Air Group, Inc., 397 F.3d 183, 189-90 (3d Cir.2005) (a whistleblower retaliation claim is "too remote and too attenuated to fall within the scope of the ADA" and is not preempted). Thus, courts analyzing state employment claims
In this case, resolution under state law of the Plaintiffs' claims would not have a "forbidden significant effect" on prices. The skycaps do not seek the elimination of the $2 fee, but instead challenge the airline's method of collection—which, they claim, operated to deprive skycaps of tip revenue to which they were legally entitled. This case is analogous to DiFiore, in which Judge Young noted that, while the airline had accurately characterized the curbside check-in fee as a revenue stream that helps offset costs, this fact does not settle the question of whether the skycaps' claims have a "significant effect" on prices:
The question, then, is whether the claims would have such an effect on "services"—in particular, the airline's curbside baggage checking service.
In this case, the Plaintiffs argue that they have not been paid Pennsylvania's minimum wage, and that the manner in which the curbside baggage checking fee is
Because the Plaintiffs' state law claims do not have a forbidden significant effect on airline prices or on any airline service, these claims are not preempted by the ADA. Not only is this result dictated by Morales, but it is also consistent with the purpose of the ADA itself, which was designed to deregulate the sclerotic airline industry, not to exempt airline employees from overtime pay and minimum wage laws that present no danger of interfering with this project.
US Airways also argues that all of Plaintiffs' claims against U.S. Airways should be dismissed on the ground that Plaintiffs have failed to allege that the airline is the skycaps' joint employer, along with Prime Flight. US Airways argues that the skycaps' claims cannot proceed unless the skycaps have adequately pled that they are employed by the airline.
Although Pennsylvania law does not clearly establish the test to be employed in order to evaluate the existence of "joint employer" status, analysis of this issue is always intensely factual in nature. See Graves v. Lowery, 117 F.3d 723, 729 (3d Cir. 1997) ("the precise contours of an employment relationship can only be established by a careful factual inquiry").
In addition to arguing that all of Plaintiffs' claims are preempted by the ADA,
To set forth a tortious interference claim, plaintiffs must plead: (1) the existence of an existing or prospective contractual relationship between plaintiffs and a third party; (2) intent on the part of defendants to harm the plaintiffs by interfering with this relationship; (3) absence of privilege or justification for such interference; and (4) actual harm or damage to plaintiffs as a result of defendants' conduct. United States Healthcare v. Blue Cross of Greater Phila., 898 F.2d 914, 925 (3d Cir.1990) (citing Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 208, 412 A.2d 466 (Pa.1979)). Under Pennsylvania law, an existing or prospective contractual relationship is a required element of the tort. Thompson Coal Co., 488 Pa. at 208, fn. 7, 412 A.2d 466 ("underlying [the tort's] requisites, of course, is the existence of a contract or of a prospective contractual relation between the third person and the plaintiff").
In this case, Plaintiffs claim that Defendants interfered with an implied contractual relationship between skycaps and the air-traveling public. However, tips are discretionary payments, and Plaintiffs have failed to plead facts that would show the existence of an implied contractual relationship between skycaps and passengers. Since Plaintiffs have failed to satisfy this element of the tort, their tortious interference claim will be dismissed.
Unjust enrichment is an equitable doctrine, and its elements are met where: (1) benefits have been conferred on one party by another; (2) the recipient has appreciated the benefits; and (3) the recipient has accepted and retained the benefits under such circumstances that it would be inequitable or unjust for the recipient to retain the benefits without payment of value. Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 447 (3d Cir.2000) (applying Pennsylvania law) (citing 16 Summary of Pa. Jur. 2d Commercial Law § 2.2 (1994)).
In this case, the Plaintiffs have adequately pled each of these elements of the tort. The benefit allegedly conferred is the difference between the wages actually paid to skycaps and the wages that would have been paid had U.S. Airways complied with the PMWA.
Defendants argue that the conduct alleged in this case does not rise to the level of unconscionability required to sustain an unjust enrichment claim. While "unconscionability" has not been interpreted extensively in this context, there are apposite cases in which courts applying Pennsylvania law have implied that it is an element of the tort. See Smith-Cook v. National R.R. Passenger Corp., 2005 WL 3021101 at *11, 2005 U.S. Dist. LEXIS 27297 at *40 (E.D.Pa., Nov. 10, 2005) ("to recover under quantum meruit, a claimant must show that the defendant either wrongfully secured or passively received a benefit that would be unconscionable for the defendant to retain without compensating the provider") (citing Green Stripe, Inc. v. Berny's Internacionale, 159 F.Supp.2d 51, 56 (E.D.Pa.2001); Halstead v. Motorcycle Safety Found., Inc., 71 F.Supp.2d 455, 459 (E.D.Pa.1999)); but see Allegheny Gen. Hosp., 228 F.3d 429, 447 (making no reference to unconscionability in setting out the elements of unjust enrichment).
At this stage in the litigation, Plaintiffs have alleged facts sufficient to clear any unconscionability hurdle. Skycaps are semi-skilled workers who rely on tip revenue to make a minimum wage. If, in fact, the Defendants have failed to pay Plaintiffs for time worked, or have been paying Plaintiffs a sub-minimum wage while simultaneously curtailing skycaps' ability to receive tips, then it would indeed be unconscionable for the Defendants to retain the benefit that they have accrued at the skycaps' expense. Plaintiffs have alleged facts that would, if true, entitle them to the remedy of quantum meruit. See, e.g., Eastland v. Du Pont, 1996 WL 421940, 1996 U.S. Dist. LEXIS 10360 (E.D.Pa., July 23, 1996) (allowing an unjust enrichment claim to proceed where plaintiff-employee claimed that defendant-employer failed to pay him for services that he had rendered in the course of their employment relationship).
The Motion to Dismiss is denied as to Counts I and II of the Complaint, which
An order to this effect follows.
Therefore, it is not accurate to say in this case, as the Court did in DiFiore, 483 F.Supp.2d at 128, that an unjust enrichment claim "may turn on whether the $2 fees are really tips meant for the skycaps." Even assuming that none of the $2 payments are intended to be tips, and that a change in the method of collection would have no impact on the amount of money skycaps receive from passengers, the Defendants could be considered unjustly enriched if for any reason they were paying skycaps a wage beneath the statutory minimum while skycaps were not, taken as a group, receiving tips sufficient to make up the difference.
Of course, the skycaps claim that the way in which the $2 fee is collected is the reason that they have not received enough tip compensation to elevate their wages over the statutory threshold. But on the unjust enrichment theory presented in this case, the skycaps would not be entitled to the $2 fee itself; they are merely entitled to be paid the Pennsylvania minimum wage for every hour worked. Cf. DiFiore, 483 F.Supp.2d 121 (adjudicating claims under the MTL, which explicitly entitles tipped employees to payments intended as tips).