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Cohan v. Medline Industries, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 27, 2014

DAVID COHAN, on behalf of himself and all other similarly situated persons, known and unknown, Plaintiff,
v.
MEDLINE INDUSTRIES, INC., Defendant.

MEMORANDUM OPINION AND ORDER

MANISH S. SHAH, District Judge.

David Cohan sued his former employer, Medline Industries, Inc., alleging that it improperly withheld some of his wages. Cohan brought suit on behalf of himself and a proposed nationwide class. The proposed class consists of current and former Medline employees whose wages were allegedly subject to improper deductions. (A motion for class certification was filed, but is not ripe for ruling.)

Count I is a nationwide class action claim brought under the Illinois Wage Payment and Collection Act. Brought alternatively to Count I, Count II alleges violations of the wage payment statutes of thirty states, and divides the statutes (and the nationwide class) into four groups.

Medline moved to dismiss both counts on the grounds that Cohan, a New York resident, lacks standing to pursue a claim under the wage payment statute of any state other than New York. For the reasons discussed below, Medline's motion is denied.

I. Standing

Medline brought its motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure, arguing that Cohan lacks standing to bring his claims. "Article III of the Constitution confines the judicial power of federal courts to deciding actual Cases' or Controversies.' One essential aspect of this requirement is that any person invoking the power of a federal court must demonstrate standing to do so." Hollingsworth v. Perry, 570 U.S. ___, 133 S.Ct. 2652, 2661 (2013) (internal citation omitted). To establish standing, Cohan must show that "he has suffered a concrete and particularized injury that is fairly traceable to the challenged conduct, and is likely to be redressed by a favorable judicial decision." Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992)). "As a jurisdictional requirement, the plaintiff bears the burden of establishing standing." Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009).

Medline argues that the Illinois Wage Payment and Collection Act does not apply to Cohan because he lived and worked in New York, not Illinois. (Medline argues likewise for the other twenty-eight states listed in the complaint.) But that is an argument on the merits, not standing. See Morrison v. YTB Int'l, Inc., 649 F.3d 533, 535-36 (7th Cir. 2011) (holding that dismissal on the grounds that the Illinois Consumer Fraud Act does not protect customers outside Illinois is a dismissal on the merits, not on standing); see also Boundas v. Abercrombie & Fitch Stores, Inc., 2011 U.S. Dist. LEXIS 133880, at *5-7 (N.D. Ill. Nov. 21, 2011) (explaining that dismissal on the grounds that the Ohio Consumer Sales Practices Act does not cover transactions outside Ohio is a dismissal on the merits, not on standing). Medline questions whether the IWPCA applies to its relationship with Cohan. This is a question about what conduct a statute reaches, and that is a merits question; it does not implicate the tribunal's power to hear the case. Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845, 851 (7th Cir. 2012) (en banc).

Standing in the class action context can and should be evaluated with respect to the individual named-plaintiff and later-in the event a class is certified-with respect to the class as a whole. See Payton v. County of Kane, 308 F.3d 673, 680 (7th Cir. 2002). For present purposes, Cohan alleges that Medline improperly withheld some money from him. A court can redress that injury by ordering Medline to pay Cohan. Nothing more is required for standing. See Morrison, 649 F.3d at 536.

Count II, which is brought in the alternative to Count I, seeks liability under the wage payment statutes of thirty different states. Cohan cannot piggy-back on the injuries of unnamed class members. Payton, 308 F.3d at 682. But Cohan does have standing in the Article III sense because he was directly injured by Medline. See Arreola v. Godinez, 546 F.3d 788, 795 (7th Cir. 2008) (when deciding standing, courts must look at the case as a whole and not separate the claims for which plaintiff will be entitled to relief from those for which he will not). Whether his claim should proceed as an IWPCA or a multi-state action is a different question. See Morrison, 649 F.3d at 536 ("If the Illinois Consumer Fraud Act law does not apply because events were centered outside Illinois, then plaintiffs must rely on some other state's law; this application of choice-of-law principles has nothing to do with standing, though it may affect whether a class should be certified-for a class action arising under the consumer-fraud laws of all 50 states may not be manageable, even though an action under one state's law could be."); see also Payton, 308 F.3d at 681 (holding that named plaintiffs, who were injured by only two out of the nineteen defendants, may nonetheless be entitled to represent a class suing all nineteen defendants).[1]

Cohan has standing to bring the claim in Count I or, in the alternative, Count II. Medline's Rule 12(b)(1) motion is denied.

II. The Application of the IWPCA to Cohan

I consider Medline's argument about the application of the IWPCA to Cohan under the standard of Rule 12(b)(6). I construe the complaint in the light most favorable to Cohan, accept as true all well-pleaded facts, and draw reasonable inferences in his favor. Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013). Rule 12(b)(6) limits my consideration to "allegations set forth in the complaint itself, documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice." Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).

The complaint must "state a claim to relief that is plausible on its face." Yeftich, 722 F.3d at 915 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for ...


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