United States District Court, N.D. Illinois, Eastern Division
FRANCISCO HERNANDEZ, ISAURA MARTINEZ, RUFINA HERNANDEZ, NARCICO MEDINA, MARTIN HERNANDEZ, ANGLEINA SANTIAGO, and ANA LAURA FLORES on behalf of similarly situated individuals Plaintiff,
MULTI-SERVICIOS LATINO, INC., RIGOBERTO AGUILAR, individually, EUGENIO AGUILAR. individually, RON'S TEMPORARY HELP SERVICES, INC., SURESTAFF, INC., FLEXIBLE STAFFING SERVICES, INC., TRIUNE LOGISTICS, LLC, REAL TIME STAFFING SERVICES, LLC d/b/a SELECT REMEDY, ELITE LABOR SERVICES, LTD. and ACCURATE PERSONNEL, LLC, Defendants.
MEMORANDUM OPINION & ORDER
M. ROWLAND, United States District Judge.
Elite Staffing, Inc. (“Elite”) moves to dismiss
on res judicata grounds, arguing that Plaintiffs are
engaged in impermissible claim splitting following the
settlement of an earlier case. For the following reasons,
Elite's motion to dismiss on res judicata
grounds (Dkt. 228, 230) is granted.
case has been proceeding for several years, the Court
presumes general familiarity with the factual background and
includes only a brief summary of facts relevant to this
motion. On November 18, 2016, Francisco Hernandez filed a
class action complaint asserting various claims under the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.
§§ 1962(c) and 1964(c) (“RICO”), the
Fair Labor Standards Act, 29 U.S.C. § 201, et.
seq. (“FLSA”), the Illinois Minimum Wage
Law, 820 ILCS 105/1, et. seq. (“IMWL”),
the Illinois Wage Payment Collection Act, 820 ILCS 115/1,
et. seq. (“IWPCA”), and the Illinois Day
and Temporary Labor Services Act, 820 ILCS 175/1, et.
seq. (“IDTLSA”). Plaintiffs eventually filed
a Third Amended Complaint, which several Defendants moved to
dismiss under Rule 12(b)(6). On September 6, 2018, the Court
dismissed only the RICO claims, finding that the remaining
claims were “marginally sufficient” and thus
stated a claim. (Dkt. 217 at 4-5) The Court instructed
Plaintiffs to file an amended complaint, but only to make
each count more straightforward and to make it clear which
counts applied to which defendants. (Id.)
Importantly, this instruction was “based on form rather
than substance, ” as the Court already determined that
the Third Amended Complaint stated a claim. (Id.)
Plaintiff complied with the Court's instruction and filed
a Fourth Amended Complaint on September 20, 2018. (Dkt. 218)
moves to dismiss on res judicata grounds, arguing
that Plaintiff is engaged in impermissible claim splitting
following the settlement of a prior lawsuit, Baker v.
Elite Staffing, Inc., Case No. 15 CV 3246. (Dkt. 230 at
1) In Baker, Plaintiffs on behalf of themselves and
all others similarly situated sued Elite for violations of
the FLSA, the IMWL, and the IDTLSA. (Id.) The Court
certified a Rule 23 class encompassing all of Plaintiffs'
“state law claims.” (Case No. 15 CV 3246, Dkt. 43
¶ 3) The claims raised in the Baker case arise
from the same transactions encompassed in the instant case,
and there is significant overlap in the time periods
cov-ered. (Case No. 16 CV 10747, Dkt 230 at 2-4)
Each Plaintiff in the instant case was an unnamed class
member in Baker and, despite being represented by
the same counsel and the fact that both cases were pending at
the same, did not elect to opt out of the Baker
parties settled the Baker action pursuant to a
settlement agreement. (Dkt. 230 at 2-4) On March 1, 2017, the
Baker Court entered a final order of approval and
dismissed the matter with prejudice. (Id. at Ex. C;
Case No. 15 CV 3246, Dkt. 55) Elite argues that the final
order in Baker acts as a bar to the instant action.
preclusive effect of a federal court judgement is determined
by federal common law.” Taylor v. Sturgell,
553 U.S. 880, 891 (2008). The doctrine of res
judi-cata bars claims that were “litigated or
could have been litigated in a previous action.”
Bell v. Taylor, 827 F.3d 699, 706 (7th Cir.
2016). Res judicata, or claim preclusion, has three
elements: “(1) an identity of the parties or their
privies in the first and second lawsuits; (2) an identity of
the cause of action; (3) a final judgment on the merits in
the first suit.” Adams v. City of
Indianapolis, 742 F.3d 720, 736 (7th Cir. 2014).
elements of res judicata are met. As mentioned
above, the claims raised in Baker arise from the
same transactions as in the instant case, and the time
periods covered are the same. (Dkt 230 at 2-4) Each Plaintiff
in the instant case was an unnamed class member in
Baker and did not opt out of that class or the
settlement agreement. (Id.) Thus, the elements of
res judicata are met. However, Plaintiffs argue that
in settling Baker, those Plaintiffs released only
those claims arising under the IDTLSA and preserved all
others. (Dkt. 234 at 21-22) In making this argument,
Plaintiffs point to the language of the settlement agreement
and the scope of the release. Specifically, the settlement
‘Released Claims' means any and all claims arising
under the IDTLSA that were and could have been brought
against Defendant Elite in this Lawsuit, excluding any claims
arising under Section 15, 20, 25, 40, 90, 95(a)(1), 95(a)(3),
and 95(a)(4) (except that any claim for attorneys' fees
and costs relating to the released claims are also released)
of the ID-TLSA.
(Dkt. 234 at 21) (citing Ex. G, Joint Stipulation and
Agreement to Settle Class Action Claims).
Elite is not arguing that Plaintiff released their claims.
(Dkt. 247 at 3) Rather, Elite argues that the dismissal of
the Baker case acts as a bar to the instant suit,
“irrespective of the scope of the release.”
(Id.) The Court agrees. Although the Baker
plaintiffs may have intended to release only the IDTLSA
claims and preserve all others, that is not what happened.
Instead, the Baker court certified a class of state
law claims and then dismissed all of the pending claims with
prejudice. (Case. No. 15 C 3246, Dkt. 55, Final Approval
Order) As Elite notes, the scope of the release does not
alter the ultimate resolution of the case. (Dkt. 247 at 3)
The Baker court dismissed the entire action-all claims
pending against Elite-with prejudice. (Dkt. 230, Ex. C ¶
15; Case. No. 15 C 3246, Dkt. 55, Final Approval Order) This
is a final order on the ...