LUPIAN v. JOSEPH CORY HOLDINGS LLC, 2:16-cv-05172

Plaintiffs (five individuals) sued Joseph Cory Holdings, LLC, alleging violations of Illinois wage law (IWPCA) and New Jersey wage law plus unjust enrichment; New Jersey and unjust enrichment claims were previously dismissed with prejudice.
The court held that the Illinois Wage Payment and Collection Act (IWPCA) is not facially preempted by the Federal Aviation Administration Authorization Act (FAAAA), allowing the IWPCA claim to proceed.
The court relied on the Seventh Circuit’s approach in Costello, treating the IWPCA as regulating labor inputs (employees) rather than a motor carrier’s prices, routes, or services, and noted the IWPCA permits wage deductions with written consent (per Northwest v. Ginsberg) which provides flexibility relevant to preemption analysis.
The court acknowledged a circuit split: the First Circuit in Schwann applied a “logical effect” test that reached a different result on Massachusetts law, creating a meaningful difference in legal approach.
Defendant moved under 28 U.S.C. § 1292(b) to certify the preemption question for interlocutory appeal to the Third Circuit and to stay district proceedings pending appeal; Plaintiffs opposed.
The court granted certification and a stay, finding the preemption question is controlling, there is substantial ground for difference of opinion (circuit split), and an immediate appeal could materially advance termination of the litigation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FAAAA preempts the IWPCA	IWPCA is not preempted; it regulates employer–employee relations and any effect on carrier prices/routes/services is too remote	FAAAA preempts IWPCA because state wage laws can interfere with FAAAA’s deregulatory objectives	Court certified interlocutory appeal: issue is controlling and there is substantial ground for difference of opinion; stay granted
Whether the circuit decisions create substantial ground for difference of opinion	No; several courts including the Seventh Circuit and district courts have found no preemption, so no meaningful split	Yes; First and Seventh Circuits apply different tests ("logical effect" vs. relational), producing a circuit split	Court found a clear difference of opinion based on differing tests and potential for opposite outcomes
Whether interlocutory appeal would materially advance termination	No; appeal unlikely to end case (Plaintiffs contested)	Yes; if Third Circuit holds IWPCA preempted, Plaintiffs’ sole remaining claim would be eliminated and case would terminate	Court held appeal could materially advance termination and thus §1292(b) criteria satisfied
Whether proceedings should be stayed pending appeal	Opposed; Plaintiffs argued discovery should proceed	Defendant sought stay to avoid unnecessary discovery costs in putative class action	Court granted stay under its docket-control powers to preserve judicial economy

Costello v. BeavEx, Inc., 810 F.3d 1045 (7th Cir. 2016) (IWPCA regulates labor input and does not facially conflict with FAAAA)
Schwann v. FedEx Ground Package Sys., Inc., 813 F.3d 429 (1st Cir. 2016) (applies a "logical effect" test and found preemption for part of Massachusetts law)
Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (2014) (state-law flexibility via employee consent can avoid preemption concerns)
Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir. 1974) (sets §1292(b) criteria for interlocutory appeal)
Landis v. North American Co., 299 U.S. 248 (1936) (district courts have authority to stay proceedings for docket control and judicial economy)
Facenda v. N.F.L. Films, Inc., 542 F.3d 1007 (3d Cir. 2008) (example of interlocutory appeal on federal preemption issues)