PDX North Inc v. Commissioner New Jersey Dept, 978 F.3d 871

PDX North operated as a "last-mile" shipper and long classified delivery drivers as independent contractors; NJ Department of Labor audited PDX and concluded the drivers were employees, assessing unpaid unemployment contributions, interest, and penalties; PDX filed administrative review at the New Jersey OAL (Feb 19, 2015) and a federal suit (Sept 22, 2015) claiming FAAAA preemption and Commerce Clause violations.
PDX’s OAL proceeding was stayed at PDX’s request (Feb 29, 2016) and the stay has been repeatedly renewed; PDX admits its drivers fail New Jersey’s Independent Contractor Test and Large Motor Carrier Exemption.
SLS Delivery Services faced a similar audit, intervened in the federal suit (intervention granted July 27, 2018), and remains at the audit stage with no administrative judgment yet.
The Commissioner moved for judgment on the pleadings (Rule 12(c)) arguing Younger abstention (Oct 7, 2018); the district court dismissed both PDX and SLS on Younger grounds and flagged the Tax Injunction Act (TIA) but did not rule on it.
On appeal, the Third Circuit affirmed dismissal as to PDX (state OAL proceeding was an ongoing quasi‑criminal civil enforcement proceeding and Middlesex factors favored abstention), reversed dismissal as to SLS (audit was too preliminary to be an "ongoing judicial proceeding"), and remanded; the court instructed the district court to consider the TIA on remand for SLS.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Timeliness of Rule 12(c) motion	12(c) filed after discovery; district court should not consider it	Pleadings closed Oct 5; 12(c) filed Oct 7; motion timely and did not delay trial	Motion timely; district court did not abuse discretion in considering it
Waiver/consent to federal jurisdiction (stay & failure to raise Younger earlier)	Commissioner consented to federal jurisdiction by agreeing to stay state action and not raising Younger earlier	Consent to stay ≠ waiver of Younger; earlier motion omissions do not bar raising Younger later	No waiver or consent; Younger could be asserted later
Judicial estoppel against Commissioner for asserting Younger	Commissioner’s positions are inconsistent (agreed to stay then argued Younger) and estoppel should apply	Positions not genuinely inconsistent; consent to stay is irrelevant to Younger	Judicial estoppel does not apply
Applicability of Younger (quasi‑criminal civil enforcement and Middlesex factors)	Younger inapplicable; federal court should hear preemption and constitutional claims; SLS audit is not an ongoing judicial proceeding	State audits/assessments are civil enforcement quasi‑criminal proceedings; Middlesex factors favor abstention	For PDX: Younger applies — dismissal affirmed. For SLS: audit too preliminary to be an ongoing judicial proceeding — dismissal reversed and remanded (district court to address TIA)

Younger v. Harris, 401 U.S. 37 (establishes Younger abstention doctrine)
Sprint Commc’ns., Inc. v. Jacobs, 571 U.S. 69 (describes Younger’s scope and abstention principles)
Middlesex Cnty. Ethics Comm. v. Garden State Bar Ass’n, 457 U.S. 423 (announces the three Middlesex factors for Younger)
Addiction Specialists, Inc. v. Twp. of Hampton, 411 F.3d 399 (3d Cir. 2005) (consent to stay state action does not waive Younger abstention)
ACRA Turf Club, LLC v. Zanzuccki, 748 F.3d 127 (3d Cir. 2014) (framework for determining whether state commenced quasi‑criminal civil enforcement)
Mulholland v. Marion Cnty. Election Bd., 746 F.3d 811 (7th Cir. 2014) (agency investigations at a preliminary stage do not trigger Younger abstention)