Stout v. Fedex Ground Package System, Inc.
3:14-cv-02169
N.D. OhioNov 17, 2015Background
- Plaintiffs Anthony and Rosa Stout and Stout Allied Trucking entered an operating agreement with FedEx Ground on October 30, 2006; FedEx terminated the relationship on October 28, 2011.
- Plaintiffs filed a First Amended Complaint asserting 20 causes of action; FedEx moved to dismiss nine counts (1, 7, 8, 9, 11, 13, 14, 15, 16).
- Relevant asserted claims included false-light invasion of privacy, multiple fraud-based claims (fraudulent concealment, misrepresentation, inducement, and general fraud), FLSA wage/retaliation claims, wrongful discharge (challenged by arbitration clause), and breach of fiduciary duty.
- FedEx argued several claims were time-barred by applicable statutes of limitations (one- or two-year for privacy/defamation, four-year for fraud, two/three-year for FLSA) and that the arbitration clause and lack of fiduciary relationship warranted dismissal.
- The court evaluated the pleadings under Rule 12(b)(6) standards, considered governing Pennsylvania law for the operating agreement, and applied Ohio substantive law for torts where relevant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations for invasion-of-privacy / false-light | Stout: claim is false-light and subject to Ohio's 4-year provision | FedEx: claim is really defamation/false-light and governed by shorter defamation limitations (1 or 2 years) | Court: allegations sound in both false-light and defamation; 1-year defamation period applies; privacy claim dismissed as time-barred |
| Fraud-based claims (Counts 7, 8, 9, 13) | Stout: fraud arose from 2006 statements and induced the contract | FedEx: fraud claims are time-barred (4-year limit) and plaintiffs fail to plead delayed discovery/tolling | Court: fraud accrued in 2006; plaintiffs did not plead discovery/tolling; fraud claims dismissed as time-barred |
| FLSA claims (Counts 14, 15) | Stout: misclassification and willful FLSA violations justify 3-year period | FedEx: FLSA claims barred by 2-year statute unless willful; only post-9/30/11 acts could be timely | Court: plaintiff's willfulness allegation is conclusory without facts showing reckless or knowing violation; three-year period not pled; FLSA claims dismissed as time-barred |
| Enforceability of arbitration clause for wrongful discharge claim | Stout: arbitration provision is procedurally and substantively unconscionable; should not be enforced | FedEx: operating agreement contains mandatory arbitration for termination disputes | Court: plaintiffs failed to plead procedural unconscionability in commercial context; arbitration clause enforced; wrongful-discharge claim dismissed |
| Breach of fiduciary duty | Stout: contractual dealings, confidential information, payroll/insurance practices created fiduciary duties | FedEx: no fiduciary relationship alleged; ordinary business relationship does not create fiduciary duty | Court: plaintiffs did not allege mutual recognition of special trust; fiduciary-duty claim dismissed |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must state a plausible claim; legal conclusions not presumed true)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard requires more than labels and conclusions)
- Welling v. Weinfeld, 866 N.E.2d 1051 (Ohio 2007) (recognizing false-light invasion-of-privacy tort and its relation to defamation)
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (U.S. 1988) (willful FLSA violations extend the limitations period when employer knew or recklessly disregarded legal requirements)
- Keller v. Miri Microsystems LLC, 781 F.3d 799 (6th Cir. 2015) (employer cannot avoid FLSA by misclassifying employees and economic-reality factors apply)
- Investors REIT One v. Jacobs, 546 N.E.2d 206 (Ohio 1989) (discovery rule tolls statute of limitations until injury is discovered with reasonable care)