Giоvani DEPIANTI, and all others similarly situated, Plaintiff, Appellant, Hyun Ki Kim, and all others similarly situated; Kyu Jin Roh, and all others similarly situated; Gerardo Vazquez, and all others similarly situated; Gloria Roman, and all others similarly situated; Juan Aguilar, and all others similarly situated; Nicole Rhodes, and all others similarly situated; Mateo Garduno, and all others similarly situated; Chiara Harris, and all others similarly situated; Todor Sinapov, and all others similarly situated; Grasielle Regina Dos Santos, Plaintiffs, v. JAN-PRO FRANCHISING INTERNATIONAL, INC., Defendant, Appellee.
No. 16-2256
United States Court of Appeals, First Circuit.
September 29, 2017
Before THOMPSON, SELYA, and BARRON, Circuit Judges.
Rife argues that because defendants had previously agreed to his request for an extension of time to file a response to the defendant‘s motion to dismiss, “the
Affirmed.
Jeffrey Mark Rosin, with whom Constangy, Brooks, Smith & Prophete, LLP was on brief, for appellee.
THOMPSON, Circuit Judge.
Generation after generation of parents have passed along a basic adage to their children: if at first you don‘t suсceed, try, try again. Such advice encouraging perseverance can serve one well throughout a myriad of life experiences. But while steadfast determination may, in the abstract, be worthy of aspiration, the legal field has—as is often the case—made an exception to this generalized rule.
Plaintiff Giovanni Depianti (“Depianti“) appeals from the district court‘s grant of summary judgment to Defendant Jan-Pro Franchising International, Inc. (“Jan-Pro“). The lower court‘s ruling rested on principles of res judicata, concluding that the court was bound by a Georgia court judgment involving the exact same parties and the exact same issues. Because we agree that Depianti has already had his bite at the apple and is not entitled to yet another, we affirm.
Getting Our Factual Bearings
We recite here only a brief synopsis of the factual background of this dispute, saving our energy, instead, for the necessary heavy lift that our discussion of this case‘s procedural history will require. Jan-Pro is a national company principally headquartered in Alpharetta, Georgia that organizes commercial cleaning franchises. Under its particular franchise model, Jan-Pro contracts with what are known as intermediary “master franchisees” or “master owners” (regional, third party entities) to whom it sells exclusive rights to use the “Jan-Pro” logo, which is trademarked. As of 2009 (which is the most up-to-date figure in the record), ninety-one different master owners existed. These master owners, in turn, sell business plans to “unit franchisees.” In other words, the business model set up by Jan-Pro is twofold, with (1) Jan-Pro acting as franchisor and the master owner acting as franchisee, in one instance and (2) the master owner acting as franchisor to the unit franchisee, in the other.
Jan-Pro and its master owners are separate corporate entities and each has its own staff. Moreover, master owners may sell or transfer their individual businesses without approval from Jan-Pro. Jan-Pro also reserves the right to inspect any premises serviced by either the master owner or any of the master owner‘s franchisees to ensure the Jan-Pro standards are being maintained. Still, master owners have their own entity names and internal business structures, and are responsible for their own marketing, accounting, and general operations.
As for master owners and their unit franchisees, under the terms of the model franchise agreement, master owners agree to provide their franchisees with an initial book of business, as well as start-up equipment and cleaning supplies. Moreover, the master owner furnishes a training program for its unit franchisees. Once initial set-up and training is complete, the master
One such master owner is Bradley Marketing Enterprises, Inc. (“BME“), which purchased master franchise rights from Jan-Pro in 2003 for a region covering parts of Massachusetts. In June 2003, Depianti signed a franchise agreement with BME at the level of “FP-100” (which is simply shorthand lingo for saying that Depianti was promised $100,000 in gross annual billings through his franchise relationship with BME). In order to enter into this agreement and obtain the unit franchise, Depianti was required to pay BME $23,400.
A Whirlwind Procedural Tour
Having given a very short overview of the lay of the land, we now embark on the more burdensome task of sketching out the nearly decade long life-cycle of this matter.
A. The District of Massachusetts
On April 18, 2008, Depianti brоught suit against Jan-Pro alleging that his status as a unit franchisee of BME was a farce and that he was actually a direct employee of Jan-Pro.1 He further maintained that due to this misclassification, he was denied certain employment benefits in violation of the Massachusetts Independent Contractor Law,
After discovery closed both sides moved for summary judgment as to the Section 148B Claim.2 The district court was then tasked with applying Section 148B‘s three-prong test to the undisputed, material facts presented before it. Under that test, an individual performing a service is considered an employee unless:
(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
(2) the service is performed outside the usual course of the business of the employer; and, (3) the individual is customarily engaged in an independently estаblished trade, occupation, profession or business of the same nature as that involved in the service performed.
The district court, however, encountered difficulties in properly applying the test. It expressed uncertainty as to how the multi-leveled franchise model employed by Jan-Pro would impact application of the three prongs. For example, the court noted that the relevant contract in the litigation was a franchise agreement between BME and Depianti—not one between Jan-Pro and Depianti—and that it had found no cases where a defendant was held liable under Section 148B without the named defendant being a party to the сontract at issue. In light of the lack of developed Massachusetts state law or controlling state precedent on this issue, the court declined to rule one way or the other on the motions for summary judgment and, instead, issued an order explaining that it was “concerned that the [Massachusetts Supreme Judicial Court (“SJC“)] has not yet been given an opportunity to decide legal questions that will likely have a substantial impact on the conduct of business throughout the Commonwealth.” The court, therefore, explained that it was certifying the following question to the SJC: “[w]hether a defendant may be liable for employee misclassification under [
B. Georgia State Court
At the same time the Massachusetts case was being litigated in the federal district court, a separate action initiated by Jan-Pro was making its way through the Georgia state-court system. As is relevant to this appeal, Jan-Pro had sought a declaratory judgment holding that no employment relationship between Jan-Pro and Depianti existed under Section 148B and that Jan-Pro was, therefore, not liable to Depianti in tort or contract. In the same case, Jan-Pro also sought a declaratory judgment against another unit franchisee, Hyun Ki Kim (“Kim“) (the reason this seеmingly extraneous fact is mentioned will become apparent later in our analysis).
At the early stages of the case, Depianti moved the Georgia superior court (the state‘s trial-level court) to dismiss the Georgia action for lack of personal jurisdiction. The superior court, however, refused to do so. On the contrary, the court concluded Depianti had not met his burden of demonstrating that he lacked the minimum contacts necessary to establish jurisdiction as required by the Georgia Long-Arm Statute. As such, the case proceeded to discovery.
Following the conclusion of discovery, both sides moved for summary judgment as to the Section 148B claim. In so doing, Depianti once again challenged whether the superior court had personal jurisdiction over him. The superior court concluded—as it did at the motion to dismiss
Depianti, however, made the choice not to appeal the superior court‘s personal-jurisdiction order. Jan-Pro, on the other hand, did appeal the superior court‘s summary-judgment ruling in favor of Depianti to the Georgia Court of Appeals (“GCA“) (an intermediate appellate court in Georgia). Eventually, the GCA sided with Jan-Pro and reversed, concluding Jan-Pro had met its burden of proving all three prongs of Section 148B. That is, the GCA concludеd that Depianti was free from the control and direction of Jan-Pro; the cleaning services he performed were outside the usual course of Jan-Pro‘s business; and Depianti was engaged in an independently-established business (anyone interested in an in-depth recitation of the GCA‘s reasoning regarding each of the individual prongs can check out the GCA‘s decision at this citation: Jan-Pro Franchising Int‘l, Inc. v. Depianti, 310 Ga. App. 265, 712 S.E.2d 648 (2011) (“Depianti Georgia“)).
In light of this adverse ruling against Depianti, he filed a petition for writ of certiorari to the Georgia Supreme Court. The Georgia Supreme Court subsequently stayed its consideration of the petition pending the outcome of the SJC‘s answer to the question certified to it by the federal district court in Boston (as discussed earlier).
Thus, as it stands in our whirlwind tour of this matter‘s procedural history, both the federal district court for the District of Massachusetts and the Georgia Supreme Court had, at this point in time, entered stays pending the outcome of the SJC‘s answer.
C. The Massachusetts Supreme Judicial Court Provides its Answer
Enter the SJC stage right with that desperately awaited-upon answer to the question certified. May a defendant be liable for employee misclassification under Section 148B even where there was no contract for service between the plaintiff and defendant? Yes, the SJC responded. Depianti v. Jan-Pro Franchising International, Inc., 465 Mass. 607, 990 N.E.2d 1054 (2013) (“Depianti Answer“).6
[i]n concluding that an entity like Jan-Pro can be held liable under G.L. c. 149, § 148B, without a contract between itself and the employee, we should not be understood as suggesting that Jan-Pro is in fact liable. We take no position on the question whether the necessary predicates for liability can be established here, a matter involving determinations as to the summary judgment record that are solely within the purview of the United States District Court.
Id. at 623, n.16, 990 N.E.2d 1054.
All the court decided was “that the lack of a contract for service between the putative employer and putative employee does not itself preclude liability” under Section 148B. Id. at 624-25, 990 N.E.2d 1054 (emphasis added). No more, no less.
D. The Aftermath
Less than a month after the SJC issued its answer to the district court‘s certified question, the Georgia Supreme Court lifted its stay and denied the petition for certiorari, noting that each of the justices concurred that the case was not worthy of review. Jan-Pro then filed a notice of final judgment in the Massachusetts district court, explaining that in light of the Georgia Supreme Court‘s denial of certiorari, the GCA decision granting summary judgment in favor of Jan-Pro was final and should be honored for res judicata purposes.
Soon thereafter, both parties stipulated in the Georgia superior court to the dismissal of the Georgia action with prejudice and waived all rights to appeal. As such, that case effectively ended.
Back in Massachusetts, the district court also lifted the stay and both parties filed supplemental summary-judgment briefs in light of the SJC decision. Giving preclusive effect to the Georgia decision, the district court judge granted Jan-Pro‘s motion for summary judgment as to the Seсtion 148B claim and denied Depianti‘s motion regarding the same. Depianti, disagreeing with the district judge‘s order, has appealed and so, at long last, here we are.
Our Take
Depianti argues the district court erred in finding it was bound by the GCA‘s conclusion that he was not an employee of Jan-Pro for purposes of Section 148B. In particular, he contends that the GCA decision was not a final judgment and, therefore, the preclusive effect it would otherwise be given under res judicata principles did not attach. Jan-Pro, unsurprisingly, believes just the opposite—namely, that the district court properly applied res judicata and, as such, reached the only legally cognizable outcоme in granting Jan-Pro‘s motion for summary judgment.
While we now step in to review de novo the district court‘s grant of summary judg-
A. Primer
Res judicata, which provides that a final judgment on the merits of an action precludes the parties from relitigating claims that were or could have been raised in a prior action, Haag v. United States, 589 F.3d 43, 45 (1st Cir. 2009), should be nothing new to litigants appearing before us. Indeed, its roots are almost as old as the Republic itself, deriving from the full faith and credit clause of the United States Constitution. See
The records and judicial proceedings of any court of any ... State, Territory or Possession ... shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.
No surprise, then, that we have concluded that a federal court must give preclusive effect to a state-court judgment if the state court would. Atwater v. Chester, 730 F.3d 58, 62 n.3 (1st Cir. 2013).
And res judicata shouldn‘t be thought of as some hollow princiрle meant solely to be a thorn in the side of losing parties, either. To the contrary:
Its enforcement is essential to the maintenance of social order; for the aid of judicial tribunals would not be invoked for the vindication of rights of person and property if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals ...
S. Pac. R.R. Co. v. United States, 168 U.S. 1, 49, 18 S.Ct. 18, 42 L.Ed. 355 (1897). Thus, because res judicata serves interests of great concern to the public—like finality, repose, and judicial economy—our judicial superiors remind us that fidelity to these core interests is frequently of greater importance than “any individual judge‘s ad hoc determination of the equities in a particular case.” Federated Dep‘t Stores, Inc. v. Moitie, 452 U.S. 394, 401, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981); see also Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979) (explaining that res judicata is a “fundamental precept of common-law adjudication“).
If “[t]he central role of adversary litigation in our society is to provide binding answers,” 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4403 (3d ed.), then it is the doctrine of res judicata that necessarily preserves “judicial dispute resolution against the corrosive disrespect that would follow if the same matter were twice litigated to inconsistent results.” Id. That is to say, res judicata is a protection
B. Application of Primer
With those res judicata principles in mind, we now turn to the heart of this matter. Because, as noted earlier, “a state court judgment is entitled to the same preclusive effect in federal court as it would be given in the state in which it was rendered[,]” García-Monagas v. De Arellano, 674 F.3d 45, 50 (1st Cir. 2012), and because the state court rendering the decision at issue here is in Georgia, we apply the same preclusion principles that courts in the Peach State would apply.
Georgia‘s doctrine of res judicata is codified at
A judgment of a court of competent jurisdiction shall be conclusive between the same рarties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside.
And, in order for the doctrine to apply in Georgia, “three prerequisites must be satisfied: (1) identity of the parties or their privies; (2) identity of the cause of action; and (3) previous adjudication on the merits by a court of competent jurisdiction.” Brown & Williamson Tobacco Corp. v. Gault, 280 Ga. 420, 421, 627 S.E.2d 549 (2006).
Depianti takes no issue with either the first or second prereqs. Depianti and Jan-Pro were the parties in both the Georgia and Massachusetts actions—satisfying prereq number one—and both actions were tasked with determining the type of relationship Depianti maintained with Jan-Pro (employee or independent contractor)—satisfying prereq number two. Instead, it is the last of the three prereqs—whether the judgment of the GCA was a final adjudication on the merits—that forms the crux of this dispute.
In Georgia, “final” means “a case in which a judgment ... has been rendered, the availability of appeal exhausted, and the time for a petition for certiorari elapsed or a petition for certiorari finally denied.” Turpin v. Todd, 268 Ga. 820, 831 n.49, 493 S.E.2d 900 (1997) (quoting Griffith v. Kentucky, 479 U.S. 314, 321 n.6, 107 S.Ct. 708, 93 L.Ed.2d 649 (1987)). Here, given that the Georgia Supreme Court did, in fact, deny certiorari, it would appear as though the GCA‘s judgment was final for purposes of res judicata. But Depianti argues otherwise. He counters that while it is true the Georgia Suрreme Court denied certiorari, the Georgia superior court never entered a subsequent final judgment following that denial. Without such explicit entry of final judgment by the trial court, Depianti continues, no preclusive effect attached to the GCA‘s decision.
While Depianti doesn‘t cite to the legal source of his argument on this issue, his reasoning seems to be based on
any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the
order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
In other words, if there are multiple claims in a case and a judgment is only rendered as to one of them, that judgment is “not a final judgment and lacks res judicata effect unless the trial court expressly directs the entry of a final judgment and determines that there is no just reason for delaying the finality of the judgment.” Roth v. Gulf Atl. Media of Georgia, Inc., 244 Ga. App. 677, 679, 536 S.E.2d 577 (2000).
Here, the original action contained two discrete claims—one pertaining to Depianti and one pertaining to another unit franchisee, Hyun Ki Kim (we told you Kim would come back up). While the superior court granted Depianti‘s summary-judgment motion, it denied summary judgment with regards to Kim. Thus, immediately following thе adjudication of the summary judgment motions, the court‘s judgment as to Depianti was not at that time final because the claim against Kim remained. See id. A Georgia statutory provision—
But that is not what happened here. Instead, Jan-Pro did, in fact, choose to immediately appeal the Depianti summary-judgment decision. In Georgiа, where an immediate appeal of a summary-judgment decision is undertaken pursuant to
To summarize, Depianti‘s argument that the Georgia judgment was not final bеcause the superior court never crafted a declaratory judgment to close out the case is a failure. Once the GCA spoke and the Georgia Supreme Court denied certiorari, the shape of that declaration was foreordained. We have made plain, long ago, that we will not force a litigant “round and round the mulberry bush for no better reason than ceremonial punctiliousness[,]” González v. Vélez, 864 F.3d 45, 56 (1st Cir. 2017) (quoting Jusino v. Zayas, 875 F.2d 986, 990 (1st Cir. 1989)), and mandating that Jan-Pro get the superior court‘s stamp of approval on the final judgment of the GCA would do just that.
This could otherwise be the end of the case, but Depianti attempts to circumvent this unfavorable outcome by asserting a second argument: that the Georgia courts never had personal jurisdiction over him and, therefore, the GCA decision also cannot be considered final for that reason. “A motion to set aside a judgment based upon a lack of jurisdiction over the person may be brought at any time[,]” Swafford v. Elkins, 327 Ga. App. 802, 803, 761 S.E.2d 359 (2014), even at the conclusion of a case. Depianti argues that because he never forfeited the right to lodge an appeal on jurisdictional grounds, the final judgment of the GCA cannot truly be “final.” Notwithstanding the fact that the GCA‘s decision was final for the reasons already discussed above, this alternative argument is also unavailing.
It is undisputed that Depianti challenged whether the Georgia superior court had jurisdiction over him at the motion to dismiss stage and again at summary judgment. It is also undisputed that the court determined both times that it properly possessed jurisdiction. In general, such interlocutory orders are not appealable. See, e.g., Anthony v. Anthony, 236 Ga. 508, 509, 224 S.E.2d 349 (1976). But—and this should start to sound familiar—there is an exception to this generalized rule. “The courts of Georgia and [our sister court, the 11th Circuit‘s] binding precedent interpreting Georgia law have clarified that when a trial judge certifies an interlocutory order for immediate appeal, the order becomes final for purposes of both appealability and preclusion.” Cmty. State Bank v. Strong, 651 F.3d 1241, 1265-66 (11th Cir. 2011) (citing Culwell v. Lomas & Nettleton Co., 242 Ga. 242, 242, 243, 248 S.E.2d 641 (1978)). Here, the superior court did exactly that. When it granted Depianti‘s motion for summary judgment on the Section 148B claim (and also rejected his assertion that no personal jurisdiction existed), the court simultaneously issued a certificate of immediate review as to the personal jurisdiction ruling. That is, the court noted that the question of personal jurisdiction was of such importance to the case that Depianti should be afforded the opportunity to appeal its decision forthwith. Depianti, however, chose not to appeal the personal jurisdiction issue, presumably because he had won on the substantive Section 148B claim. And while that may have seemed like sound strategy at the time, strategic decisions have consequences. Here, that decision to forego an appeal created res judicata effect. See id. (quoting Culwell, 242 Ga. at 243, 248 S.E.2d 641) (“[i]f the trial court does certify that the judgment is final and ripe for review under
Finally, to the extent Depianti argues that the GCA got the decision wrong and that the logic it relied upon was overruled by the SJC in Depianti Answer, that argument fails.10 Whether or not Depianti Answer chаnged the lay of the land by substantially altering how Section 148B claims should be adjudicated, it is nonetheless “a well-settled principle that res judicata does not allow dispensation for intervening changes in the law.” Haag v. Shulman, 683 F.3d 26, 32 n.2 (1st Cir. 2012). That is to say, “the res judicata consequences of a final ... judgment on the merits [are not] altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case.” Moitie, 452 U.S. at 398, 101 S.Ct. 2424. Indeed, “if courts relaxed the principles of claim preclusion every time it appeared that a litigant had a strong claim ‘on the equities,’ the doctrine would fail to serve its purposes of promoting judicial economy and repose.” Rose v. Town of Harwich, 778 F.2d 77, 82 (1st Cir. 1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2278, 90 L.Ed.2d 720 (1986).11 Any argument to the contrary, therefore, is a nonstarter.
Wrapping It Up
As attractive as it often is to resolutely pursue a certain position—especially one so wholeheartedly believed in—the more appropriate approach is sometimes to simply let sleeping dogs lie—particularly where, as here, the law mandates it.
Affirmed.