De Giovanni v. Jani-King International, Inc.

262 F.R.D. 71, 2009 U.S. Dist. LEXIS 86431, 2009 WL 2993798
CourtDistrict Court, D. Massachusetts
DecidedSeptember 21, 2009
DocketCivil Action No. 07-cv-10066-RCL
StatusPublished
Cited by12 cases

This text of 262 F.R.D. 71 (De Giovanni v. Jani-King International, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
De Giovanni v. Jani-King International, Inc., 262 F.R.D. 71, 2009 U.S. Dist. LEXIS 86431, 2009 WL 2993798 (D. Mass. 2009).

Opinion

MEMORANDUM AND ORDER

YOUNG, District Judge.

I. INTRODUCTION

In this putative class action, named plaintiffs Vincent De Giovanni (“De Giovanni”) and Mariette Barros (“Barros”) (collectively “the plaintiffs”) brought suit against Jani-King, Inc., Jani-King International, Inc., and Jani-King of Boston, Inc. (collectively “Jani-King”). Jani-King is one of the largest janitorial services corporations in the world. De Giovanni, Barros, and the individuals in the class they seek to represent, entered into franchise agreements with Jani-King to provide cleaning services to Jani-King’s clients in Massachusetts.

The plaintiffs assert two distinct categories of claims against Jani-King, both of which arise out of them franchisor-franchisee relationship. The first, which for ease of reference the Court will refer to as the plaintiffs’ “unfair business practices” claims, actually consists of breach of contract, misrepresentation, Massachusetts General Laws Chapter 93A, unjust enrichment, and quantum meruit causes of action. In this set of claims, the plaintiffs allege that Jani-King systematically fails to meet its obligations under the franchise agreement it enters into with all franchisees. In the second set of allegations, which the Court will refer to as plaintiffs’ “employment classification” claims, plaintiffs allege that Jani-King violates Massachusetts wage and employment laws by classifying its franchisees as independent contractors, when, in fact, the franchisees are employees.

Before the Court is the plaintiffs’ motion for class certification of both their unfair business practices and employment classification claims under Federal Rule of Civil Procedure 23. For the reasons discussed below, the Court DENIES the motion to certify the plaintiffs’ unfair business practices claims. Certification of the breach of contract, misrepresentation, unjust enrichment, and quantum meruit claims are denied with prejudice. Certification of the plaintiffs’ claims arising under Chapter 93A regarding excessive fees and the inherent unfairness of section 4.3.3 of the franchise agreement, are denied without prejudice. All other Chapter 93A claims are denied with prejudice. The Court GRANTS the plaintiffs’ motion to certify the employment classification claims.

A. Procedural Posture

The initial class action complaint in this case, which was filed on January 12, 2007, [75]*75named only De Giovanni as a potential class representative. (Doc. No. 1.) On April 16, 2007, De Giovanni filed an amended complaint, naming Barros as an additional plaintiff and adding the allegations related to Jani-King’s classification of franchisees as independent contractors. (Doc. No. 13.) On September 8, 2008, the defendants filed their answer to the plaintiffs’ amended complaint. (Doc. No. 36.)

On January 1, 2009, the plaintiffs filed the instant motion to certify this case as a class action. (Doc. No. 45.) The Court conducted a hearing on the motion for class certification on May 21, 2009.

B. Facts

As stated above, Jani-King is one of the largest providers of janitorial services in the country. Jani-King operates on a franchise model, whereby it grants franchisees the right to use the Jani-King name and provides franchisees with cleaning contracts to service in exchange for payments from its franchisees.

Jani-King requires that franchisees enter into a standard, adhesion contract (“Franchise Agreement”) delineating the governing terms of the franchisor-franchisee relationship. (See Franchise Agreement, Ex. 1 attach. Pis.’ Mot., Doc. No. 45.) The agreement is quite detailed, but the primary consideration exchanged by the parties is as follows. A new franchisee agrees to pay Jani-King a franchise fee.1 In return, Jani-King promises to “secure commercial cleaning and maintenance contracts” and to offer to the franchisee “the opportunity to provide service to [accounts]” with “minimum cumulative gross monthly billings” equal to a specified amount. The cumulative value of the cleaning contracts the Jani-King must offer its new franchisees is called the “Initial Finder’s Fee Business” (“Initial Business”). Jani-King must provide a new franchisee with the opportunity to service cleaning accounts with a cumulative, gross monthly value equal or greater to the Initial Business within the “Initial Offering Period,” which ranges from 120 days for less expensive franchises to more than 330 days for more expensive franchises. Further, Jani-King may only offer new franchisees cleaning contracts within a geographic territory specified in each franchisee’s franchise agreement. In sum, in exchange for a franchise fee, Jani-King promises, before the expiration of the Initial Offering Period, to offer new franchisees the right to service cleaning contracts located within a limited geographic area that have a gross monthly billing value equal or greater to the Initial Business.

As a new franchisee pays Jani-King a larger franchise fee, the value of the Initial Business increases proportionally. For example, under Jani-King’s “Plan A,” it’s least expensive franchise, a franchisee pays Jani-King an $8,600 franchise fee and Jani-King promises to provide $500 in Initial Business within a 120 day Initial Offering Period. (2005 Uniform Franchise Offering Circular (“UFOC”) 3, 22, Ex. B, attach. Rubenstein Dec., Doc. No. 52.) Under Jani-King’s plan E-10, the plan that named-plaintiff De Giovanni purchased, a new franchisee pays Jani-King a $32,750 franchise fee and Jani-King promises to provide $10,000 in Initial Business within 330 days. (UFOC 3, 22.)

Section 12.7 of the Franchise Agreement provides that “[i]t is agreed and understood that Franchisee will act at all times as an independent contractor and will not, at any time, directly or indirectly, hold itself out as an agent, servant or employee of Franchisor.” The Franchise Agreement also includes a 22-year non-competition clause. (Franchise Agreement ¶ 5.2.3(d).) At the same time, Jani-King franchisees are free to sell their franchises, may hire their own employees, and may generally structure and operate their franchises as they see fit.

C. Federal Jurisdiction

This Court has diversity jurisdiction over the plaintiffs suit pursuant to 28 U.S.C. § 1332.

[76]*76II. DISCUSSION

The plaintiffs seek to certify two separate classes: an unfair business practices class and an employment classification class.

A. Standard of Review

“A plaintiff who seeks to certify a class action has the burden of demonstrating that the four prerequisites enumerated in Federal Rule of Civil Procedure 23(a), plus one of the provisions of Federal Rule of Civil Procedure 23(b), are satisfied.” In re TJX Cos. Retail Sec. Breach Litig., 246 F.R.D. 389, 392 (D.Mass.2007) (citing Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32, 38 (1st Cir.2003)).

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Bluebook (online)
262 F.R.D. 71, 2009 U.S. Dist. LEXIS 86431, 2009 WL 2993798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/de-giovanni-v-jani-king-international-inc-mad-2009.