Kelchner v. CRST Expedited, Inc

CourtDistrict Court, N.D. Iowa
DecidedApril 2, 2025
Docket1:24-cv-00082
StatusUnknown

This text of Kelchner v. CRST Expedited, Inc (Kelchner v. CRST Expedited, Inc) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kelchner v. CRST Expedited, Inc, (N.D. Iowa 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA CEDAR RAPIDS DIVISION HARLEY KELCHNER, an individual, No. 24-CV-82-CJW-KEM individually and on behalf of all others similarly situated, Plaintiff, vs. MEMORANDUM OPINION AND ORDER CRST EXPEDITED, INC., CRST

SPECIALIZED TRANSPORTATION, INC., CRST LINCOLN SALES, INC., and JOHN SMITH, an individual, Defendants.

_________________________ The matter before the Court is a motion filed by defendant CRST Specialized Transportation, Inc. (“Specialized”). (Doc. 56). Specialized requests that the Court certify its order denying Specialized’s motion to dismiss (Doc. 53) for interlocutory appeal to the Eighth Circuit Court of Appeals, or, alternatively, that the Court certify a question to the Iowa Supreme Court. (Doc. 56). Plaintiff filed a resistance. (Doc. 57). Specialized filed a reply. (Doc. 58). For the following reasons, Specialized’s motion to certify an interlocutory appeal is denied, but its motion to alternatively certify a question to the Iowa Supreme Court is granted. I. FACTUAL BACKGROUND1 Specialized is a transportation company which delivers goods throughout the United States, specializing in high-volume freight and logistics. (Doc. 28-2, at 1–2). Plaintiff is an independent contractor driver who was, and apparently still is, under contract with Specialized. (Id., at 3). Defendant CRST Lincoln Sales, Inc. (“Lincoln Sales”) is a “sister company” of Specialized. (Id.). Approximately sixty percent of Specialized’s new contractors, including plaintiff, lease their equipment from Lincoln Sales. (Id., at 3–4). Defendant CRST Expedited, Inc. (“Expedited”) is another sister company of Specialized. (Id., at 2). Defendant John Smith is chairman of the board and partial owner of CRST International Holding Company, Inc., which is the parent company of Specialized, Lincoln Sales, and Expedited. (Docs. 28-4, at 1; 34, at 1–2). Lincoln Sales and Expedited are both incorporated in Iowa and have their principal place of business in Iowa. (Doc. 1, at 3). Smith is an Iowa resident. (Id., at 4). Specialized is incorporated in Indiana and has its principal place of business in Indiana. (Docs. 1, at 3; 28-2, at 1; 33, at 1). Specialized has been registered to do business in Iowa as a foreign corporation since 2020. (Docs. 40-6 & 40-9). According to its affidavits, Specialized employs its own personnel, including its leadership team, dispatchers, and other operational and support staff—all of whom live and work in the greater Fort Wayne, Indiana area. (Doc. 28-2, at 2). Specialized also employs individuals in various other states—Maryland, Illinois, Ohio, and California—but none in Iowa. (Id.). Specialized states that it “does not have a physical presence in Iowa.” (Id.). Specialized also states that, although Expedited is its “sister company,” the two

1 The facts are generally taken from plaintiff’s complaint. (Doc. 1). Additional facts are taken from affidavits and exhibits submitted by the parties. companies each have their own operating authority, personnel, headquarters, and customers. (Docs. 28-2, at 2; 28-3, at 2). Plaintiff’s complaint paints a slightly different picture than Specialized’s affidavits on several of these topics. Plaintiff alleges that the various defendants have an “interrelated network” with “common ownership, control, officers, directors, members, managers, office locations, customer databases, and mailing addresses.” (Doc. 1, at 4). Plaintiff further alleges that the corporate defendants co-mingle funds, share methods to identify potential drivers, have common marketing and recruiting staffs, share a billing department, and have a common dispatch and customer service staff. (Id.). For example, one of the attachments to plaintiff’s complaint is an allegedly deceptive advertisement which Expedited allegedly published online on behalf of Specialized. (Docs. 1, at 5; 1- 1). Plaintiff also alleges that defendants have a common website which advertises the lease purchase program, and specifically refers to Specialized as a “division” of CRST. (Doc. 1, at 7–9). The three CRST defendants all apparently share the same CEO, President, secretary, and treasurer. (Docs. 40-8 & 40-13).2 The three CRST defendants also share the same registered agent in Des Moines, upon whom plaintiff served this lawsuit at the same time for each of the three companies. (See Docs. 4, 5, & 6). Specialized does not have any employee drivers; instead, it contracts with independent contractor drivers. (Doc. 28-2, at 2). New contractors attend a week-long “onboarding program” at Specialized’s headquarters in Fort Wayne before driving under Specialized’s name. (Id.). During the onboarding program, the contractors sign their contracts, and, if the contractor elects to lease their equipment through Lincoln Sales,

2 Plaintiff makes this claim in his brief, but the exhibit to which plaintiff refers only shows that these individuals hold these officer positions at Specialized. (See Docs. 40, at 9; 40-13). then the contractor also has the opportunity to inspect and select their truck. (Id., at 2– 3). Plaintiff, a Florida resident, is an independent contractor with Specialized. (Docs. 1, at 3; 28-2, at 3). In early 2022, plaintiff reached out to Specialized, expressing interest in Specialized’s independent contractor program. (Doc. 28-2, at 3). A Specialized recruiter, who lives and works in North Carolina, communicated with plaintiff about the program. (Id.). In March 2022, plaintiff traveled to Fort Wayne, attended Specialized’s onboarding program, signed his contract with Specialized, and selected a truck to lease from Lincoln Sales. (Id., at 3–4). Plaintiff then began driving with Specialized throughout the United States, including Iowa. (Docs. 1, at 3; 28-2, at 4). Specialized’s contractors, presumably including plaintiff, have daily contact with Specialized’s dispatchers, who are based in Fort Wayne. (Doc. 28-2, at 4). On August 23, 2024, plaintiff filed his complaint. (Doc. 1). Plaintiff brought a claim against defendants for “Violation of the Iowa Business Opportunity Promotions Act, Iowa Code §§ 551A.1–551A.10.” (Id., at 14–15). Specialized filed a motion to dismiss for want of personal jurisdiction. (Doc. 28). The Court denied Specialized’s motion to dismiss. (Doc. 53). Specialized then filed a motion to certify the Court’s order for interlocutory appeal or, alternatively, to certify a question to the Iowa Supreme Court. (Doc. 56). II. ANALYSIS A. Certification of Interlocutory Appeal In certain situations, district courts can certify a non-final order for interlocutory appeal. Under Title 28, United States Code, Section 1292(b), a district judge can allow an appeal from an order not otherwise appealable if the judge is “of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation[.]” The Eighth Circuit Court of Appeals has explained that this section “establishes three criteria for certification: the district court must be ‘of the opinion that’ (1) the order ‘involves a controlling question of law’; (2) ‘there is substantial ground for difference of opinion’; and (3) certification will ‘materially advance the ultimate termination of the litigation.’” White v. Nix, 43 F.3d 374, 377 (8th Cir. 1994) (quoting Paschall v. Kan. City Star Co., 605 F.2d 403, 406 (8th Cir. 1979)).

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Bluebook (online)
Kelchner v. CRST Expedited, Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelchner-v-crst-expedited-inc-iand-2025.