Amicus Curiae Brief — California Trucking Association, Inc., et al., Petitioners v. Rob Bonta, Attorney General of California, et al.
Supreme Court briefMay 24, 2022
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No. 21-194
In the Supreme Court of the United States
CALIFORNIA TRUCKING ASSOCIATION, INC., ET AL.,
PETITIONERS
v.
ROB BONTA, ATTORNEY GENERAL OF CALIFORNIA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
JOHN E. PUTNAM
General Counsel
PAUL M. GEIER
Assistant General Counsel
PETER J. PLOCKI
Deputy Assistant General
Counsel
CHARLES E. ENLOE
Senior Trial Attorney
Department of Transportation
EARL ADAMS, JR.
Chief Counsel
CHARLES J. FROMM
Deputy Chief Counsel
TRACY M. WHITE
Senior Attorney
Federal Motor Carrier
Safety Administration
ELIZABETH B. PRELOGAR
Solicitor General
Counsel of Record
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
SOPAN JOSHI
Assistant to the Solicitor
General
MARK B. STERN
JENNIFER L. UTRECHT
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Whether a generally applicable California labor statute setting forth the conditions that must be satisfied to
classify a worker as an independent contractor (as opposed to an employee), when applied to trucking operations in the State, is “related to a price, route, or service
of any motor carrier,” 49 U.S.C. 14501(c)(1), and thus
preempted by federal law.
(I)
TABLE OF CONTENTS
Page
Statement ...................................................................................... 1
Discussion .................................................................................... 10
Conclusion ................................................................................... 23
TABLE OF AUTHORITIES
Cases:
American Airlines, Inc. v. Wolens,
513 U.S. 219 (1995)............................................................ 5, 6
American Trucking Associations, Inc. v.
Los Angeles, 569 U.S. 641 (2013)....................................... 22
Bedoya v. American Eagle Express Inc.,
914 F.3d 812 (3d Cir.), cert. denied,
140 S. Ct. 102 (2019) ................................................. 9, 20, 21
California Trucking Association v. Su,
903 F.3d 953 (9th Cir. 2018), cert. denied,
139 S. Ct. 1331 (2019) ................................................... 18, 19
Chambers v. RDI Logistics, Inc.,
65 N.E.3d 1 (Mass. 2016) ................................................... 20
Community for Creative Non-Violence v. Reid,
490 U.S. 730 (1989)................................................................ 2
Costello v. BeavEx, Inc.,
810 F.3d 1045 (7th Cir. 2016), cert. denied,
137 S. Ct. 2289 (2017) ................................................... 20, 21
Dan’s City Used Cars, Inc. v. Pelkey,
569 U.S. 251 (2013).......................................................... 5, 12
Davis v. United States, 417 U.S. 333 (1974) ....................... 20
Dilts v. Penske Logistics, LLC,
769 F.3d 637 (9th Cir. 2014), cert. denied,
575 U.S. 996 (2015)........................................................ 16, 17
Dynamex Operations West, Inc. v. Superior Court,
416 P.3d 1 (Cal. 2018) ....................................................... 2, 3
(III)
IV
Cases—Continued:
Page
Estrada v. FedEx Ground Package System, Inc.,
154 Cal. App. 4th 1 (2007) .................................................. 13
Massachusetts Delivery Association v. Healey,
821 F.3d 187 (1st Cir. 2016) ............................................... 20
Miller v. C.H. Robinson Worldwide, Inc.,
976 F.3d 1016 (9th Cir. 2020), petition for cert.
pending, No. 20-1425 (filed Apr. 8, 2021) ................... 18, 19
Morales v. Trans World Airlines, Inc.,
504 U.S. 374 (1992)...........................................5, 6, 10, 11, 19
NLRB v. United Insurance Co.,
390 U.S. 254 (1968)................................................................ 2
Nationwide Mutual Insurance Co. v. Darden,
503 U.S. 318 (1992)................................................................ 1
Northwest, Inc. v. Ginsberg, 572 U.S. 273 (2014) ............... 21
People v. Superior Court,
57 Cal. App. 5th 619 (2020), cert. denied,
142 S. Ct. 76 (2021) ....................................................... 14, 16
Rowe v. New Hampshire Motor Transport
Association, 552 U.S. 364 (2008) .............................. passim
S.G. Borello & Sons, Inc. v. Department of
Industrial Relations, 769 P.2d 399 (Cal. 1989) ....... 2, 4, 14
Schwann v. FedEx Ground Package System, Inc.,
813 F.3d 429 (1st Cir. 2016) ..................................... 8, 20, 21
Singer Manufacturing Co. v. Rahn,
132 U.S. 518 (1889)................................................................ 2
United States v. Silk, 331 U.S. 704 (1947)............................. 2
Ward v. United Airlines, Inc.,
986 F.3d 1234 (9th Cir. 2021) ....................................... 18, 19
Wisniewski v. United States, 353 U.S. 901 (1957) ............. 19
Statutes and regulations:
Airline Deregulation Act of 1978,
Pub. L. No. 95-504, 92 Stat. 1705 ........................................ 5
V
Statutes and regulations—Continued:
Page
§ 3(a), 92 Stat. 1706 ........................................................... 5
Federal Aviation Administration Authorization Act
of 1994, Pub. L. No. 103-305, 108 Stat. 1569 ...................... 4
Motor Carrier Act of 1980,
Pub. L. No. 96-296, 94 Stat. 793 .......................................... 5
§ 2, 94 Stat. 793 .................................................................. 5
49 U.S.C. 14501(c)(1) ......................................................... 5, 10
49 U.S.C. 14102 ........................................................................ 4
49 U.S.C. 41713(b)(1) ............................................................... 5
Cal. Labor Code § 2775 et seq. (2020) .................................... 3
§ 226.2 (2015) .................................................................... 13
§ 2775(b) ............................................................................. 3
§ 2775(b)(1)(A)-(C) ............................................................ 3
§ 2775(b)(1)(B) ................................................................. 14
§ 2775(b)(3) ......................................................................... 4
§ 2776 .............................................................................. 3, 7
§§ 2776-2784 ....................................................................... 3
§ 2776(a) ........................................................................... 15
§ 2776(a)(1) ....................................................................... 15
§ 2776(a)(1)-(12) ........................................................... 3, 15
§ 2776(a)(2) ....................................................................... 15
§ 2776(a)(3) ....................................................................... 15
§ 2776(a)(4) ....................................................................... 15
§ 2776(a)(5) ....................................................................... 15
§ 2776(a)(6) ....................................................................... 15
§ 2776(a)(7) ....................................................................... 15
§ 2776(a)(8) ....................................................................... 15
§ 2776(a)(9) ....................................................................... 15
§ 2776(a)(10) ..................................................................... 15
§ 2776(a)(11) ..................................................................... 15
§ 2776(a)(12) ..................................................................... 15
VI
Statutes and regulations—Continued:
Page
A.B. 5, ch. 296 (Cal. 2019) ....................................................... 3
A.B. 2257, ch. 38 (Cal. 2020).................................................... 3
49 C.F.R.:
Section 376.11 .................................................................... 4
Section 376.12(c)(1) ........................................................... 4
Miscellaneous:
Jon O. Shimabukuro, Congressional Research
Service, R46765, Worker Classification: Employee
Status Under the National Labor Relations Act,
the Fair Labor Standards Act, and the ABC Test
(Apr. 20, 2021), go.usa.gov/xu5Ab ....................................... 3
In the Supreme Court of the United States
No. 21-194
CALIFORNIA TRUCKING ASSOCIATION, INC., ET AL.,
PETITIONERS
v.
ROB BONTA, ATTORNEY GENERAL OF CALIFORNIA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
This brief is submitted in response to the order of the
Court inviting the Solicitor General to express the views
of the United States. In the view of the United States,
the petition for a writ of certiorari should be denied.
STATEMENT
Petitioners brought this suit seeking to preclude enforcement of a state statute setting forth the conditions
that must be satisfied to classify a worker as an independent contractor (as opposed to an employee), for
purposes of state law. The district court granted a preliminary injunction on the ground that the statute likely
was preempted by federal law. Pet. App. 51a-79a. The
court of appeals reversed. Id. at 1a-50a.
1. a. Whether a worker is an employee or an independent contractor is an issue of importance in a variety
of areas of law. See, e.g., Nationwide Mutual Insur(1)
2
ance Co. v. Darden, 503 U.S. 318 (1992) (employee benefits); Community for Creative Non-Violence v. Reid,
490 U.S. 730 (1989) (copyright); NLRB v. United Insurance Co., 390 U.S. 254 (1968) (union representation);
United States v. Silk, 331 U.S. 704 (1947) (Social Security benefits); Singer Manufacturing Co. v. Rahn, 132
U.S. 518 (1889) (vicarious tort liability). If a worker is
an employee, the hiring business may bear many responsibilities, such as providing worker’s compensation
insurance and complying with various wage-and-hour
provisions of state law. See Dynamex Operations West,
Inc. v. Superior Court, 416 P.3d 1, 5 (Cal. 2018). By
contrast, “the business does not bear any of those costs
or responsibilities” with respect to an independent contractor. Ibid.
Like other jurisdictions, California has sought to define the circumstances in which a worker will be classified as an employee for certain state-law purposes notwithstanding the hiring entity’s desire to treat the
worker as an independent contractor. Until 2018, California classified workers for a variety of purposes based
on a common-law test that principally considered
“whether the person to whom service is rendered has
the right to control the manner and means of accomplishing the result desired.” S.G. Borello & Sons, Inc.
v. Department of Industrial Relations, 769 P.2d 399,
404 (Cal. 1989) (citation omitted). California also considered “several ‘secondary’ indicia of the nature of a
service relationship,” including “whether or not the
work is a part of the regular business of the principal.”
Ibid.
In its 2018 decision in Dynamex, the Supreme Court
of California adopted a new test—called the “ABC” test
(presumably because it has three principal elements)—
3
for classifying workers for purposes of California wageand-hour laws. 416 P.3d at 7. Under that test, a worker
is an independent contractor only if the hiring entity can
demonstrate that (A) “the worker is free from the control and direction of the hirer in connection with the
performance of the work, both under the contract for
the performance of such work and in fact”; (B) “the
worker performs work that is outside the usual course
of the hiring entity’s business”; and (C) “the worker is
customarily engaged in an independently established
trade, occupation, or business of the same nature as the
work performed for the hiring entity.” Ibid. As of April
2021, at least 20 States and the District of Columbia had
adopted the ABC test for at least some purposes.
Jon O. Shimabukuro, Congressional Research Service,
R46765, Worker Classification: Employee Status Under the National Labor Relations Act, the Fair Labor
Standards Act, and the ABC Test 9 (Apr. 20, 2021),
go.usa.gov/xu5Ab; see id. at 14-27 (listing state laws).
In 2019 and 2020, the California legislature codified
the ABC test in Assembly Bill 5 and Assembly Bill 2257,
respectively. Cal. Labor Code § 2775 et seq.; see
§ 2775(b)(1)(A)-(C) (2020) (codifying the three elements
of the ABC test). In its current form, the statute expands the applicability of the ABC test beyond the
wage-and-hour laws, see § 2775(b), while at the same
time exempting certain occupations and services from
its reach, see §§ 2776-2784. One of those exemptions
provides that the ABC test “do[es] not apply to a bona
fide business-to-business contracting relationship” if
certain conditions are satisfied. § 2776; see § 2776(a)(1)(12). In general, if the ABC test does not apply “to a
particular context,” the California statute provides that
“the determination of employee or independent con-
4
tractor status in that context shall instead be governed
by” the common-law test in Borello, supra. Cal. Labor
Code § 2775(b)(3) (2020).
b. This case involves the application of California’s
ABC test to independent owner-operators in the trucking industry. As the name implies, owner-operators are
drivers who own (or, sometimes, lease) and operate
their own trucks. See C.A. E.R. 202, 221-222. Owneroperators generally enter into contracts with motor carriers (i.e., trucking companies) both to lease the vehicle
to the motor carrier for transporting property and to
drive the truck for the duration of the lease. See ibid.
Under regulations issued by the Federal Motor Carrier
Safety Administration, if a licensed motor carrier uses
a leased truck, the motor carrier must “assume complete responsibility” for the truck’s operations and be
given “exclusive possession, control, and use” of the
truck for the duration of the lease.
49 C.F.R.
376.12(c)(1); see 49 U.S.C. 14102; 49 C.F.R. 376.11.
Petitioners, a trade association that represents motor carriers and two individual owner-operators, sued
several California state officials (respondents here)
challenging application of the ABC test. Respondent
International Brotherhood of Teamsters intervened as
a defendant. As relevant here, petitioners argued that
application of the ABC test to motor carriers and the
owner-operators with whom they contract is preempted
by the Federal Aviation Administration Authorization
Act of 1994 (FAAAA), Pub. L. No. 103-305, 108 Stat.
1569.
The FAAAA provides as a general matter that “a
State * * * may not enact or enforce a law, regulation,
or other provision having the force and effect of law related to a price, route, or service of any motor carrier
5
* * * with respect to the transportation of property.”
49 U.S.C. 14501(c)(1). That language was borrowed directly from a provision in the Airline Deregulation Act
of 1978 (ADA), Pub. L. No. 95-504, 92 Stat. 1705, which
as amended preempts all state laws “related to a price,
route, or service of an air carrier.”
49 U.S.C.
41713(b)(1).
Those preemption provisions were part of federal deregulatory efforts. In the ADA, Congress “largely deregulated domestic air transport,” American Airlines,
Inc. v. Wolens, 513 U.S. 219, 222 (1995), replacing the
prior public-utility model for regulating commercial airlines with one favoring “maximum reliance on competitive market forces and on actual and potential competition,” ADA § 3(a), 92 Stat. 1706. Congress likewise deregulated trucking in the Motor Carrier Act of 1980,
Pub. L. No. 96-296, 94 Stat. 793, as “part of [its] continuing effort * * * to reduce unnecessary regulation by
the Federal Government.” § 2, 94 Stat. 793; see Rowe
v. New Hampshire Motor Transport Association, 552
U.S. 364, 368 (2008). The ADA’s broadly worded
preemption provision was intended “[t]o ensure that the
States would not undo federal deregulation with regulation of their own.” Morales v. Trans World Airlines,
Inc., 504 U.S. 374, 378 (1992). “Congress similarly
sought to pre-empt state trucking regulation” in the
FAAAA, Rowe, 552 U.S. at 368, albeit only “with respect to the transportation of property,” 49 U.S.C.
14501(c)(1); see Dan’s City Used Cars, Inc. v. Pelkey,
569 U.S. 251, 261 (2013).
This Court has recognized that the identical language in the two preemption provisions—“related to a
price, route, or service”—should be interpreted identically. See Rowe, 552 U.S. at 370. The Court also has
6
explained that those provisions have an “expansive
sweep.” Morales, 504 U.S. at 384 (citation omitted).
They preempt not only those state laws that make “reference to” the prices, routes, or services of airlines and
motor carriers, but also those laws of general applicability that have a “significant impact” on prices, routes,
or services. Id. at 388, 390; see Rowe, 552 U.S. at 375;
Wolens, 513 U.S. at 224. The Court has emphasized,
however, that the statutes do not preempt generally applicable state laws that affect prices, routes, or services
in merely a “tenuous, remote, or peripheral” manner.
Morales, 504 U.S. at 390 (citation omitted).
2. The district court preliminarily enjoined application of the ABC test “as to any motor carrier operating
in California.” Pet. App. 78a; see id. 51a-79a. As relevant here, the court held that petitioners had raised at
least “serious questions” about whether the FAAAA
preempts application of California’s codification of the
ABC test to motor carriers operating in the State. Id.
at 62a (citation omitted); see id. at 62a-75a. The court
explained that “the FAAAA likely preempts ‘an all or
nothing’ state law * * * that categorically prevents motor carriers from exercising their freedom to choose between using independent contractors or employees.”
Id. at 66a-67a (citation omitted). The court found that
to be “precisely the case here” because “drivers who
may own and operate their own rigs will never be considered independent contractors under California law”
under the second element of the ABC test, given that
they “necessarily perform work within ‘the usual
course of the motor carrier hiring entity’s business.’ ”
Id. at 67a (brackets omitted).
The district court reasoned that the ABC test “determin[es] whether all of California employment laws
7
do or do not apply,” and thus is likely preempted as applied to motor carriers because “the combined effect of
all such laws has a significant impact on motor carriers’
prices, routes, or services.” Pet. App. 73a. The court
rejected respondents’ argument that petitioners and
other motor carriers and owner-operators could avail
themselves of the business-to-business exemption in the
statute, Cal. Labor Code § 2776 (2020), explaining that
respondents “ha[d] not shown how that is possible” and
that California officials had “not expressly concede[d]
that the exception would apply.” Pet. App. 74a; see id.
at 74a n.11.
3. A divided panel of the court of appeals reversed.
Pet. App. 1a-50a.
a. The court of appeals held that petitioners were
unlikely to succeed on the FAAAA preemption issue.
After reviewing relevant precedent, the court explained
that “a generally applicable state law is not ‘related to a
price, route, or service of any motor carrier’ for purposes of the F[AAA]A unless the state law ‘binds the
carrier to a particular price, route or service’ or otherwise freezes them into place or determines them to a
significant degree.” Pet. App. 19a (citation and emphasis omitted). The court further explained that the ABC
test “does not have the sort of binding or freezing effect
on prices, routes, or services that [is] preempted under
the F[AAA]A” because the ABC test affects only “a motor carrier’s relationship with its workforce,” not its
“relationship with consumers.” Id. at 20a-21a.
The court of appeals then turned to petitioners’ argument that application of the ABC test to motor carriers nevertheless would have an “impact [that] is so significant that it indirectly determines prices, routes, or
services.” Pet. App. 21a; see id. at 21a-24a. The court
8
observed that petitioners had alleged that application of
the ABC test would increase equipment and labor costs
“by as much as 150% or more,” which would cause carriers to reconfigure or eliminate some routes and potentially cease operating in the State altogether, leaving
the remaining carriers to offer only diminished services.
Id. at 22a. The court acknowledged that “a generally
applicable law could so significantly impact the employment relationship between motor carriers and their employees that it effectively binds motor carriers to specific prices, routes, or services at the consumer level.”
Id. at 24a. But the court observed that it had previously
rejected preemption claims based on predicted incidental effects similar to those posited by petitioners.
Id. at 22a-24a. The court also noted that petitioners’ allegations of increased costs relied heavily on their contention that motor carriers would be forced to buy a
fleet of trucks, but that petitioner California Trucking
Association had conceded that carriers could avoid
those costs by hiring drivers who own their own trucks,
rendering any impact on prices, routes, or services
speculative given the underdeveloped state of the record. Id. at 22a & n.11.
The court of appeals rejected petitioners’ reliance on
decisions from the First and Third Circuits. See Pet.
App. 29a-30a. In Schwann v. FedEx Ground Package
System, Inc., 813 F.3d 429 (2016), the First Circuit held
that the FAAAA preempts application of the second element of the ABC test as codified under Massachusetts
law. The court of appeals here explained that Schwann
found the second element of the ABC test preempted
“because interfering with the employer’s decision
whether to use an employee or an independent contractor could prevent a motor carrier from using its pre-
9
ferred methods of providing delivery services, raise the
motor carrier’s costs, and impact routes.” Pet. App.
30a. In Bedoya v. American Eagle Express Inc., 914
F.3d 812, cert. denied, 140 S. Ct. 102 (2019) (No. 181382), the Third Circuit held that the FAAAA does not
preempt application of the ABC test as codified under
New Jersey law. The court of appeals in this case observed, however, that Bedoya had “opin[ed] in dicta
that the F[AAA]A preempt[ed] Massachusetts’ ABC
test because it ‘mandates a particular course of action—
e.g., requiring carriers to use employees rather than independent contractors.’ ” Pet. App. 30a (brackets and
citation omitted). The court stated that the “language
relied upon” in Schwann and Bedoya “is contrary to
[Ninth Circuit] precedent” that had “concluded that
such indirect consequences have ‘only a tenuous, remote, or peripheral connection to rates, routes[,] or services.’ ” Ibid. (citation omitted).
b. Judge Bennett dissented. Pet. App. 33a-50a. In
his view, the majority “ignore[d] the possibility that a
state law might affect a motor carrier’s relationship
with its workforce and have a significant impact on that
motor carrier’s prices, routes, or services.” Id. at 36a.
In Judge Bennett’s view, the California law “will ‘categorically prevent motor carriers from exercising their
freedom to choose between using independent contractors or employees,’ ” and therefore “will significantly
impact motor carriers’ services by mandating the
means by which they are provided.” Id. at 40a (brackets
and citation omitted). Specifically, he stated that application of the ABC test to motor carriers under California law will “diminish[] the specialized transportation
services that motor carriers are able to provide through
independent contractor drivers” and “eliminate motor
10
carriers’ flexibility to accommodate fluctuations in supply and demand.” Id. at 40a-41a.
c. The court of appeals stayed issuance of the mandate pending disposition of the petition for a writ of certiorari. Pet. App. 82a-83a.
DISCUSSION
The petition for a writ of certiorari should be denied.
The court of appeals correctly determined that petitioners were unlikely to succeed on their claim that the
FAAAA preempts applying the ABC test as codified under California law to owner-operators, and the court’s
decision does not conflict with any decision of this
Court. Although the circuits have reached differing
outcomes with respect to FAAAA preemption of the
ABC test as codified under the laws of various States,
those case-specific decisions do not create a conflict
warranting this Court’s review. Moreover, the interlocutory posture of this case and the need to resolve a
threshold issue of state law—namely, whether motor
carriers and owner-operators may fall within the
business-to-business exemption under California law—
make this case a poor vehicle in which to address the
question presented. Further review is unwarranted.
1. a. To be preempted under the FAAAA, a claim
must seek to enforce a state law “related to a price,
route, or service of any motor carrier.” 49 U.S.C.
14501(c)(1). This Court has provided important guidance on the meaning of that language in Morales v.
Trans World Airlines, Inc., 504 U.S. 374 (1992), and
Rowe v. New Hampshire Motor Transport Association,
552 U.S. 364 (2008).
In Morales, the Court concluded that the phrase
“relat[ed] to” in the ADA’s similarly worded preemption provision reflects a broad and deliberately expan-
11
sive preemptive purpose, and that the ADA thus
preempts state-law claims “having a connection with, or
reference to, airline ‘rates, routes, or services.’ ” 504
U.S. at 383-384 (citation omitted). The Court held in
Morales that a state law “may ‘relate to’ ” a price, route,
or service even if it is not specifically addressed to the
airline industry or the effect is “only indirect.” Id. at
386 (citation omitted). At the same time, the Court recognized that “ ‘some state actions may affect airline
fares in too tenuous, remote, or peripheral a manner’ to
have pre-emptive effect.” Id. at 390 (brackets and citation omitted). The Court had no occasion in Morales to
define “ ‘where it would be appropriate to draw the
line,’ ” because the state provisions at issue there—
guidelines interpreting general consumer-protection
laws in a way that restricted airlines’ advertising of
their fares—plainly related to (indeed, expressly referred to) airline fares and had a “significant impact” on
them. Id. at 389-390 (citation omitted).
In Rowe, the Court held that the same principles
govern the preemptive scope of the FAAAA. Applying
those standards, the Court held that the FAAAA
preempted a Maine statute forbidding licensed tobacco
retailers from employing a “delivery service” unless
that service followed a particular set of prescribed delivery procedures. 552 U.S. at 371 (citation omitted);
see id. at 370-372. The Court emphasized that the
Maine statute directly focused on motor-carrier services and would require carriers “to offer tobacco delivery services that differ significantly from those that, in
the absence of the regulation, the market might dictate.” Id. at 372. The Court concluded that “[t]he Maine
law thereby produce[d] the very effect that the federal
law sought to avoid, namely, a State’s direct substitu-
12
tion of its own governmental commands for ‘competitive
market forces’ in determining (to a significant degree)
the services that motor carriers will provide.” Ibid. (citation omitted).
The Court in Rowe noted, however, that the FAAAA
does not preempt laws of general applicability that only
incidentally affect motor carriers. Citing Morales, the
Court stressed that “the state laws whose ‘effect’ is ‘forbidden’ under federal law are those with a ‘significant
impact’ on carrier rates, routes, or services,” and not
laws that apply to carriers only in their capacity as
members of the general public. Rowe, 552 U.S. at 375
(citation omitted); see Dan’s City Used Cars, Inc. v.
Pelkey, 569 U.S. 251, 260-261 (2013).
b. Under those principles, the court of appeals correctly concluded that petitioners were not likely to succeed on the merits of their preemption argument. The
court agreed with petitioners that the FAAAA would
preempt a generally applicable state labor law whose
“impact is so significant that it indirectly determines
price, routes, or services.” Pet. App. 21a. The court also
assumed that the ABC test would “require[] that motor
carriers use employees rather than independent contractors as drivers.” Ibid. But on the present record,
the court rejected petitioners’ conclusion that applying
the ABC test would necessarily result in a significant
impact on prices, routes, or services.
Petitioners had contended that the ABC test would
increase carriers’ costs “by as much as 150% or more”
as a result of having to use employees instead of independent contractors as drivers. Pet. App. 22a. But as
the court of appeals observed, that contention “rel[ied]
heavily on [the] claim that motor carriers w[ould] be
forced to buy a fleet of trucks,” notwithstanding peti-
13
tioners’ acknowledgment that carriers “could avoid incurring such costs by hiring owner-operators (i.e., drivers who own their own trucks) as employees.” Id. at 22a
n.11; see Estrada v. FedEx Ground Package System,
Inc., 154 Cal. App. 4th 1, 25 (2007) (explaining that under California law, “an employer may require its employees to provide their own trucks” as long as the employer reimburses the employee for operating expenses). Moreover, California law does not require motor carriers to hire drivers as full-time employees, and
California generally allows piece-rate compensation for
part-time or seasonal employees as long as the compensation results in payment of at least a minimum wage,
taking into account rest and recovery breaks. See Cal.
Labor Code § 226.2 (2015). Contrary to petitioners’
suggestion (Pet. 27), therefore, carriers would retain
the flexibility to engage owner-operators as needed to
provide “specialized trucking services” or “increased
service in times of peak demand.” The court of appeals
thus was correct to conclude that petitioners’ claimed
impacts on prices, routes, or services due to increased
costs were “merely speculative” given “the undeveloped
record in the district court.” Pet. App. 22a n.11. Petitioners provide no sound basis for this Court to secondguess those factbound determinations, especially at this
interlocutory stage of the proceedings.
Furthermore, petitioners’ assertions concerning
substantially increased costs, leading in turn to a significant impact on prices, routes, or services, implicitly
rely on the premise that applying the new California
statute will require widespread reclassification of drivers. But petitioners have not established that premise
for two reasons.
14
First, petitioners principally focus on the second
element of the ABC test, which requires that the worker
“perform[] work that is outside the usual course
of the hiring entity’s business.” Cal. Labor Code
§ 2775(b)(1)(B) (2020). But whether “the work is a part
of the regular business of the principal” also is a consideration (even if not a mandatory element) under the
common-law test that would apply if the ABC test were
inapplicable. S.G. Borello & Sons, Inc. v. Department
of Industrial Relations, 769 P.2d 399, 404 (Cal. 1989).
And the common-law test, like the first element of the
ABC test, places great weight on whether the hirer exercises control and direction over the worker. Given
those considerations, petitioners have not established
that owner-operators necessarily would be properly
classified as independent contractors under the commonlaw test. Cf. People v. Superior Court, 57 Cal. App. 5th
619, 625 (2020) (Cal Cartage) (documenting the California legislature’s recent findings that “two-thirds of California port drayage drivers” were “misclassified as independent contractors when they in fact work as employees under California and federal labor laws,” and
that “rampant misclassification of drivers contributes
to wage theft and leaves drivers in a cycle of poverty”)
(citation omitted), cert. denied, 142 S. Ct. 76 (2021) (No.
20-1453); Teamsters Br. in Opp. 18. If most owneroperators should be classified as employees even under
the common-law test, application of the ABC test would
not result in any widespread reclassification from a
prior lawful status, and thus would not fairly be regarded as having a significant impact on prices, routes,
or services either.
Second, petitioners’ argument overlooks that the
California statute exempts from the ABC test any “bona
15
fide business-to-business contracting relationship”—
including one with “an individual acting as a sole
proprietor”—when certain conditions are satisfied. Cal.
Labor Code § 2776(a) (2020); see § 2776(a)(1)-(12) (listing the conditions). Some of those conditions are obviously inapposite, e.g., § 2776(a)(12) (excluding “work for
which a license from the Contractors’ State License
Board is required”), and others are unremarkable, e.g.,
§ 2776(a)(3) (requiring the contract to be in writing and
to specify the payment and due dates); § 2776(a)(4) (requiring the service provider to have a “business license
or business tax registration” if the jurisdiction requires
one). The remaining conditions require, among other
things, that the service provider be “free from the control and direction of the contracting business entity in
connection with the performance of the work,”
§ 2776(a)(1); generally “provid[e] services directly to
the contracting business rather than to customers of
the contracting business,” § 2776(a)(2); “maintain[] a
business location * * * that is separate from the business or work location of the contracting business,”
§ 2776(a)(5); be “customarily engaged in an independently established business of the same nature as
that involved in the work performed,” § 2776(a)(6); be
able to “contract with other businesses to provide the
same or similar services,” § 2776(a)(7); “advertise[] and
hold[] itself out to the public as available to provide the
same or similar services,” § 2776(a)(8); generally “provide[] its own tools, vehicles, and equipment to perform
the services,” § 2776(a)(9); be able to “negotiate its own
rates,” § 2776(a)(10); and, “[c]onsistent with the nature
of the work,” be able to “set its own hours and location
of work,” § 2776(a)(11).
16
Petitioners assert (Pet. 33 n.6) that “carriers and
owner-operators generally will not be able to meet” all
of those conditions, but petitioners neither specify
which conditions the carriers and owner-operators
could not meet, nor demonstrate that any steps required to meet all of the conditions would result in a significant impact on prices, routes, or services. See Cal
Cartage, 57 Cal. App. 5th at 633-634 (rejecting the argument that “independent owner-operators can never
meet several of the requirements in the business-tobusiness exemption”). Perhaps petitioners ultimately
would be able to demonstrate that the business-tobusiness exemption is unavailable without itself imposing a significant impact on prices, routes, or services—
but they have not done so at this interlocutory stage,
which further counsels against this Court’s review.
c. Petitioners assert that the court of appeals erred
by adopting the view “that the FAAAA preempts only
laws that ‘bind, compel or otherwise freeze into place a
particular price, route, or service.’ ” Pet. 24; see Pet. 2430. That assertion is overstated. After reviewing the
statutory language and relevant case law, the court explained that “a generally applicable state law is not ‘related to a price, route, or service of any motor carrier’
for purposes of the F[AAA]A unless the state law [(1)]
‘binds the carrier to a particular price, route or service’
or otherwise [(2)] freezes them into place or [(3)] determines them to a significant degree.” Pet. App. 19a (citation and emphasis omitted). For that proposition, the
court relied (ibid.) on its prior decision in Dilts v.
Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014),
cert. denied, 575 U.S. 996 (2015) (No. 14-801). Dilts
stated that the FAAAA preempts “those state laws that
are significantly ‘related to’ prices, routes, or services,”
17
and found that certain state laws governing employee
meal and rest breaks were not preempted as applied to
short-haul truck drivers because “the laws do not ‘bind’
motor carriers to specific prices, routes, or services”; do
not “ ‘freeze into place’ prices, routes, or services”; and
do not “ ‘determine (to a significant degree) the prices,
routes, or services that motor carriers will provide.’ ”
Id. at 647 (brackets and citations omitted). Like the decision below, therefore, Dilts viewed the binding of carriers to specific prices, routes, or services as one way to
establish preemption—not as the exclusive test for
FAAAA preemption.
In focusing on the “binds” and “freezes” language,
petitioners overlook the disjunctive “or determines
them to a significant degree” language. Pet. App. 19a
(citation omitted). That language is taken directly from
this Court’s decision in Rowe. See 552 U.S. at 372. The
court of appeals’ recognition that the FAAAA preempts
state laws that “determine (to a significant degree) the
prices, routes, or services that motor carriers will provide,” Dilts, 769 F.3d at 647 (brackets and citation omitted), thus makes clear that the Ninth Circuit’s preemption test is consistent with this Court’s precedent and
not meaningfully different from the “significant effect”
test that petitioners derive (cf. Pet. 27, 31) from that
precedent. Indeed, the Ninth Circuit in Dilts expressly
“agree[d] with” the government’s invited amicus brief
in that case explaining that state labor laws and similar
generally applicable laws “are not preempted by the
FAAAA unless they have a ‘significant effect’ on prices,
routes, or services.” 769 F.3d at 649-650; see Gov’t Amicus Br. at 14-16, 18-23, Dilts, supra (9th Cir. Feb. 18,
2014) (No. 12-55705).
18
Other Ninth Circuit cases likewise have made clear
the court’s view that the FAAAA and ADA preempt
state laws that have a significant impact on prices,
routes, or services, regardless of whether the laws bind
carriers to or freeze into place particular prices, routes,
or services. For example, in finding that the ADA does
not preempt a generally applicable California labor law
regarding wage statements, the Ninth Circuit discussed
the “binding” language to which petitioners object, but
then held that “what proves dispositive here is that [the
airline] has presented no evidence that [its] increased
costs would have a ‘significant impact’ on its prices,
routes, or services.” Ward v. United Airlines, Inc., 986
F.3d 1234, 1243 (2021) (citation omitted).
Similarly, in Miller v. C.H. Robinson Worldwide,
Inc., 976 F.3d 1016 (2020), petition for cert. pending,
No. 20-1425 (filed Apr. 8, 2021), the Ninth Circuit held
that a state-law negligence claim was “ ‘related to’ carrier prices, routes, or services” under the FAAAA’s
preemption provision even though the claim did “not
‘bind’ [the carrier] to ‘specific prices, routes, or services.’ ” Id. at 1023-1024 (emphasis added; citation omitted). The court acknowledged its prior use of the “binding” language, but clarified “that the scope of FAAAA
preemption is broader than this language suggests.”
Id. at 1025. And in California Trucking Association v.
Su, 903 F.3d 953 (2018), cert. denied, 139 S. Ct. 1331
(2019) (No. 18-887), the Ninth Circuit reiterated that
the FAAAA preempts a state law “that significantly impacts a carrier’s prices, routes, or services,” as distinguished from one “that has only a tenuous, remote, or
peripheral connection.” Id. at 960.
As those decisions make clear, the Ninth Circuit has
adopted and regularly applies a test for ADA and
19
FAAAA preemption that looks to “significant impact”
on prices, routes, or services—a phrase used in Morales, see 504 U.S. at 390, and repeated in Rowe, see 552
U.S. at 375. And the Ninth Circuit has done so notwithstanding its use as well of the “binds” or “freezes”
language—which itself echoes language from this
Court’s cases, see Morales, 504 U.S. at 388 (describing
the preempted law as having imposed “binding requirements as to how [airline] tickets may be marketed”);
Rowe, 552 U.S. at 372 (explaining that the preempted
“law would freeze into place services that carriers might
prefer to discontinue in the future”).
2. Further review also is unwarranted because the
decision below does not create a conflict with any decision of this Court or another court of appeals that warrants this Court’s review. Petitioners base (Pet. 15-23)
an asserted circuit conflict on the Ninth Circuit’s supposed adoption of a “binds” or “freezes” test. But as
just explained, the Ninth Circuit has not actually
adopted such a test, as exemplified by recent decisions
making clear that the “dispositive” consideration is
whether application of state law to a carrier “would have
a ‘significant impact’ on its prices, routes, or services,”
Ward, 986 F.3d at 1243 (citation omitted); see Miller,
976 F.3d at 1024-1025; California Trucking Association, 903 F.3d at 960. And because petitioners have not
identified any other court of appeals or state court of
last resort that has adopted a “binds” or “freezes” test,
any residual disagreement between Ninth Circuit panels would at most amount to an intracircuit conflict that
would not warrant this Court’s review. See Wisniewski
v. United States, 353 U.S. 901, 902 (1957) (per curiam)
(“It is primarily the task of a Court of Appeals to recon-
20
cile its internal difficulties.”); see also, e.g., Davis v.
United States, 417 U.S. 333, 340 (1974).
Petitioners contend (Pet. 18-21) that the decision below conflicts with decisions of the First Circuit and the
Supreme Judicial Court of Massachusetts holding that
the FAAAA preempted application of the second element of the ABC test as codified under Massachusetts
law. See Massachusetts Delivery Association v. Healey, 821 F.3d 187 (1st Cir. 2016); Schwann v. FedEx
Ground Package System, Inc., 813 F.3d 429 (1st Cir.
2016); Chambers v. RDI Logistics, Inc., 65 N.E.3d 1
(Mass. 2016). Petitioners further contend (Pet. 21-23)
that the decision below “cannot be reconciled with the
analysis used by the Third and Seventh Circuits,” Pet.
21, in decisions holding that the FAAAA did not
preempt application of the ABC test under New Jersey
and Illinois law, respectively. See Bedoya v. American
Eagle Express Inc., 914 F.3d 812 (3d Cir.), cert. denied,
140 S. Ct. 102 (2019) (No. 18-1382); Costello v. BeavEx,
Inc., 810 F.3d 1045 (7th Cir. 2016), cert. denied, 137 S.
Ct. 2289 (2017) (No. 15-1305). None of those casespecific decisions establishes a conflict warranting this
Court’s review.
Both the First Circuit and the Massachusetts high
court found it significant that the relevant Massachusetts statutes would compel carriers to treat “last mile”
delivery drivers as employees. See Schwann, 813 F.3d
at 438 (stating that the law “requires FedEx to use persons who are employees to perform first-and-last mile
pick-up and delivery services”); Chambers, 65 N.E.3d at
9 (citing Schwann and stating that the law imposes a
“de facto ban” on “us[ing] independent contractors” for
such services); see also Massachusetts Delivery Association, 821 F.3d at 191-192 (relying on Schwann). In
21
reaching that conclusion, the First Circuit observed
that Massachusetts law prohibited the parties from contracting around some of the more onerous requirements
applicable to employees, Schwann, 813 F.3d at 433, 439,
and distinguished the Seventh Circuit’s decision in Costello precisely because of “the carrier’s ability under Illinois law to contract around the state rule[s]” applicable to employees, id. at 440 n.8; see Costello, 810 F.3d
at 1057. The Third Circuit, conversely, distinguished
Schwann on the ground that unlike the Massachusetts
statute codifying the ABC test, New Jersey’s statute
contained an “alternative method for reaching independent contractor status—that is, by demonstrating
that the worker provides services outside of the putative employer’s ‘places of business.’ ” Bedoya, 914 F.3d
at 824 (citation omitted).
Here, the presence of the business-to-business exemption indicates that, like the Illinois and New Jersey
statutes—but unlike the Massachusetts one—the California statute does not necessarily require motor carriers to hire owner-operators as employees for purposes
of state labor law rather than to engage them as independent contractors.
Moreover, any analysis of
FAAAA preemption requires analyzing the effects of
applying the challenged state law to the particular parties and industry at issue. Cf. Northwest, Inc. v. Ginsberg, 572 U.S. 273, 283 (2014) (“What is important * * *
is the effect of a state law, regulation, or provision, not
its form.”). At a minimum, the effects of the California
law on classification of owner-operators—and any resulting indirect impact on carriers’ prices, routes, or
services—would become clearer with a fuller record, cf.
Pet. App. 22a n.11, at which point the court below could
22
revisit its preliminary conclusion as to petitioners’ likelihood of success.
3. This case is an unsuitable vehicle to review the
question presented not just because of its interlocutory
posture, but also because, as noted above, whether
owner-operators could be covered by the business-tobusiness exemption remains a substantial and unresolved question of state law. In a recent case involving
FAAAA preemption, this Court declined to address one
of the questions on which it had granted certiorari because “the pre-enforcement posture of th[e] case” made
it unclear how the municipal entity would enforce the
challenged law. American Trucking Associations, Inc.
v. Los Angeles, 569 U.S. 641, 654 (2013). This case likewise effectively presents a pre-enforcement challenge,
given that the district court’s preliminary injunction
has remained in force in light of the stay of the court
of appeals’ mandate. As in American Trucking, there
is “no reason to take a guess now” about whether the
business-to-business exemption would cover owneroperators, or what the burdens associated with satisfying its conditions would be. Id. at 654-655. “There will
be time enough to address” the FAAAA preemption issue if warranted once that threshold question of state
law has been answered. Id. at 655.
23
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
JOHN E. PUTNAM
General Counsel
PAUL M. GEIER
Assistant General Counsel
P ETER J. PLOCKI
Deputy Assistant General
Counsel
CHARLES E. ENLOE
Senior Trial Attorney
Department of Transportation
EARL ADAMS, JR.
Chief Counsel
CHARLES J. FROMM
Deputy Chief Counsel
T RACY M. WHITE
Senior Attorney
Federal Motor Carrier
Safety Administration
MAY 2022
ELIZABETH B. PRELOGAR
Solicitor General
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
SOPAN JOSHI
Assistant to the Solicitor
General
MARK B. STERN
JENNIFER L. UTRECHT
Attorneys
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.