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Supreme Court Seeks U.S. Take on Trucker, Airline Disputes (1)

Nov. 15, 2021, 3:14 PMUpdated: Nov. 15, 2021, 7:21 PM

The U.S. Supreme Court asked the U.S. solicitor general to weigh in on a case involving truckers who want a carve-out from a law making it difficult to defend their independent contractor status in California, as well as an airline’s attempt to fend off the state’s wage and hour laws.

The justices Monday said that they want the federal government’s opinion on issues in both cases that could determine when federal law supersedes state laws seeking to govern job rights for workers in the transportation industry.

The California Trucking Association sought high court review of a U.S. Court of Appeals for the Ninth Circuit ruling that said the Federal Aviation Administration Authorization Act didn’t override California’s worker status law, known as Assembly Bill 5.

The Ninth Circuit found no federal preemption of A.B. 5 because the state law didn’t relate to motor carrier prices, routes, or services.

The justices also requested the solicitor general to weigh in on Alaska Airlines and Virgin America’s appeal of a Ninth Circuit decision the airlines say guts the Airline Deregulation Act. The airlines say the appeals court concocted an overly restrictive test for federal preemption that undermines that law’s core purpose: superseding state laws that significantly affect air carrier prices, routes, or services.

Truckers’ Arguments

The trucking industry relies heavily on contractors, and has fought to be exempt from state regulations for years because of federal law.

At the center of the current trucking association dispute is a 2018 California Supreme Court decision, later codified by state lawmakers in A.B. 5, that requires employers in the state to apply a three-part “ABC test” to determine whether a worker is an employee entitled to job benefits or an independent contractor who isn’t.

Several industry groups have since urged in friend of the court briefs for the justices to take up this issue, arguing that recent rulings in California furthered a clear split between federal appeals courts.

The First Circuit held that the Federal Aviation Administration Authorization Act preempts Massachusetts’ independent contractor statute, but the Third and Seventh circuits determined the federal law didn’t bar similar laws in New Jersey and Illinois. The justices declined to take up a similar case earlier this year.

The California Trucking Association is represented by Mayer Brown LLP. The California Justice Department is defending the state law.

Airlines

Alaska Airlines and Virgin America are also appealing a Ninth Circuit decision, which tossed more than $35 million of a $77 million class action judgment against the airlines but rejected the airlines’ arguments insofar as they were based on Airline Deregulation Act preemption of California’s meal-and-rest-break laws.

According to the airlines, the Ninth Circuit established a rule limiting federal preemption to state laws that “bind” airlines to a particular price, route, or service, which they say is excessively restrictive and at odds with the standard used by other circuit courts. They claim the decision will force air carriers to comply with a patchwork of highly variable state meal-and-rest-break requirements, driving up costs and ultimately ticket prices for travelers.

Nineteen states filed friend of the court briefs in support of review, arguing that the Ninth Circuit’s decision will cause “severe economic harm” to state and local economies, disproportionately affecting communities served by regional airlines and airports.

The U.S. filed a brief in support of the airlines before the Ninth Circuit, backing the view that California’s meal-and-rest break requirements are federally preempted and would prove disruptive for the airline industry as a whole.

California told the Ninth Circuit that its meal-and-rest-break requirements are flexible enough that they don’t interfere with the federal regulatory scheme governing airline carriers.

A state’s general employment laws—which don’t dictate a carriers’ prices, routes, or services—aren’t preempted solely on the basis that they impose costs or impact carriers’ business decisions, California argued.

The airlines are represented by Morgan, Lewis & Bockius LLP; Skadden, Arps, Slate, Meagher & Flom LLP; and Jones Day. The class is represented by Kosinski & Thiagaraj LLP, Miller Shah LLP, and Cooper & Kirk PLLC.

The cases are Virgin Am. Inc. v. Bernstein, U.S., No. 21-260, solicitor brief requested 11/15/21 and Cal. Trucking Ass’n v. Bonta, U.S., No. 21-194, solicitor brief requested 11/15/21.

(Updated with additional reporting throughout.)

To contact the reporters on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com; Holly Barker in Washington at hbarker@bloombergindustry.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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