FAA, Transportation Workers: Domino’s Pizza Drivers Involved In “Last-Leg” Of Interstate Commerce Are Exempt From Arbitration
Ninth Circuit Explains Drivers Inside California May Be Engaged In Interstate Commerce.
The ingredients for Domino's pizzas are delivered from out-of-state to warehouses in California where they are weighed, redistributed, packaged, and delivered by truck drivers in California to Domino's Pizza franchisees located in California. Do the California drivers qualify as a class of transportation workers exempt from the Federal Arbitration Act under 9 USC § 1? That is the question addressed in Edmond Carmona, et al. v. Domino's Pizza, LLC, 21-55009 (9th Cir. 7/21/23) (Hurwitz, Wardlaw, Parker, Jr.).
Yes, answers Judge Andrew D. Hurwitz, who authored the panel's opinion. So long as the so-called "last-leg" driver is engaged in an unbroken stream of interstate commerce, the driver qualifies as a transportation worker exempt from the coverage of the FAA. It doesn't matter here that the pizza ingredients are repackaged in the California warehouse and ordered by the California franchisees, because the ingredients are unaltered and travel through a continuous stream of interstate commerce. Judge Hurwitz relies on Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), which he does not find to be incompatible with the Supreme Court's opinion in Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022). In Saxon, the Supreme Court, focusing on the actual work performed by the class of workers, exempted from the FAA “workers who physically load and unload cargo on and off airplanes.”
Delegation: Ninth Circuit Concludes That Delegation Clause Is Enforceable, Regardless Of Whether Arbitration Clause Is Found To Be Enforceable
Nesting dolls (Matryoshka dolls). Wikipedia. Published under GNU Free Documentation License, Version 1.2, and any subsequent versions.
We can analogize the next case to a nesting doll problem. The delegation clause in an arbitration agreement (Agreement) is a mini-agreement nested in the Agreement. The Agreement is nested in an employment contract, consumer contract, or some other contract. The different contracts can be analyzed separately, and their relationship to one another must be considered.
Here, a district court judge found the nested delegation clause to clearly and unmistakably delegate arbitrability issues to the arbitrator. However, the judge also found the delegation clause to be substantively and procedurally unconscionable, and therefore unenforceable. This conclusion was based on the fact that the Agreement contained a pre-dispute jury trial waiver. The waiver, however, only kicked in if the Agreement was found to be unenforceable. Having determined that the delegation clause was unenforceable, the judge then concluded that the Agreement itself was unenforceable, based on the same pre-dispute jury waiver. The defendant employer, seeking to compel arbitration, appealed the adverse ruling. Kenneth Holley-Gallegly v. TA Operating, LLC, 22-55950 (9th Cir. 7/21/23) (Smith, Hamilton, Collins).
The Court of Appeals reversed, directing the district court to order the arbitrator to decide the arbitrability issue. The reason? The pre-dispute waiver of a jury trial did not infect the nested delegation clause. The arbitrator could still decide the issue of arbitrability. If the arbitrator decided that the case was arbitrable, then the waiver of a jury trial became irrelevant, because the case would never be litigated in court, and there could not be a jury trial. Thus, the jury waiver could only possibly have effect if the arbitrator decided the Agreement was unenforceable — i.e., reached the same conclusion as the district court judge. Under the delegation clause, the arbitrator might conclude that the Agreement was unenforceable or enforceable, and either way, the delegation clause could be operable.
Settlement: Mediator settlement proposals: a perspective
My Perspective.
I've written an article about mediator settlement proposals and it is published in the July 2023 issue of Advocate. For my readers interested in the topic, here is a link to the article: Download Alexander-July23-article
Arbitration, Scope: 9th Circuit Ruled Amazon Arbitration Agreement With Flex Drivers Did Not Apply To Spying On Drivers On Facebook
Two Judge Majority With Judge Susan P. Graber Concurring And Dissenting.
Amazon Flex Drivers sued Amazon for allegedly spying on them in a closed Facebook group where the drivers discussed employment-related issues when they were not working. A panel of the 9th Circuit held that a 2016 arbitration agreement applied, because the employer seems not to have given adequate notice of the terms of a later agreement to the drivers. However, a majority of the panel held that the allegations of spying did not come within the scope of the arbitration agreement; in fact, the drivers' claim that spying and invasion of privacy were wrongful acts would have been wrongful acts even if they had not been drivers. Drickey Jackson v. Amazon, No. 21-56107 (9th Cir. 4/19/23) (Schroeder, Friedland; Graber conc. & dsst.).
Judge Graber concurred that the 2016 agreement applied and that denial of a motion to compel arbitration was appealable. However, she believed that the conduct alleged did arise from the employment relationship, and therefore the drivers should have been required to arbitrate."In sum," Judge Graber wrote, "Defendant allegedly spied on Plaintiff solely because of Plaintiff’s independent contractor relationship with Defendant and in order to defeat, preempt, or combat work-related activities by Plaintiff and other Flex drivers." (emphasis by Judge Graber).
Arbitration, Deadlines, Prompt Payment, Fees: Plaintiff Successfully Exercises Option To Withdraw From Arbitration Because Defendant Employer Was Tardy Paying Arbitration Fees
Courts Have Been Unforgiving In Interpreting An Unambiguous Statute. See CCP § 1281.98.
"A statute gave Milan Cvejic the option to get out of arbitration if Skyview was tardy in paying its arbitration fees. Skyview was tardy in paying its arbitration fee. Cvejic was entitled to get out." Milan Cvejic v. Skyview Capital, LLC, B318880 (2/8 6/28/23) (Wiley, Grimes, Viramontes).
COMMENTS: (1) A panel of three arbitrators got it wrong. (2) Cvejic was smart and did not sit on his rights. "Within about an hour of the call [whereby the arbitration panel set a new deadline for defendant to pay the fees], Cvejic’s counsel wrote the panel to say Cvejic was withdrawing from the arbitration under section 1281.98."
See previous posts about § 1281.98 dated 8/1/22, 12/11/22, 1/2/23, 3/21/23.
Nonsignatories: Second Dist., Div. 7 Holds Ford Motor Company Cannot Compel Arbitration Under Dealership Contract
Second District, Div. 7 Sides With Second Dist., Div. 8, Rejects Reasoning In Third District Case.
Rejecting equitable estoppel and third-party beneficiary theories, the Court of Appeal holds that Ford Motor Company cannot piggyback on to the arbitration provision in a dealership contract, and thus Ford is unable to compel arbitration with the buyer of its vehicle. The plaintiff's claim for breach of express warranty against Ford was not based on or intertwined with the dealership's contract with the buyer. In fact, the dealership contract provided it offered no express manufacturer's warranties, though the manufacturer, Ford, could do so. Rosanna Montemayor et al. v. Ford Motor Company, B20477 (2/7 6/26/23) (Feuer, Perluss, Escalante).
The opinion is in line with the reasoning in the Ford Motor Warranty Cases, 89 Cal.App.5th 1324 (2023) [see my 5/3/23 post] and at odds with the reasoning in Felisilda v. FCA US LLC , 53 Cal.App.5th 486 (2020) [see my 8/29/2020 post].