Ever Bedoya v. American Eagle Express Inc, 914 F.3d 812

Background

Plaintiffs Ever Bedoya, Diego Gonzalez, and Manuel Decastro (delivery drivers) sued American Eagle Express, Inc. (AEX) as a putative class, alleging misclassification as independent contractors and seeking rights under New Jersey Wage and Hour Law (NJWHL) and Wage Payment Law (NJWPL).
AEX moved for judgment on the pleadings arguing the Federal Aviation Authorization Administration Act (FAAAA) preempts New Jersey’s ABC independent-contractor test and thus bars the state-law claims.
The District Court denied AEX’s Rule 12(c) motion and allowed interlocutory appeal under 28 U.S.C. § 1292(b); the Third Circuit reviews preemption de novo.
New Jersey’s ABC test treats workers as employees unless the employer proves (A) freedom from control, (B) service outside usual course of business or outside employer’s places of business, and (C) engagement in an independent business.
The central legal question is whether the FAAAA’s express preemption of state laws "related to" motor carrier prices, routes, or services (with respect to transportation of property) preempts New Jersey’s ABC classification test.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FAAAA preempts NJ’s ABC independent-contractor test	NJ’s wage laws regulate labor inputs (employee status/wages) and are traditional state police powers not targeted by FAAAA	FAAAA preempts any state law that affects carrier prices, routes, or services; NJ test will force AEX to change delivery model, affecting prices/routes/services	Not preempted. Court held New Jersey’s ABC test is a background labor law regulating employer-employee relations and does not have a direct or significant effect on carrier prices, routes, or services
Whether NJ test directly regulates carrier services or binds carriers to use employees rather than contractors	NJ test governs employer-worker relationships, not carrier-customer service outputs	Application of the test will effectively force carriers to employ drivers, altering service delivery and costs	Not bound. NJ test does not categorically bar use of independent contractors and provides alternative means of compliance, so it does not "bind" carriers to a particular service model
Whether the test’s effect on carrier operations is significant enough to frustrate FAAAA’s deregulatory purpose	Any employer cost/operational impacts are incidental and do not undermine Congress’ goal of deregulation	Reclassification would impose substantial costs (HR, fleet, benefits, route control) that significantly affect prices/routes/services	Insignificant. Speculative or indirect costs to carriers are too tenuous/remote to trigger preemption
Whether a state-by-state difference (patchwork) warrants preemption	Wage laws are largely uniform and within states’ police powers; Congress listed NJ among jurisdictions whose laws did not conflict with FAAAA	Differences among states could create a patchwork that frustrates national deregulation	No patchwork problem. NJ’s ABC test is similar to tests in other states and Congress contemplated leaving such pre-existing labor regulations intact

Key Cases Cited

In re Vehicle Carrier Servs. Antitrust Litig., 846 F.3d 71 (3d Cir. 2017) (preemption framework and presumption against preemption applied)
Lupian v. Joseph Cory Holdings, LLC, 905 F.3d 127 (3d Cir. 2018) (FAAAA does not preempt state wage law; labor laws are state police powers)
Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251 (2013) (FAAAA’s "related to" language is cabined; not limitless)
Rowe v. New Hampshire Motor Transport Ass’n, 552 U.S. 364 (2008) (FAAAA/ADA preemption principles; Maine tobacco-delivery law preempted because it prescribed carrier service)
Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) (ADA preemption interpretation—broad "related to" language but limited by context)
Northwest, Inc. v. Ginsberg, 572 U.S. 273 (2014) ("related to" covers laws with connection to rates, routes, or services)
Schwann v. FedEx Ground Package Sys., Inc., 813 F.3d 429 (1st Cir. 2016) (Massachusetts ABC test preempted where it effectively barred use of independent contractors for delivery services)
Costello v. BeavEx, Inc., 810 F.3d 1045 (7th Cir. 2016) (Illinois wage law not preempted; distinctions between carrier-customer and carrier-workforce laws)
Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) (California meal/rest-break laws not preempted where they did not bind carriers to specific services)
DiFiore v. American Airlines Inc., 646 F.3d 81 (1st Cir. 2011) (generally applicable laws may be preempted if they directly regulate how airline services are performed)