Kairy v. SuperShuttle International
660 F.3d 1146
| 9th Cir. | 2011Background
- PUC has broad regulatory authority over passenger stage corporations and its decisions are generally insulated from judicial review by Cal. Pub. Util. Code § 1759.
- Chapter 11 of the Public Utilities Act provides private remedies for violations of law by public utilities, including actionable claims for damages under § 2106.
- General Order 158-A § 5.03 requires PSC drivers to be under complete supervision, direction and control of the carrier, and contemplates three driver-status options (employee of certificate holder, employee of sub-carrier, or independent owner-operator).
- SuperShuttle transitioned California drivers from employees to independent contractor franchisees under a unit franchise model; plaintiffs are current/former franchisee drivers alleging misclassification under California law.
- Plaintiffs removed the action to federal court under CAFA; district court dismissed based on § 1759, applying Covalt's three-part test.
- Ninth Circuit reverses, holding the district court may proceed on state-law claims without hindering PUC regulatory authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1759 bars district court jurisdiction over California wage claims | Covalt permits state-law relief if not hindering PUC authority. | PUC policy and § 1759 prevent interference with regulatory authority. | Not barred; jurisdiction remains. |
| Does PUC have authority to regulate PSC-driver relationships | PUC authority is broad and encompasses driver classifications. | PUC does not necessarily regulate employment status. | PUC has authority to regulate driver relationships. |
| Has the PUC exercised its authority over the PSC-driver relationship | General Order 158-A and Prime Time demonstrate actual exercise of control. | Agnostic stance in General Order 158-A and Prime Time shows no definitive exercise of employment-status control. | Court does not need to decide this point; proceeding does not hinder PUC. |
| Would a California employment-status determination hinder PUC policy | De facto employee status would not conflict with PUC safety/regulatory aims. | California employer-employee analysis would interfere with PUC framework. | No hindrance; status determination can proceed. |
Key Cases Cited
- Covalt v. Pac. Gas & Elec. Co., 55 Cal.Rptr.2d 724 (Cal. 1996) (three-part Covalt test for preemption under § 1759)
- Hartwell Corp. v. Superior Court, 115 Cal.Rptr.2d 874 (Cal. 2002) (confirms Covalt framework and regulatory-safety considerations)
- People ex rel. Orloff v. Pac. Bell, 80 P.3d 201 (Cal. 2003) (acknowledges use of Covalt analysis and PUC amicus guidance)
- Koponen v. Pac. Gas & Elec. Co., 81 Cal.Rptr.3d 22 (Cal. App. 2008) (relies on PUC amicus guidance in Covalt framework)
- Borello & Sons, Inc. v. Dep't of Indus. Relations, 769 P.2d 399 (Cal. 1989) (common law test for employee vs. independent contractor)
- Narayan v. EGL, Inc., 616 F.3d 895 (9th Cir. 2010) (multi-factor test for employee status adopted in California context)