821 F.3d 187
1st Cir.2016Background
- Massachusetts Delivery Association (MDA) sued on behalf of same-day delivery companies (exemplar: Xpressman) challenging application of Massachusetts Independent Contractor Statute, Mass. Gen. Laws ch. 149, § 148B(a)(2) ("Prong 2").
- Prong 2 treats a worker as an employee unless the service is performed "outside the usual course of the business of the employer." MDA contends this forces carriers to classify couriers as employees.
- Xpressman uses independent couriers paid per route who use their own vehicles and bear delivery costs; routes are awarded via competitive bidding for scheduled routes and matched daily for on-demand work.
- MDA argued Prong 2 is preempted by the Federal Aviation Administration Authorization Act (FAAAA), 49 U.S.C. § 14501(c)(1), which precludes state laws that "relate to" a motor carrier's prices, routes, or services.
- District court granted summary judgment for MDA on remand, holding Prong 2 is preempted as a matter of logical effect; First Circuit affirmed, applying Schwann reasoning and concluding Prong 2 expressly references and significantly affects carriers' services and routes.
Issues
| Issue | Plaintiff's Argument (MDA) | Defendant's Argument (Healey) | Held |
|---|---|---|---|
| Whether FAAAA §14501(c)(1) preempts application of Prong 2 to same-day delivery companies | Prong 2 forces carriers to treat couriers as employees, thereby relating to carriers' prices, routes, and services and is therefore preempted | Prong 2 does not have a significant impact on carriers' prices, routes, or services; genuine factual disputes exist | Affirmed: Prong 2 is preempted as it expressly references services and, as a logical effect, significantly impacts carriers' choices about how to provide services and design routes |
Key Cases Cited
- Mass. Delivery Ass'n v. Coakley, 769 F.3d 11 (1st Cir. 2014) (remanded to determine whether Prong 2 "relate[s] to" carriers' prices, routes, or services under FAAAA)
- Schwann v. FedEx Ground Package Sys., Inc., 813 F.3d 429 (1st Cir. 2016) (FAAAA preempts application of Prong 2 to delivery carriers because it expressly references and significantly impacts prices, routes, or services)
- Morales v. Trans World Airlines, Inc., 504 U.S. 374 (U.S. 1992) (FAAAA-style preemption analysis: state laws may be preempted if they "relate to" airline prices, routes, or services)
- Costello v. BeavEx, Inc., 810 F.3d 1045 (7th Cir. 2016) (contrasting treatment on preemption of state contractor-classification rules)
- Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) (another circuit's approach to FAAAA preemption in the independent-contractor context)