Mickey Dilts v. Penske Logistics LLC
769 F.3d 637
| 9th Cir. | 2014Background
- Plaintiffs are a certified class of 349 California intrastate delivery drivers employed by Penske (drivers on the Whirlpool account) alleging routine violations of California meal- and rest-break laws (Cal. Lab. Code §§ 226.7, 512; Cal. Code Regs. tit. 8, § 11090).
- California law requires a 30-minute meal break for >5 hours worked and a paid 10-minute rest break for every four hours (with limited waiver possibilities); failure to provide triggers statutory penalty (an extra hour's pay).
- Defendants removed to federal court; on summary judgment the district court held the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempted the state break rules as applied to motor carriers and dismissed the suit.
- The Ninth Circuit reviews de novo whether the FAAAA preempts state law and framed the question around whether the state rules are "related to" prices, routes, or services of motor carriers with respect to transportation of property (49 U.S.C. § 14501(c)(1)).
- The Ninth Circuit majority (Graber, J.) reversed: concluding California's meal/rest laws are generally applicable background employment regulations that do not bind carriers to particular prices, routes, or services and thus are not preempted; the opinion relied on preemption principles from Morales/Rowe and related precedent.
- Judge Zouhary concurred separately to emphasize Penske's burden to prove preemption and that Penske produced only generalized, not route-specific evidence; he stressed the limited record and that the pricing impact shown (3.4% estimate) was insufficient to establish preemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAAAA preempts California meal/rest-break laws as applied to motor carriers | Dilts: state laws are ordinary labor rules not aimed at prices/routes/services and thus not preempted | Penske: break rules are "related to" services/routes (and prices) because they affect service timing, routing, and availability | Not preempted — laws are general background employment rules that do not bind carriers to particular prices, routes, or services |
| Whether the break laws "freeze into place" or mandate specific services | Dilts: laws set timing windows for individual breaks but do not mandate that carriers suspend service or provide particular services | Penske: laws effectively require cessation of service or alter service frequency/scheduling | Court: laws regulate individual employees' breaks; carriers may schedule/stagger staff and are not bound to specific services — no freezing of services |
| Whether increased operating costs or scheduling changes make the laws "related to" prices/routes/services | Dilts: cost increases or scheduling impacts are indirect and insufficient for preemption; analogous to prevailing wage and safety rules | Penske: costs and scheduling burdens (e.g., parking, crew substitution) materially affect routes/services and prices | Court: increased costs alone do not trigger preemption; general laws affecting many industries are not preempted absent a direct binding effect on prices/routes/services |
| Burden of proof and evidentiary showing for preemption (as-applied) | Dilts: Defendants must show actual or substantial effect on routes/services/prices | Penske: argues hypothetical or general operational impacts suffice | Court & Concurrence: Penske bears burden and provided only generalized evidence; absent concrete proof of a significant effect, preemption fails |
Key Cases Cited
- Morales v. Trans World Airlines, 504 U.S. 374 (state laws with a connection to carrier rates, routes, or services may be preempted)
- Rowe v. New Hampshire Motor Transp. Ass'n, 552 U.S. 364 (state law requiring special delivery verification preempted where it would effectively dictate services and freeze market choices)
- Dan's City Used Cars, Inc. v. Pelkey, 133 S. Ct. 1769 (interpretive guide for scope of FAAAA preemption and limits imposed by "transportation of property" language)
- Californians for Safe & Competitive Dump Truck Transp. v. Mendonca, 152 F.3d 1184 (9th Cir.) (FAAAA does not preempt generally applicable prevailing wage law)
- Air Transp. Ass'n v. City of San Francisco, 266 F.3d 1064 (9th Cir.) (generally applicable city laws that do not compel particular services/routes are not preempted)
- Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (state law claims related to services/prices (frequent-flyer benefits) can be preempted)