Swift Transportation Co. v. United States District Court for District of Arizona
830 F.3d 913
9th Cir.2016Background
- Van Dusen (two interstate drivers) signed contractor agreements with Swift designating them as independent contractors and requiring arbitration of disputes.
- Van Dusen sued, alleging misclassification as employees (FLSA and state wage claims); Swift moved to compel arbitration under the agreements.
- Van Dusen argued the agreements are “contracts of employment” exempt from the FAA under 9 U.S.C. § 1; the district court initially deferred the § 1 question to an arbitrator and later set a discovery/trial schedule to decide employment status.
- Ninth Circuit previously held the district court must decide whether § 1 applies (In re Van Dusen and Van Dusen II) but did not prescribe the procedure for that determination.
- Swift sought a writ of mandamus to vacate the case-management order and require the district court to decide the § 1 exemption without discovery or trial; the Ninth Circuit denied mandamus.
Issues
| Issue | Plaintiff's Argument (Van Dusen) | Defendant's Argument (Swift) | Held |
|---|---|---|---|
| Whether mandamus relief is warranted to vacate the district court’s case-management order | Mandamus unnecessary; district court may proceed | Mandamus needed to prevent unnecessary discovery/trial and to preserve arbitration rights | Denied — mandamus not appropriate under Bauman factors |
| Whether the district court must decide the § 1 FAA exemption before compelling arbitration | District court should decide § 1; but may resolve as a legal question | District court must decide § 1 and should do so without discovery/trial | Court reaffirmed district court must decide § 1 (per prior opinions) but may use case management including discovery |
| Whether the § 1 determination must be made without discovery/trial (i.e., on the contract’s face as a pure legal question) | § 1 is a categorical, legal determination based on contract terms; no discovery required | The district court should decide § 1 without procedurally mandated briefing-only rule, and may use discovery if appropriate | Held: No controlling precedent requiring decision without discovery; district court’s use of discovery/trial is not clearly erroneous |
| Whether Swift has an adequate alternative remedy (ability to appeal) and whether prejudice justifies mandamus | Van Dusen: final judgment/appeal adequate; prejudice not compelling | Swift: interlocutory order not appealable; proceeding to trial will irreparably undermine arbitration right | Court: Swift can appeal a final order; litigation costs alone don’t justify mandamus; factor favors denial |
Key Cases Cited
- In re Van Dusen, 654 F.3d 838 (9th Cir. 2011) (district court must assess § 1 exemption before compelling arbitration)
- Van Dusen v. Swift Transp. Co., 544 Fed.Appx. 724 (9th Cir. 2013) (law of the case: district court must determine § 1 exemption)
- Bauman v. U.S. Dist. Ct., 557 F.2d 650 (9th Cir. 1977) (five-factor mandamus test)
- In re United States, 791 F.3d 945 (9th Cir. 2015) (mandamus factors are flexible; clear-error factor critical)
- Modzelewski v. Resolution Trust Corp., 14 F.3d 1374 (9th Cir. 1994) (categorical contract analysis to determine whether agreement is an employment contract)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (U.S. 1967) (policy favoring arbitration; § 1 exempts certain contract categories)