IN RE WILLIAM GRICE, WILLIAM GRICE, Petitioner, v. UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, LOS ANGELES, Respondent, UBER TECHNOLOGIES, INC., Real Party in Interest.
No. 20-70780
United States Court of Appeals for the Ninth Circuit
September 4, 2020
D.C. No. 2:18-cv-02995-PSG-GJS. Argued and Submitted August 11, 2020, Pasadena, California.
FOR PUBLICATION
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
OPINION
Petition for Writ of Mandamus
Before: Diarmuid F. O‘Scannlain and Consuelo M. Callahan, Circuit Judges, and Michael H. Watson,* District Judge.
Opinion by Judge Callahan
SUMMARY**
Mandamus / Arbitration
The panel denied a petition for a writ of mandamus seeking to vacate the district court‘s order compelling arbitration in an Uber driver‘s putative class action alleging that the company failed to safeguard his and other drivers’ and riders’ personal information and mishandled a data security breach.
The district court concluded that the Uber driver did not fall within an arbitration exemption set forth in
COUNSEL
Richard P. Rouco (argued), Quinn Connor Weaver Davies & Rouco LLP, Birmingham, Alabama; D. Anthony Mastando, and Eric J. Artrip, Mastando & Artrip LLC, Huntsville, Alabama; for Petitioner.
Theane Evangelis (argued), Gibson Dunn & Crutcher LLP, Los Angeles, California; Catherine E. Stetson, Michelle A. Kisloff, and Kyle M. Druding, Hogan Lovells US LLP, Washington, D.C.; Vassi Iliadis, Hogan Lovells US LLP, Los Angeles, California; for Real Party in Interest.
CALLAHAN, Circuit Judge:
The Federal Arbitration Act (“FAA” or “the Act“) places arbitration agreements on an equal footing with other contracts, requiring courts to enforce them according to their terms. Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67–68 (2010) (citations omitted). But the Act exempts from its coverage “contracts of employment” of three categories of workers: “seamen,” “railroad employees,” and a residual category comprising “any other class of workers engaged in foreign or interstate commerce.”
I
Uber Technologies, Inc. (“Uber“) is a technology company specializing in rideshare services. Uber‘s smartphone application (the “Uber App“) connects riders needing transportation with local drivers available to drive them to their destinations for a fare. When a driver accepts a rideshare request through the Uber App, the App provides them basic rider information, including name and pick-up location. The rider then communicates a desired drop-off location, and fares are generated based on distance and time to the drop-off. Rideshare fares are charged automatically via the Uber App, with Uber withholding a percentage of each fare as a “service fee.”
William Grice is an Uber driver based in Alabama who has, since 2016, used the Uber App to provide rideshare services to and from Huntsville International Airport and Birmingham-Shuttlesworth International Airport. Uber entered into agreements with these airports (and many others) to allow Uber drivers like Grice to pick up arriving passengers and transport them to their final destinations. In the course of his work, Grice never crosses state lines. Thus, Grice‘s passengers travel interstate (by virtue of the flights they take), but Grice does not.
In November 2017, Grice filed a putative class action lawsuit against Uber, alleging that the company failed to safeguard his and other Uber drivers’ and riders’ personal information and mishandled a data security breach in which that information was stolen by online hackers.1 Uber moved to compel arbitration, citing the Technology Services Agreement (“TSA“) that Grice and other Uber drivers signed requiring arbitration of “any disputes . . . arising out of or related to [the driver‘s] relationship” with Uber and prohibiting arbitration “on a class, collective action, or representative basis.” Grice responded that he “driv[es] passengers (who are engaged in interstate travel) and their luggage to and from airports” and therefore qualifies for the FAA‘s
Grice now petitions this court for a writ of mandamus vacating the district court‘s referral to arbitration.2 Because mandamus “is a drastic and extraordinary remedy reserved only for really extraordinary causes,” we may not grant Grice‘s request unless he shows that his right to the writ is “clear and indisputable.” In re Van Dusen, 654 F.3d 838, 840–41 (9th Cir. 2011) (internal quotation marks and citations omitted). At a minimum, he must show that the district court‘s interpretation of
II
Congress enacted the FAA in 1925 “in response to a perception that courts were unduly hostile to arbitration.” Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018). Designed to replace this “widespread judicial hostility” with a “liberal policy favoring arbitration,” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citation omitted), the FAA “requires courts rigorously to enforce arbitration agreements according to their terms,” Epic Sys., 138 S. Ct. at 1621 (citation and internal quotation marks omitted). Section 1 of the FAA, however, exempts from the Act‘s coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
The Supreme Court has narrowly interpreted the residual clause as covering “only contracts of employment of transportation workers“—that is, workers who, as a class, are “engaged in foreign or interstate commerce.” Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 112, 119 (2001). The Court has also noted that most courts have defined “transportation workers” to mean those engaged in the actual movement of goods in interstate commerce. Id. at 119 (citing Cole v. Burns Int‘l Sec. Servs., 105 F.3d 1465, 1471 (D.C. Cir. 1997)). But we have described the residual clause as applying to “the contracts of employees who actually transport people or goods in interstate commerce.” Craft v. Campbell Soup Co., 177 F.3d 1083, 1085 (9th Cir. 1999) (per curiam) (emphasis added), abrogated on other grounds by Circuit City, 532 U.S. 105. And this broader interpretation has been embraced by several courts in recent decisions addressing the
In Singh v. Uber Technologies, Inc., 939 F.3d 210, 219 (3d Cir. 2019), the Third Circuit held that “the residual clause of
In each case, the critical factor was not the nature of the item transported in interstate commerce (person or good) or whether the plaintiffs themselves crossed state lines, but rather “[t]he nature of the business for which a class of workers perform[ed] their activities.” Waithaka, 966 F.3d at 10; accord Rittman v. Amazon.com, Inc., — F.3d —, 2020 WL 4814142, at *9 (9th Cir. 2020); see also Rogers, 2020 WL 1684151, at *5 (“[T]he question posed by the exemption is ‘not whether the individual worker actually engaged in interstate commerce, but whether the class of workers to which the complaining worker belonged engaged in interstate commerce.‘” (quoting Bacashihua v. U.S. Postal Serv., 859 F.2d 402, 405 (6th Cir. 1988))). Thus, for example, a truck driver for an interstate trucking company may be exempt even if the particular trucker only occasionally, see Int‘l Brotherhood of Teamsters Local Union No. 50 v. Kienstra Precast, LLC, 702 F.3d 954, 958 (7th Cir. 2012), or never, see Bacashihua, 859 F.2d at 405, drives across state lines. Likewise, so-called “last mile” delivery drivers may be engaged in interstate commerce based on the nature of their employer‘s business “regardless of whether the workers themselves physically cross state lines.” Waithaka, 966 F.3d at 26 (holding that Amazon Flex (“AmFlex“) delivery drivers are exempt under
III
Applying these principles to the rideshare industry, the district court in Rogers concluded that “Lyft drivers, as a class, are not engaged in interstate commerce.”4 2020 WL 1684151, at *6. Instead, “[t]heir work predominantly entails intrastate trips, an activity that undoubtedly affects interstate commerce but is not interstate commerce itself.” Id. Even though “some drivers (especially those who live near state borders) regularly transport passengers across state lines, the company
Similarly, the district court here contrasted the nature of Uber‘s business with that of Amazon and various shipping and package delivery companies that are engaged in delivering products “concededly in the stream of interstate commerce.” The district court agreed that these companies’ employees, unlike Grice, are exempt under the residual clause even if they “do not themselves deliver items across state lines,” and it concluded that because Grice “was not part of a group engaged in foreign or interstate commerce, he does not fall within the [
Grice notes that the district court also found it significant that he transported passengers, as opposed to goods, and that he never personally crossed state lines. But to the extent these findings are in tension with cases such as Singh, Waithaka, Rittman, and Rogers, which emphasized the interstate nature of an employer‘s business as the critical factor for determining whether a worker qualifies for the
The closest he comes is Singh. There, the Third Circuit remanded to the district court for discovery based on Singh‘s claim that he frequently drove passengers from the Newark airport “across state lines” to New York. 939 F.3d at 226, 232. But the court did not conclude that Singh, by virtue of this claim, “belongs to a class of transportation workers engaged in interstate commerce or in work so closely related thereto as to be in practical effect part of it.” Id. at 227. Instead, it remanded to the district court to decide that question, noting the inquiry should be informed by a variety of factors such as the contents of Singh‘s agreements with Uber, information regarding the rideshare industry, and information regarding the work performed by rideshare drivers. Id. at 227–28. Thus, Singh does not suggest that the district court‘s ruling is “clearly erroneous as a matter of law.”
Nor is Waithaka particularly helpful to Grice. That case held that “last-mile delivery workers who haul goods on the final legs of interstate journeys are transportation workers ‘engaged in . . . interstate commerce,’ regardless of whether the workers themselves physically cross state lines.” 966 F.3d at 26. But Waithaka‘s holding was limited to the
Grice also points to United States v. Yellow Cab, an antitrust case that held the transportation of interstate rail passengers and their luggage between rail stations in Chicago to facilitate their travel is part of “the stream of interstate commerce.” 332 U.S. 218, 228–29 (1947), overruled on other grounds by Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (1984). But there, passengers contracted directly with the railroads for this “between-station transportation” service, which was exclusively provided by a single cab company subcontracted by the railroads. Id. The Court also held that “when local taxicabs merely convey interstate train passengers between their homes and the railroad station in the normal course of their independent local service, that service is not an integral part of interstate transportation.” Id. at 228, 233.
Grice‘s employment is more like the local taxicab service that the Supreme Court held to be “not an integral part of interstate transportation” in Yellow Cab. Although Uber entered into agreements with the Huntsville and Birmingham airports to allow Uber drivers like Grice to pick up arriving passengers, Grice does not contend that his passengers contracted with the airlines to hire him. Nor is there any evidence that Grice provided “between-airport transportation” in Huntsville and Birmingham to facilitate his passengers’ interstate travel. Thus, Yellow Cab, like Singh, supports rather than undermines the district court‘s rationale for denying Grice‘s
Nonetheless, Grice offers an alternative interpretation of the residual clause which, he claims, “follows well settled understandings of the phrase ‘engaged in foreign or interstate commerce.‘” Under Grice‘s construction, the clause would apply to workers who, like him, “provid[e] transportation services to persons or goods traveling across state lines (i.e., in the flow of foreign or interstate commerce).” But as the Seventh Circuit noted in Wallace, this “interpretation would sweep in numerous categories of workers whose occupations have nothing to do with interstate transport—for example, dry cleaners who deliver pressed shirts manufactured in Taiwan and ice cream truck drivers selling treats made with milk from an out-of-state dairy.” 2020 WL 4463062, at *3. Contrary to Grice‘s understanding, “the residual exemption is . . . about what the worker does,” not just “where the goods [or people] have been.” Id. Today almost every object we buy has some component that comes from out-of-state. Grice‘s proposed reading of
IV
In sum, even accepting that there are some tensions between the district court‘s
DENIED.