Thursday, July 10, 2014

Ninth Circuit Rejects FAAAA Preemption of California Meal and Rest Break Requirements: Dilts v. Penske Logistics

On July 9, 2014, the Ninth Circuit issued its ruling in Dilts v. Penske Logistics,  __ F.3d __ (9th Cir. 2014) [2014 U.S. App. LEXIS 12933], concluding that “[t]he FAAAA does not preempt California's meal and rest break laws …, because those state laws are not ‘related to’ … prices, routes, or services.”  Slip Opinion, at 24.  As explained by the Court, the question was not even a close call, as the Court reasoned that California break laws are merely rules of general applicability which operate no differently than state laws governing speed and weight limits, which obviously, are not preempted due to their tangential adverse impact on prices, routes and serves:
Although we have in the past confronted close cases that have required us to struggle with the "related to" test, and refine our principles of FAAAA preemption, we do not think that this is one of them. In light of the FAAAA preemption principles outlined above, California's meal and rest break laws plainly are not the sorts of laws "related to" prices, routes, or services that Congress intended to preempt. They do not set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly. They are "broad law[s] applying to hundreds of different industries" with no other "forbidden connection with prices[, routes,] and services." Air Transp. Ass'n, 266 F.3d at 1072. They are normal background rules for almost all employers doing business in the state of California. And while motor carriers may have to take into account the meal and rest break requirements when allocating resources and scheduling routes—just as they must take into account state wage laws, Mendonca, 152 F.3d at 1189, or speed limits and weight restrictions, 49 U.S.C. § 14501(c)(2)—the laws do not "bind" motor carriers to specific prices, routes, or services, Am. Trucking, 660 F.3d at 397. Nor do they "freeze into place" prices, routes, or services or "determin[e] (to a significant degree) the [prices, routes, or] services that motor carriers will provide," Rowe, 552 U.S. at 372.
Slip Opinion, at 18.

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