UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Docket No. _________IN RE CON-WAY FREIGHT INC. Defendant-Petitioner, vs. UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF CALIFORNIA Respondent, JORGE R. QUEZADA Real Party in Interest. From the United States District Court For the Northern District of California Case No. C 09-03670 JW PETITION FOR WRIT OF MANDAMUS COMPELLING DETERMINATION THAT CON-WAY’S PIECE-RATE COMPENSATION POLICY IS LAWFUL Barrett Green, Bar No. 145393 Littler Mendelson, P.C. 2049 Century Park East, 5th FloorLos Angeles, California 90067 T: 310.553.0308 / F: 310.553.5583 Richard H. Rahm, Bar No. 130728 Angela J. Rafoth, Bar No. 241966 Littler Mendelson, P.C. 650 California Street, 20th FloorSan Francisco, CA 94108.2693 T: 415.433.1940 / F: 415.399.8490 Attorneys for Defendant-Petiti onerCON-WAY FREIGHT INC. Case: 13-71160 04/02/2013 ID: 8574584 DktEntry: 1-1 Page: 1 of 40
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In Re Conway Freight Petition for Writ of Mandamus
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7/28/2019 In Re Conway Freight Petition for Writ of Mandamus
UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF CALIFORNIA
Respondent,
JORGE R. QUEZADAReal Party in Interest.
From the United States District CourtFor the Northern District of California
Case No. C 09-03670 JW
PETITION FOR WRIT OF MANDAMUS COMPELLING
DETERMINATION THAT CON-WAY’S PIECE-RATE COMPENSATION
POLICY IS LAWFUL
Barrett Green, Bar No. 145393Littler Mendelson, P.C.2049 Century Park East, 5th Floor Los Angeles, California 90067T: 310.553.0308 / F: 310.553.5583
Richard H. Rahm, Bar No. 130728Angela J. Rafoth, Bar No. 241966Littler Mendelson, P.C.650 California Street, 20th Floor San Francisco, CA 94108.2693T: 415.433.1940 / F: 415.399.8490
Attorneys for Defendant-Petitioner CON-WAY FREIGHT INC.
I. INTRODUCTION .......................................................................................... 1
II. STATEMENT OF RELIEF SOUGHT .......................................................... 7
III. STATEMENT OF ISSUES PRESENTED .................................................... 8
IV. STATEMENT OF RELEVANT FACTS ....................................................... 8
A. Con-way Compensates Drivers By The Trip, WhichContractually Covers Both Driving And Non-Driving Duties ............ 8
B. The District Court Held That Con-way’s Piece Rate Could NotLegally Compensate Its Drivers For Non-Driving Activities .............. 9
V. CON-WAY’S PETITION FOR A WRIT OF MANDATE SHOULDBE GRANTED ............................................................................................. 10
A. Con-way Satisfies The Ninth Circuit’s Guidelines For Granting
A Petition For A Writ Of Mandate .................................................... 10B. Alternative Relief Is Not Available As There Is No Appeal
From The District Court’s Summary Judgment Decision ................. 11
C. Con-way Will Suffer Severe Prejudice That Cannot BeRemedied On Direct Appeal At The End Of The Case ..................... 11
D. FAAAA Preemption Of California Minimum Wage Law As ToPiece Rate Pay Is A Significant Issue Of First Impression ................ 13
1. The FAAAA Preempts State Laws Having A SignificantImpact On Prices, Routes And Services Of Motor Carriers ..................................................................................... 13
2. Rowe Dictates That California’s Minimum Wage LawsAs To Piece Rates Are Preempted By The FAAAA ............... 15
a. California Courts Have Held That Each Hour Worked Must Be Separately Compensated ................... 15
b. The FAAAA Preempts California’s MinimumWage Laws Because They Directly Affect AMotor Carrier’s Services, Routes Or Prices .................. 17
E. Alternatively, The District Court Committed Clear ReversibleError By Holding A Piece Rate Could Not Cover Certain
Duties .................................................................................................. 211. As A Matter Of Contract, A Piece Rate May Legally
Include Non-Driving Duties .................................................... 21
2. The Cardenas and Quezada Decisions Are Contrary ToWell-Established Supreme Court Precedent ............................ 25
VI. CONCLUSION ............................................................................................. 29
Aguiar v. California Sierra Express, Inc.,2012 U.S. Dist. LEXIS 63348 (E.D. Cal. May 4, 2012) .................................... 20
Aguirre v. Genesis Logistics,2012 U.S. Dist. LEXIS 186132 (C.D. Cal. November 5, 2012) ........................ 21
American Trucking Associations, Inc. v. City of Los Angeles,660 F. 3d 384 (9th Cir. 2011) (“ ATA”) ............................................... 3, 17, 19, 20
Angeles v. US Airways, Inc.,2013 U.S. Dist. LEXIS 22423 (N.D. Cal. Feb. 18, 2013) (ADA) ...................... 21
Armenta v. Osmose, Inc.,135 Cal. App. 4th 314 (2005) ......................................................................passim
Balasanyan v. Nordstrom, Inc.,2012 U.S. Dist. LEXIS 181350 (S.D. Cal. Dec. 20, 2012) .................... 6, 7, 8, 13
Bauman v. U.S. Dist. Ct.,
557 F. 2d 650 (9th Cir. 1977) ............................................................................. 10
Bickley v. Schneider National Carriers, Inc.,2013 U.S. Dist. LEXIS 8636 (N.D. Cal. Jan. 22, 2013) ................................. 12, 7
Blackwell v. Skywest Airlines, Inc.,2008 U.S. Dist. LEXIS 97955 (S.D. Cal. Dec. 3, 2008) ................................... 20
Campbell v. Vitran,2012 U.S. Dist. LEXIS 85509 (C.D. Cal. June 8, 2012) (Ninth Circuit
Case No. 12-56250) ........................................................................................ 1, 20
Cardenas v. McLane Foodservices, Inc.,796 F. Supp. 2d 1246 (C.D. Cal. 2011) .......................................................passim
Christensen v. U.S. Dist. Ct.,844 F.2d 694 (9th Cir. 1988) .............................................................................. 11
Quezada v. Con-way Freight, Inc.,2012 U.S. Dist. LEXIS 98639 (N.D. Cal. July 11, 2012) (hereafter Appendix to Petition (“AP”) at AP004-017) .................................................. 3, 25
Rowe v. New Hampshire Motor Transport Assn.,552 U.S. 364 (2008) .....................................................................................passim
Schachter v. Citigroup, Inc.,47 Cal.4th 610 (2009) ................................................................................... 22, 24
Steinhebel v. Los Angeles Times Communications, LLC ,126 Cal.App.4th 696 (2005) ......................................................................... 24, 29
Again, following Cardenas, the District Court granted Plaintiff’s motion, even
though there is no California statute or regulation or even Labor Commissioner
ruling requiring a piece rate to separately compensate each duty required in the
completion of the piece. Con-way accordingly petitions for a writ of mandamus
directing the District Court to reverse its summary judgment order (“Order”).
The District Court’s decision in this case is an issue of first
impression, insofar as FAAAA preemption of California’s minimum wage as
applied to piece rates has never been addressed by an appellate court.
Alternatively, the District Court’s decision constitutes clear and reversible error
with respect to holding that California minimum wage law prohibits a piece rate
from covering both driving and non-driving duties, as that decision lacks any
statutory or regulatory basis.1 See AP008 (“neither party has identified any
binding authority which directly addresses this question, and the Court is aware of
none”). Relief is imperative so that Con-way, and every other trucking company
compensating its California drivers by piece rate, will have appellate clarification
whether or not it is legal error to require motor carriers to comply with California’s
1
Incentive-based compensation is under attack in California both withrespect to piece-rate compensation and commission-based compensation. See
Balasanyan v. Nordstrom, Inc., 2012 U.S. Dist. LEXIS 181350, *20 (S.D. Cal.Dec. 20, 2012) (following Armenta and Cardenas, district court held thatcommissions could not compensate sales assistants for activities unrelated toselling). On April 2, 2013, the defendant in Balasanyan has also filed a petition tothis Court for a writ of mandate as to the district court’s ruling on commissions.
piece rate law when their drivers are in California – either because such laws have
been held not to be preempted by the FAAAA or because motor carriers must now
separately compensate each “duty” performed by a driver in completing the
hauling of goods, regardless of the parties’ intentions. Absent mandamus relief,
the parties in this class action, as well as the parties in numerous other class actions
in this state – potentially affecting thousands of other drivers – will unnecessarily
incur the time and expense of preparing for and conducting class trials, only to
have those decisions later reversed.2
II. STATEMENT OF RELIEF SOUGHT
Con-way seeks an order directing the District Court to vacate its July
11, 2012 Order and (1) to enter summary judgment in favor of Con-way because
the FAAAA preempts California’s minimum wage law as applied to piece-rate
compensation; or, alternatively, (2) enter summary judgment in favor of Con-way
because a piece rate may legally cover both driving and non-driving duties and still
comply with California’s minimum wage requirements.
2 See, e.g., Ortega v. J.B. Hunt Transport, Inc., Case No. 2:07-CV-08336-FMC-JCx, ¶ 29 (C.D. Cal. Nov. 7, 2008) (Complaint filed Nov. 19, 2007);
Anderson v. Andrus Transp. Servs., Inc., San Bernardino Superior Court Case No.CIV DS 915878 (Complaint filed Nov. 4, 2009); Bickley v. Schneider National
Carriers, Inc., 2013 U.S. Dist. LEXIS 8636 (N.D. Cal. Jan. 22, 2013); RJN Exs. 2-4 (attaching true and correct copies of these complaints). See also Balasanyan v.
Nordstrom, Inc., 2012 U.S. Dist. LEXIS 181350 (S.D. Cal. Dec. 20, 2012)(petition for writ of mandate to this Court filed on April 2, 2013 as to whether commissions can cover non-sales activities).
contrary to the purpose of the FAAAA, the effect of Maine’s law was “significant”
and, for that reason, preempted.4 Id. at 373. The Court also held that to allow
Maine to pass such laws would mean that other states could do the same.
And to interpret the federal law to permit these, and similar,state requirements could easily lead to a patchwork of state
service-determining laws, rules, and regulations. That stateregulatory patchwork is inconsistent with Congress’ major legislative effort to leave such decisions, where federalunregulated, to the competitive marketplace.
Id. at 373 (emphasis supplied). The Supreme Court thus held that, even if it did
not directly regulate carriers, and even if the costs it imposed on the transportation
industry were insignificant, the law was still preempted. Id. at 376.
2. Rowe Dictates That California’s Minimum Wage Laws As
To Piece Rates Are Preempted By The FAAAA.
a. California Courts Have Held That Each Hour
Worked Must Be Separately Compensated.
In Armenta v. Osmose, Inc., 135 Cal.App.4th 314, 324 (2005), the
California Court of Appeal held that “the FLSA model of averaging all hours
worked ‘in any work week’ to compute an employer’s minimum wage obligation
under California law is inappropriate,” and, therefore, the “minimum wage
4
The Supreme Court also acknowledged that “federal law might not pre-empt state laws that affect fares in only a ‘tenuous, remote, or peripheral ...manner,’ such as state laws forbidding gambling.” Rowe, 552 U.S. at 371(emphasis supplied). Likewise, a “state regulation that broadly prohibits certainforms of conduct and affects, say, truckdrivers, only in their capacity as membersof the public (e.g., a prohibition on smoking in certain public places),” might not
standard applies to each hour worked ” for which they were not separately paid.
(Emphasis supplied.) In Gonzalez , 2013 Cal. App. Unpub. LEXIS 1728 at *17, a
California Court of Appeal recently found that the anti-averaging principle in
Armenta also applied to piece-rate compensation for auto mechanics and that “the
minimum wage [must be paid] for each hour worked.”5 (Emphasis in original.)
In Cardenas, a California district court held that Armenta’s anti-
averaging principle applied to piece-rate compensation in the motor carrier
industry. See Cardenas, 796 F.Supp.2d at 1249-53.6
In that case, the district court
held that because “averaging” is not allowed, a motor carrier’s piece rate had to
separately compensate a driver for each duty performed, as otherwise the work was
uncompensated. See id. at 1253. Moreover, the district court held that “it is
irrelevant whether the pay formula was intended to compensate pre- and post-trip
duties, or even if employees believed it covered those duties, if its formula did not
actually directly compensate those pre- and post-trip duties.” Id. (emphasis in
original). The District Court in the present action also followed Cardenas, holding
5 Although the Court of Appeal issued Gonzalez as an unpublished opinion,to date, there have been six requests filed with the Court of Appeal to publish theopinion, with two of the requests being made by attorneys representing “truck
drivers.” See Court of Appeal website: http://appellatecases.courtinfo.ca.gov. 6 Cardenas, which was also decided on a motion for summary judgment,
was settled between the parties prior to trial, and, therefore, the district court’sruling never received appellate review. This outcome, not unusual in high-valueclass actions, illustrates how this issue, while important and recurring, isappropriate for issuance of a writ such that it does not indefinitely become casedispositive while evade appellate review.
conditions on the “contractual relationships between motor carriers and third
parties.” ATA, 660 F.3d at 407-08. In this respect, it is difficult to imagine a
greater significant impact than every time a driver drives into a new state, the
motor carrier is obligated to change its method of paying the driver, is obligated to
change the contract between the motor carrier and the driver, and is forced to
monitor the driver on an hour-by-hour basis. Again, the motor carrier must do this,
not because of competition but “simply because the State seeks to enlist the motor-
carrier operators as allies in its enforcement efforts” of California’s minimum wage
laws. See Rowe, 552 U.S. at 376. Moreover, if California can enact such laws,
“other States could do the same,” leading to a “patchwork of state service-
determining laws, rules and regulations.” Id. at 373. California’s minimum wage
laws as to piece-rate compensation are thus preempted by the FAAAA.
Ten district courts in California have held that either the FAAAA or
the ADA preempts California’s meal and rest break laws because of the impact that
such laws have on services and routes, and the Dilts and Campbell cases are
presently before this Court to address the scope of FAAAA preemption.7 In Dilts,
7 In addition to the Dilts and Campbell cases, the other district court casesfinding either FAAAA or ADA preemption of California meal and rest break lawsare: Blackwell v. Skywest Airlines, Inc., 2008 U.S. Dist. LEXIS 97955, *42-54(S.D. Cal. Dec. 3, 2008) (ADA); Equivel v. Vistar Corp., 2012 U.S. Dist. LEXIS26686, *18 (C.D. Cal. Feb. 8, 2012) (FAAAA); Aguiar v. California Sierra Express, Inc., 2012 U.S. Dist. LEXIS 63348, *3 (E.D. Cal. May 4, 2012)(FAAAA); Jasper v. C.R. England, Inc., 2012 U.S. Dist. LEXIS 186607, *9-26
the district court held that, as a matter of “simple mathematics,” complying with
California’s meal and rest break laws “bind motor carriers to a smaller set of
possible routes,” and reduce the number of hours services can be provided. Dilts,
819 F.Supp.2d at 1118-19. Applying the Dilts analysis, California’s minimum
wage laws, as applied to drivers’ piece-rate compensation, are likewise preempted
because of the effect they have on a motor carrier’s services and routes, if not their
prices. Con-way accordingly requests that this Court grant its petition so that these
FAAAA preemption issues may be decided together, and so that Con-way will not
be forced to try a class action before these issues are decided.8
E. Alternatively, The District Court Committed Clear Reversible
Error By Holding A Piece Rate Could Not Cover Certain Duties.
1. As A Matter Of Contract, A Piece Rate May Legally
Include Non-Driving Duties.
The District Court, relying on Armenta and Cardenas, committed
clear and reversible error when it held that “California law does not allow an
(C.D. Cal. Aug. 30, 2012) (FAAAA); Cole v. CRST, Inc., 2012 U.S. Dist. LEXIS144944, *11-17 (C.D. Cal. Sept. 27, 2012) (FAAAA); Aguirre v. Genesis Logistics, 2012 U.S. Dist. LEXIS 186132, *12-21 (C.D. Cal. November 5, 2012)(FAAAA); Miller v. Southwest Airlines, Co., 2013 U.S. Dist. LEXIS 18835, *12-17 (N.D. Cal. Feb. 12, 2013) (ADA); Angeles v. US Airways, Inc., 2013 U.S. Dist.LEXIS 22423, *25-30 (N.D. Cal. Feb. 18, 2013) (ADA).
8 The District Court’s analysis also conflicts with the analysis in Rowe whenit uses a “compliance” standard for FAAAA preemption, i.e., because Con-wayalready compensates certain non-driving tasks on an hourly basis, there can be no
preemption. See AP014. That standard is contrary to Rowe, which rejected as “off the mark” the State of Maine’s argument that the regulation at issue would not impose “significant additional costs upon carriers.” Rowe, 552 U.S. at 373.
provides that piece-rate employees must be separately paid for time they are
required to work but unable to earn compensation at the piece rate, e.g., attending
meetings that prevent the employee from earning his or her piece rate. See AP010.
The District Court then concludes that the DLSE Manual “does not appear to allow
for the possibility of simply building extra compensation into the piece-rate
amount for mandatory work time in which the piece-rate cannot be earned.” Id .
As such, “when employees are required to perform a task that precludes them from
earning piece-rate compensation, they must be directly compensated for that time,”
and that “‘building in’ compensation for non-driving tasks on a per-mile rate is not
permissible under the California Labor Code.” AP013, 015.
As in Cardenas, because the District Court fails to make reference to
the compensation agreement, it assumes that the only duty that is being
compensated is that of “driving.”9 However, if drivers are paid to haul a load from
the supplier to the consignee, which involves the completion of many duties, it
then becomes illogical to state that the “non-driving tasks” prevent the driver from
“earning piece-rate compensation.” As discussed above in connection with
commission contracts, the right to compensation “depends on the terms of the
contract for compensation.” Nein, 174 Cal.App. 4th at 853. Thus, performing a
9 The Gonzalez decision commits the same error as Cardenas when itassumes, without discussion, that a piece rate for auto mechanics could not compensate them for down time between repairs, even if the parties had agreed tosuch a condition. See Gonzalez , 2013 Cal. App. Unpub. LEXIS 1728 at *3-5.
I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by usingthe appellate CM/ECF system on April 2, 2013.
Participants in the case who are registered CM/ECF users will beserved by the appellate CM/ECF system.
I further certify that some of the participants in the case are notregistered CM/ECF users. I have mailed the foregoing document):
• PETITION FOR WRIT OF MANDAMUS COMPELLING
DETERMINATION THAT CON-WAY’S PIECE-RATE
COMPENSATION POLICY IS LAWFUL
by First-Class Mail, postage prepaid, or have dispatched it to a third partycommercial carrier for delivery within 3 calendar days to the following non-CM/ECF participants:
Lawrence R. Cagney, Esq.Westrup Klick 444 West Ocean Blvd., Suite 1614Long Beach, CA 90802-4524
Fax: 562.435.4856
Michael L. Carver Law Offices of Michael L. Carver 1395 Ridgewood Drive, Ste. 300Chico, CA 95973
Fax: 530.891.8512
Jonathan Che GettlemanLaw Office of Jonathan Che Gettleman223 River Street, Ste. DSanta Cruz, CA 95060
Honorable Jeffrey S. WhiteUnited States District Court
Northern District of California450 Golden Gate AvenueSan Francisco, CA 94102