The Ninth Circuit Puts Up Road Block To Motor Carrier Arguing That California Break Laws Are Preempted By The FAAA Act, But Leaves Some Wiggle Room

On Wednesday, the United States Ninth Circuit Court of Appeals rendered a decision that, on its face, involved a technical preemption issue, but one that will have serious repercussions for those in the transportation industry operating in California. In plain terms, the question was whether California's detailed meal and rest break requirements conflict with a federal statute barring states from regulating the prices, routes and services of motor carriers and airlines.

Over the past few years, California district courts have varied as to whether motor carriers must follow California meal and rest break laws, or whether the Federal Aviation Administration Authorization Act of 1994 ("FAAA Act" or the "Act") preempts California law in this regard. On July 9, 2014, in Dilts v. Penske Logistics, LLC, the Ninth Circuit decided, for the first time, that such preemption generally does not apply. Nevertheless, the possibility remains open that, in a future case, a motor carrier (particularly a long haul carrier) or airline may offer stronger evidence of and arguments for preemption.

Under the FAAA Act, in most instances a state "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property." 49 U.S.C. § 14501(c)(1). The Act was passed "'to prevent States from undermining federal deregulation of interstate trucking' through a 'patchwork' of state regulations."

In Dilts, the plaintiffs sought to represent a class of hourly appliance delivery drivers and installers, working exclusively within California and on short-haul routes. They argued that they were unable to take the California-mandated meal and rest periods, and sought to assert the usual array of California wage and hour claims as a result. The lower court found that because California's rest and meal period requirements so severely affected trucking prices, routes, and services, they were preempted by the FAAA Act, and it granted summary judgment in the employer's favor.

After finding a strong presumption against preemption, the Ninth Circuit stated that while the FAAA Act's "related to" language is deliberately expansive and broad, it does not preempt state laws that affect prices, routes, or services in only a tenuous way. It concluded that where a law does not refer directly to rates...