890 F.3d 769 (9th Cir. 2018), 17-35640, Chamber of Commerce of the United States of America v. City of Seattle

Docket Nº:17-35640
Citation:890 F.3d 769
Opinion Judge:M. SMITH, Circuit Judge:
Party Name:CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA; Rasier, LLC, Plaintiffs-Appellants, v. CITY OF SEATTLE; Seattle Department of Finance and Administrative Services; Fred Podesta, in his official capacity as Director, Finance and Administrative Services, City of Seattle, Defendants-Appellees.
Attorney:Michael A. Carvin (argued ), Jacqueline M. Holmes, Christian G. Vergonis, and Robert Stander, Jones Day, Washington, D.C.; Lily Fu Claffee, Steven P. Lehotsky, and Warren Postman, U.S. Chamber Litigation Center, Washington, D.C.; Douglas C. Ross and Robert J. Maguire, Davis Wright Tremaine LLP, S...
Judge Panel:Before: MILAN D. SMITH, JR. and MARY H. MURGUIA, Circuit Judges, and EDUARDO C. ROBRENO, District Judge.
Case Date:May 11, 2018
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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890 F.3d 769 (9th Cir. 2018)

CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA; Rasier, LLC, Plaintiffs-Appellants,

v.

CITY OF SEATTLE; Seattle Department of Finance and Administrative Services; Fred Podesta, in his official capacity as Director, Finance and Administrative Services, City of Seattle, Defendants-Appellees.

No. 17-35640

United States Court of Appeals, Ninth Circuit

May 11, 2018

Argued and Submitted February 5, 2018— Seattle, Washington.

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Appeal from the United States District Court for the Western District of Washington, Robert S. Lasnik, District Judge, Presiding, D.C. No. 2:17-cv-00370-RSL.

SUMMARY[**]

Antitrust / Labor Law

The panel affirmed in part and reversed in part the district court's dismissal of an action challenging, on federal antitrust and labor law grounds, a Seattle ordinance authorizing a collective-bargaining process between "driver coordinators"-like Uber Technologies; Lyft, Inc.; and Eastside for Hire, Inc. -and independent contractors who work as for-hire drivers.

The ordinance permits independent-contractor drivers, represented by an entity denominated an "exclusive driver representative, " and driver coordinators to agree on the "nature and amount of payments to be made by, or withheld from, the driver coordinator to or by the drivers."

The panel reversed the district court's dismissal of claims that the ordinance violates, and is preempted by, § 1 of the Sherman Antitrust Act because the ordinance sanctions price-fixing of ride-referral service fees by private cartels of independent-contractor drivers. The panel held that the state-action immunity doctrine did not exempt the ordinance from preemption by the Sherman Act because the State of Washington had not clearly articulated and affirmatively expressed a state policy authorizing private parties to price-fix the fees that for-hire drivers pay to companies like Uber or Lyft in exchange for ride-referral services. In addition, the active-supervision requirement for state-action immunity applied, and was not met.

The panel affirmed the district court's dismissal of claims that the ordinance was preempted by the National Labor Relations Act under either Machinists or Garmon preemption.

The panel remanded the case for further proceedings.

Michael A. Carvin (argued ), Jacqueline M. Holmes, Christian G. Vergonis, and Robert Stander, Jones Day, Washington, D.C.; Lily Fu Claffee, Steven P. Lehotsky, and Warren Postman, U.S. Chamber Litigation Center, Washington, D.C.; Douglas C. Ross and Robert J. Maguire, Davis Wright Tremaine LLP, Seattle, Washington; Timothy J. O’Connell, Stoel Rives LLP, Seattle, Washington; for Plaintiffs-Appellants.

Stacey M. Leyton (argued ), Stephen P. Berzon, and P. Casey Pitts, Altshuler Berzon LLP, San Francisco, California; Michael K. Ryan (argued ), Sara O’Connor-Kriss, Josh Johnson, and Gregory C. Narver, Assistant City Attorneys; Peter S. Holmes, Seattle City Attorney; City Attorney’s Office, Seattle, Washington; for Defendants-Appellees.

Michele Arington (argued ), Assistant Attorney General; Joel Marcus, Deputy General Counsel; David C. Shonka, Acting General Counsel; Federal Trade Commission, Washington, D.C.; Robert B. Nicholson and Steven J. Mintz, Attorneys; Andrew C. Finch, Principal Deputy Assistant Attorney General; Makan Delrahim, Assistant Attorney General; Antitrust Division, United States Department of Justice, Washington, D.C.; for Amici Curiae United States and Federal Trade Commission.

William R. Peterson and Allyson N. Ho, Morgan Lewis & Bockius LLP, Houston, Texas; Harry I. Johnson III, Morgan Lewis & Bockius LLP, Los Angeles, California; Stacey Anne Mahoney, Morgan Lewis & Bockius LLP, New York, New York; for Amici Curiae Coalition for a Democratic Workplace, National Federation of Independent Business Small Business Legal Center, and Consumer Technology Association.

Matthew J. Ginsburg and Harold Craig Becker, Washington, D.C., for Amici Curiae American Federation of Labor and Congress of Industrial Organizations.

Jonathan F. Mitchell, Stanford, California; Thomas R. McCarthy, Consovoy McCarthy Park PLLC, Arlington, Virginia; for Amici Curiae Antitrust Law Professors.

Alan D. Copsey, Deputy Solicitor General; Noah G. Purcell, Solicitor General; Robert W. Ferguson, Attorney General; Office of the Attorney General, Olympia, Washington; for Amicus Curiae State of Washington.

Matthew J. Segal and Kymberly K. Evanson, Pacifica Law Group LLP, Seattle, Washington, for Amicus Curiae Professor Samuel Estreicher.

Rebecca Smith and Ceilidh Gao, National Employment Law Project— WA, Seattle, Washington, for Amici Curiae Los Angeles Alliance for a New Economy, National Domestic Worker Alliance, National Employment Law Project, Partnership for Working Families, and Puget Sound Sage.

Catherine L. Fisk, Berkeley, California; Charlotte Garden, Fred T. Korematsu Center for Law and Equality, Ronald A. Peterson Law Clinic, Seattle University School of Law, Seattle, Washington; for Amici Curiae Labor Law Professors.

Sanjukta Paul, Detroit, Michigan, for Amici Curiae Law and Business Professors.

Barbara D. Underwood, Solicitor General; Anisha S. Dasgupta, Deputy Solicitor General; Seth M. Rokosky, Assistant Solicitor General of Counsel; Eric T. Schneiderman, Attorney General; Office of the Attorney General, New York, New York; Douglas S. Chin, Attorney General, Department of the Attorney General, Honolulu, Hawaii; Lisa Madigan, Attorney General, Office of the Attorney General, Chicago, Illinois; Thomas J. Miller, Attorney General, Office of the Attorney General, Des Moines, Iowa; Janet T. Mills, Attorney General, Office of the Attorney General, Augusta, Maine; Brian E. Frosh, Attorney General, Attorney General’s Office, Baltimore, Maryland; Maura Healey, Attorney General, Attorney General’s Office, Boston, Massachusetts; Lori Swanson, Attorney General, Office of the Attorney General, St. Paul, Minnesota; Ellen F. Rosenblum, Attorney General, Office of the Attorney General, Salem, Oregon; Josh Shapiro, Attorney General, Office of the Attorney General, Harrisburg, Pennsylvania; Peter F. Kilmartin, Attorney General, Office of the Attorney General, Providence, Rhode Island; Thomas J. Donovan, Jr., Attorney General, Office of the Attorney General, Montpelier, Vermont; Karl A. Racine, Attorney General, Office of the Attorney General, Washington, D.C.; for Amici Curiae the States of New York, Hawai’i, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Oregon, Pennsylvania, Rhode Island, and Vermont, and the District of Columbia.

Before: MILAN D. SMITH, JR. and MARY H. MURGUIA, Circuit Judges, and EDUARDO C. ROBRENO,[*] District Judge.

OPINION

M. SMITH, Circuit Judge:

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On December 14, 2015, the Seattle City Council enacted into law Ordinance 124968, an Ordinance Relating to Taxicab, Transportation Network Company, and For-Hire Vehicle Drivers (Ordinance).1 The Ordinance was the first municipal ordinance of its kind in the United States, and authorizes a collective-bargaining process between "driver coordinators"— like Uber Technologies (Uber), Lyft, Inc. (Lyft ), and Eastside for Hire, Inc. (Eastside)— and independent contractors who work as for-hire drivers. The Ordinance permits independent-contractor drivers, represented by an entity denominated an "exclusive driver representative," and driver coordinators to agree on the "nature and amount of payments to be made by, or withheld from, the driver coordinator to or by the drivers." Seattle, Wash., Municipal Code § 6.310.735(H)(1). This provision of the Ordinance is the crux of this case.

Acting on behalf of its members Uber, Lyft, and Eastside, Plaintiff-Appellant the Chamber of Commerce of the United States of America, together with Plaintiff-Appellant Rasier, LLC, a subsidiary of Uber (collectively, the Chamber), sued Defendants-Appellees the City of Seattle, the Seattle Department of Finance and Administrative Services (the Department ), and the Department’s Director, Fred Podesta (collectively, the City), challenging the Ordinance on federal antitrust and labor law grounds. First, the Chamber asserts that the Ordinance violates, and is preempted by, section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, because the Ordinance sanctions price-fixing of ride-referral service fees by private cartels of independent-contractor drivers. Second, the Chamber claims that the Ordinance is

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preempted by the National Labor Relations Act (NLRA), 29 U.S.C. § § 151-169, under Machinists and Garmon preemption.

The district court dismissed the case, holding that the state-action...

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