Chamber of Commerce of the United States v. City of Seattle, No. 17-35640

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtM. SMITH, Circuit Judge
Citation890 F.3d 769
Parties 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.
Docket NumberNo. 17-35640
Decision Date11 May 2018

890 F.3d 769

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.

Argued and Submitted February 5, 2018—Seattle, Washington
Filed May 11, 2018


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:

890 F.3d 775

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

890 F.3d 776

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 immunity doctrine exempts the Ordinance from preemption by the Sherman Act, and that the NLRA does not preempt the Ordinance. The Chamber appealed both holdings.

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We reverse the district court's dismissal of the Chamber's federal antitrust claims, and remand the federal antitrust claims to the district court for further proceedings. We also affirm the district court's dismissal of the Chamber's NLRA preemption claims.

FACTUAL AND PROCEDURAL BACKGROUND

A. Ride-Referral Companies

Eastside is the largest dispatcher of taxicab and for-hire vehicles in the Pacific Northwest. Eastside provides licensed taxicab and for-hire vehicle drivers with dispatch, advertising, payment processing, and other administrative services, in exchange for a weekly fee, payable by drivers to Eastside. Relying on advertising and a preexisting client base, Eastside generates transportation requests from passengers, who call, text-message, or email Eastside to request a ride. Eastside then refers ride requests to drivers through a mobile data terminal. If a passenger uses a credit card to pay a driver, Eastside processes the transaction and remits the payment to the driver. The drivers who pay for Eastside's services are independent contractors—Eastside does not dictate how the drivers operate their transportation businesses. For example, some drivers own licensed vehicles, whereas others lease them.

Uber and Lyft, founded in 2009 and 2012, respectively, have ushered ride-referral services into the digital age. Uber and Lyft have developed proprietary smartphone applications (apps) that enable an online platform, or digital marketplace, for ride-referral services, often referred to as "ridesharing" services. After downloading the Uber or Lyft app onto their smartphones, riders request rides through the app, which transmits ride requests to available drivers nearby. Drivers are free to accept or ignore a ride request. If a driver accepts a ride request, he or she is matched electronically with the rider, and then proceeds to the rider's location and fulfills the ride request. If a driver ignores a ride request, the digital platform transmits the request to another nearby driver. Drivers may cancel a ride request, even after initially accepting it, at any point prior to the commencement of the ride. Riders, too, may decide whether or not to accept a ride...

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17 practice notes
  • Rest. Law Ctr. v. City of N.Y., 17 Civ. 9128 (PGG)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • February 6, 2019
    ...does not forbid Consumer Affairs from registering that organization under the Deductions Law. Chamber of Commerce v. City of Seattle, 890 F.3d 769 (9th Cir. 2018) is instructive 360 F.Supp.3d 224on this point. In that case, the Ninth Circuit considered a Seattle ordinance that "authorize[d]......
  • Ellis v. Salt River Project Agric. Improvement & Power Dist., No. CV-19-01228-PHX-SMB
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    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • January 10, 2020
    ...307 ). "State-action immunity is the exception rather than the rule." Chamber of Commerce of the United States of Am. v. City of Seattle ¸ 890 F.3d 769, 781 (9th Cir. 2018). If applicable, state-action immunity bars antitrust claims against qualifying entities. Cost Mgmt. Servs. Inc. v. Was......
  • Moreno v. UtiliQuest, LLC, No. 21-55313
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    • March 18, 2022
    ...decide that Moreno was an employee, the district court erred in its reasoning. See Chamber of Com. of the U.S. v. City of Seattle , 890 F.3d 769, 795 (9th Cir. 2018). "Nevertheless, we may affirm based on any ground supported by the record." 29 F.4th 578 Johnson v. Riverside Healthcare Sys.......
  • Nw. Grocery Ass'n v. City of Seattle, CASE NO. C21-0142-JCC
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    • United States District Courts. 9th Circuit. United States District Court (Western District of Washington)
    • March 18, 2021
    ...conduct arguably subject to the regulatory jurisdiction of the NLRA. See Chamber of Com. of the U.S. of Am. v. City of Seattle , 890 F.3d 769, 790 (9th Cir. 2018) (citing San Diego Bldg. Trades Council v. Garmon , 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959) ).5 Plaintiffs argue the Ord......
  • Request a trial to view additional results
14 cases
  • Rest. Law Ctr. v. City of N.Y., 17 Civ. 9128 (PGG)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • February 6, 2019
    ...does not forbid Consumer Affairs from registering that organization under the Deductions Law. Chamber of Commerce v. City of Seattle, 890 F.3d 769 (9th Cir. 2018) is instructive 360 F.Supp.3d 224on this point. In that case, the Ninth Circuit considered a Seattle ordinance that "authori......
  • Ellis v. Salt River Project Agric. Improvement & Power Dist., No. CV-19-01228-PHX-SMB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • January 10, 2020
    ...immunity is the exception rather than the rule." Chamber of Commerce of the United States of Am. v. City of Seattle ¸ 890 F.3d 769, 781 (9th Cir. 2018). If applicable, state-action immunity bars antitrust claims against qualifying entities. Cost Mgmt. Servs. Inc. v. Wash. Nat. Gas Co. ......
  • Green Solutions Recycling, LLC v. Reno Disposal Co., Case No. 3:16-cv-00334-MMD-CBC
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Nevada
    • January 7, 2019
    ...sovereign capacity of the States to regulate their economies." Chamber of Commerce of the United States of Am. v. City of Seattle , 890 F.3d 769, 781 (9th Cir. 2018) (quoting Phoebe Putney , 568 U.S. at 224, 133 S.Ct. 1003 ). Following Parker , the Supreme Court has extended immunity f......
  • Clark v. City of Seattle, No. 17-35693
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 9, 2018
    ...to Taxicab, Transportation Network Company, and For-Hire Vehicle Drivers (Ordinance). Chamber of Commerce of the U.S. v. City of Seattle , 890 F.3d 769, 775 (9th Cir. 2018). The Ordinance establishes a multistep collective-bargaining process between "driver coordinators," such as ......
  • Request a trial to view additional results

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