Mass. Delivery Ass'n v. Coakley
| Decision Date | 30 September 2014 |
| Docket Number | No. 13–2307.,13–2307. |
| Citation | 769 F.3d 11 |
| Parties | MASSACHUSETTS DELIVERY ASSOCIATION, Plaintiff, Appellant, v. Martha COAKLEY, Attorney General of the Commonwealth of Massachusetts, Defendant, Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
OPINION TEXT STARTS HERE
David C. Casey, with whom Christopher B. Kaczmarek, Stephen T. Melnick, and Littler Mendelson, P.C. were on brief for appellant.
Kate Comerford Todd, Steven P. Lehotsky, National Chamber Litigation Center, Inc., James C. Rehnquist, Kate E. MacLeman, William M. Jay, and Goodwin Procter
LLP on brief for the Chamber of Commerce of the United States of America, amicus curiae.
Wesley S. Chused and Looney & Grossman LLP on brief for Massachusetts Motor Transportation Association, amicus curiae.
Peter Sacks, State Solicitor, with whom Martha Coakley, Attorney General of Massachusetts, and Pierce O. Cray, Kate J. Fitzpatrick, and Douglas S. Martland, Assistant Attorneys General, were on brief for appellee.
Scott L. Nelson, Adina H. Rosenbaum, and Public Citizen Litigation Group on brief for Public Citizen, Inc., amicus curiae.
Harold L. Lichten, Shannon Liss–Riordan, Catherine Ruckelshaus, and National Employment Law Project on brief for Massachusetts Employment Lawyers Association and the National Employment Law Project, amici curiae.
Before LYNCH, Chief Judge, RIPPLE* and SELYA, Circuit Judges.
The Federal Aviation Administration Authorization Act (“FAAAA”) preempts any state law “related to a price, route, or service of any motor carrier ... with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). In a previous appeal in this case, we held, contrary to the district court, that abstention under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), was not appropriate and remanded. Mass. Delivery Ass'n v. Coakley, 671 F.3d 33 (1st Cir.2012) (hereinafter, “ MDA I ”). The question now presented is whether the express preemption provision of the FAAAA preempts one prong of the Massachusetts Independent Contractor Statute, Mass. Gen. Laws ch. 149, § 148B(a)(2), which requires that workers perform a service “outside the usual course of the business of the employer” to be classified as independent contractors. The district court held that Section 148B(a)(2) escapes FAAAA preemption. Finding that the district court did not sufficiently credit the broad language and legislative history of the FAAAA's express preemption provision, we reverse and remand.
The Massachusetts Delivery Association (“MDA”) is a nonprofit trade organization representing same-day delivery companies in Massachusetts. The MDA filed this action for a declaration that the “B Prong” of Section 148B is preempted by the FAAAA, and for an injunction barring the Attorney General from enforcing it against the MDA's members. The MDA used one member company, X Pressman Trucking & Courier, Inc. (“Xpressman”), as an exemplar for the purposes of this litigation.
Like other members, Xpressman relied heavily on independent contractors to provide same-day delivery services to its customers in Massachusetts and throughout New England. Roughly 58 couriers provide delivery services for Xpressman's clients as independent contractors. Xpressman's independent contractors are paid for each completed delivery, rather than by the hour or week, and they do not receive benefits such as health insurance or retirement. Xpressman has only 6 full-time and 2 part-time employees to oversee its administrative and warehouse functions. No employees perform courier functions.
However, Xpressman argues that, under Massachusetts law, it is required to designatethe couriers as employees rather than as independent contractors. Section 148B sets up a three-part test to differentiate employees from independent contractors, as follows:
For the purpose of this chapter and chapter 151, an individual performing any service, except as authorized under this chapter, shall be considered to be an employee under those chapters unless:
(3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
Mass. Gen. Laws ch. 149, § 148B (a) (2004). The MDA argues that the couriers will always fail the “B Prong,” or the second requirement, of Massachusetts's test for independent contractors, since these contractors perform delivery services within the usual course of business for the delivery companies.
The legislative purpose of Section 148B is “to protect employees from being deprived of the benefits enjoyed by employees through their misclassification as independent contractors.” MDA I, 671 F.3d at 36–37 (quoting Somers v. Converged Access, Inc., 454 Mass. 582, 911 N.E.2d 739, 749 (2009)). An “employee” classification under Section 148B triggers legal requirements on the “employers” under various wage and employment laws.1See id. at 36. If an employing entity improperly classifies an employee as an independent contractor under Section 148B, a variety of sanctions is available. Id. at 37. Actions for failure to comply with Section 148B can be pursued by the Commonwealth, or by the employees themselves. Id.
According to the MDA, being forced to treat the couriers as employees, rather than independent contractors, “would profoundly alter Xpressman's business model as well as the prices, routes and services it offers customers.” Xpressman has provided evidence as to the changes that would ensue to recruiting, interviewing, and hiring; the need for human resources management; and the increased compensation, fringe benefits, and taxes. It provided evidence that routes would also change since couriers treated as employees would have to drive to and from Xpressman's facility, would have less flexibility to accept short routes, and could not drive the long routes without a mandatory break. Finally, Xpressman contends that it would no longer be able to provide on-demand services with employees. “All told, converting independent contractor-couriers to employees would nearly double Xpressman's labor costs ... annually.”
The FAAAA expressly preempts certain state laws relating to motor carriers. Specifically, the FAAAA states:
Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States 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 (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.
49 U.S.C. § 14501(c)(1) (2005).
The MDA moved for summary judgment, arguing that the FAAAA preempts the B Prong, the second requirement, of Section 148B. The Attorney General cross-moved for summary judgment on all counts, arguing that the case does not present a justiciable case or controversy. In the event that summary judgment was not granted in her favor, the Attorney General argued that the FAAAA does not preempt Section 148B and asked for additional discovery pursuant to Federal Rule of Civil Procedure 56(d). The Attorney General subsequently moved to compel additional deposition time under Federal Rule of Civil Procedure 30(d)(1), and the further production of documents.
The district court found a justiciable case or controversy and denied the Attorney General's cross-motion for summary judgment on this ground. The district court held that the FAAAA does not preempt Section 148B, and dismissed the MDA's preemption claims on the merits. Finally, the district court denied as moot the Attorney General's motion to compel since it sought information solely related to the now-dismissed preemption claims. The MDA appealed the district court's holding.
In her brief, the Attorney General argues that the district court erred in ruling that the MDA alleged a justiciable case or controversy. The Attorney General failed to cross-appeal the district court's ruling on this issue. Generally, “[a] party who neglects to file a cross-appeal may not use his opponent's appeal as a vehicle for attacking a final judgment in an effort to diminish the appealing party's rights thereunder.” Sueiro Vázquez v. Torregrosa de la Rosa, 494 F.3d 227, 232 (1st Cir.2007) (quoting Figueroa v. Rivera, 147 F.3d 77, 81 (1st Cir.1998)). Here, however, we will review the Attorney General's argument since it concerns our own jurisdiction as well. See, e.g., United Seniors Ass'n, Inc. v. Philip Morris USA, 500 F.3d 19, 23 (1st Cir.2007).
The Attorney General argues that the “MDA essentially seeks an advisory opinion on whether one prong of section 148B's three-prong test is preempted.” There is no dispute that in order to classify its couriers as independent contractors, the MDA must satisfy all three prongs of the Massachusetts statute. The MDA has made no showing, however, as relates to Prong A or Prong C. Even if we hold Prong B preempted, according to the Attorney General, the couriers may still be classified as employees.
The divide between a valid declaratory judgment and an invalid advisory opinion can be narrow. See MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007). “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S....
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