Rivas v. Rail Delivery Service, Inc.

• Decision Date: 08 September 2005
• Docket Number: No. 03-55450.,No. 03-55447.,No. 03-55452.,No. 03-55449.,03-55447.,03-55452.,03-55450.,03-55449.
• Citation: 423 F.3d 1079
• Parties: Miguel Osmar RIVAS, Plaintiff-Appellant, v. RAIL DELIVERY SERVICE, INC., a California corporation, Defendant-Appellee. Tobias Renteria, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. K & R Transportation Inc., a California corporation; Adriana Vasquez; Robert A. Curry, Sr., Defendants-Appellees. Salvador Rodriguez, Plaintiff-Appellant, v. RWA Trucking Company, Inc.; Andy Asman, Defendant-Appellees. Wilfredo Pineda, individually and on behalf of all similarly situated, Plaintiff-Appellant, v. Harbor Express Inc., a California corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

423 F.3d 1079

Miguel Osmar RIVAS, Plaintiff-Appellant, v. RAIL DELIVERY SERVICE, INC., a California corporation, Defendant-Appellee.

Tobias Renteria, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. K & R Transportation Inc., a California corporation; Adriana Vasquez; Robert A. Curry, Sr., Defendants-Appellees.

Salvador Rodriguez, Plaintiff-Appellant, v. RWA Trucking Company, Inc.; Andy Asman, Defendant-Appellees.

Wilfredo Pineda, individually and on behalf of all similarly situated, Plaintiff-Appellant, v. Harbor Express Inc., a California corporation, Defendant-Appellee.

No. 03-55447.

No. 03-55452.

No. 03-55450.

No. 03-55449.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 3, 2004.

Filed September 8, 2005.

COPYRIGHT MATERIAL OMITTED

Stephen Glick, Kumetz & Glick, Los Angeles, CA, for plaintiffs-appellants.

Greg P. Stefflre, Robert W. Sanders, Stefflre & Sanders, Long Beach, CA, for defendants-appellees Rail Delivery Service, Inc., Harbor Express, Inc. and RWA Trucking, Inc.

Neil S. Lerner, Sands Lerner, Los Angeles, CA, for defendant-appellee K & R Transportation, Inc.

Appeals from the United States District Court for the Central District of California; Mariana R. Pfaelzer, District Judge, Presiding. D.C. Nos. 98-0392 MRP, CV 98-0290 MRP, CV 98-0393 MRP, CV 98-0397 MRP.

Before: TASHIMA, FISHER, and TALLMAN, Circuit Judges.

TASHIMA, Circuit Judge:

These consolidated appeals involve four cases in which the district court granted a permanent injunction under the Interstate Commerce Commission Termination Act ("ICCTA"). The district court found that Defendant motor carriers had entered into past contracts with Plaintiffs that did not comply with one of the Truth-in-Leasing regulations promulgated pursuant to the Motor Carrier Act; the injunction directed Defendants to comply. Plaintiffs in all four cases appeal the court's injunction as too narrow, claiming that it should have required Defendants' compliance with four additional regulatory provisions. Plaintiffs also appeal the court's denial of attorneys' fees. In addition, Plaintiff Renteria appeals a grant of summary judgment to Defendant K & R Transportation on Renteria's claims based on violations of the California Insurance Code. We conclude that Plaintiffs lacked standing because: (1) the regulatory violations for which they sought injunctive relief caused them no injury, depriving them of Article III standing; and (2) the ICCTA would have an impermissible retroactive effect if it conferred standing to bring claims for damages on the basis of contracts executed before the ICCTA's effective date. We therefore vacate the district court's judgments and remand for dismissal of the cases for lack of jurisdiction.

Factual and Procedural Background

Plaintiffs are owner-operators who have contracted with Defendant motor carriers to transport goods for Defendants. Plaintiffs and Defendants entered into written agreements at different times between 1991 and 1995. In December 1997, Plaintiffs filed complaints in Los Angeles Superior Court alleging that: (1) Plaintiffs were employees of Defendants by operation of law under the requirements imposed by the ICCTA and the Truth-in-Leasing regulations, notwithstanding contractual provisions identifying the owner-operators as independent contractors, and that Defendants had unlawfully denied Plaintiffs the benefits of employees; (2) Defendants failed to comply with federal Truth-in-Leasing regulations, thereby breaching fiduciary duties to Plaintiffs; and (3) Defendants sold insurance to Plaintiffs without a license permitting them to do so under California law.

These cases were removed to federal district court. The district court twice denied motions to remand the cases to state court. The district court ruled that there is no private cause of action for damages under the ICCTA for violations of the Truth-in-Leasing regulations unless the plaintiff first obtains an agency order. This ruling eliminated Plaintiffs' ICCTA claims for damages, leaving ICCTA claims for injunctive relief and state law claims. It then granted summary judgment for Defendants on Plaintiffs' employment status claims, concluding that compliance with federal law did not preclude owner-operators from being independent contractors. The court also granted summary judgment for Defendants on Plaintiffs' unlawful sale of insurance claims.

The cases proceeded to trial on Plaintiffs' remaining ICCTA claims for injunctive relief to remedy violations of the Truth in-Leasing regulations. The court first tried the issue of whether the written agreements between Plaintiffs and Defendants substantially complied with the regulations. The court determined that the Defendants failed substantially to comply with 49 C.F.R. § 376.12(c)(1), which requires leases to state that the motor carrier assumes complete responsibility for the operation of the hauling equipment for the duration of the lease. It granted Plaintiffs injunctions under 49 U.S.C. § 14704(a)(1). The judgments prohibited each Defendant from using equipment it did not own to haul goods unless it entered into a written agreement that complied with 49 C.F.R. § 376.12(c)(1) and denied Plaintiffs' requests for attorneys' fees.

Legal Background

In 1979, the Interstate Commerce Commission ("ICC") promulgated the Truth-in-Leasing regulations, which exist in substantially the same form today at 49 C.F.R. Part 376. Owner-Operator Independent Drivers Ass'n, Inc. v. Arctic Express, Inc., 270 F.Supp.2d 990, 992 (S.D.Ohio 2003) (citing Global Van Lines, Inc. v. ICC, 627 F.2d 546, 549(D.C.Cir.1980)). Until 1996, the ICC could bring civil actions to enforce the regulations, which require that leases between motor carriers and owner-operators contain certain provisions. Id. at 992-93. The ICCTA terminated the ICC as an agency as of January 1, 1996. Interstate Commerce Commission Termination Act of 1995, Pub.L. No. 104-88, 109 Stat. 803 (1995), codified at 49 U.S.C. § 10101 et seq. The ICCTA allows owner-operators to bring private causes of action against motor carriers for some violations of the Motor Carrier Act and its attendant regulations, including the Truth-in-Leasing regulations. 49 U.S.C. § 14704(a); see Arctic Express, 270 F.Supp.2d at 993.

Analysis

This appeal raises two standing issues. Although the parties did not fully address these issues, we have an independent obligation to examine our own and the district court's jurisdiction. See Fed.R.Civ.P. 12(h)(3); Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986) ("[E]very federal appellate court has a special obligation to satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review, even though the parties are prepared to concede it.") (internal quotation marks omitted). We review questions of standing de novo. City of Sausalito v. O'Neill, 386 F.3d 1186, 1196 (9th Cir.2004).

I. Article III Standing

In order to have Article III standing, a plaintiff must have suffered an injury in fact. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).¹ A plaintiff demonstrates injury in fact by pointing to "some threatened or actual injury resulting from the putatively illegal action." 4805 Convoy, Inc. v. City of San Diego, 183 F.3d 1108, 1111 (9th Cir.1999) (quoting Virginia v. Am. Booksellers Ass'n, Inc., 484 U.S. 383, 392, 108 S.Ct. 636, 98 L.Ed.2d 782 (1988)). Plaintiffs concede that the regulatory violations for which they sought injunctive relief caused them no injury. Because the Truth-in-Leasing violations caused them no injury, Plaintiffs did not have Article III standing to bring suit against Defendant motor carriers for those violations.

Defendant motor carriers appear to agree with the district court's conclusion that a plaintiff need not demonstrate injury in order to obtain an injunction to remedy violations of the Truth-in-Leasing regulations. See 49 U.S.C. § 14704(a)(1) ("A person may bring a civil action for injunctive relief for violations of sections 14102 and 14103."). A federal statute, however, cannot confer standing on plaintiffs who do not meet Article III requirements. See Preston v. Heckler, 734 F.2d 1359, 1364 (9th Cir.1984) ("The test for standing under a statute may be more rigorous but not more lenient than the article III requirements."). The district court concluded that Plaintiffs had standing because their original complaints alleged injury. The injury alleged in the complaints, however, related to alleged California Insurance Code violations, Plaintiffs' theory of "statutory employment" (under which compliance with Truth-in-Leasing regulations made Plaintiff owner-operators employees by operation of law, rendering Defendants' treatment of them as independent contractors unlawful), and allegations that Defendants unlawfully extracted hidden charges from Plaintiffs' earnings in violation of the Truth-in-Leasing regulations. The district court thus would have had federal question jurisdiction (if Plaintiffs had ICCTA standing to bring suit based on pre-1996 contracts) over Plaintiffs' claims relating to unlawful denial of employment benefits and unlawful withholding of funds because Plaintiffs alleged that they sustained damages as a result of the regulatory violations underlying those claims. Jurisdiction over those claims could not, however, confer jurisdiction over distinct federal claims for which Plaintiffs could demonstrate no injury. The district court thus should have dismissed Plaintiffs' claims for injunctive relief to remedy Truth-in-Leasing violations when Plaintiffs conceded a lack of injury. Cf. Lujan, 504 U.S. at 560, 112 S.Ct. 2130.

II. ICCTA Standing

In order to determine the district court's proper course of action on remand, we must determine whether Plaintiffs had standing under the ICCTA to bring the...