Opinion
A138658
02-20-2015
MARTIN MARINE et al., Plaintiffs and Appellants, v. INTERSTATE DISTRIBUTOR CO., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115 . (Alameda County Super. Ct. No. RG07358277)
Plaintiff Martin Marine, a truck driver employed by defendant Interstate Distributor Co. (Interstate), filed a putative class action alleging Interstate failed to comply with California meal and break period regulations. Following certification of a class consisting of all Interstate drivers on exclusively intrastate routes, the trial court granted judgment on the pleadings to Interstate, concluding Marine's claims were preempted by the Federal Aviation Administration Authorization Act of 1994 (49 U.S.C. § 14501 et seq.; Act). Relying primarily on state and federal appellate court decisions rendered after entry of the trial court's order, we reverse the finding of preemption.
I. BACKGROUND
Marine drives a truck for Interstate. He filed this putative class action in November 2007, alleging Interstate failed to provide its drivers the rest and meal breaks required by California law and to comply with certain recordkeeping aspects of state wage and hour laws.
Although the class was initially alleged to include all Interstate drivers, Marine amended his complaint in 2011 to narrow the class to all persons employed by Interstate "as local hourly drivers in the State of California." The intent of the amendment was to exclude from the class drivers whose routes took them outside the state. In 2012, a class was certified, limited to intrastate drivers for Interstate.
Soon after class certification, Interstate moved for judgment on the pleadings, arguing Marine's claims were preempted by the Act. The Act, which grew out of the federal effort to deregulate the trucking industry, contains a preemption provision stating, "a State . . . may not enact or enforce a 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); see Rowe v. New Hampshire Motor Transp. Assn. (2008) 552 U.S. 364, 368 (Rowe).)
In its motion, Interstate relied on five separate federal district court decisions finding the Act preempts the application of state meal and rest break regulations to truck drivers because such laws have a significant effect on the routes and services of their employers. Interstate argued resolution of the issue on the basis of the pleadings alone was appropriate because Marine's complaint acknowledges compliance with state law would require Interstate to "change its policies, practices and delivery scheduling (by scheduling fewer deliveries per driver and reducing expectations and mandates about delivery times) in order to provide meal and rest breaks." (Underscoring omitted.) Marine filed a voluminous opposition arguing meal and break regulations were outside the preemptive intent of the Act because they had only a peripheral impact on prices, routes, and services.
The trial court granted the motion. The court rejected Marine's argument that a motion for judgment on the pleadings was an inappropriate procedural vehicle for evaluating preemption, noting, "the preemption issue does not turn on an evidentiary snapshot of [Interstate's] current operations" but is "framed by broader considerations, i.e., whether [meal and break] laws, by their very nature, impose substantive standards upon a motor carrier's routes and services, thereby running afoul of federal law intended to eliminate a patchwork of potentially inconsistent state laws governing a particular class of employees." After an extended examination of the issues, the court adopted the analysis of the district court decisions cited by Interstate, relying particularly on a decision since reversed by the Ninth Circuit, Dilts v. Penske Logistics LLC (S.D.Cal. 2011) 819 F.Supp.2d 1109, in finding the meal and break regulations preempted.
II. DISCUSSION
Marine argues the trial court erred in concluding his claims were preempted by the Act.
" 'A judgment on the pleadings in favor of the defendant is appropriate when the complaint fails to allege facts sufficient to state a cause of action. [Citation.] A motion for judgment on the pleadings is equivalent to a demurrer and is governed by the same de novo standard of review.' [Citation.] 'All properly pleaded, material facts are deemed true, but not contentions, deductions, or conclusions of fact or law . . . .' " (People ex rel. Harris v. PAC Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777 (PAC Anchor).)
As noted above, the Act precludes state laws "related to a price, route, or service" of motor carriers. (49 U.S.C. § 14501(c)(1).) The Supreme Court has held that, in general terms, state laws that are significantly "related to" rates, routes, or services, even indirectly, are preempted by the Act, while those having "only a 'tenuous, remote, or peripheral' " connection to rates, routes, or services are not preempted. (Rowe, supra, 552 U.S. at p. 371.) The statute itself expressly excludes, as " 'matters which are not "prices, rates or services" and which are therefore not preempted,' " many types of state laws, including those that "enact safety regulations with respect to motor vehicles; control trucking routes based on vehicle size, weight, and cargo; impose certain insurance, liability, or standard transportation rules; regulate the intrastate transport of household goods and certain aspects of tow-truck operations; or create certain uniform cargo or antitrust immunity rules." (Dilts v. Penske Logistics, LLC (9th Cir. 2014) 769 F.3d 637, 644 (Dilts).) Based on these exclusions, the Ninth Circuit has concluded, "Congress did not intend to preempt generally applicable state transportation, safety, welfare, or business rules that do not otherwise regulate prices, routes, or services." (Ibid.)
Meal and rest breaks for transportation company employees are governed by wage order No. 9-2001, issued by the Industrial Welfare Commission (IWC), encoded as California Code of Regulations, title 8, section 11090. (Godfrey v. Oakland Port Services Corp. (2014) 230 Cal.App.4th 1267, 1274 (Godfrey).) Pursuant to that wage order, an employee must, in general terms, be provided a 30-minute meal break in the first five hours of the workday and 10-minute rest periods in the middle of each four-hour period of work. (Cal. Code Regs., tit. 8, § 11090, subds. 11(A), (C), 12(A).) The employer is given considerable flexibility in determining the manner and timing of these breaks. (See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1032, 1034-1035.)
When it ruled on Interstate's motion, the trial court had no directly applicable appellate guidance in determining whether California's meal and rest break regulations are preempted by the Act, but that is no longer the case. In the nearly two years since the trial court's ruling, both the Ninth Circuit, in Dilts, supra, 769 F.3d 637, and Division Two of this court, in Godfrey, supra, 230 Cal.App.4th 1267, have rendered decisions in cases materially indistinguishable from this one. Both found the application of California wage and hour laws to intrastate truck drivers is not preempted by the Act. (Dilts, at p. 647; Godfrey, at pp. 1278-1280.) During that same time, our Supreme Court held the application of California's minimum wage laws to intrastate truck drivers is similarly not preempted. (PAC Anchor, supra, 59 Cal.4th at pp. 784-785.)
As Dilts explained, after a careful analysis: "In light of [the Act's] preemption principles outlined above, California's meal and rest break laws plainly are not the sorts of laws 'related to' prices, routes, or services that Congress intended to preempt. They do not set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly. They are 'broad law[s] applying to hundreds of different industries' with no other 'forbidden connection with prices[, routes,] and services.' [Citation.] They are normal background rules for almost all employers doing business in the state of California. And while motor carriers may have to take into account the meal and rest break requirements when allocating resources and scheduling routes—just as they must take into account state wage laws, [citation], or speed limits and weight restrictions, [citation]—the laws do not 'bind' motor carriers to specific prices, routes, or services, [citation]. Nor do they 'freeze into place' prices, routes, or services or 'determin[e] (to a significant degree) the [prices, routes, or] services that motor carriers will provide,' [citation]." (Dilts, supra, 769 F.3d at p. 647.) Godfrey found this analysis persuasive and adopted it with little additional discussion. (Godfrey, supra, 230 Cal.App.4th at pp. 1279-1280.) The United States Department of Transportation takes the same view. (Dilts, at pp. 649-650.) We are persuaded as well.
This holding is consistent with the Supreme Court's decision in PAC Anchor. Minimum wage laws are imposed on trucking companies by the same IWC wage order setting meal and break periods. (Cal. Code Regs., tit. 8, § 11090, subd. 4(A).) In finding the minimum wage laws not preempted by the Act, the court concluded state laws generally regulating "wages, hours, and working conditions" that "do not refer to prices, routes, or services" are not preempted because any "effect on defendants' prices, routes, or services . . . is indirect." (PAC Anchor, supra, 59 Cal.4th at p. 785.) Meal and rest break regulations are the same type of generally applicable rules governing working conditions, with no direct connection to prices, routes, and services.
Defendant argues the meal and break period regulations will affect its prices, routes, and services because accommodating the regulations may impose added costs, resulting in higher prices, and require adjustments in the manner routes are carried out and services provided. Interstate cites few specifics, however, other than the added expense and delay inherent in allowing drivers to rest and the difficulty of finding a place to park a large truck, which could eliminate the use of routes that do not afford convenient stopping points. Various specific claims of this type were considered and rejected in Dilts. (Dilts, supra, 769 F.3d at pp. 647-650.) In general terms, the argument proves too much, since compliance with any state regulation is likely to impose added costs and require some juggling of routes and services. That alone does not result in preemption under the Act, as the express exclusions in the Act itself illustrate. As explained in Dilts, "generally applicable background regulations that are several steps removed from prices, routes, or services, such as prevailing wage laws or safety regulations, are not preempted, even if employers must factor those provisions into their decisions about the prices that they set, the routes that they use, or the services that they provide. Such laws are not preempted even if they raise the overall cost of doing business or require a carrier to re-direct or reroute some equipment. [Citation.] Indeed, many of the laws that Congress enumerated [in the Act] as expressly not related to prices, routes, or services—such as transportation safety regulations or insurance and liability rules, [citation]—are likely to increase a motor carrier's operating costs. But Congress clarified that this fact alone does not make such laws 'related to' prices, routes, or services. Nearly every form of state regulation carries some cost. The statutory text tells us, though, that in deregulating motor carriers and promoting maximum reliance on market forces, Congress did not intend to exempt motor carriers from every state regulatory scheme of general applicability." (Id. at p. 646.)
Because Interstate moved for judgment on the pleadings, its discussion of the potential impact of the application of meal and break period regulations was necessarily hypothetical. While the requirement that drivers be permitted periodically to pull over to eat and rest undoubtedly will be inconvenient for Interstate's route schedulers at times, and costs will be marginally greater and deliveries marginally slower, we are not persuaded any such effects will impose a material burden on prices, routes, and services. As noted in the text, the Supreme Court's interpretation of these regulations in Brinker Restaurant Corp. v. Superior Court, supra, 53 Cal.4th 1004, provides an employer with substantial flexibility in scheduling breaks. (Id. at pp. 1032, 1034-1035.)
III. DISPOSITION
The judgment of the trial court is reversed. The matter is remanded for further proceedings consistent with this decision.
/s/_________
Margulies, Acting P.J.
We concur: /s/_________
Dondero, J.
/s/_________
Banke, J.