March 28
Southwest Airlines, Co. v. Saxon
21-309, 7th Cir.
Preview by Erica Hackett, Online Editor
The issue in Southwest Airlines, Co. v. Saxon is whether airline baggage ramp supervisors are exempt from the Federal Arbitration Agreement (FAA). The FAA requires that courts enforce arbitration agreements, however it exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. §1. Baggage ramp workers and supervisors actively load and unload cargo from aircraft engaged in interstate commerce, including passenger luggage, freight, and mail.
Respondent Latrice Saxon was the original plaintiff in this case—she and other Southwest Airlines ramp supervisors sued the company for its failure to pay them overtime under the Fair Labor Standards Act. Southwest moved to dismiss the suit in favor of arbitration, claiming that Saxon was bound by an arbitration agreement imposed by Southwest on employees who are not subject to a collective bargaining agreement. Southwest argues that this agreement requires the ramp supervisors to arbitrate their claims, while Saxon argues that they fall into the FAA exception as a “class of workers engaged in foreign or interstate commerce.” Brief for Respondent at 7, Southwest Airlines, Co. v. Saxon, No. 21-309 (filed Feb. 24, 2022).
The district court held that Saxon and the ramp supervisors were not exempt from the FAA, but the Seventh Circuit unanimously reversed. The appellate court found that ramp supervisors actively load and unload interstate cargo, and thus “are actually engaged in the movement of goods in interstate commerce.” Brief for Respondent at 8 (quoting Saxon v. Southwest Airlines, Co., 993 F.3d 492, 498 (7th. Cir. 2021)). The court further explained: “Actual transportation is not limited to the precise moment either goods or the people accompanying them cross state lines. Loading and unloading cargo onto a vehicle so that it may be moved interstate, too, is actual transportation . . .” Id.
The crux of Saxon’s argument is that ramp supervisors are actively engaged in interstate commerce even when they do not cross state lines themselves. Saxon argues that this interpretation is in line with the plain meaning of the 1925 text of the FAA and subsequent Supreme Court interpretation of the FAA, which holds that the FAA’s exemption extends to “the contracts of employment of transportation workers.” Brief for Respondent at 5 (quoting Circuit City Stores, Inc. v. Abrams, 532 U.S. 105, 109 (2001)).
In contrast, Southwest Airlines argues that the Court should interpret this exemption narrowly to uphold the FAA’s broader pro-arbitration purpose. It writes in its brief that because the ramp supervisors do not actually cross state lines, they are not transportation workers within the meaning of the statute. Further, it argues that railroad employees and seamen are workers who “participated directly in the cross-border transportation of goods or people” by riding on the vessel itself and thus are materially different from baggage ramp supervisors. Brief for Petitioner at 12, Southwest Airlines, Co. v. Saxon, No. 21-309 (filed Jan. 24, 2022).
The decision of the Court in this case will impact every airline that employs ramp supervisors at airports across the United States. The lawyers at American, United, Delta, and other U.S. carriers are likely watching this opinion with bated breath. The 7th Circuit opinion was logical and well-written, and the Court could easily uphold it. However, it is also possible that the Court will swing the other way on a slippery slope theory, concerned that incorporating ramp supervisors into the exempted class of transportation workers will somehow lead to the inclusion of “workers whose occupations have nothing to do with interstate transport—for example . . . ice cream truck drivers selling treats made with milk from an out-of-state dairy.” Brief for Petitioner at 9-10 (quoting Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 802 (7th Cir. 2020)). In fact, that outcome is not out of the realm of possibility because then-Judge Amy Coney Barrett authored the opinion in Wallace.
Anyone who has ever taken a flight and then waited for their checked bags to arrive at baggage claim understands, at least at some level, that their bag did not just materialize at their destination: it was handled by people on the ground at each airport. The importance of these people to the airline industry indicates that any case involving their employment conditions affects the way Americans travel, and this case is no exception.
LeDure v. Union Pacific Railroad Company
20-807, 7th Cir.
Preview by Yiho Kim, Online Editor
What does it mean to “use” a locomotive? In LeDure v. Union Pacific Railroad Co, the Court will decide whether a locomotive is “in use” on a railroad’s line and therefore subject to the Locomotive Inspection Act (LIA) and its safety regulations when the locomotive and its train makes a temporary stop in a railyard.
Petitioner Bradley LeDure was a locomotive engineer for Respondent Union Pacific Rail Road Company working at its railyard in Salem, Illinois. Brief for Respondent at 9, LeDure v. Union Pacific Railroad Co., No. 20-807, (U.S. filed Mar. 2, 2022). On August 12, 2016, around 2 AM, while inspecting a Union Pacific locomotive making a temporary stop, LeDure slipped on an oil slick and fell, sustaining permanently debilitating injuries. Brief for Petitioner at 7-8, LeDure v. Union Pacific Railroad Co., No. 20-807, (U.S. filed Jan. 31, 2022). The locomotive in question was traveling from Chicago to southern Missouri when its train made a stop at the railyard for assembly before continuing its journey. Brief for Petitioner at 7; Brief for Respondent at 11-12.
LeDure brought negligence claims against Union Pacific under the Federal Employers Liability Act (FELA), which holds an employer negligent per se for violating safety standards under the LIA. 45 U.S.C. § 51; Brief for Respondent, at 5.
First enacted in 1911 to combat the high accident rate and short life expectancies plaguing the railroad industry, the LIA requires railroad carriers to maintain various safety and inspection requirements for any locomotive. 49 U.S.C. § 20701. However, these requirements only apply to locomotives that are in “use” or are “allowed to be used” on the railroad line. Id. Therefore, for the LIA to have been in effect and allow recovery for LeDure, the district court had to find that the locomotive was “in use” at the time of his injury. Unconvinced, the District Court for the Southern District of Illinois granted summary judgment for Union Pacific.
The Seventh Circuit affirmed dismissal and agreed with the district court that the locomotive was not “in use” because it was “stationary, on a sidetrack, and part of a train needing to be assembled” before continuing its route, and thus the LIA did not apply. LeDure v. Union Pacific Railroad Co., 962 F.3d 907, 910 (7th Cir. 2020).
In arguing that the locomotive was subject to the LIA at the time of the accident, LeDure presents a broad reading of the statute that covers all rail vehicles – “including stationary vehicles – that a railroad includes or has available to include as part of a train.” Brief for Petitioner at 9. According to ordinary usage of the time of the statute, LeDure contends that “use” and “allow to be used” are correctly understood in the railroad context as “put to a purpose” or “employ.” Id. LeDure supports that this expansive reading is consistent with the language and structure of the statute, as well as “more than a century’s worth” of Supreme Court precedent. Id.
Pointing to the LIA’s text, context, and regulatory history, Union Pacific counters that a locomotive is “used” under the LIA only when it is actively being engaged in active service. Brief for Respondent at 16. Per Union Pacific, “use” an instrumentality is properly understood as using something it for its intended purpose. Brief for Respondent at 17. See Smith v. United States, 508 U.S. 223, 242 (1993) (Scalia, J., dissenting). Further, Union Pacific argues that LeDure’s broad reading of the statute would “break the statute” by expanding the regulatory reach of daily inspections to all dormant locomotives regardless of plans for use. Brief for Respondent at 2.
Solicitor General Prelogar filed an amicus brief for the United States supporting LeDure’s position focusing on the Supreme Court’s broad construction of the word “use” in the related Safety Appliance Act, which also covers safety of rail vehicles. See Brief for Amicus Curiae United States in support of Petitioner at 13, (U.S. filed Feb. 7, 2022).
Recently, railroad cases have left the Court sharply divided. Sam Callahan & Allon Kedem, Justices to decide what it means to “use” a locomotive, SCOTUSblog (Mar. 25, 2022, 5:38 PM), https://www.scotusblog.com/2022/03/justices-to-decide-what-it-means-to-use-a-locomotive/; see e.g., Salinas v. United States Railroad Retirement Bd., 592 US _ (2021). While this case seems to present a narrow statutory interpretation question about an obscure statute, the “methodological questions lurking beneath the surface may end up sharply dividing the justices.” Callahan & Kedem.
March 29
Torres v. Texas Dept. of Public Safety
No. 20-603, Tex. App.
Preview by Charlotte Cuccia, Online Editor
In Torres v. Texas Dept. of Public Safety, the Supreme Court will determine if Congress has the power to authorize suits against non-consenting states pursuant to its war powers.
The Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) establishes certain protections for servicemembers. These include the ability to take military leave from civilian jobs, the prompt reemployment upon return from service, and the freedom from discrimination based on military service. 38 U.S.C. §§4311-13, 4316. When servicemembers who sustain disabilities during their military service want to reenter the workforce, USERRA requires employers to accommodate their disabilities and make an effort to rehire them in the position that they would have had or in an equivalent position of “seniority, status, and pay.” §4313(a)(3). Servicemembers who are discriminated against by their employer may bring an action under the USERRA.
Petitioner Le Roy Torres suffered extensive lung damage while deployed in Iraq after exposure to toxic fumes from burn pits, which were used to burn trash and human waste on many military bases. Brief for Petitioner at 15, Torres v. Texas Dept. of Public Safety, No. 20-603 (U.S. filed Jan. 31, 2022). Upon returning to Texas, Torres notified Respondent, the Texas Department of Public Safety (“DPS”) of his intent to be reemployed and explained that the damage to his lungs would prevent him from performing all of his duties as a Texas State Trooper. Id. Following some back-and-forth, Torres felt that he was not adequately being accommodated, and filed suit against the DPS under USERRA. Id. at 16. DPS moved to dismiss on the grounds that the state of Texas was protected by sovereign immunity. Id.
Torres argues that because Congress enacted USERRA pursuant to its war powers, it has the power to authorize suits against non-consenting states under those powers. Torres goes on to argue that the “war powers clauses exclusively delegate military matters to the national government” and by their nature require “the states to relinquish their sovereignty.” Id. at 18. The United States agrees, stating that the principles of state sovereign immunity do not bar suits against state employers under USERRA because the constitutional structure “divested them of that immunity in certain areas” such as “Congress’s exercise of its war powers.” Brief for the United States as Amicus Curiae Supporting Petitioner at 16, Torres v. Texas Dept. of Public Safety, No. 20-603 (U.S. filed Feb. 7, 2022).
DPS argues, on the contrary, that the Supreme Court has “repeatedly held that Congress cannot abrogate state sovereign immunity by exercising its Article I powers” and that individual states did not surrender their immunity except for four narrow scenarios: bankruptcy, suits by other states, suits by the Federal Government, and suits involving federal eminent domain. These categories do not include war powers. Brief for Respondent at 8, 11, 12, Torres v. Texas Dept. of Public Safety, No. 20-603 (U.S. filed Mar. 2, 2022).
Unsurprisingly, those who filed briefs in favor of Torres include a variety of veteran support organizations, as well as a bipartisan group of members of Congress who believe that USERRA should support American veterans and servicemembers upon their return to the United States and not be “left to [a] patchwork system of protections” depending on which state they call home. Brief of Bipartisan Members of Congress as Amici Curiae in Support of Petitioner at 3, Torres v. Texas Dept. of Public Safety, No. 20-603 (U.S. filed Feb. 7, 2022).
Fifteen states, led by Montana, write in support of DPS to argue that the integral nature of American federalism supports state sovereignty and that any clause-by-clause analysis would create an undue burden on the states which cuts against precedent. Brief of Amici Curiae States of Montana and 14 Other States in Support of Defendant-Respondent at 21, Torres v. Texas Dept. of Public Safety, No. 20-603 (U.S. filed Mar. 9, 2022).
Both lines of reasoning are understandable: the facts of this case are necessarily compelling to those who wish to better support veterans, while the potential long-term ramifications should give individual states pause as to their continued sovereign immunity. The Supreme Court will hear oral arguments on March 29, 2022.
March 30
Viking River Cruises, Inc. v. Moriana
No. 20-1573, Cal. Ct. App.
Preview by Azad Niroomand, Online Editor
Arbitration clauses have appeared with increasing frequency in contracts that deal with a wide variety of issues. This expansion of arbitration agreements has largely been guided by the Federal Arbitration Act (“FAA”) which emphasized the importance of arbitration in commercial settings. Courts have previously stated that Congress enacted the FAA to “reverse the longstanding judicial hostility to arbitration,” and to “establish[] a liberal federal policy favoring arbitration agreements.” Green Tree Fin. Corp.–Ala. v. Randolph, 531 U.S. 79, 89 (2000); CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012).
In this case, the issue presented to the Court is “[w]hether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under the California Private Attorneys General Act.”
California has enacted the “Private Attorney General Act,” which is a procedural statute allowing for an aggrieved employee to seek a monetary award on a representative basis against their employer on behalf of themselves or similarly situated individuals. Petitioner for Cert at 8. Under California law, pre-dispute agreements, like the arbitration agreement at issue, in which an employee agrees to arbitrate all claims individually and “forgo her right to pursue a representative PAGA actions unenforceable as against public policy.” Id. at 10. This rule was established by the California Supreme Court in Iskanian v. CLS Transportation Los Angeles, LLC, 327 P.3d 129 (Cal. 2014)
This case arises from a PAGA action filed by the Respondent, a sales representative employed by the Petitioner, on behalf of herself and other similarly situated employees alleging that her employer had violated the California labor code. Petitioner for Cert at 12. Before those proceeding had initiated, Ms. Moriana has signed a contract with Viking River Cruises, Inc. agreeing to binding bilateral arbitration for “any dispute arising out of or relating to your employment.” Id. at 13.
The arbitration agreement expressly waived any right to a court proceeding and expressly waived the possibility of any collective or representative proceedings. Id. When Viking River Cruises moved to compel arbitration, the trial court denied this motion and the California Court of Appeals affirmed. Id. at 14-15. The California Supreme Court denied Viking River Cruises’ petition for review. Id.
Petitioner argues that the FAA requires enforcement of the parties’ agreement to arbitrate bilaterally by expressly agreeing to forgo collective action like the PAGA actions at issue here. Brief for Petitioner at 18, Viking River Cruises, Inc. v. Moriana. No. 20-1573 (filed Jan. 31, 2022). They further argue that FAA preempts application of California’s so called “Iskanian Rule” that was relied upon by the courts below. Id. at 22.
Petitioner also emphasizes that the California Supreme Court’s holding in Iskanian v. CLS Transportation Los Angeles, LLC effectively nullifies application of the Supreme Court’s jurisprudence in AT&T Mobility, LLC v. Concepcion, 563 U.S. 333 (2011) and Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018) in California. Brief for Petitioner at 43, Viking River Cruises, Inc. v. Moriana. No. 20-1573 (filed Jan. 31, 2022).
Respondent argues conversely that the FAA does not require enforcement of agreements to waive representative, private attorneys general claims. Brief for Respondent at 13, Viking River Cruises, Inc. v. Moriana. No. 20-1573 (filed Mar. 02, 2022). This is correct, Respondent claims, because “nothing in the FAA’s text, structure, or stated purposes requires enforcement of agreements to waive statutory claims.” Id. at 15. Respondent further argues that the procedures outlined in the PAGA are not incompatible with arbitration and further that the saving clause of the FAA provides support for California’s Iskanian anti-waiver rule. Id. at 25, 38.
This case follows several other arbitration-related cases taken up by the High Court this term and like those cases has the potential to significant reshape the application and interpretation of arbitration clauses.
