Severed Truckers

Betancourt v. Transp. Brokerage Specialists, Inc., No. A159528 (D1d3 Mar. 28, 2021)

As we’ve previously discussed, the Federal Arbitration Act does not apply to truck drivers who are “engaged in foreign or interstate commerce.” And as we’ve also previously discussed, under what’s called the “last mile” rule, courts have applied the exception intrastate truckers who are driving the final leg of an interstate distribution. Which is what the plaintiff here is.

That being the case, California, not federal, arbitration law applied to Plaintiff’s arbitration agreement. The contract contained a class action waiver—unenforceable under California law, which is generally preempted by FAA § 2. But since preemption does not apply here, the waiver is invalid under prior California cases like Gentry, which are no longer good law outside of the trucker context. The Court of Appeal also finds a second provision—prohibiting a not-prevailing party in an arbitration from moving a court to vacate—to be unconscionable. The Court, however, finds these provisions to be severable, at least so far as they apply to claims Plaintiff did not bring as a class action. 

So the Court of Appeal reverses and remands to the trial court to determine whether the non-class claims claims should be severed and separately sent to arbitration.

Truckers II

Muro v. Cornerstone Staffing Solutions, Inc., No. D070206 (D4d1 Feb. 23, 2018)

Plaintiff is a trucker bringing a wage and hour class action against the Temp Service that employs him. His employment contract has an arb clause with a class action waiver. But as was addressed in the 2015 Garrido case, the FAA has a carve out for transportation worker contracts. So the clause is measured under California state arbitration law, which still applies a pre-AT&T v. Concepcion rule that usually invalidates class action waivers. Which happens here. So, like Mr. Garrido, Plaintiff here gets to keep his case in court as a class action.

Affirmed.

If Arbitration Fails, Try Arm Wrestling

Performance Team Freight Systems v. Aleman, No. B259146 (D2d2 Nov. 2. 2015)

Interesting how cases seem to come in clusters. We just talked about this. And here too, not very long ago. Interstate truckers’ employment contracts are excluded from the scope of the Federal Arbitration Act. As the recent Garcia case shows, given the difference of opinion between the California Supreme Court and the federal Supreme Court about the overall justness of aggressively compelling consumers and employees to arbitration, that can have some pretty interesting effects. But it doesn’t matter here because the exception applies only to employment contracts and not to agreements between trucking companies and their independent contractors. Plaintiff has the burden of providing the exception. Since here, his evidence did not show he was an employee, he could not show that the exception applies.

Nor were the claims outside the scope of the arbitration clause or the agreement itself unconscionable. In a rare analysis, the court finds that the plaintiff established that the agreement was substantively unconscionable but not procedurally so. (It’s almost always the other way around.) Plaintiff apparently failed to put in the typical declaration stating stating he was offered the contract only on a “take it or leave it” basis. Or that—as his appellate brief contends—the contract was only offered in English and he spoke only Spanish. While those things seem easy to prove, plaintiff still must actually prove them, with evidence.

So off to arbitration he goes.

Reversed.

Why doesn’t Hollywood make stuff like this anymore?