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.