Sorry to have been off-line; the day job of being a neutral tied me up on an arbitration and some teaching.

Interstate transportation worker exception

An on-going question centers on the reach of the “interstate transportation worker” exception in Article 1 of the Federal Arbitration Act.  In summary, if a worker falls within the exception, the FAA does not give a  federal court the authority to enforce any arbitration agreement which may be part of his or her agreement with the Defendant. (A possible exception arises when the party moving to compel arbitration also claims such a right under State law).

In 2022, SCOTUS held that a ramp supervisor, who occasionally helped load baggage onto interstate flights, fell within the exception, Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022). The case left the lower courts to disagree on the extent to which it applied to delivery drivers who handle goods that travel interstate, but who, themselves, do not cross state lines.  SCOTUS currently has three cases which could force it to resolve this Circuit-splitting issue.

Bissonnette v. LePage Bakeries Park Street, LLC, Dkt. No. 23-51, raises, among other issues, the question of whether a court, in determining whether a worker is exempt from the coverage of the FAA, should look to the nature of the business of the party seeking to compel arbitration or only to the plaintiff’s individual responsibilities. Bissonnette delivered baked goods, which were baked in a different state, from a warehouse to stores within the same state as the warehouse.  The Second Circuit held that, because the store buying the product was interested in the baked goods, rather than the transportation thereof, Bissonnette was not a “transportation worker.”  It, therefore, compelled arbitration, pursuant to the agreement under which Bissonnette got his distribution rights. The case is scheduled for argument on February 20^th.   You can get a full set of the briefs and those of the myriad amici at SCOTUSblog.com.

Two related cert. petitions seem to have flown under the radar.  Domino’s Pizza, LLC v. Carmona, Dkt. No. 43-427, is similar to Bissonnette, in that it relates to the FAA’s coverage of drivers who deliver pizza ingredients from a warehouse to the stores. The case was distributed for the Court’s conference this coming Friday, January 19^th.  Amazon.com, Inc. v. Miller, Dkt. No. 23-424, raises the question of whether a class of last-mile drivers, who may be delivering groceries and other products which Amazon categorizes as “locally stocked,” fall within the Section 1 exception.  Both cases address the effect of Saxon on pre-existing authority. Amazon.com was assigned for conference on January 5^th, but no order has yet been issued.  SCOTUS blog is not following these petitions, so, if you want to see the briefs, you will have to go to the Supreme Court’s docket.

The Circuits are all over the board on these questions, a situation which Amazon.com in its petition for cert. refers to as a “real muddle.”  Based on its decisions over the last Terms, SCOTUS seems to be interested in arbitration questions; we’ll see where they go on this important one.  If they hold the petitions until the resolution of Bissonnette and remand for reconsideration thereunder, we may know nothing until June.

More from SCOTUS; Stay v. Dismissal

The January 3^rd edition of “Highlights” discussed the cert. petition which was then pending in Smith v. Spirrizzi, Dkt. No. 22-1218.  The case addresses whether a District Court, when compelling arbitration under the FAA, has the discretion to dismiss the case, or whether it may merely issue a stay.  On Friday, the Court granted cert. in the case.  While SCOTUS will certainly not resolve the matter this Term, if you are addressing the issue in a District Court, the pendency of the question before SCOTUS may be a relevant consideration.

Litigation Waiver

Davis v. Realpage, Inc., 2024 U.S. Dist. LEXIS 5281 (S.D. Fla. January 10, 2024)(Augustin-Birch, M.J.), holds that a party does not waive its right to compel arbitration by filing an Offer of Judgment under Fed. R. Civ. P. 68. The court opines that, by filing a Rule 68 Offer, “the Defendant indicated a decision to avoid litigation altogether.”  Thus, it did not “demonstrate an intent to litigate,” which is the crux of a finding of arbitration waiver. The case provides a good discussion of the effect of Morgan v. Sundance, 596 U.S. 411 (2022), on the Eleventh Circuit’s waiver doctrine.

Winter has come to New England, with a real snow cover.  If you are the sections of the U.S. which are suffering bitter cold, be safe.

David Reif, FCIArb
Reif ADR
Dreif@reifadr.com
Reifadr.com