Delivery Express Inc. v. Joel Sacks, in his capacity as the Director of Washington State Department of Labor…

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DELIVERY EXPRESS INC.,
Plaintiff-Appellant,
v.
JOEL SACKS, in his capacity as the
Director of Washington State Department of
Labor & Industries, an agency of the
executive department of the State of
Washington; et al.,
Defendants-Appellees.
No. 16-35543
D.C. No. 3:15-cv-05842-BHS
MEMORANDUM*
Appeal from the United States District Court
for the Western District of Washington
Benjamin H. Settle, District Judge, Presiding
Submitted May 8, 2018**
Seattle, Washington
Before: GOULD and IKUTA, Circuit Judges, and FREUDENTHAL,*** District
Judge.
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
*** The Honorable Nancy D. Freudenthal, United States District Judge for
the District of Wyoming, sitting by designation.
FILED
JUN 22 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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The Washington State Department of Labor and Industries (DOLI) imposed
workers’ compensation premiums and penalties for violations of workers’
compensation laws on Delivery Express Inc. (DEI). DEI then brought a
declaratory judgment action claiming that the workers’ compensation laws in
Washington State, codified in Title 51 of the Revised Code of Washington, are pre-
empted by the Federal Aviation Administration Authorization Act (FAAAA),
which prevents states from “enact[ing] or enforc[ing] any law, rule, regulation,
standard, or other provision having the force and effect of law relating to intrastate
rates, intrastate routes, or intrastate services of any freight forwarder or broker.”
49 U.S.C. § 14501(b)(1). The district court granted summary judgment to DOLI,
concluding that the workers’ compensation laws are not pre-empted. We affirm.
We have held that where a challenged law does not directly refer to rates
routes or services, the relevant question is “whether the provision, directly or
indirectly, binds the carrier to a particular price, route or service and thereby
interferes with the competitive market forces in the industry.” Dilts v. Penske
Logistics, LLC, 769 F.3d 637, 646 (9th Cir. 2014) (citation omitted). “[G]enerally
applicable background regulations that are several steps removed from prices,
routes, or services” are not pre-empted by the FAAAA, “even if they raise the
overall cost of doing business or require a carrier to re-direct or reroute some
equipment.” Id.

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In Dilts we held that California meal and rest break provisions were not pre-
empted. Id. at 647. Similarly, in Californians for Safe & Competitive Dump Truck
Transp. v. Mendonca, 152 F.3d 1184 (9th Cir. 1998), we held that California
prevailing wage laws were not pre-empted. Id. at 1189. The workers’
compensation law challenged here is not meaningfully distinguishable from the
meal and rest break provisions in Dilts, or the prevailing wage law in Mendonca.
The Washington workers’ compensation law is a generally applicable background
provision that applies across many industries. It makes no references to rates,
routes, or services. And any incidental effect that it has on rates, routes, or services
is remote at best. Such generally applicable employment laws that operate “several
steps removed from prices, routes, or services” do not interfere with Congress’s
deregulatory goals, because they create a level playing field in which competitive
market forces can operate. See Dilts, 769 F.3d at 646, 649; Mendonca, 152 F.3d at
1189.
DEI also argues that the workers’ compensation law is pre-empted because it
creates a “patchwork” of different state regulations, and that this is contrary to the
purpose of the FAAAA. We have rejected this argument in the past, and held that
the prohibition on patchwork laws only relates to laws that are otherwise
sufficiently related to prices, routes, or services. Dilts, 769 F.3d at 647 (“The fact

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that laws may differ from state to state is not, on its own, cause for FAAAA
preemption.”).1 That same principle applies here.
AFFIRMED.
1 Appellees’ Motion to Take Judicial Notice (Dkt. 22) is DENIED.

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