United States Court of Appeals 

For the First Circuit 

No. 15-1908 

MASSACHUSETTS DELIVERY ASSOCIATION, 

Plaintiff, Appellee, 

v. 

MAURA T. HEALEY, in her official capacity as 

Attorney General of the Commonwealth of Massachusetts, 

Defendant, Appellant. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS 

[Hon. Denise J. Casper, U.S. District Judge] 

Before 

Howard, Chief Judge, 

Selya and Lynch, Circuit Judges. 

Douglas S. Martland, Assistant Attorney General, with whom 

Maura Healey, Attorney General of Massachusetts, was on brief, for 

appellant. 

David C. Casey, with whom Christopher B. Kaczmarek, Stephen 

T. Melnick, and Littler Mendelson, P.C. were on brief, for 

appellee. 

May 11, 2016 
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LYNCH, Circuit Judge. The question in this case is 

whether the express preemption provision of the Federal Aviation 

Administration Authorization Act of 1994 ("FAAAA"), 49 U.S.C. 

§ 14501(c)(1), preempts the application of "Prong 2" of the 

Massachusetts Independent Contractor Statute, Mass. Gen. Laws ch. 

149, § 148B(a)(2), to the same-day delivery companies that 

constitute the Massachusetts Delivery Association ("MDA"). This 

court previously remanded this case to the district court for a 

determination, on review of the full evidentiary record, of whether 

Prong 2 is FAAAA-preempted because it "relate[s] to" the prices, 

routes, or services of the motor carriers. Mass. Delivery Ass'n 

v. Coakley (MDA II), 769 F.3d 11, 23 (1st Cir. 2014). On remand, 

the district court, at summary judgment, answered in the 

affirmative. Mass. Delivery Ass'n v. Healey, 117 F. Supp. 3d 86, 

97–98 (D. Mass. 2015).

After the filing of the appeal in this case, this court 

held in Schwann v. FedEx Ground Package System, Inc. that the FAAAA 

preempts the application of Prong 21 to the nationwide package 

delivery service FedEx. 813 F.3d 429, 432 (1st Cir. 2016). 

Applying the reasoning in Schwann, we affirm. 

 1 An earlier appeal of this case referred to this 

subsection as "Prong B." We now adopt the term "Prong 2," as used 

in Schwann. 
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I. 

The MDA is a trade organization representing same-day 

delivery service companies in Massachusetts. The MDA brought this 

suit on behalf of its members, seeking a declaration that Prong 2 

is preempted by the FAAAA as well as an injunction barring the 

Attorney General from enforcing Prong 2 against its members. The 

MDA chose one member, X Pressman Trucking & Courier, Inc. 

("Xpressman"), as an exemplar for this litigation. 

Xpressman offers its clients both scheduled-route and 

on-demand deliveries. For scheduled-route deliveries, packages 

are picked up and dropped off at regular times and places. 

Xpressman's scheduled routes are serviced by forty-six couriers. 

Xpressman selects scheduled-route couriers by soliciting bids 

through online advertisements and awarding the route to whoever 

advances the best bid. For on-demand deliveries, the times, 

locations, and total number of deliveries are variable and 

unpredictable. Each day, couriers provide Xpressman with their 

availability to make on-demand deliveries, and Xpressman matches 

on-demand delivery requests with available couriers. It was 

represented to us at oral argument that up to a dozen couriers 

submit their availability for on-demand deliveries each day and 

that that number comprises different individuals from day to day. 

Xpressman considers its couriers to be independent 

contractors. Xpressman's couriers drive their own cars and trucks. 
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They are paid for each route they complete and they do not receive 

benefits such as health insurance, retirement, or workers' 

compensation. Meanwhile, Xpressman has six full-time and two parttime workers, whom Xpressman classifies as employees, for 

administrative and warehouse duties. Those workers are paid on an 

hourly or salary basis, and they receive benefits such as health 

insurance, retirement, and workers' compensation.

The basic premise of the MDA's claim is that 

Massachusetts law forces Xpressman and other MDA members to 

designate their couriers as employees rather than as independent 

contractors, as its member companies have classified them. The 

relevant Massachusetts law is the Massachusetts Independent 

Contractor Statute, Mass. Gen. Laws ch. 149, § 148B, which 

establishes a three-prong test to determine who is an "employee" 

for the purposes of Massachusetts General Laws Chapters 149 and 

151. A worker is considered an employee rather than an independent 

contractor unless the employer can meet all three prongs: 

For the purpose of this chapter and chapter 

151, an individual performing any service, 

except as authorized under this chapter, shall 

be considered to be an employee under those 

chapters unless: 

(1) the individual is free from control 

and direction in connection with the 

performance of the service, both under 

his contract for the performance of 

service and in fact; and 

(2) the service is performed outside the 

usual course of the business of the 

employer; and, 
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(3) the individual is customarily engaged 

in an independently established trade, 

occupation, profession or business of the 

same nature as that involved in the 

service performed. 

Mass. Gen. Laws ch. 149, § 148B(a). The second requirement is 

what we have termed "Prong 2." Schwann, 813 F.3d at 433. The MDA 

claims that Prong 2's requirement that an independent contractor 

only perform services "outside the usual course of the business of 

the employer" makes it impossible for its member delivery companies 

to treat their couriers as independent contractors. We recognized 

in Schwann that this characteristic of Prong 2 -- that "it makes 

any person who performs a service within the usual course of the 

enterprise's business an employee" -- is "something of an anomaly" 

among state wage laws. Id. at 438. 

The MDA argues that because the application of Prong 2 

would require its member companies to treat their couriers as 

employees, the application of Prong 2 to its members is preempted 

by the FAAAA. The FAAAA's express preemption provision states: 

Except as provided in paragraphs (2) and (3), 

a State, political subdivision of a State, or 

political authority of 2 or more States may 

not enact or enforce a law, regulation, or 

other provision having the force and effect of 

law related to a price, route, or service of 

any motor carrier (other than a carrier 

affiliated with a direct air carrier covered 

by section 41713(b)(4)) or any motor private 

carrier, broker, or freight forwarder with 

respect to the transportation of property. 
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49 U.S.C. § 14501(c)(1) (emphases added). The MDA argues that by 

requiring its member companies to treat their couriers as employees 

rather than as independent contractors, the Massachusetts law 

"relate[s] to" their prices, routes, or services and is FAAAApreempted. 

The MDA filed this suit on September 7, 2010. On April 

8, 2011, the district court dismissed the case on the basis of 

abstention under Younger v. Harris, 401 U.S. 37 (1971). In the 

first appeal in this case, this court reversed and remanded. Mass. 

Delivery Ass'n v. Coakley (MDA I), 671 F.3d 33, 35 (1st Cir. 2012). 

On remand, the parties filed cross-motions for summary 

judgment. The district court denied the MDA's motion and allowed 

the Attorney General's motion in part, holding that Prong 2 was 

not preempted by the FAAAA. In the second appeal in this case, 

this court vacated and remanded. MDA II, 769 F.3d at 23. We 

instructed the district court on remand to determine, on a full 

evidentiary record, id., whether Prong 2 "expressly references, or 

has a significant impact on, carriers' prices, routes, or 

services," id. at 17–18. In doing so, we "express[ed] no view on 

the sufficiency of the evidence before the district court." Id. 

at 22. 

On remand, the parties renewed their cross-motions for 

summary judgment. The MDA argued that Prong 2 was preempted both 

as a matter of logical effect and by record evidence showing an 
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impermissible significant impact on prices, routes, or services. 

The Attorney General argued for summary judgment based on the lack 

of any such significant impact. In the alternative, the Attorney 

General argued that the MDA's motion for summary judgment should 

be denied because of the existence of genuine issues of material 

fact. 

On July 8, 2015, the district court entered summary 

judgment for the MDA and held that the FAAAA preempts Prong 2 as 

to the members of the MDA as a matter of logical effect. Mass. 

Delivery Ass'n, 117 F. Supp. 3d at 97–98. At the same time, the 

district court denied the Attorney General's motion for summary 

judgment. Id. 

This appeal followed. 

II. 

We review the district court's grant of summary judgment 

de novo, viewing the facts in the light most favorable to the nonmoving party. Flovac, Inc. v. Airvac, Inc., No. 15-1571, 2016 WL 

1319274, at *2 (1st Cir. Apr. 4, 2016). Summary judgment is 

appropriate when there is "no genuine dispute as to any material 

fact and the movant is entitled to judgment as a matter of law." 

Fed. R. Civ. P. 56(a). 

Recently, in Schwann, this court faced a suit by delivery 

drivers who claimed that, under the same Massachusetts statute at 

issue here, FedEx should have treated them as employees rather 
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than as independent contractors. 813 F.3d at 432. We affirmed 

the district court's holding that the FAAAA preempted the 

application of the Prong 2 requirement to FedEx. Id. 

Our analysis in Schwann began by recognizing that FAAAA 

preemption is purposefully expansive and may occur even when the 

state law has only an indirect effect on prices, routes, or 

services. Id. at 436 (citing MDA II, 769 F.3d at 18). "[A] state 

statute is preempted if it expressly references, or has a 

significant impact on, carriers' prices, routes, or services." 

Id. (quoting MDA II, 769 F.3d at 17–18); see also Morales v. Trans 

World Airlines, Inc., 504 U.S. 374, 388 (1992). Significant impact 

may be proven by "empirical evidence" or "the logical effect that 

a particular scheme has on the delivery of services," or some 

combination of each. Schwann, 813 F.3d at 437 (quoting MDA II, 

769 F.3d at 21). 

We concluded that the application of Prong 2 to FedEx 

would both expressly reference and have a significant impact on 

FedEx's prices, routes, or services. As to the former, we found 

express reference because the application of Prong 2 to FedEx would 

require "a judicial determination of the extent and types of motor 

carrier services that FedEx provides" in order to determine whether 

that service is within the usual course of business of FedEx. Id. 

at 437–38. 
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As to the latter, we found that the application of Prong 

2 would have a significant impact, as a matter of logical effect, 

on FedEx's services and routes. The application of Prong 2 would 

logically have a significant impact on FedEx's services because it 

would take away from FedEx "[t]he decision whether to provide a 

service directly, with one's own employee, or to procure the 

services of an independent contractor." Id. at 438. The 

application of Prong 2 would deprive FedEx of the choice of 

"providing for first-and-last mile pick-up and delivery services 

through an independent person who bears the economic risk 

associated with any inefficiencies in performance," id. at 439, 

and as a result, "a court, rather than the market participant, 

would ultimately determine what services that company provides and 

how it chooses to provide them," id. at 438. We went on to conclude 

that the application of Prong 2 would also have a logical effect 

on FedEx's routes because it would not allow "delegat[ion of] the 

precise design of the route to [a] contractor, who assume[s] the 

risks and benefits of increased or decreased efficiencies achieved 

by the selected routes." Id. at 439. 

In Remington v. J.B. Hunt Transport, Inc., decided the 

same day as Schwann, this court faced a challenge to the 

application of Prong 2 to another freight and package delivery 

company in Massachusetts. No. 15-1252 (1st Cir. Feb. 22, 2016). 

Faced with arguments that "materially mirror[ed] those in 
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Schwann," we concluded that as in Schwann, "application of Prong 

2 to the independent-contractor drivers for J.B. Hunt is 

preempted." Id., slip op. at 2. 

The Attorney General asks us to reconsider Schwann, 

saying that it was wrongly decided. But under the law of the 

circuit doctrine, we are "bound by a prior panel decision, absent 

any intervening authority." United States v. Mouscardy, 722 F.3d 

68, 77 (1st Cir. 2013) (quoting United States v. Grupee, 682 F.3d 

143, 149 (1st Cir. 2012)). The Attorney General points to no such 

intervening authority. The decisions from other circuits that the 

Attorney General argues are inconsistent with Schwann -- Costello 

v. BeavEx, Inc., 810 F.3d 1045 (7th Cir. 2016), Amerijet 

International, Inc. v. Miami-Dade County, 627 F. App'x 744 (11th 

Cir. 2015) (per curiam), and Dilts v. Penske Logistics, LLC, 769 

F.3d 637 (9th Cir. 2014) -- were already considered by this court 

in Schwann. Those decisions were also raised in the petition for 

rehearing and the petition for rehearing en banc in Schwann, which 

were both denied. 

Applying the reasoning in Schwann, we find that the FAAAA 

preempts the application of Prong 2 to Xpressman. As in Schwann, 

application of Prong 2 to Xpressman would require a judicial 

determination of whether a particular service offered by Xpressman 

fits within its usual course of business. See Schwann, 813 F.3d 
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at 437–38. As such, Prong 2 expressly references Xpressman's 

services. 

Also, as in Schwann, application of Prong 2 to Xpressman 

would logically have a significant effect on Xpressman's routes 

and services. The Attorney General attempts to distinguish Schwann 

on the basis that in Schwann, FedEx's relationship with its drivers 

was governed by an Operating Agreement under which each contractor 

acquired an exclusive and transferable interest in the customer 

accounts located in particular FedEx delivery areas. Id. at 432. 

By contrast, the Attorney General points out, Xpressman's couriers 

do not operate under such agreements but are instead chosen by 

bidding for routes in response to online advertisements. 

It is true that FedEx's particular arrangement with its 

drivers was significant to the Schwann decision. We recognized 

that by relying on such an arrangement, FedEx gave drivers "an 

economic incentive to keep costs low, to deliver packages 

efficiently, and to provide excellent customer service." Id. at 

439. We reasoned that the application of Prong 2, by preventing 

FedEx from employing such an arrangement, would "substantially 

restrain the free-market pursuit of perceived efficiencies and 

competitive advantage" of such an arrangement and thereby dictate 

"what services that company provides and how it chooses to provide 

them." Id. at 438. Additionally, we concluded that preventing 

FedEx from offering such economic incentives to drivers would 
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logically be expected to have a significant impact on routes. Id. 

at 439. In Remington, we concluded that the application of Prong 

2 to the motor carrier J.B. Hunt would similarly deprive J.B. Hunt 

of its pursuit of perceived efficiencies, even though J.B. Hunt's 

particular arrangement with its drivers was different from that of 

FedEx. Remington, slip op. at 2. 

Xpressman does not use the same arrangement as either 

FedEx or J.B. Hunt, but Schwann's reasoning applies nonetheless. 

Like FedEx's drivers, Xpressman's couriers bear the expenses of 

delivering packages and receive compensation based on the number 

of packages delivered. As far as the record indicates, Xpressman's 

couriers are free to decide what route to follow in making 

deliveries, just as the FedEx drivers were. As such, Xpressman, 

like FedEx, has structured its relationship with its couriers to 

incentivize its couriers to keep costs low and to deliver packages 

efficiently. See Schwann, 813 F.3d at 439. Further bolstering 

such an incentive is Xpressman's competitive bidding system in 

which routes are awarded to the couriers that submit the lowest 

bids. 

Application of Prong 2 to Xpressman would, as in Schwann, 

deprive Xpressman of its choice of method of providing for delivery 

services and incentivizing the persons providing those services. 

As a matter of logic, such a restraint on Xpressman's pursuit of 

perceived economic efficiencies "would ultimately determine what 
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services that company provides and how it chooses to provide them." 

Id. at 438. Likewise, application of Prong 2 would logically be 

expected to have a significant impact on Xpressman's routes. 

Applying the logic of Schwann, we hold that the 

application of Prong 2 to the members of the MDA is preempted by 

the FAAAA. We affirm.