FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHAMBER OF COMMERCE OF THE 

UNITED STATES OF AMERICA;

RASIER, LLC,

Plaintiffs-Appellants,

v.

CITY OF SEATTLE; SEATTLE 

DEPARTMENT OF FINANCE AND 

ADMINISTRATIVE SERVICES; FRED 

PODESTA, in his official capacity as 

Director, Finance and Administrative 

Services, City of Seattle,

Defendants-Appellees.

No. 17-35640

D.C. No.

2:17-cv-00370-

RSL

OPINION

Appeal from the United States District Court

for the Western District of Washington

Robert S. Lasnik, District Judge, Presiding

Argued and Submitted February 5, 2018

Seattle, Washington

Filed May 11, 2018
2 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

Before: MILAN D. SMITH, JR. and MARY H. 

MURGUIA, Circuit Judges, and EDUARDO C. 

ROBRENO,* District Judge.

Opinion by Judge Milan D. Smith, Jr.

SUMMARY**

Antitrust / Labor Law

The panel affirmed in part and reversed in part the 

district court’s dismissal of an action challenging, on federal 

antitrust and labor law grounds, a Seattle ordinance 

authorizing a collective-bargaining process between “driver 

coordinators”—like Uber Technologies; Lyft, Inc.; and 

Eastside for Hire, Inc. —and independent contractors who 

work as for-hire drivers.

The ordinance permits independent-contractor drivers, 

represented by an entity denominated an “exclusive driver 

representative,” and driver coordinators to agree on the 

“nature and amount of payments to be made by, or withheld 

from, the driver coordinator to or by the drivers.”

The panel reversed the district court’s dismissal of 

claims that the ordinance violates, and is preempted by, § 1 

of the Sherman Antitrust Act because the ordinance 

 * The Honorable Eduardo C. Robreno, Senior United States District 

Judge for the Eastern District of Pennsylvania, sitting by designation.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 3

sanctions price-fixing of ride-referral service fees by private 

cartels of independent-contractor drivers. The panel held 

that the state-action immunity doctrine did not exempt the 

ordinance from preemption by the Sherman Act because the 

State of Washington had not clearly articulated and 

affirmatively expressed a state policy authorizing private 

parties to price-fix the fees that for-hire drivers pay to 

companies like Uber or Lyft in exchange for ride-referral 

services. In addition, the active-supervision requirement for 

state-action immunity applied, and was not met.

The panel affirmed the district court’s dismissal of 

claims that the ordinance was preempted by the National 

Labor Relations Act under either Machinists or Garmon

preemption.

The panel remanded the case for further proceedings.

COUNSEL

Michael A. Carvin (argued), Jacqueline M. Holmes, 

Christian G. Vergonis, and Robert Stander, Jones Day,

Washington, D.C.; Lily Fu Claffee, Steven P. Lehotsky, and 

Warren Postman, U.S. Chamber Litigation Center, 

Washington, D.C.; Douglas C. Ross and Robert J. Maguire, 

Davis Wright Tremaine LLP, Seattle, Washington; Timothy 

J. O’Connell, Stoel Rives LLP, Seattle, Washington; for 

Plaintiffs-Appellants.

Stacey M. Leyton (argued), Stephen P. Berzon, and P. Casey 

Pitts, Altshuler Berzon LLP, San Francisco, California; 

Michael K. Ryan (argued), Sara O’Connor-Kriss, Josh 

Johnson, and Gregory C. Narver, Assistant City Attorneys; 
4 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

Peter S. Holmes, Seattle City Attorney; City Attorney’s 

Office, Seattle, Washington; for Defendants-Appellees.

Michele Arington (argued), Assistant Attorney General; Joel 

Marcus, Deputy General Counsel; David C. Shonka, Acting 

General Counsel; Federal Trade Commission, Washington, 

D.C.; Robert B. Nicholson and Steven J. Mintz, Attorneys; 

Andrew C. Finch, Principal Deputy Assistant Attorney 

General; Makan Delrahim, Assistant Attorney General; 

Antitrust Division, United States Department of Justice,

Washington, D.C.; for Amici Curiae United States and 

Federal Trade Commission.

William R. Peterson and Allyson N. Ho, Morgan Lewis & 

Bockius LLP, Houston, Texas; Harry I. Johnson III, Morgan 

Lewis & Bockius LLP, Los Angeles, California; Stacey 

Anne Mahoney, Morgan Lewis & Bockius LLP, New York, 

New York; for Amici Curiae Coalition for a Democratic 

Workplace, National Federation of Independent Business 

Small Business Legal Center, and Consumer Technology 

Association.

Matthew J. Ginsburg and Harold Craig Becker, Washington, 

D.C., for Amici Curiae American Federation of Labor and 

Congress of Industrial Organizations.

Jonathan F. Mitchell, Stanford, California; Thomas R. 

McCarthy, Consovoy McCarthy Park PLLC, Arlington, 

Virginia; for Amici Curiae Antitrust Law Professors.

Alan D. Copsey, Deputy Solicitor General; Noah G. Purcell, 

Solicitor General; Robert W. Ferguson, Attorney General; 

Office of the Attorney General, Olympia, Washington; for 

Amicus Curiae State of Washington.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 5

Matthew J. Segal and Kymberly K. Evanson, Pacifica Law 

Group LLP, Seattle, Washington, for Amicus Curiae 

Professor Samuel Estreicher.

Rebecca Smith and Ceilidh Gao, National Employment Law 

Project—WA, Seattle, Washington, for Amici Curiae Los 

Angeles Alliance for a New Economy, National Domestic 

Worker Alliance, National Employment Law Project, 

Partnership for Working Families, and Puget Sound Sage.

Catherine L. Fisk, Berkeley, California; Charlotte Garden, 

Fred T. Korematsu Center for Law and Equality, Ronald A. 

Peterson Law Clinic, Seattle University School of Law, 

Seattle, Washington; for Amici Curiae Labor Law 

Professors.

Sanjukta Paul, Detroit, Michigan, for Amici Curiae Law and 

Business Professors.

Barbara D. Underwood, Solicitor General; Anisha S. 

Dasgupta, Deputy Solicitor General; Seth M. Rokosky, 

Assistant Solicitor General of Counsel; Eric T. 

Schneiderman, Attorney General; Office of the Attorney 

General, New York, New York; Douglas S. Chin, Attorney 

General, Department of the Attorney General, Honolulu, 

Hawaii; Lisa Madigan, Attorney General, Office of the 

Attorney General, Chicago, Illinois; Thomas J. Miller,

Attorney General, Office of the Attorney General, Des 

Moines, Iowa; Janet T. Mills, Attorney General, Office of 

the Attorney General, Augusta, Maine; Brian E. Frosh, 

Attorney General, Attorney General’s Office, Baltimore, 

Maryland; Maura Healey, Attorney General, Attorney 

General’s Office, Boston, Massachusetts; Lori Swanson, 

Attorney General, Office of the Attorney General, St. Paul, 

Minnesota; Ellen F. Rosenblum, Attorney General, Office of 
6 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

the Attorney General, Salem, Oregon; Josh Shapiro, 

Attorney General, Office of the Attorney General, 

Harrisburg, Pennsylvania; Peter F. Kilmartin, Attorney 

General, Office of the Attorney General, Providence, Rhode 

Island; Thomas J. Donovan, Jr., Attorney General, Office of 

the Attorney General, Montpelier, Vermont; Karl A. Racine, 

Attorney General, Office of the Attorney General, 

Washington, D.C.; for Amici Curiae the States of New York, 

Hawai‘i, Illinois, Iowa, Maine, Maryland, Massachusetts, 

Minnesota, Oregon, Pennsylvania, Rhode Island, and 

Vermont, and the District of Columbia.

OPINION

M. SMITH, Circuit Judge:

On December 14, 2015, the Seattle City Council enacted 

into law Ordinance 124968, an Ordinance Relating to 

Taxicab, Transportation Network Company, and For-Hire 

Vehicle Drivers (Ordinance).1 The Ordinance was the first 

municipal ordinance of its kind in the United States, and 

authorizes a collective-bargaining process between “driver 

coordinators”—like Uber Technologies (Uber), Lyft, Inc. 

(Lyft), and Eastside for Hire, Inc. (Eastside)—and 

independent contractors who work as for-hire drivers. The 

Ordinance permits independent-contractor drivers, 

represented by an entity denominated an “exclusive driver 

representative,” and driver coordinators to agree on the 

“nature and amount of payments to be made by, or withheld 

from, the driver coordinator to or by the drivers.” Seattle, 

 1 The Ordinance amended section 6.310.110 of the Seattle 

Municipal Code, and added section 6.310.735 to the Code. See Seattle, 

Wash., Municipal Code §§ 6.310.110, 6.310.735.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 7

Wash., Municipal Code § 6.310.735(H)(1). This provision 

of the Ordinance is the crux of this case.

Acting on behalf of its members Uber, Lyft, and 

Eastside, Plaintiff-Appellant the Chamber of Commerce of 

the United States of America, together with PlaintiffAppellant Rasier, LLC, a subsidiary of Uber (collectively, 

the Chamber), sued Defendants-Appellees the City of 

Seattle, the Seattle Department of Finance and 

Administrative Services (the Department), and the 

Department’s Director, Fred Podesta (collectively, the City), 

challenging the Ordinance on federal antitrust and labor law 

grounds. First, the Chamber asserts that the Ordinance 

violates, and is preempted by, section 1 of the Sherman 

Antitrust Act, 15 U.S.C. § 1, because the Ordinance 

sanctions price-fixing of ride-referral service fees by private 

cartels of independent-contractor drivers. Second, the 

Chamber claims that the Ordinance is preempted by the

National Labor Relations Act (NLRA), 29 U.S.C. §§ 151–

169, under Machinists and Garmon preemption.

The district court dismissed the case, holding that the 

state-action immunity doctrine exempts the Ordinance from 

preemption by the Sherman Act, and that the NLRA does not 

preempt the Ordinance. The Chamber appealed both 

holdings.

We have jurisdiction over this appeal pursuant to 

28 U.S.C. § 1291. We reverse the district court’s dismissal 

of the Chamber’s federal antitrust claims, and remand the 

federal antitrust claims to the district court for further 

proceedings. We also affirm the district court’s dismissal of 

the Chamber’s NLRA preemption claims.
8 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

FACTUAL AND PROCEDURAL BACKGROUND

A. Ride-Referral Companies

Eastside is the largest dispatcher of taxicab and for-hire 

vehicles in the Pacific Northwest. Eastside provides 

licensed taxicab and for-hire vehicle drivers with dispatch, 

advertising, payment processing, and other administrative 

services, in exchange for a weekly fee, payable by drivers to 

Eastside. Relying on advertising and a preexisting client 

base, Eastside generates transportation requests from 

passengers, who call, text-message, or email Eastside to 

request a ride. Eastside then refers ride requests to drivers 

through a mobile data terminal. If a passenger uses a credit 

card to pay a driver, Eastside processes the transaction and 

remits the payment to the driver. The drivers who pay for 

Eastside’s services are independent contractors—Eastside 

does not dictate how the drivers operate their transportation 

businesses. For example, some drivers own licensed 

vehicles, whereas others lease them.

Uber and Lyft, founded in 2009 and 2012, respectively, 

have ushered ride-referral services into the digital age. Uber 

and Lyft have developed proprietary smartphone 

applications (apps) that enable an online platform, or digital 

marketplace, for ride-referral services, often referred to as 

“ridesharing” services. After downloading the Uber or Lyft 

app onto their smartphones, riders request rides through the 

app, which transmits ride requests to available drivers 

nearby. Drivers are free to accept or ignore a ride request. 

If a driver accepts a ride request, he or she is matched 

electronically with the rider, and then proceeds to the rider’s 

location and fulfills the ride request. If a driver ignores a 

ride request, the digital platform transmits the request to 

another nearby driver. Drivers may cancel a ride request, 

even after initially accepting it, at any point prior to the 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 9

commencement of the ride. Riders, too, may decide whether 

or not to accept a ride from any of the drivers contacted 

through the app. After a ride is completed, riders pay drivers 

via the Uber or Lyft app, using a payment method, such as a 

credit card, placed on file with Uber or Lyft.

Uber and Lyft’s business models have facilitated the rise 

of the so-called “gig economy.” In order to receive ride 

requests through the apps, drivers contract with, and pay a 

technology licensing fee to, Uber or Lyft. These licensing 

fees are a percentage of riders’ paid fares: Uber and Lyft 

subtract their technology licensing fees from riders’ 

payments, and remit the remainder to drivers. Drivers’ 

contractual agreements with either Uber or Lyft are not 

exclusive—in fact, many drivers use several ridesharing 

apps and even operate multiple apps simultaneously. 

Drivers may use the Uber and Lyft apps for however long 

and whenever they wish, if they wish to use them at all.

B. The Ordinance

On December 14, 2015, the Seattle City Council adopted 

Ordinance 124968. The stated purpose of the Ordinance is 

to “allow[] taxicab, transportation network company, and 

for-hire vehicle drivers (‘for-hire drivers’) to modify specific 

agreements collectively with the entities that hire, direct, 

arrange, or manage their work,” in order to “better ensure 

that [for-hire drivers] can perform their services in a safe, 

reliable, stable, cost-effective, and economically viable 

manner.” Seattle, Wash., Ordinance 124968, pmbl.

The Ordinance requires “driver coordinators” to bargain 

collectively with for-hire drivers. Id. § 1(I). A “driver 

coordinator” is defined as “an entity that hires, contracts 

with, or partners with for-hire drivers for the purpose of 

assisting them with, or facilitating them in, providing for-
10 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

hire services to the public.” Seattle, Wash., Municipal Code 

§ 6.310.110. The Ordinance applies only to drivers who 

contract with a driver coordinator “other than in the context 

of an employer-employee relationship”—in other words, the 

Ordinance applies only to independent contractors. Id. 

§ 6.310.735(D).

The collective-bargaining process begins with the 

election of a “qualified driver representative,” or QDR. Id. 

§§ 6.310.110, 6.310.735(C). An entity seeking to represent 

for-hire drivers operating within Seattle first submits a 

request to the Director of Finance and Administrative 

Services (the Director) for approval to be a QDR. Id.

§ 6.310.735(C). Once approved by the City, the QDR must 

notify the driver coordinator of its intent to represent the 

driver coordinator’s for-hire drivers. Id. § 6.310.735(C)(2).

Upon receiving proper notice from the QDR, the driver 

coordinator must provide the QDR with the names, 

addresses, email addresses, and phone numbers of all 

“qualifying drivers.”2 Id. § 6.310.735(D). This disclosure 

requirement applies only to driver coordinators that have 

“hired, contracted with, partnered with, or maintained a 

contractual relationship or partnership with, 50 or more forhire drivers in the 30 days prior to the commencement date” 

set by the Director. Id.

The QDR then contacts the qualifying drivers to solicit 

their interest in being represented by the QDR. Id. 

§ 6.310.735(E). Within 120 days of receiving the qualifying 

 2 To be a qualifying driver, a for-hire driver must have “dr[iven] at 

least 52 trips originating or ending within the Seattle city limits for a 

particular Driver Coordinator during any three-month period in the 

12 months preceding the commencement date.” Seattle, Wash., 

Qualifying Driver and Lists of Qualifying Drivers, Rule FHDR-1.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 11

drivers’ contact information, the QDR submits to the 

Director statements of interest from qualifying drivers 

indicating that they wish to be represented by the QDR in 

collective-bargaining negotiations with the driver 

coordinator. Id. § 6.310.735(F)(1). If a majority of 

qualifying drivers consent to representation by the QDR, the 

Director certifies the QDR as the “exclusive driver 

representative” (EDR) for all for-hire drivers for that 

particular driver coordinator.3 Id. § 6.310.735(F)(2).

Once the Director certifies the EDR,

the driver coordinator and the EDR shall 

meet and negotiate in good faith certain 

subjects to be specified in rules or regulations 

promulgated by the Director including, but 

not limited to, best practices regarding 

vehicle equipment standards; safe driving 

practices; the manner in which the driver 

coordinator will conduct criminal 

background checks of all prospective drivers; 

the nature and amount of payments to be 

made by, or withheld from, the driver

coordinator to or by the drivers; minimum 

hours of work, conditions of work, and 

applicable rules.

Id. § 6.310.735(H)(1) (emphasis added).

 3 If more than one QDR is able to demonstrate that a majority of 

qualifying drivers wish to be represented by that QDR, the Director will 

designate the QDR with the largest number of statements of interest to 

be the EDR. Seattle, Wash., Municipal Code § 6.310.735(F)(2).
12 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

If an agreement is reached, the driver coordinator and the 

EDR submit the written agreement to the Director. Id. 

§ 6.310.735(H)(2). The Director reviews the agreement for 

compliance with the Ordinance and Chapter 6.310 of the 

Seattle Municipal Code, which governs taxicabs and for-hire 

vehicles. Id. In conducting this review, the Director is to 

“ensure that the substance of the agreement promotes the 

provision of safe, reliable, and economical for-hire 

transportation services and otherwise advance[s] the public 

policy goals set forth in Chapter 6.310 and in the 

[Ordinance].” Id.

The Director’s review is not limited to the parties’ 

submissions or the terms of the proposed agreement. Id. 

Rather, the Director may gather and consider additional 

evidence, conduct public hearings, and request information 

from the EDR and the driver coordinator. Id.

The agreement becomes final and binding on all parties 

if the Director finds the agreement compliant. Id. 

§ 6.310.735(H)(2)(a). The agreement does not take effect 

until the Director makes such an affirmative determination. 

Id. § 6.310.735(H)(2)(c). If the Director finds the agreement 

noncompliant, the Director remands it to the parties with a 

written explanation of the agreement’s failures, and may 

offer recommendations for remedying the agreement’s 

inadequacies. Id. § 6.310.735(H)(2)(b).

If the driver coordinator and the EDR do not reach an 

agreement, “either party must submit to interest arbitration 

upon the request of the other,” in accordance with the 

procedures and criteria specified in the Ordinance. Id. 

§ 6.310.735(I). The interest arbitrator must propose an 

agreement compliant with Chapter 6.310 and in line with the 

City’s public policy goals. Id. § 6.310.735(I)(2). The term 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 13

of an agreement proposed by the interest arbitrator may not 

exceed two years. Id.

The interest arbitrator submits the proposed agreement 

to the Director, who reviews the agreement for compliance 

with the Ordinance and Chapter 6.310, in the same manner 

the Director reviews an agreement proposed by the parties. 

Id. § 6.310.735(I)(3).

The parties may discuss additional terms and propose 

amendments to an approved agreement. Id. § 6.310.735(J). 

The parties must submit any proposed amendments to the 

Director for approval. Id. The Director has the authority to 

withdraw approval of an agreement during its term, if the 

Director finds that the agreement no longer complies with 

the Ordinance or furthers the City’s public policy goals. Id. 

§ 6.310.735(J)(1).

C. Procedural History

The Ordinance took effect on January 22, 2016.

The Chamber first filed suit challenging the Ordinance 

as preempted by the Sherman Act and the NLRA on March 

3, 2016, but its suit was dismissed as unripe, because no 

entity had yet applied for QDR certification. See Chamber 

of Commerce of the U.S. v. City of Seattle, No. C16-

0322RSL, 2016 WL 4595981, at *2, *4 (W.D. Wash. Aug. 

9, 2016).

Subsequently, the Director designated Teamsters Local 

117 (Local 117) as a QDR on March 3, 2017. On March 7, 

2017, Local 117 notified Uber, Lyft, Eastside, and nine other

driver coordinators of its intent to serve as the EDR of all 

qualifying drivers who contract with those companies, and 

requested the qualifying drivers’ contact information.
14 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

On March 9, 2017, the Chamber filed suit again, seeking 

a declaration that the Ordinance is unenforceable and a 

preliminary injunction enjoining the City from enforcing the 

Ordinance.4 Relevant to the present appeal,5 the Chamber 

asserted two federal antitrust claims—a violation claim and 

a preemption claim. Specifically, the Chamber claimed that 

the City violated section 1 of the Sherman Act by enacting 

and enforcing the Ordinance, and that the Ordinance 

conflicts with, and is preempted by, the Sherman Act. The 

Chamber also asserted two federal labor preemption claims, 

challenging the Ordinance as preempted by the NLRA under 

Machinists and Garmon preemption.

On March 21, 2017, the City filed a motion to dismiss. 

On April 4, 2017, before ruling on the City’s motion to 

dismiss, the district court granted the Chamber’s motion for 

a preliminary injunction.6

 4 The Chamber filed an Amended Complaint adding Rasier as a coplaintiff on April 11, 2017. The Amended Complaint, which is 

otherwise largely identical in substance to the original Complaint, is the 

operative complaint in this case.

5 The Chamber also asserted claims for violation of its members’ 

federal rights under 42 U.S.C. § 1983, municipal action unauthorized by 

Washington law, violation of the Washington Consumer Protection Act, 

and violation of the Washington Public Records Act. These claims are 

not addressed on appeal, because the Chamber did not raise them in its 

opening brief. See Tsao v. Desert Palace, Inc., 698 F.3d 1128, 1137 n.13 

(9th Cir. 2012) (stating that issues not raised in an opening brief are 

waived).

6 The City appealed from the district court’s order granting the 

Chamber’s motion for a preliminary injunction in Case No. 17-35371. 

The City’s appeal was voluntarily dismissed on September 6, 2017.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 15

Although the district court granted the Chamber’s 

motion for a preliminary injunction, it also granted the City’s 

motion to dismiss on August 1, 2017, concluding that the 

state-action immunity doctrine exempted the Ordinance 

from preemption by the Sherman Act,7 and that the 

Ordinance was not preempted by the NLRA. The district 

court entered judgment on August 4, 2017. The Chamber 

timely appealed on August 9, 2017.

On August 28, 2017, the Chamber filed an emergency 

motion for an injunction pending appeal in this court. The 

City opposed the motion. On September 8, 2017, we granted 

the Chamber’s emergency motion and enjoined enforcement 

of the Ordinance pending this appeal.

STANDARD OF REVIEW

We review the district court’s grant of a motion to 

dismiss de novo. Shames v. Cal. Travel & Tourism Comm’n, 

626 F.3d 1079, 1082 (9th Cir. 2010).

 7 The district court dismissed both of the Chamber’s federal antitrust 

claims on the basis of state-action immunity. Because the district court 

did not rule on the merits of the Chamber’s antitrust violation claim, we 

do not address the merits of that claim here.
16 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

ANALYSIS

I. State-Action Immunity Does Not Protect the 

Ordinance from Preemption by Section 1 of the 

Sherman Act.

We turn first to the Chamber’s federal antitrust claims, 

and hold that the Ordinance does not meet the requirements 

for state-action immunity.8

A. Preemption

In determining whether the Sherman Act preempts a 

state or local law pursuant to the Supremacy Clause, we 

apply the principles of conflict preemption. “As in the 

typical pre-emption case, the inquiry is whether there exists 

an irreconcilable conflict between the federal and state [or 

local] regulatory schemes.” Rice v. Norman Williams Co., 

458 U.S. 654, 659 (1982).

A state or local law, “when considered in the abstract, 

may be condemned under the antitrust laws,” and thus 

preempted, “only if it mandates or authorizes conduct that 

necessarily constitutes a violation of the antitrust laws in all 

 8 Ordinarily, we would discuss first the threshold question of 

whether the Ordinance, which regulates labor relations between for-hire 

drivers and driver coordinators, is preempted wholly by federal labor 

law.

However, for purposes of this opinion, we discuss the Chamber’s 

labor preemption claims last. The Chamber’s NLRA preemption claims, 

in contrast to the Chamber’s challenge to the district court’s holding 

regarding state-action immunity, lack merit, and do not warrant reversal 

of the district court’s order. As is evident from the Chamber’s briefing 

and presentation at oral argument, the Chamber’s federal antitrust 

claims, rather than its federal labor law claims, are the core of its appeal.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 17

cases, or if it places irresistible pressure on a private party to 

violate the antitrust laws in order to comply with the statute.” 

Id. at 661. “Such condemnation will follow under [section] 

1 of the Sherman Act when the conduct contemplated by the 

statute is in all cases a per se violation.” Id. However, “[i]f 

the activity addressed by the statute does not fall into that 

category, and therefore must be analyzed under the rule of 

reason, the statute cannot be condemned in the abstract.” Id. 

Unlike the categorical analysis under the per se rule of 

illegality, “[a]nalysis under the rule of reason requires an 

examination of the circumstances underlying a particular 

economic practice, and therefore does not lend itself to a 

conclusion that a statute is facially inconsistent with federal 

antitrust laws.” Id. In short, the Ordinance may be 

preempted facially by federal antitrust law if it authorizes a 

per se violation of section 1 of the Sherman Act, but not if it 

must be analyzed under the rule of reason.

Section 1 of the Sherman Act prohibits “[e]very contract, 

combination in the form of trust or otherwise, or conspiracy, 

in restraint of trade or commerce.” 15 U.S.C. § 1. Chief 

among such illegal arrangements are price-fixing 

agreements: “Under the Sherman Act a combination formed 

for the purpose and with the effect of raising, depressing, 

fixing, pegging, or stabilizing the price of a commodity in 

interstate or foreign commerce is illegal per se.” United 

States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 (1940). 

“Price-fixing agreements between two or more competitors, 

otherwise known as horizontal price-fixing agreements, fall 

into the category of arrangements that are per se unlawful.” 

Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006); see 

Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 986 

(9th Cir. 2000) (“Foremost in the category of per se 

violations is horizontal price-fixing among competitors.”). 

Put simply, “collusion” among competitors is “the supreme 
18 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

evil of antitrust.” Verizon Commc’ns Inc. v. Law Offices of 

Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004).

Here, the district court assumed, without deciding, “that 

collusion between independent economic actors to set the 

prices they will accept for their services in the market is a 

per se antitrust violation.” On appeal, the City 

acknowledges that it “did not challenge the Chamber’s 

contention that collective negotiations regarding topics such 

as payments to drivers could, absent Parker immunity, 

constitute per se antitrust violations.” Because the district 

court dismissed the Chamber’s federal antitrust claims solely 

on the basis of state-action immunity, we limit our analysis 

to that issue. We accept, without reaching the merits of the 

question, that the Ordinance authorizes a per se antitrust 

violation. The parties may address on remand which mode 

of antitrust analysis—the per se rule of illegality or the rule 

of reason—applies.

B. The Requirements for State-Action Immunity

The state-action immunity doctrine derives from Parker 

v. Brown, 317 U.S. 341 (1943). In Parker, the Supreme 

Court held that “because ‘nothing in the language of the 

Sherman Act . . . or in its history’ suggested that Congress 

intended to restrict the sovereign capacity of the States to 

regulate their economies, the Act should not be read to bar 

States from imposing market restraints ‘as an act of 

government.’” FTC v. Phoebe Putney Health Sys., Inc., 

568 U.S. 216, 224 (2013) (quoting Parker, 317 U.S. at 350, 

352). Following Parker, the Supreme Court has, “under 

certain circumstances,” extended immunity from federal 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 19

antitrust laws to “nonstate actors carrying out the State’s 

regulatory program.” Id. at 224–25.9

State-action immunity is the exception rather than the 

rule. Indeed, the Supreme Court has stressed that it is 

“disfavored”: “[G]iven the fundamental national values of 

free enterprise and economic competition that are embodied 

in the federal antitrust laws, ‘state-action immunity is 

disfavored, much as are repeals by implication.’” Id. at 225 

(quoting FTC v. Ticor Title Ins. Co., 504 U.S. 621, 636 

(1992)); see id. at 236 (reiterating “the principle that ‘stateaction immunity is disfavored’” (quoting Ticor Title, 504 

U.S. at 636)). In line with its “preference” against stateaction immunity, the Supreme Court “recognize[s] stateaction immunity only when it is clear that the challenged 

anticompetitive conduct is undertaken pursuant to a 

regulatory scheme that ‘is the State’s own.’” Id. at 225 

(quoting Ticor Title, 504 U.S. at 635). The Supreme Court’s 

narrow take on state-action immunity is all the more 

exacting when a non-state actor invokes the protective 

umbrella of Parker immunity: “‘[C]loser analysis is 

required when the activity at issue is not directly that of’ the 

State itself, but rather ‘is carried out by others pursuant to 

state authorization.’” Id. (quoting Hoover v. Ronwin,

466 U.S. 558, 568 (1984)).

 9 The City’s argument that the presumption against preemption 

applies here is misplaced. State-action immunity is a defense to

preemption. See, e.g., Phoebe Putney, 568 U.S. at 235 (referring to 

Parker immunity as a “state-action defense to price-fixing claims”). The 

City did not argue below that the Ordinance does not authorize a per se

violation of section 1 of the Sherman Act. Accordingly, there is no 

challenge regarding the issue of whether preemption should or could 

apply. The only question is whether the defense to preemption applies.
20 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

The Supreme Court uses a two-part test, sometimes 

referred to as the Midcal test, to “determin[e] whether the 

anticompetitive acts of private parties are entitled to 

immunity.” Id. First, “the challenged restraint [must] be one 

clearly articulated and affirmatively expressed as state 

policy,” and second, “the policy [must] be actively 

supervised by the State.” Id. (quoting Cal. Retail Liquor 

Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 

(1980)).

“Because municipalities and other political subdivisions 

are not themselves sovereign, state-action immunity under 

Parker does not apply to them directly.” Id. As such, 

“immunity will only attach to the activities of local 

governmental entities if they are undertaken pursuant to a 

‘clearly articulated and affirmatively expressed’ state policy 

to displace competition.” Id. at 226 (quoting Cmty. 

Commc’ns Co. v. Boulder, 455 U.S. 40, 52 (1982)). Local 

governmental entities, “unlike private parties, . . . are not 

subject to the ‘active state supervision requirement’ because 

they have less of an incentive to pursue their own selfinterest under the guise of implementing state policies.” Id. 

(quoting Town of Hallie v. City of Eau Claire, 471 U.S. 34, 

46–47 (1985)). “Where state or municipal regulation by a 

private party is involved, however, active state supervision 

must be shown, even where a clearly articulated state policy 

exists.” Hallie, 471 U.S. at 46 n.10.

i. The Clear-Articulation Test

We conclude that the anticompetitive restraint 

challenged in this case fails the first prong of the Midcal test. 

The State of Washington has not “clearly articulated and 

affirmatively expressed” a state policy authorizing private 

parties to price-fix the fees for-hire drivers pay to companies 

like Uber or Lyft in exchange for ride-referral services.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 21

The clear-articulation test is met “if the anticompetitive 

effect was the ‘foreseeable result’ of what the State 

authorized.” Phoebe Putney, 568 U.S. at 226–27 (quoting 

Hallie, 471 U.S. at 42). “‘[T]o pass the “clear articulation” 

test,’ a state legislature need not ‘expressly state in a statute 

or its legislative history that the legislature intends for the 

delegated action to have anticompetitive effects.’” Id. at 226 

(alteration in original) (quoting Hallie, 471 U.S. at 43). To 

illustrate, the Supreme Court concluded in City of Columbia 

v. Omni Outdoor Advertising, Inc., 499 U.S. 365 (1991), that 

“the clear-articulation test was satisfied because the 

suppression of competition in the billboard market was the 

foreseeable result of a state statute authorizing 

municipalities to adopt zoning ordinances regulating the 

construction of buildings and other structures.” Phoebe 

Putney, 568 U.S. at 227.

Our inquiry with respect to the clear-articulation test is a 

precise one. “[T]he relevant question is whether the 

regulatory structure which has been adopted by the state has 

specifically authorized the conduct alleged to violate the 

Sherman Act.” Cost Mgmt. Servs., Inc. v. Wash. Nat. Gas 

Co., 99 F.3d 937, 942 (9th Cir. 1996) (emphasis added). The 

state’s authorization must be plain and clear: The relevant 

statutory provisions must “‘plainly show’ that the [state] 

legislature contemplated the sort of activity that is 

challenged,” which occurs where they “confer ‘express 

authority to take action that foreseeably will result in 

anticompetitive effects.’” Hass v. Or. State Bar, 883 F.2d 

1453, 1457 (9th Cir. 1989) (first emphasis added) (quoting 

Hallie, 471 U.S. at 43–44). The state, in its sovereign 

capacity, must “clearly intend[] to displace competition in a 

particular field with a regulatory structure . . . in the relevant 

market.” S. Motor Carriers Rate Conference, Inc. v. United 

States, 471 U.S. 48, 64 (1985).
22 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

Once we determine that there is express state 

authorization, we then turn to the concept of foreseeability, 

which “is to be used in deciding the reach of antitrust 

immunity that stems from an already authorized monopoly, 

price regulation, or other disruption in economic 

competition.” Shames, 626 F.3d at 1084 (second emphasis 

added). A foreseeable result cannot circumvent the 

requirement that there be express authorization in the first 

place: “[A] foreseeable result cannot create state 

authorization itself,” but must itself stem from express 

authorization, which is “the necessary predicate for the 

Supreme Court’s foreseeability test.” Id. (quoting Columbia 

Steel Casting Co. v. Portland Gen. Elec. Co., 111 F.3d 1427, 

1444 (9th Cir. 1997)). We must be careful not to “appl[y] 

the concept of ‘foreseeability’ from [the] clear-articulation 

test too loosely.” Phoebe Putney, 568 U.S. at 229.

Applying these principles to the Ordinance, we conclude 

that the clear-articulation requirement has not been satisfied. 

The state statutes relied upon by the City Council in enacting 

the Ordinance—Revised Code of Washington sections 

46.72.001, 46.72.160, 81.72.200, and 81.72.210—do not 

“plainly show” that the Washington legislature 

“contemplated” allowing for-hire drivers to price-fix their 

compensation. Nor is such an anticompetitive result 

foreseeable.

We examine the state statutes in turn. First, Revised 

Code of Washington section 46.72.001 provides:

The legislature finds and declares that 

privately operated for hire transportation 

service is a vital part of the transportation 

system within the state. Consequently, the 

safety, reliability, and stability of privately 

operated for hire transportation services are 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 23

matters of statewide importance. The 

regulation of privately operated for hire 

transportation services is thus an essential 

governmental function. Therefore, it is the 

intent of the legislature to permit political 

subdivisions of the state to regulate for hire 

transportation services without liability under 

federal antitrust laws.

Id.10

That the Washington state legislature “inten[ded] . . . to 

permit political subdivisions of the state to regulate for hire 

transportation services without liability under federal 

antitrust laws,” id., is insufficient to bring the Ordinance 

within the protective ambit of state-action immunity. We are 

mindful of the Supreme Court’s instruction that “a State may 

not confer antitrust immunity on private persons by fiat,” 

Ticor Title, 504 U.S. at 633, and that a “State may not 

validate a municipality’s anticompetitive conduct simply by 

declaring it to be lawful,” Hallie, 471 U.S. at 39. Rather, it 

must first meet the Midcal requirements: A state “may 

displace competition with active state supervision [only] if 

the displacement is both intended by the State and 

implemented in its specific details.”11 Ticor Title, 504 U.S. 

 10 We will not separately analyze Revised Code of Washington 

section 81.72.200, which uses substantially similar language as section 

46.72.001.

11 The City cites City of Lafayette v. Louisiana Power & Light Co., 

435 U.S. 389 (1978), for the proposition that “a specific, detailed 

legislative authorization” is not required. Id. at 415 (plurality opinion). 

However, in the same decision, the Supreme Court stated that “an 

adequate state mandate for anticompetitive activities of cities and other 

subordinate governmental units exists when it is found ‘from the 
24 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

at 633. We may not “defer[]to private pricefixing 

arrangements under the general auspices of state law,” but 

instead must ensure that the “precondition[s] for immunity 

from federal law,” such as “[a]ctual state involvement,” are 

met. Id. After all, “[i]mmunity is conferred out of respect 

for ongoing regulation by the State, not out of respect for the 

economics of price restraint.” Id.

The plain language of the statute centers on the provision 

of “privately operated for hire transportation services,” 

Wash. Rev. Code § 46.72.001, not the contractual payment 

arrangements between for-hire drivers and driver 

coordinators for use of the latter’s smartphone apps or ridereferral services. Although driver coordinators like Uber 

and Lyft contract with providers of transportation services, 

they do not fulfill the requests for transportation services—

the drivers do. Nothing in the statute evinces a clearly 

articulated state policy to displace competition in the market 

for ride-referral service fees charged by companies like 

Uber, Lyft, and Eastside. In other words, although the 

statute addresses the provision of transportation services, it 

is silent on the issue of compensation contracts between forhire drivers and driver coordinators. To read into the plain 

text of the statute implicit state authorization and intent to 

displace competition with respect to for-hire drivers’

compensation would be to apply the clear-articulation test 

“too loosely.” Phoebe Putney, 568 U.S. at 229.

 

authority given a governmental entity to operate in a particular area, 

that the legislature contemplated the kind of action complained of.’” Id. 

(emphases added) (quoting City of Lafayette v. La. Power & Light Co., 

532 F.2d 431, 434 (5th Cir. 1976)). As explained above, the City has not 

shown that the Washington legislature contemplated the kind of 

anticompetitive restraint established by the Ordinance.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 25

Revised Code of Washington section 46.72.160 also 

lends no support to the City’s position. The statute, which 

focuses on the regulation of for-hire vehicle services, 

provides that “[c]ities . . . may license, control, and regulate 

all for hire vehicles operating within their respective 

jurisdictions.” Wash. Rev. Code § 46.72.160 (emphasis 

added). Each enumerated example of regulatory power in 

section 46.72.160 plainly indicates legislative concern with 

the provision of vehicular services:

The power to regulate includes:

(1) Regulating entry into the business of 

providing for hire vehicle transportation 

services;

(2) Requiring a license to be purchased as a 

condition of operating a for hire vehicle and 

the right to revoke, cancel, or refuse to reissue 

a license for failure to comply with regulatory 

requirements;

(3) Controlling the rates charged for 

providing for hire vehicle transportation 

service and the manner in which rates are 

calculated and collected;

(4) Regulating the routes and operations of

for hire vehicles, including restricting access 

to airports;

(5) Establishing safety and equipment 

requirements; and
26 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

(6) Any other requirements adopted to ensure 

safe and reliable for hire vehicle

transportation service.

Id. (emphases added).12 These enumerated powers refer 

specifically to for-hire vehicles, which by definition are 

“vehicles used for the transportation of passengers for 

compensation.” Wash. Rev. Code § 46.72.010(1). None of 

the powers confer upon the City the authority to regulate the 

fees Uber, Lyft, and Eastside charge in exchange for use of 

their smartphone apps or ride-referral services. Even the 

power to regulate “the rates charged for providing for hire 

vehicle transportation service”—the closest analog to the 

challenged Ordinance provision—speaks to rates charged to 

passengers in exchange for the provision of transportation 

services, not the fees Uber and Lyft charge to drivers for use 

of their apps. And the sixth enumerated power—a residual 

power—addresses “for hire vehicle transportation 

service[s],” not ride-referral service fees.

Our case law also forecloses the City’s broad reading of 

the Washington statutes. In Medic Air Corp. v. Air 

Ambulance Authority, we distinguished between the market 

for air ambulance services and the market for dispatching air 

ambulances in the course of applying the clear-articulation 

test. 843 F.2d 1187, 1189–90 (9th Cir. 1988). We held that 

“a county board of health had clearly intended to displace 

competition by establishing a monopoly in the market of 

dispatching air ambulances in the county, and that state 

action immunity therefore shielded this monopoly.” 

Shames, 626 F.3d at 1084 (citing Medic Air, 843 F.2d at 

 12 We will not separately analyze Revised Code of Washington 

section 81.72.210, which uses substantially similar language as section 

46.72.160.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 27

1189). However, we declined to extend the scope of that 

immunity, holding that “this immunity did not reach 

anticompetitive conduct in the ambulance service market, 

because this was ‘not a “necessary or reasonable 

consequence” of the decision to establish an exclusive 

dispatcher.’” Id. (quoting Medic Air, 843 F.2d at 1189). 

Here, too, there is a critical distinction between 

transportation services by for-hire drivers and ride-referral 

services by companies like Uber and Lyft. We cannot 

collapse the market for ride-referral services into the market 

for transportation services without colliding with our case 

law.

Furthermore, the Supreme Court has discouraged 

extending state-action immunity indiscriminately, in line 

with the “principle that ‘state-action immunity is 

disfavored.’” Phoebe Putney, 568 U.S. at 236 (quoting

Ticor Title, 504 U.S. at 636). “[R]egulation of an industry, 

and even the authorization of discrete forms of 

anticompetitive conduct pursuant to a regulatory structure, 

does not establish that the State has affirmatively 

contemplated other forms of anticompetitive conduct that 

are only tangentially related.” Id. at 235. To illustrate, the 

Supreme Court held in Phoebe Putney that a state law 

vesting a local governmental entity with general corporate 

powers and allowing it to acquire hospitals “d[id] not clearly 

articulate and affirmatively express a state policy 

empowering the [entity] to make acquisitions of existing 

hospitals that w[ould] substantially lessen competition.” Id. 

at 228.

The Supreme Court has consistently demonstrated 

reluctance to careen beyond the bounds of state authorization 

in its application of the clear-articulation test. We must 

follow suit. In Goldfarb v. Virginia State Bar, 421 U.S. 773 
28 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

(1975), the Supreme Court “rejected a state-action defense 

to price-fixing claims where a state bar adopted a 

compulsory minimum fee schedule. Although the State 

heavily regulated the practice of law, [the Supreme Court] 

found no evidence that it had adopted a policy to displace 

price competition among lawyers.” Phoebe Putney, 

568 U.S. at 235 (citing Goldfarb, 421 U.S. at 788–92). Here, 

although the State of Washington authorized municipalities 

to regulate the for-hire transportation services industry at 

large, the statutes do not indicate that the state adopted a 

policy authorizing for-hire drivers to fix the rates Uber and 

Lyft charge for use of their ride-referral apps.

Similarly, in Cantor v. Detroit Edison Co., 428 U.S. 579 

(1976), the Supreme Court “concluded that a state 

commission’s regulation of rates for electricity charged by a 

public utility did not confer state-action immunity for a 

claim that the utility’s free distribution of light bulbs 

restrained trade in the light-bulb market.” Phoebe Putney, 

568 U.S. at 235 (citing Cantor, 428 U.S. at 596); see Cantor, 

428 U.S. at 584 (observing that “[t]he statute creating the 

Commission contains no direct reference to light bulbs”). 

The regulation of rates in one area—i.e., the regulation of 

rates charged to passengers for transportation services—

does not confer the shield of state-action immunity onto 

anticompetitive conduct in a related market—i.e., pricefixing the fees for-hire drivers pay to Uber and Lyft in order 

to use their digital platforms.

In cases in which the Supreme Court found the cleararticulation test to be satisfied, the initial state authorization 

clearly contemplated and plainly encompassed the 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 29

challenged anticompetitive conduct.13 For example, in 

Omni, “where the respondents alleged that the city had used 

its zoning power to protect an incumbent billboard provider 

against competition, [the Supreme Court] found that the 

clear-articulation test was easily satisfied,” as the 

suppression of competition in the billboard market stemmed 

clearly and directly from state statutes delegating authority 

to cities to adopt zoning ordinances regulating buildings and 

other structures. Phoebe Putney, 568 U.S. at 230. Indeed, 

the Court explained that “‘[t]he very purpose of zoning 

regulation is to displace unfettered business freedom in a 

manner that regularly has the effect of preventing normal 

acts of competition’ and that a zoning ordinance regulating 

the size, location, and spacing of billboards ‘necessarily 

protects existing billboards against some competition from 

newcomers.’” Id. (alteration in original) (quoting Omni,

 13 The City’s selective reading of the Supreme Court’s decision in 

North Carolina State Board of Dental Examiners v. FTC, 135 S. Ct. 1101 

(2015), does not buttress its position. The Supreme Court observed only 

that the clear-articulation test, on its own, is insufficient to justify stateaction immunity:

The two requirements set forth in Midcal provide 

a proper analytical framework to resolve the ultimate 

question whether an anticompetitive policy is indeed 

the policy of a State. The first requirement—clear 

articulation—rarely will achieve that goal by itself, for 

a policy may satisfy this test yet still be defined at so 

high a level of generality as to leave open critical 

questions about how and to what extent the market 

should be regulated.

Id. at 1112. In so stating, the Supreme Court made a noncontroversial 

point: The fact that a state may have clearly articulated a policy, and 

thus satisfied the first Midcal requirement, does not answer key questions 

about the implementation of the policy—questions which are addressed 

by the second Midcal requirement of active state supervision.
30 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

499 U.S. at 373). Unlike the zoning statutes in Omni, which 

authorized the regulation of buildings and structures, the 

Washington statutes in this case authorize regulation of the 

provision of transportation services to passengers—they do 

not encompass regulation of the payment contracts between 

for-hire drivers and ride-referral services.

Similarly, in Southern Motor Carriers, the Supreme 

Court concluded that the clear-articulation test was readily 

satisfied where four state public service commissions 

decided to permit collective ratemaking by common carriers

for intrastate transportation of general commodities. 

471 U.S. at 62–66. Three of the four states had “statutes that 

explicitly permit collective ratemaking by common 

carriers,” the exact anticompetitive conduct in the precise 

market at issue. Id. at 63. Mississippi, the fourth state, had 

a statute authorizing the state public service commission not 

only to regulate common carriers, but also to “prescribe ‘just 

and reasonable’ rates for the intrastate transportation of 

general commodities.” Id. (quoting Miss. Code § 77-7-221). 

Although Mississippi’s statute did not flesh out “[t]he details 

of the inherently anticompetitive rate-setting process,” the 

statute expressly indicated the state’s intention to displace 

market competition in rate-setting for intrastate 

transportation of general commodities, the very market at 

issue. Id. at 64. The present case is clearly distinguishable 

from Southern Motor Carriers. Here, there is no state statute 

expressly authorizing private parties to price-fix the fees forhire drivers pay for use of Uber, Lyft, and Eastside’s ridereferral services.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 31

Tellingly, Uber and Lyft did not exist when the 

Washington statutes were enacted.14 The very concept of 

digital ridesharing services was probably well beyond the 

imaginations of lawmakers two to three decades ago, much 

less foreseeable. But the fact that technology has advanced 

leaps and bounds beyond the contemplation of the state 

legislature is not, on its own, the dispositive factor in our 

holding today. Digital platforms like Uber and Lyft have 

become “highly interconnected with modern economic and 

social life,” Fields v. Twitter, Inc., 881 F.3d 739, 749 (9th 

Cir. 2018), and present novel challenges and contexts for 

regulation. Nevertheless, it is not our role to make policy 

judgments properly left to the Washington state legislature. 

Instead, we must tread carefully in the area of state-action 

immunity, lest “a broad interpretation of the doctrine . . . 

inadvertently extend immunity to anticompetitive activity 

which the states did not intend to sanction,” or “a broad 

application of the doctrine . . . impede states’ freedom by 

threatening to hold them accountable for private activity they 

do not condone ‘whenever they enter the realm of economic 

regulation.’” Cost Mgmt. Servs., 99 F.3d at 941 (quoting 

Ticor Title, 504 U.S. at 635–36).

Applying governing law, we hold that the cleararticulation requirement for state-action immunity is not 

satisfied in this case.

 14 Revised Code of Washington sections 46.72.001 and 46.72.160 

were enacted in 1996. Revised Code of Washington sections 81.72.200 

and 81.72.210 were enacted in 1984.
32 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

ii. The Active-Supervision Requirement

We next hold that the Ordinance does not meet the 

active-supervision requirement for Parker immunity.

“The active supervision requirement demands . . . ‘that 

state officials have and exercise power to review particular 

anticompetitive acts of private parties and disapprove those 

that fail to accord with state policy.’” N.C. State Bd. of 

Dental Examiners v. FTC, 135 S. Ct. 1101, 1112 (2015) 

(quoting Patrick v. Burget, 486 U.S. 94, 101 (1988)). 

Because “[e]ntities purporting to act under state authority 

might diverge from the State’s considered definition of the 

public good” and “[t]he resulting asymmetry between a state 

policy and its implementation can invite private selfdealing,” the active-supervision requirement “seeks to avoid 

this harm by requiring the State to review and approve 

interstitial policies made by the entity claiming immunity.” 

Id.

As a threshold matter, we first clarify that the activesupervision requirement applies to this case. It is settled law 

that “active state supervision is not a prerequisite to 

exemption from the antitrust laws where the actor is a 

municipality rather than a private party.” Hallie, 471 U.S. at 

47. However, where, as here, “state or municipal regulation 

by a private party is involved, . . . active state supervision 

must be shown, even where a clearly articulated state policy 

exists.” Id. at 46 n.10 (citing S. Motor Carriers, 471 U.S. at 

62).

Southern Motor Carriers is illustrative. That case

involved a collective ratemaking scenario similar to the one 

authorized by the Ordinance in the present case. In Southern 

Motor Carriers, four states permitted private rate bureaus, 

composed of common carriers, to submit rate proposals to 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 33

their respective state public service commissions for 

approval or rejection. See 471 U.S. at 50–52. The states 

authorized, but did not compel, the common carriers to agree 

on the rate proposals prior to submission to the state agency. 

See id. A proposed rate could become effective in two 

circumstances—if the state agency took no action within a 

specified period of time, or, if a hearing was scheduled, only 

after affirmative agency approval. See id. Although the state 

public service commissions “ha[d] and exercise[d] ultimate 

authority and control over all intrastate rates,” id. at 51, the 

requirement of active state supervision still applied, due to 

the involvement of the private rate bureaus and common 

carriers in the ratemaking process, see id. at 66.15 Likewise 

here, private parties—for-hire drivers and driver 

coordinators—are permitted to set rates collectively and 

submit them to the Director for approval. Accordingly, the 

active-supervision requirement applies.

The involvement of private parties in municipal 

regulation renders this case ineligible for the municipality 

exception outlined in Hallie: “Hallie explained that ‘[w]here 

the actor is a municipality, there is little or no danger that it 

is involved in a private price-fixing arrangement. The only 

real danger is that it will seek to further purely parochial 

public interests at the expense of more overriding state 

goals.’” Dental Examiners, 135 S. Ct. at 1112 (alteration in 

original) (quoting Hallie, 471 U.S. at 47); see Phoebe 

Putney, 568 U.S. at 226 (noting that the municipality 

exception is designed to “preserve[] to the States their 

freedom . . . to use their municipalities to administer state 

 15 The Supreme Court found that “[t]he second prong of the Midcal

test [was] met, for the Government ha[d] conceded that the relevant 

States, through their agencies, actively supervise[d] the conduct of 

private parties.” S. Motor Carriers, 471 U.S. at 66.
34 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

regulatory policies free of the inhibitions of the federal 

antitrust laws without at the same time permitting purely 

parochial interests to disrupt the Nation’s free-market goals” 

(quoting City of Lafayette v. La. Power & Light Co., 

435 U.S. 389, 415–16 (1978) (plurality opinion)). In 

contrast, this case presents a scenario in which the City 

authorizes collective price-fixing by private parties, which 

the Director evaluates and ratifies. The amount of discretion 

the Ordinance confers upon private actors is far from 

trivial.16

Having decided that the active-supervision requirement 

applies to this case, we turn to examine whether it is met. 

Clearly, it is not. It is undisputed that the State of 

Washington plays no role in supervising or enforcing the 

terms of the City’s Ordinance.

 16 “A regulation is a unilateral restraint when ‘[n]o further action is

necessary by the private parties because the anticompetitive nature of

[the] restraint is complete upon enactment.’” Yakima Valley Mem’l

Hosp. v. Wash. State Dep’t of Health, 654 F.3d 919, 927 (9th Cir. 2011) 

(alterations in original) (quoting Costco Wholesale Corp. v. Maleng,

522 F.3d 874, 890 (9th Cir. 2008)). There, “no degree of discretion [is] 

delegated to private actors.” Id. (quoting Costco, 522 F.3d at 890). In 

contrast, “[t]he ‘hallmark’ of a hybrid restraint is the ‘delegation of

discretion to private actors.’” Id. (quoting Costco, 522 F.3d at 898 n.20). 

“The key distinction is that the regulation leaves a gap in the restraint of

trade for private parties to fill at their discretion.” Id.

Here, the anticompetitive restraint turns on the discretion of private 

actors, as the EDR and the driver coordinator agree on set prices, which 

they subsequently submit to the Director for review. We have held a 

similar anticompetitive restraint was a hybrid restraint: Where “the 

regulation[] . . . ha[d] the effect of delegating to private parties the

discretion to set the posted price to be held,” it was “an anticompetitive

arrangement they could not achieve legally by explicit agreement.” Id. 

at 930.
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 35

The City cites no controlling authority to support its 

argument that the Supreme Court uses the word “State” 

simply “as shorthand for the State and all its agents, 

including municipalities.” The Supreme Court has stated 

repeatedly that active supervision must be “by the State 

itself.” Midcal, 445 U.S. at 105; see Dental Examiners, 

135 S. Ct. at 1110 (stating that the policy must be “actively 

supervised by the State” (quoting Phoebe Putney, 568 U.S. 

at 224)), 1112 (explaining that active-supervision “requir[es] 

the State to review and approve interstitial policies made by 

the entity claiming immunity”); Ticor Title, 504 U.S. at 633 

(“[T]he policy must be actively supervised by the State 

itself.” (quoting Midcal, 445 U.S. at 105)); Patrick, 486 U.S. 

at 101 (“[T]he active supervision requirement mandates that 

the State exercise ultimate control over the challenged 

anticompetitive conduct.”).

We take it as a given that the Supreme Court means what 

it states. In Hallie, the Supreme Court stated that “[w]here 

state or municipal regulation by a private party is involved, 

however, active state supervision must be shown.”17 

471 U.S. at 46 n.10. In the first clause, the Supreme Court 

used “state or municipal,” thus drawing a disjunctive 

difference between the two words. In the second clause, it 

used only “state.” It is highly improbable that the Supreme 

Court chose to distinguish between states and municipalities 

in the beginning of the sentence, only to conflate the two in 

the latter part of the sentence.

 17 The City’s citation to Tom Hudson & Associates, Inc. v. City of 

Chula Vista, 746 F.2d 1370 (9th Cir. 1984), does not persuade us 

otherwise. The case pre-dates Hallie, and the question of whether 

municipal supervision could satisfy the active-supervision requirement 

was not at issue. See id. at 1374.
36 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

Moreover, the City’s interpretation of the Supreme 

Court’s use of “State” collapses the specific distinction the 

Supreme Court has drawn between cities, which are not 

sovereign entities, and states, which are. Sovereign capacity 

matters. Indeed, the very origins of Parker immunity stem 

from respect for the states’ sovereign capacity to regulate

their economies. Phoebe Putney, 568 U.S. at 224; see 

Dental Examiners, 135 S. Ct. at 1112 (noting that the activesupervision requirement serves to “determin[e] whether 

anticompetitive policies and conduct are indeed the action of 

a State in its sovereign capacity”). A “substate governmental 

entity” is simply not equivalent to a state: “Because 

municipalities and other political subdivisions are not 

themselves sovereign, state-action immunity under Parker 

does not apply to them directly.” Phoebe Putney, 568 U.S. 

at 225. Unlike a state, a municipality may invoke the 

protective cloak of Parker immunity under “the narrow 

exception Hallie identified” not because it is sovereign, but 

because there is “little or no danger that it is involved in a 

private price-fixing arrangement”; the fact that 

“municipalities are electorally accountable and lack the kind 

of private incentives characteristic of active participants in 

the market”; and the “substantially reduc[ed] . . . risk that [a 

municipality] would pursue private interests while 

regulating any single field.” Dental Examiners, 135 S. Ct. 

at 1112–13 (quoting Hallie, 471 U.S. at 47). All of the 

reasons justifying the Hallie exception are eviscerated by the 

involvement of private parties in this case.

In concluding that the active-supervision requirement is 

not satisfied in this case, we do not disturb Hallie’s wellsettled rule that municipal actors need not meet the activesupervision requirement. See Hallie, 471 U.S. at 47. Rather, 

following Hallie, we hold that in this case, in which private 

actors exercise substantial discretion in setting the terms of 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 37

municipal regulation, “active state supervision must be 

shown.” Id. at 46 n.10. Because the distinction between 

states and municipalities is of crucial importance for 

purposes of state-action immunity, we reject the City’s 

invitation to treat the two entities interchangeably.18

II. The Ordinance Is Not Preempted by the National 

Labor Relations Act.

We next hold that the Ordinance is not preempted by the 

NLRA under either Machinists or Garmon preemption.

“Although the NLRA itself contains no express preemption provision, [the Supreme Court] ha[s] held that 

Congress implicitly mandated two types of pre-emption as 

necessary to implement federal labor policy.” Chamber of 

Commerce of the U.S. v. Brown, 554 U.S. 60, 65 (2008). 

Both are forms of implied preemption: The first is 

Machinists preemption, named after the Court’s decision in 

Lodge 76, International Ass’n of Machinists & Aerospace 

Workers v. Wisconsin Employment Relations Commission,

427 U.S. 132 (1976). Machinists preemption “forbids both 

the National Labor Relations Board (NLRB) and States to 

regulate conduct that Congress intended ‘be unregulated 

because left “to be controlled by the free play of economic 

forces.”’” Chamber of Commerce, 554 U.S. at 65 (quoting 

Machinists, 427 U.S. at 140). Machinists preemption stems 

from “the premise that ‘“Congress struck a balance of 

protection, prohibition, and laissez-faire in respect to union 

 18 Because we conclude that the State of Washington, rather than the 

City, must carry out the active-supervision requirement, we do not reach 

the Chamber’s alternative argument that even if municipal supervision 

could satisfy the active-supervision requirement, the supervision is 

“insufficiently active.”
38 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

organization, collective bargaining, and labor disputes.”’” 

Id. (quoting Machinists, 427 U.S. at 140 n.4).

The second is Garmon preemption, named after the 

Court’s decision in San Diego Building Trades Council v. 

Garmon, 359 U.S. 236 (1959). Garmon preemption “is 

intended to preclude state interference with the National 

Labor Relations Board’s interpretation and active 

enforcement of the ‘integrated scheme of regulation’ 

established by the NLRA.” Chamber of Commerce, 

554 U.S. at 65 (quoting Golden State Transit Corp. v. City 

of Los Angeles, 475 U.S. 608, 613 (1986)). “To this end, 

Garmon pre-emption forbids States to ‘regulate activity that 

the NLRA protects, prohibits, or arguably protects or 

prohibits.’” Id. (quoting Wis. Dep’t. of Indus., Labor & 

Human Relations v. Gould Inc., 475 U.S. 282, 286 (1986)).

A. Machinists Preemption

The Chamber first contends that the Ordinance is 

preempted by the NLRA under a theory of Machinists 

preemption because the Ordinance regulates economic 

activity that Congress intended to remain unregulated and 

left to the forces of the free market. The Chamber argues 

that Congress’s choice to exclude independent contractors 

from the NLRA’s definition of “employee” in 29 U.S.C. 

§ 152(3) implicitly preempts local labor regulation of 

independent contractors. We disagree.

We begin by recounting briefly the history of the 

NLRA’s definition of “employee.” In 1935, Congress 

defined “employee” in the NLRA as follows:

The term “employee” shall include any 

employee, and shall not be limited to the 

employees of a particular employer, unless 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 39

this subchapter explicitly states otherwise, 

and shall include any individual whose work 

has ceased as a consequence of, or in 

connection with, any current labor dispute or 

because of any unfair labor practice, and who 

has not obtained any other regular and 

substantially equivalent employment, but 

shall not include any individual employed as 

an agricultural laborer, or in the domestic 

service of any family or person at his home, 

or any individual employed by his parent or 

spouse.

National Labor Relations Act, Pub. L. No. 198, § 2, 49 Stat. 

449, 450 (1935) (amended 1947).

About a decade later, the Supreme Court decided NLRB 

v. Hearst Publications, 322 U.S. 111 (1944), in which it held 

that “[w]hether . . . the term ‘employee’ includes [particular] 

workers . . . must be answered primarily from the history, 

terms and purposes of the legislation.” NLRB v. United Ins. 

Co. of Am., 390 U.S. 254, 256 (1968) (second alteration in 

original) (quoting Hearst, 322 U.S. at 124). In effect, the 

Hearst Court held that “the standard” for determining 

whether a particular worker was an employee within 

meaning of the NLRA was not one based exclusively on 

common-law agency principles, but rather “was one of 

economic and policy considerations within the labor field.” 

Id. Applying this new standard, the Supreme Court 

concluded that although newsboys were independent 

contractors, they were employees within the meaning of the 

NLRA. See Hearst, 322 U.S. at 131–32.

The Supreme Court’s ruling in Hearst triggered swift 

Congressional condemnation. See United Ins., 390 U.S. at 
40 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

256. In 1947, Congress enacted the Labor Management 

Relations Act, also known as the Taft-Hartley Act. Relevant 

to this case, the Taft-Hartley Act amended the definition of 

“employee” in the NLRA by specifically excluding 

independent contractors, as well as supervisors and 

individuals subject to the Railway Labor Act. See LaborManagement Relations Act, ch. 120, sec. 101, § 2(3), 

61 Stat. 136, 137–38 (1947). The new definition of 

“employee,” which is still operative today, provides:

The term “employee” shall include any 

employee, and shall not be limited to the 

employees of a particular employer, unless 

this subchapter explicitly states otherwise, 

and shall include any individual whose work 

has ceased as a consequence of, or in 

connection with, any current labor dispute or 

because of any unfair labor practice, and who 

has not obtained any other regular and 

substantially equivalent employment, but 

shall not include any individual employed as 

an agricultural laborer, or in the domestic 

service of any family or person at his home, 

or any individual employed by his parent or 

spouse, or any individual having the status of 

an independent contractor, or any individual 

employed as a supervisor, or any individual 

employed by an employer subject to the 

Railway Labor Act, as amended from time to 

time, or by any other person who is not an 

employer as herein defined.

Id. (emphasis added); see 29 U.S.C. § 152(3).
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 41

As the Supreme Court subsequently observed: “The 

obvious purpose of this amendment was to have the Board 

and the courts apply general agency principles in 

distinguishing between employees and independent 

contractors under the Act.” United Ins., 390 U.S. at 256. 

The legislative history of the amendment corroborates this 

observation. The House Report for the amendment 

explained:

An “employee,” according to all standard 

dictionaries, according to the law as the 

courts have stated it, and according to the 

understanding of almost everyone, with the 

exception of members of the National Labor 

Relations Board, means someone who works 

for another for hire. But in the case of [NLRB 

v. Hearst Publications, 322 U.S. 111 (1944)], 

the Board expanded the definition of the term 

“employee” beyond anything that it ever had 

included before, and the Supreme Court, 

relying upon the theoretic “expertness” of the 

Board, upheld the Board. In this case the 

Board held independent merchants who 

bought newspapers from the publisher and 

hired people to sell them to be “employees”. 

[sic] The people the merchants hired to sell 

the papers were “employees” of the 

merchants, but holding the merchants to be 

“employees” of the publisher of the papers 

was most far reaching. It must be presumed 

that when Congress passed the Labor Act, it 

intended words it used to have the meanings 

that they had when Congress passed the act, 

not new meanings that, 9 years later, the 

Labor Board might think up. In the law, there 
42 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

always has been a difference, and a big 

difference, between “employees” and 

“independent contractors”. [sic] 

“Employees” work for wages or salaries 

under direct supervision. “Independent 

contractors undertake to do a job for a price, 

decide how the work will be done, usually 

hire others to do the work, and depend for 

their income not upon wages, but upon the 

difference between what they pay for goods, 

materials, and labor and what they receive for 

the end result, that is, upon profits. It is 

inconceivable that Congress, when it passed 

the act, authorized the Board to give to every 

word in the act whatever meaning it wished. 

On the contrary, Congress intended then, and 

it intends now, that the Board give to words 

not far-fetched meanings but ordinary 

meanings. To correct what the Board has 

done, and what the Supreme Court, putting 

misplaced reliance upon the Board’s 

expertness, has approved, the bill excludes 

“independent contractors” from the 

definition of “employee”. [sic]

H.R. Rep. No. 80-245, at 18 (1947).

Citing the House Report, the Chamber asserts that 

Congress excluded independent contractors from the 

NLRA’s definition of “employee” in order to leave 

independent-contractor arrangements to the free play of 

economic forces, rather than subject to collective bargaining, 

federal or local. However, the portion of the House Report 

the Chamber relies upon actually refers to supervisors, not 

independent contractors. See id. at 16–17 (noting that 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 43

supervisors have “abandoned the ‘collective security’ of the 

rank and file voluntarily, because they believed the 

opportunities thus opened to them to be more valuable to 

them than such ‘security’”).

The House Report’s discussion of the exclusion of 

independent contractors shows that Congress intended to 

effect a return to the status quo, rather than preempt state or 

local regulation of independent contractors. Congress added 

the exclusion in order to reject the Supreme Court’s 

erroneous “new” construction of “employee” and to return 

to the common-law definition of “employee” that was in 

place nine years earlier, before Hearst. Id. at 18. While the 

Chamber makes much of Congress’s exclusion of 

independent contractors from the definition of “employee,” 

the legislative history does not support the Chamber’s claim.

Furthermore, the fact that a group of workers is excluded 

from the definition of “employee” in § 152(3), without more, 

does not compel a finding of Machinists preemption. As the 

Chamber acknowledges, § 152(2)–(3) excludes agricultural 

laborers, domestic workers, and public employees, all of 

which have been subject to state regulation. E.g., Davenport 

v. Wash. Educ. Ass’n, 551 U.S. 177, 181 (2007) (“The 

National Labor Relations Act leaves States free to regulate 

their labor relationships with their public employees.”); 

Greene v. Dayton, 806 F.3d 1146, 1149 (8th Cir. 2015) 

(“Although Congress exempted domestic service workers 

from the NLRA, Congress did not demonstrate an intent to 

shield these workers from all regulation.”). Indeed, we 

concluded with respect to the exclusion of agricultural 

laborers from § 152(3):

[W]here, as here, Congress has chosen not to 

create a national labor policy in a particular 

field, the states remain free to legislate as 
44 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

they see fit, and may apply their own views 

of proper public policy to the collective 

bargaining process insofar as it is subject to 

their jurisdiction. We find nothing in the 

National Labor Relations Act to suggest that 

Congress intended to preempt such state 

action by legislating for the entire field. 

Indeed, we draw precisely the opposite 

inference from Congress’s exclusion of 

agricultural employees from the Act.

United Farm Workers of Am. v. Ariz. Agric. Emp’t Relations 

Bd., 669 F.2d 1249, 1257 (9th Cir. 1982). We find no reason 

to treat independent contractors differently than these other 

excluded categories of workers.

Finally, the Chamber’s reliance on Beasley v. Food Fair 

of North Carolina, Inc., 416 U.S. 653 (1974), is misplaced. 

In Beasley, the Supreme Court considered whether the 

exclusion of supervisors from the NLRA’s definition of 

“employee,” which “freed employers to discharge 

supervisors without violating the [NLRA’s] restraints 

against discharges on account of labor union membership,” 

“also freed the employer from liability in damages to the 

discharged supervisors” under a state law “that provide[d] 

such an action for employees discharged for union 

membership.” Id. at 654–55. The Supreme Court held that 

section 14(a) of the NLRA contained an express statement 

of preemption that precluded employers from treating 

supervisors as employees.19 Id. at 657–62. In so holding, 

 19 Section 14(a) of the NLRA, 29 U.S.C. § 164(a), contains an 

express statement of preemption:
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 45

the Supreme Court did not rely on any theory of implicit 

preemption. Needless to say, there is no analogous express 

statement of preemption like section 14(a) for independent 

contractors.

The Supreme Court also concluded in Beasley that the 

legislative history behind the supervisor exclusion “compels 

the conclusion that Congress’ dominant purpose in 

amending [NLRA sections] 2(3) and 2(11), and enacting 

[NLRA section] 14(a) was to redress a perceived imbalance 

in labor-management relationships that was found to arise 

from putting supervisors in the position of serving two 

masters with opposed interests.” Id. at 661–62. These 

legislative concerns do not apply to independent contractors. 

In sum, Beasley is inapposite and lends no support for the 

Chamber’s claim.

Neither case law nor legislative history supports the 

Chamber’s argument that Congress’s choice to exclude 

supervisors from the definition of “employee” in § 152(3), 

on its own, has implicit preemptive effect. We thus reject 

the Chamber’s claim that the Ordinance is preempted under 

a theory of Machinists preemption.

 

Nothing herein shall prohibit any individual employed

as a supervisor from becoming or remaining a member

of a labor organization, but no employer subject to this

subchapter shall be compelled to deem individuals

defined herein as supervisors as employees for the

purpose of any law, either national or local, relating to

collective bargaining.

Id.
46 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

B. Garmon Preemption

Lastly, the Chamber argues that the Ordinance is 

preempted by the NLRA under a theory of Garmon 

preemption because the Ordinance “requires local officials 

and state courts to decide whether for-hire drivers are 

employees under the NLRA,” a determination which the 

Chamber contends is within the exclusive jurisdiction of the 

NLRB. We find this argument unpersuasive.

To start, the Ordinance expressly disclaims any such 

determination:

No provision of this ordinance shall be 

construed as . . . providing any determination 

regarding the legal status of taxicab, 

transportation network company, and for-hire 

vehicle drivers as employees or independent 

contractors. The provisions of this ordinance 

do not apply to drivers who are employees 

under 29 U.S.C. § 152(3).

Seattle, Wash., Ordinance 124968 § 6.

Moreover, the Chamber fails to meet the threshold 

requirement for a Garmon preemption claim. It is a 

“precondition for [Garmon] pre-emption[] that the conduct 

[at issue] be ‘arguably’ protected or prohibited.” Int’l 

Longshoremen’s Ass’n v. Davis, 476 U.S. 380, 394 (1986). 

This precondition “is not satisfied by a conclusory assertion 

of pre-emption.” Id. “If the word ‘arguably’ is to mean 

anything, it must mean that the party claiming pre-emption 

is required to demonstrate that his case is one that the Board 

could legally decide in his favor.” Id. at 395. In other words, 

“a party asserting pre-emption must advance an 

interpretation of the Act that is not plainly contrary to its 
U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE 47

language and that has not been ‘authoritatively rejected’ by 

the courts or the Board.” Id. (quoting Marine Eng’rs 

Beneficial Ass’n v. Interlake S.S. Co., 370 U.S. 173, 184 

(1962)). Next, the party must “put forth enough evidence to 

enable the court to find that the Board reasonably could 

uphold a claim based on such an interpretation.” Id. In short, 

“a party asserting pre-emption must put forth enough 

evidence to enable a court to conclude that the activity is 

arguably subject to the Act.” Id. at 398.

The facts of Davis are illustrative. In Davis, there was a 

dispute over whether an individual was a supervisor—in 

which case there would be no preemption—or an 

employee—in which case there would be preemption, and 

the NLRB, rather than the state court, would have proper 

jurisdiction over the matter. Id. at 394. The union in that 

case “point[ed] to no evidence in support of its assertion that 

[the individual] was arguably an employee.” Id. at 398. “Its 

sole submission [was] that [the individual] was arguably an 

employee because the Board ha[d] not decided that he was a 

supervisor.” Id. at 396. This was insufficient to meet the 

union’s “burden of showing at least an arguable case before 

the jurisdiction of a state court w[ould] be ousted.” Id.

Like the union in Davis, the Chamber, without citing any 

authority, asserts that “there is no need for the Chamber to

take a position on the employment status of for-hire drivers, 

and there is no need for the Chamber to provide any 

supporting evidence.” Instead, the Chamber lists, without 

elaboration, ongoing matters pending before the NLRB on 

the question of whether drivers who use ride-referral 

services are employees. As the party asserting preemption, 

the Chamber has not met its burden to show at least an 

arguable case that the drivers at issue are covered by the 

NLRA. Practically speaking, the question of whether drivers 
48 U.S. CHAMBER OF COMMERCE V. CITY OF SEATTLE

who contract with Uber and Lyft are employees or 

independent contractors may well be a “live issue” in other 

judicial and administrative proceedings involving different 

parties, claims, and law. But that does not absolve the 

Chamber from complying with our case law regarding 

Garmon preemption.

The Chamber asserts the alternative argument that, “[a]t 

a minimum, the Ordinance is preempted under Garmon until 

the NLRB conclusively determines whether the for-hire 

drivers who use Uber, Lyft, and Eastside are employees or 

independent contractors.” This argument, too, is futile. As 

the Supreme Court stated in Davis, “Nothing in Garmon

suggests that an arguable case for pre-emption is made out 

simply because the Board has not decided the general issue 

one way or the other.” Id. at 397.

The Chamber has not made any showing or set forth any 

evidence showing that the for-hire drivers covered by the 

Ordinance are arguably employees subject to the NLRA. 

We thus hold that the Ordinance is not preempted under the 

Chamber’s theory of Garmon preemption.

CONCLUSION

For the foregoing reasons, we reverse the district court’s 

dismissal of the Chamber’s federal antitrust claims, and 

remand the federal antitrust claims to the district court for 

further proceedings. We also affirm the district court’s 

dismissal of the Chamber’s NLRA preemption claims.

The parties shall bear their own costs on appeal.

AFFIRMED IN PART, REVERSED IN PART, 

REMANDED.