Opinion ID: 4556847
Heading Depth: 3
Heading Rank: 1

Heading: The Meaning of “Engaged in Interstate

Text: Commerce” in § 1 To resolve Amazon’s appeal, we must first interpret the meaning of the phrase “engaged in interstate or foreign commerce,” as used in § 1 of the FAA. We begin by briefly turning to the Supreme Court’s decision in Circuit City, in which the Court addressed the scope and application of § 1. The Court held that § 1 narrowly “exempts from the FAA only contracts of employment of transportation workers,” and not all contracts of employment generally. Id. at 119; RITTMANN V. AMAZON.COM 11 see also id. at 118 (“[T]he location of the phrase ‘any other class of workers engaged in . . . commerce’ in a residual provision, after specific categories of workers have been enumerated, undermines any attempt to give the provision a sweeping, open-ended construction.”). To arrive at that conclusion, the Court interpreted “[t]he plain meaning of the words ‘engaged in commerce’ [to be] narrower than the more open-ended formulation ‘affecting commerce’ and ‘involving commerce’” when construed “with reference to the statutory context . . . and in a manner consistent with the FAA’s purpose.” Id. at 118. In limiting the exemption’s scope to employment contracts of transportation workers, the Court did not decide the specific issue that Amazon raises: whether transportation workers must cross state lines to be considered workers “engaged in commerce” for the purposes of the exemption’s application. We do not, however, approach this issue on a blank slate. The plain meaning of the relevant statutory text, case law interpreting the exemption’s scope and application, and the construction of similar statutory language all support the conclusion that transportation workers need not cross state lines to be considered “engaged in foreign or interstate commerce” pursuant to § 1. To ascertain the plain meaning of the statutory text, we look to the “ordinary meaning at the time Congress enacted the statute.” New Prime, 139 S. Ct. at 539 (alterations adopted) (internal quotation marks omitted) (quoting Wis. Cent. Ltd. v. United States, 138 S. Ct. 2067, 2074 (2018)). When Congress enacted the FAA, the word “engaged” meant “occupied or employed.” Engaged, Webster’s New International Dictionary (1st ed. 1909). “Commerce” was defined as: 12 RITTMANN V. AMAZON.COM Intercourse by way of trade and traffic between different people or states and the citizens or inhabitants thereof, including not only the purchase, sale, and exchange of commodities, but also the instrumentalities and agencies by which it is promoted and the means and appliances by which it is carried on, and the transportation of persons as well as of goods, both by land and by sea. Commerce, Black’s Law Dictionary (2d ed. 1910). Taken together, those definitions can reasonably be read to include workers employed to transport goods that are shipped across state lines. The ordinary meaning of those words does not suggest that a worker employed to deliver goods that originate out-of-state to an in-state destination is not “engaged in commerce” any less than a worker tasked with delivering goods between states. Our reading of the statutory text is reinforced by decisions of other circuits and our own that have applied the exemption, as well as decisions that interpret similar statutory language. Most recently, in a nearly identical case involving the AmFlex program, the First Circuit held that AmFlex delivery providers fall within the § 1 exemption. Waithaka v. Amazon.com, Inc., No. 19-1848, — F.3d —, 2020 WL 4034997, at  (1st Cir. July 17, 2020). Relying on much of the same reasoning discussed below, see infra pp. 15–21, the First Circuit looked to statutes contemporaneous to the FAA, in particular the Federal Employees Liability Act (FELA) of 1908, to conclude that the meaning of the phrase “engaged in interstate commerce,” as understood at the time of the FAA’s passage, was not limited to those transportation workers who themselves crossed state lines. Waithaka, 2020 WL 4034997, at –8. RITTMANN V. AMAZON.COM 13 Further, at the time the Supreme Court decided Circuit City, every other circuit to have addressed the issue presented here interpreted § 1 to exempt “the employment contracts of workers actually engaged in the movement of goods in interstate commerce.” Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465, 1471 (D.C. Cir. 1997) (emphasis added) (collecting cases). Courts did not interpret that definition to require that a worker actually cross state lines for purposes of the exemption. For example, in Palcko v. Airborne Express, Inc., the Third Circuit held that a supervisor for a package transportation and delivery company who supervised drivers delivering packages in the Philadelphia area was a transportation worker engaged in interstate commerce because her work was “so closely related [to interstate and foreign commerce] as to be in practical effect part of it.” 1 372 F.3d 588, 593 (3d Cir. 2004) (alterations in original) (quoting Tenney Eng’g, Inc. v. United Elec. & Mach. Workers of Am., 207 F.2d 450, 452 (3d Cir. 1953)). Federal district courts and state courts have also understood § 1 not to require that a worker cross state lines. See, e.g., Nieto v. Fresno Beverage Co., Inc., 245 Cal. Rptr. 3d 69, 76 (Ct. App. 2019) (stating that a beverage company’s deliveries of products purchased from national and international companies, “although intrastate, were 1 Recently, the Third Circuit affirmed Palcko and expanded its test to include workers who transport people, like rideshare services. Singh v. Uber Techs., Inc., 939 F.3d 210, 219 (3d Cir. 2019). “[T]he residual clause of § 1 is not limited to transportation workers who transport goods, but may also apply to those who transport passengers, so long as they are engaged in interstate commerce or in work so closely related thereto as to be in practical effect part of it.” Id. The court remanded to the district court to decide whether rideshare drivers are engaged in interstate transportation within the meaning of § 1. Id. at 227. 14 RITTMANN V. AMAZON.COM essentially the last phase of a continuous journey of the interstate commerce . . . being transported until reaching its destination[] to [the company’s] customers.”); Christie v. Loomis Armored US, Inc., No. 10-cv-02011-WJM-KMT, 2011 WL 6152979, at  (D. Colo. Dec. 9, 2011) (finding intrastate delivery driver of currency exempt because the deliveries involved “a good that is undisputedly in the stream of interstate commerce”); Ward v. Express Messenger Sys., Inc., 413 F. Supp. 3d 1079, 1085–87 (D. Colo. 2019); Zamora v. Swift Transp. Corp., No. EP-07-CA-00400-KC, 2008 WL 2369769, at  (W.D. Tex. June 3, 2008), aff’d on other grounds, 319 F. App’x 333 (5th Cir. 2009). Courts have determined that workers do not fall within the scope of § 1’s exemption when their job duties are “only tangentially related to [the] movement of goods.” Lenz v. Yellow Transp., Inc., 431 F.3d 348, 351–52 (8th Cir. 2005). For example, in Lenz, the court held a customer service representative for a transportation carrier was not engaged in interstate commerce because he “never directly transported goods in interstate commerce,” “had no direct responsibility for transporting goods in interstate commerce,” “never handled any of the packages that [the carrier] delivered,” or “directly supervise[d] the drivers in interstate commerce,” among other reasons. Id. at 352–53. Similarly, the Eleventh Circuit concluded that “workers who incidentally transported goods interstate as a part of their job in an industry that would otherwise be unregulated” did not fall within the exemption. Hill v. Rent-A-Center, Inc., 398 F.3d 1286, 1289 (11th Cir. 2005) (holding that an account manager for a rent-to-own business who occasionally made out-of-state deliveries was not part of a class of workers in the transportation industry for purposes of the § 1 exemption). RITTMANN V. AMAZON.COM 15 Case law interpreting the phrase “engaged in commerce” in § 1 accords with how courts have interpreted similar statutory language. For example, courts interpreting FELA have held that workers were employed in interstate commerce even when they did not cross state lines. FELA provides that “[e]very common carrier by railroad while engaging in commerce between any of the several States . . . shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce” if the injury “results in whole or in part from the negligence of” the carrier. 45 U.S.C. § 51 (emphasis added). Prior to the FAA’s enactment in 1925, the Supreme Court articulated that “the true test of such employment in [such] commerce in the sense intended is, [w]as the employee, at the time of the injury, engaged in interstate transportation, or in work so closely related to it as to be practically a part of it?” Shanks v. Del., Lackwanna & W. R.R. Co., 239 U.S. 556, 558 (1916). The Court cited numerous examples of injured employees considered to be engaged in interstate commerce when they did not cross state lines in the course of their work. 2 Id. at 558–59 (collecting cases). See also 2 Amazon attempts to distinguish cases that interpret FELA on the basis that FELA “require[s] a broad construction directly opposite to the narrow construction that the Exemption requires given the FAA’s purposes.” But FELA’s breadth concerns what conduct constitutes an employer’s negligence within the meaning of the act, not the meaning of “employed in commerce” that concerns us here. See Atchison, Topeka & Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 561 (1987) (“A primary purpose of the Act was to eliminate a number of traditional defenses to tort liability and to facilitate recovery in meritorious cases.”); id. at 562 n.8 (“Indeed, in the spirit of broad construction, the FELA has been construed to cover some intentional torts even though its text only mentions negligence.”); Jamison v. Encarnacion, 281 U.S. 635, 640 (1930), superseded by statute on other grounds as recognized in McDermott Int’l, Inc. v. Wilander, 498 U.S. 337, 348 (1991) (“The Act 16 RITTMANN V. AMAZON.COM Phila. & R. Ry. Co. v. Hancock, 253 U.S. 284, 286 (1920) (railroad worker injured while operating a train carrying coal, some of which would ultimately be shipped out of state, was engaged in interstate commerce for FELA purposes because “the shipment was but a step in the transportation of the coal to real and ultimate destinations in another state”); Waithaka, 2020 WL 4034997, at  (“[W]orkers ‘engaged in interstate commerce’ did not refer only to those workers is not to be narrowed by refined reasoning or for the sake of giving ‘negligence’ a technically restricted meaning. It is to be construed liberally to fulfill the purposes for which it was enacted, and to that end the word [‘negligence’] may be read to include all the meanings given to it by courts, and within the word as ordinarily used.”). Moreover, contrary to the dissent’s position, “there is no indication that the remedial purpose of the FELA affected the Supreme Court’s conclusion that injured railroad workers who were transporting within one state goods destined for or coming from other states . . . were engaged in interstate commerce.” Waithaka, 2020 WL 4034997, at . As the First Circuit explained, “FELA was concerned with the activities of employees, just as the FAA is. Indeed, in . . . the FELA precedents that we have discussed, the question before the Court was the same as it is here: whether certain transportation workers engaged in interstate commerce.” Id. at . Amazon also points out that Congress amended FELA to eliminate courts’ line-drawing between intrastate and interstate activities. The 1939 amendment added a paragraph that broadened FELA’s application beyond those “employed in commerce” to include “[a]ny employee of a carrier, any part of whose duties . . . shall be the furtherance of interstate or foreign commerce; or shall, in any way directly or closely and substantially, affect such commerce as set forth shall, for the purposes of this chapter, be considered as being employed by such carrier in such commerce and shall be considered entitled to the benefits of this chapter.” 45 U.S.C. § 51. Whatever the “very fine distinctions” drawn in cases interpreting FELA before 1939, see S. Pac. Co. v. Gileo, 351 U.S. 493, 497 (1956), there is no question that the “employed in commerce” language embraced employees who did not cross state lines but were nevertheless engaged in interstate commerce. RITTMANN V. AMAZON.COM 17 who themselves carried goods across state lines, but also included at least two other categories of people: (1) those who transported goods or passengers that were moving interstate,” and “(2) those who were not involved in transport themselves but were in positions ‘so closely related’ to interstate transportation ‘as to practically be a part of it” (citations omitted).). “In incorporating almost exactly the same phraseology into the Arbitration Act of 1925 its draftsmen and the Congress which enacted it must have had in mind this current construction of the language which they used.” Tenney, 207 F.2d at 453. Similarly, the Supreme Court has held that the actual crossing of state lines is not necessary to be “engaged in commerce” for purposes of the Clayton and RobinsonPatman Acts. In a pair of cases decided in the same term, the Court clarified that Congress’s use of the term “engaged in commerce” was a limited assertion of its jurisdiction, and “denote[d] only persons or activities within the flow of interstate commerce—the practical, economic continuity in the generation of goods and services for interstate markets and their transport and distribution to the consumer.” Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S. 186, 195 (1974). Put another way, “[t]o be engaged ‘in commerce’ within the meaning of [the Clayton Act], a corporation must itself be directly engaged in the production, distribution or acquisition of goods or services in interstate commerce.” United States v. Am. Bldg. Maint. Indus., 422 U.S. 271, 283 (1975) (holding that the phrase “‘engaged in commerce’ as used in § 7 of the Clayton Act means engaged in the flow of interstate commerce”). Thus, “a firm engaged in entirely intrastate sales of asphaltic concrete, a product that can be marketed only locally,” even though the product was used to surface roads and interstate highways, was not “engaged in commerce” when it did not make interstate sales and was not 18 RITTMANN V. AMAZON.COM otherwise involved in national markets. Gulf Oil, 419 U.S. at 188, 195. The Court suggested that the firm could have satisfied the interstate commerce hook by showing that “the local market in asphaltic concrete [was] an integral part of the interstate market in other component commodities or products.” Id. at 196. 3 Although “statutory jurisdictional formulations” do not “necessarily have a uniform meaning whenever used by Congress,” Circuit City, 532 U.S. at 118 (quoting Am. Bldg., 422 U.S. at 277), the fact that the phrases “employed in commerce” or “engaged in commerce” have not been interpreted to require businesses or employees to cross state lines persuades us that Amazon’s unduly restrictive construction of the phrase is unwarranted. See Swift & Co. v. United States, 196 U.S. 375, 398–99 (1905) (“[C]ommerce among the states is not a technical legal conception, but a practical one, drawn from the course of business.”). Amazon insists that the term “engaged in commerce,” as used in those statutes and as discussed in Circuit City, is not akin to the phrase “engaged in foreign or interstate 3 Amazon’s further concern that these statutes encompass broader conduct than § 1 does not relate to the interpretation of the term “engaged in commerce,” but instead pertains to the subject that phrase modifies in those particular statutes. For example, citing American Building, 422 U.S. at 283, Amazon claims that “[i]n cases applying other statutes, courts have included much more than transportation in the ‘flow’ of commerce, including the production of goods for interstate sales.” That case involved the Clayton Act, which made it unlawful “for any person engaged in commerce” to discriminate in price. See Gulf Oil, 419 U.S. at 193 n.9 (emphasis added). Here, however, the concern that § 1 may sweep so broadly as to apply to corporations that manufacture or produce goods in interstate commerce is unfounded, because § 1 applies only to transportation workers engaged in such commerce. RITTMANN V. AMAZON.COM 19 commerce” in § 1 of the FAA. Amazon argues that we must interpret the latter phrase in § 1 so as not to read words out of the statute. See Circuit City, 532 U.S. at 117 (discussing Gulf Oil, 419 U.S. at 202, and Am. Bldg., 422 U.S. at 283). That contention is not persuasive. The term “in commerce” refers to interstate and foreign commerce—the type of commerce that Congress has the power to regulate. See, e.g., Gulf Oil, 419 U.S. at 195 (“[T]he distinct ‘in commerce’ language of the Clayton and Robinson-Patman Act provisions . . . appears to denote only persons or activities within the flow of interstate commerce.” (emphasis added)); Am. Bldg., 422 U.S. at 285– 86 (“[S]ince the Benton companies did not participate directly in the sale, purchase, or distribution of goods or services in interstate commerce, they were not ‘engaged in commerce’ within the meaning of § 7 of the Clayton Act.”) (emphasis added)). The FAA defines the term “commerce” as “commerce among the several States or with foreign nations . . .” 9 U.S.C. § 1. We see no way to meaningfully distinguish between the word “commerce” used in § 2, defined as “commerce among the several States or with foreign nations,” with the “foreign or interstate commerce” referenced in § 1. As Circuit City explains, Congress did not vary what it regulated in these provisions, only the reach of its regulation. Circuit City, 532 U.S. at 115, 117–18 (explaining that the phrase “affecting” or “involving” commerce demonstrated an intent to regulate to the full extent of Congress’s Commerce Clause authority, whereas “engaged in commerce” is “understood to have a more limited reach”). Indeed, interpreting § 1, the Supreme Court itself used the phrase “engaged in commerce” as shorthand for the statutory text “engaged in foreign or interstate commerce.” See Circuit City, 532 U.S. at 115, 116, 118. 20 RITTMANN V. AMAZON.COM Amazon and the dissent further contend that we must narrow the definition of “engaged in foreign or interstate commerce” to accord with the FAA’s statutory context and pro-arbitration purposes. We recognize that Circuit City rejected an expansive reading of the transportation worker exemption based in part on construing the statutory phrase “engaged in commerce” more narrowly than the phrase “involving commerce” in § 2. But Circuit City interpreted the phrase in that manner to explain why the exemption applied only to the employment contracts of transportation workers, as opposed to all employment contracts. See 532 U.S. at 118–19. Nothing in Circuit City requires that we rely on the pro-arbitration purpose reflected in § 2 to even further limit the already narrow definition of the phrase “engaged in commerce.” The authorities we have discussed simply do not run afoul of Circuit City because, as we have explained, Circuit City did not address what is at issue here. 4 In light of the weight of authority interpreting “engaged in commerce” not strictly to require the crossing of state lines, we are not persuaded that § 1 is amenable to the interpretation offered by Amazon. Accordingly, we 4 Amazon also relies on Circuity City’s discussion of existing and forthcoming legislation around the time the FAA was passed that provided for arbitration of disputes for transportation workers to argue that Congress did not intend the § 1 exemption to encompass the type of delivery providers at issue here. See Circuit City, 532 U.S. at 120–21. For the reasons the Third Circuit persuasively articulated in Singh, 939 F.3d at 225, we refuse to rely on speculation in Circuit City as to Congress’s intent—not only because doing so would be imprudent, but also because the Supreme Court cautioned against it. See Circuit City, 532 U.S. at 119–20. See also Waithaka, 2020 WL 4034997, at  (“[T]he residual clause means that Congress contemplated the future exclusion of workers other than railroad employees and seamen, and it did not limit that exclusion to those with available dispute resolution systems. Purpose cannot override text.”). RITTMANN V. AMAZON.COM 21 conclude that § 1 exempts transportation workers who are engaged in the movement of goods in interstate commerce, even if they do not cross state lines.