Court Opinion

ID: 9410516
Source: CourtListenerOpinion
Date Created: 2023-07-21 17:01:09.952865+00
Date Added: 2024-06-11T17:20:58.287424
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

EDMOND CARMONA,                           No. 21-55009

               Plaintiff-Appellee,           D.C. No.
                                          8:20-cv-01905-
and                                          JVS-JDE

ABRAHAM MENDOZA; ROGER
NOGUERIA, on behalf of themselves           OPINION
and all others similarly situated,

               Plaintiffs,

 v.

DOMINO’S PIZZA, LLC, a Michigan
Corporation,

               Defendant-Appellant.

      On Remand from the United States Supreme Court

            Argued and Submitted June 20, 2023
                   Seattle, Washington

                    Filed July 21, 2023
2                   CARMONA V. DOMINO’S PIZZA

Before: Kim McLane Wardlaw, Barrington D. Parker, Jr.,*
        and Andrew D. Hurwitz, Circuit Judges.

                   Opinion by Judge Hurwitz

                          SUMMARY**

                    Federal Arbitration Act

    On remand from the United States Supreme Court, the
panel affirmed the district court’s order denying Domino
Pizza’s motion to compel arbitration in a putative class
action brought by three Domino truck drivers, alleging
violations of California labor law.
    The panel previously affirmed the district court’s denial
of Domino’s motion to compel arbitration, holding that
because the drivers were a “class of workers engaged in
foreign or interstate commerce,” their claims were exempt
from the Federal Arbitration Act by 9 U.S.C. § 1. The
Supreme Court granted certiorari, vacated, and remanded for
reconsideration in light of Southwest Airlines Co. v. Saxon,
142 S. Ct. 1783 (2022).
    On remand, the panel stated that its prior decision
squarely rested upon its reading of Rittmann v. Amazon.com,
Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon

*
  The Honorable Barrington D. Parker, Jr., United States Circuit Judge
for the U.S. Court of Appeals for the Second Circuit, 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.
                 CARMONA V. DOMINO’S PIZZA                  3

delivery drivers. The panel found no clear conflict between
Rittmann and Saxon and nothing in Saxon that undermined
the panel’s prior reasoning that because the plaintiff drivers
in this case, like the Amazon package delivery drivers in
Rittmann, transport interstate goods for the last leg to their
final destinations, they are engaged in interstate commerce
under § 1.
    Rejecting Domino’s attempts to distinguish Rittmann,
the panel stressed that the issue was not how the purchasing
order was placed, but rather whether the plaintiff drivers
operate in a single, unbroken stream of interstate commerce
that renders interstate commerce a central part of their job
description. A pause in the journey of the goods at a
warehouse did not remove the goods from the stream of
interstate commerce because the goods were inevitably
destined from the outset of the interstate journey for
Domino’s franchisees.

                        COUNSEL

Norman M. Leon (argued), DLA Piper LLP US, Chicago,
Illinois; Steve L. Hernández, DLA Piper LLP US, Los
Angeles, California; Taylor Wemmer, DLA Piper LLP US,
San Diego, California; Courtney G. Saleski, DLA Piper LLP
US, Philadelphia, Pennsylvania; Jacob Frasch, DLA Piper
LLP US, Washington, D.C.; Gerson H. Smoger, Smoger &
Associates, Dallas, Texas; for Defendant-Appellant.
Aashish Y. Desai (argued) and Adrianne De Castro, Desai
Law Firm P.C., Costa Mesa, California, for Plaintiff-
Appellee.
4                CARMONA V. DOMINO’S PIZZA

Elizabeth B. Wydra, Brianna J. Gorod, and Smita Ghosh,
Constitutional Accountability Center, Washington, D.C., for
Amicus Curiae Constitutional Accountability Center.
Jeffrey R. White and Tad Thomas, American Association for
Justice, Washington, D.C.; Gerson H. Smoger, Smoger &
Associates, Dallas, Texas; for Amicus Curiae American
Association for Justice.

                         OPINION

HURWITZ, Circuit Judge:

    This is a putative class action by three truck drivers
against their employer, Domino’s Pizza. We previously
affirmed the district court’s denial of Domino’s motion to
compel arbitration, holding that because the drivers were a
“class of workers engaged in foreign or interstate
commerce,” their claims were exempted from the Federal
Arbitration Act (“FAA”) by 9 U.S.C. § 1. Carmona v.
Domino’s Pizza, LLC, 21 F.4th 627, 628 (9th Cir. 2021).
The Supreme Court granted certiorari, vacated, and
remanded for reconsideration in light of Southwest Airlines
Co. v. Saxon, 142 S. Ct. 1783 (2022). Domino’s Pizza, LLC
v. Carmona, 143 S. Ct. 361 (2022). Upon reconsideration,
we again affirm.
                              I.
    Domino’s sells ingredients used to make pizzas to its
franchisees. As relevant to this case, Domino’s buys those
ingredients from suppliers outside of California, and they are
then delivered to Domino’s Southern California Supply
Chain Center. At the Supply Center, Domino’s employees
                  CARMONA V. DOMINO’S PIZZA                    5

reapportion, weigh, and package the relevant ingredients for
delivery to local franchisees but do not otherwise alter them.
The plaintiff drivers (“D&S drivers”), employees of
Domino’s, then deliver the ingredients in response to orders
from Domino’s California franchisees.
    Three D&S drivers filed this putative class action against
Domino’s in 2020, alleging various violations of California
labor law. Each plaintiff’s agreement with Domino’s
requires arbitration of “any claim, dispute, and/or
controversy” between them. But the district court denied
Domino’s motion to compel arbitration, finding the
plaintiffs exempt from the FAA under 9 U.S.C. § 1 as
members of a class of transportation workers “engaged in
foreign or interstate commerce.” We affirmed, concluding
that these last-leg truck drivers were “engaged in a single,
unbroken stream of interstate commerce.” Carmona, 21
F.4th at 629–30 (cleaned up).
                               II.
    In Saxon, the Supreme Court considered whether § 1
exempted from the FAA “workers who physically load and
unload cargo on and off airplanes.” 142 S. Ct. at 1789. In
finding these workers exempt, the Court focused on the
“class of workers” at issue, an inquiry which emphasized not
the employer’s business but rather “the actual work that the
members of the class . . . typically carry out” in that business.
Id. at 1788. An employee whose typical duties were to clean
a local office, for example, would not be a member of an
exempt class simply because his employer was itself
engaged in interstate commerce. Id. at 1792. But the Court
held that an employee who “frequently loads and unloads
cargo on and off airplanes that travel in interstate commerce”
was engaged in interstate commerce. Id. at 1793. The Court
6                  CARMONA V. DOMINO’S PIZZA

held that, in assessing whether workers are engaged in
interstate commerce, the critical question is whether the
workers are actively “engaged in transportation” of goods in
interstate commerce and play a “direct and necessary role in
the free flow of goods across borders.” Id. at 1790 (cleaned
up). In finding that the cargo workers met this description,
the Court specifically rejected Southwest’s argument that the
cargo workers must themselves cross state lines to be
engaged in interstate commerce. Id. at 1791.
    Saxon did not address the question now before us.
Rather, the Court expressly pretermitted whether “last leg”
drivers like the D&S drivers in this case qualified for the
exemption, stating:

       We recognize that the answer will not always
       be so plain when the class of workers carries
       out duties further removed from the channels
       of interstate commerce or the actual crossing
       of borders. Compare, e.g., Rittmann v.
       Amazon.com, Inc., 971 F.3d 904, 915 (C.A.9
       2020) (holding that a class of “last leg”
       delivery drivers falls within § 1’s exemption),
       with, e.g., Wallace v. Grubhub Holdings,
       Inc., 970 F.3d 798, 803 (C.A.7 2020)
       (holding that food delivery drivers do not). In
       any event, we need not address those
       questions to resolve this case.

Id. at 1789 n.2.
                             III.
     The Supreme Court remanded “for further consideration
in light of [Saxon].” Carmona, 143 S. Ct. at 361. Our prior
                    CARMONA V. DOMINO’S PIZZA                        7

decision squarely rested upon our reading of Rittmann v.
Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), a case
whose continued validity Saxon expressly declined to
address. Saxon, 142 S. Ct. at 1789 n.2. Unless Rittmann is
somehow “clearly irreconcilable” with Saxon, we are
required to continue to follow it.1 Miller v. Gammie, 335
F.3d 889, 899–900 (9th Cir. 2003) (en banc). We find no
clear conflict between Rittmann and Saxon.
    Rittmann confronted whether delivery drivers who
transported goods from Amazon warehouses to in-state
consumers were exempt from the FAA under § 1. 971 F.3d
at 915. After first analyzing the business of “the company
for whom the delivery person works,” id. at 917, we turned
to what Saxon later confirmed is the central inquiry: what the
relevant class of workers actually did, id. at 915 (“AmFlex
workers pick up packages that have been distributed to
Amazon warehouses, certainly across state lines, and
transport them for the last leg of the shipment to their
destination.”). And we concluded that, because the Amazon
goods shipped in interstate commerce were not transformed
or altered at the warehouses, the entire journey represented
one continuous stream of commerce. Id. at 915–17.
    Our prior opinion held that the FAA exempted the claims
in this case because the D&S drivers were part of a “class of
workers engaged in foreign or interstate commerce,” 9
U.S.C. § 1; Carmona, 21 F.4th at 628. Although we noted
that the “nature of the business for which a class of workers
performed their activities” was a “critical factor” in the § 1
analysis, id. at 629 (cleaned up), we in the end focused

1
 Although we recognize that the Fifth Circuit disagrees with Rittmann,
see Lopez v. Cintas Corp., 47 F.4th 428, 432–34 (5th Cir. 2022), we are
bound by it.
8                 CARMONA V. DOMINO’S PIZZA

heavily on what the class of workers to which the plaintiffs
belonged actually did. Relying on Rittmann, we stressed that
because “the D&S drivers, like the Amazon package
delivery drivers, transport [interstate] goods for the last leg
to their final destinations,” they are engaged in interstate
commerce under § 1. Id. at 630 (cleaned up). Nothing in
Saxon undermines that reasoning.
     Our prior opinion also squarely rejected Domino’s
attempts to distinguish Rittmann. Id. We find them no more
persuasive the second time around. Domino’s primarily
argues that Rittmann does not control because, unlike
Amazon customers, Domino’s franchisees do not order the
goods until after they arrive at the warehouse. But we
previously stressed that “[t]he issue is not how the
purchasing order is placed, but rather whether the D&S
drivers operate in a single, unbroken stream of interstate
commerce that renders interstate commerce a central part of
their job description.” Id. (cleaned up). Indeed, the Supreme
Court has long rejected the notion that the timing of an order
is itself dispositive of whether goods remain in the stream of
interstate commerce. See Walling v. Jacksonville Paper Co.,
317 U.S. 564, 570 (1943) (“We do not mean to imply that a
wholesaler’s course of business based on anticipation of
needs of specific customers, rather than on prior orders or
contracts, might not at times be sufficient to establish that
practical continuity in transit necessary to keep a movement
of goods ‘in commerce’ . . . .”).
    Nor does the pause in the journey of the goods at the
warehouse alone remove them from the stream of interstate
commerce. See id. at 568 (“The entry of the goods into the
warehouse interrupts but does not necessarily terminate their
interstate journey.”); id. (“[I]f the halt in the movement of
goods is a convenient intermediate step in the process of
                 CARMONA V. DOMINO’S PIZZA                 9

getting them to their final destinations, they remain ‘in
commerce’ until they reach those points.”); see also Fraga
v. Premium Retail Servs., Inc., 61 F.4th 228, 241 (1st Cir.
2023) (holding that an employer’s “use of its own employees
to carry the materials for the last part of each interstate
journey does not turn the journey into two unconnected
trips”). Because the goods in this case were inevitably
destined from the outset of the interstate journey for
Domino’s franchisees, it matters not that they briefly paused
that journey at the Supply Center.
    Citing A.L.A. Schechter Poultry Corp. v. United States,
295 U.S. 495 (1935), Domino’s also argues that the interstate
journey ended at the Supply Center because the goods were
repackaged there. But in contrast to Schechter, which
involved chickens slaughtered at the poultry company and
only then delivered to local buyers, id. at 520–21, the
relevant ingredients in this case are unaltered from the time
they arrive in the Supply Center until they are delivered to
franchisees. Immediato v. Postmates, Inc., 54 F.4th 67 (1st
Cir. 2022), upon which Domino’s also relies, is similarly
inapposite: the products delivered in that case were
transformed from their constituent ingredients into meals
before the plaintiff drivers delivered them. Id. at 78.
                            IV.
    We conclude that Saxon is not inconsistent, let alone
clearly irreconcilable, with Rittmann, which continues to
control our analysis. We therefore AFFIRM the order of the
district court.