Court Opinion

ID: 4274629
Source: CourtListenerOpinion
Date Created: 2018-05-11 17:00:35.319285+00
Date Added: 2024-06-11T14:33:35.807527
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

CHAMBER OF COMMERCE OF THE               No. 17-35640
UNITED STATES OF AMERICA;
RASIER, LLC,                               D.C. No.
              Plaintiffs-Appellants,    2:17-cv-00370-
                                             RSL
                 v.

CITY OF SEATTLE; SEATTLE                   OPINION
DEPARTMENT OF FINANCE AND
ADMINISTRATIVE SERVICES; FRED
PODESTA, in his official capacity as
Director, Finance and Administrative
Services, City of Seattle,
               Defendants-Appellees.

      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 Plaintiff-
Appellant 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 for-
hire 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 co-
plaintiff 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 ‘state-
action immunity is disfavored’” (quoting Ticor Title, 504
U.S. at 636)). In line with its “preference” against state-
action immunity, the Supreme Court “recognize[s] state-
action 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 self-
interest 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 ride-
referral 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 for-
hire 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., price-
fixing 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 clear-
articulation 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 state-
action 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 for-
hire drivers pay for use of Uber, Lyft, and Eastside’s ride-
referral 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 clear-
articulation 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 self-
dealing,” 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 active-
supervision 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 active-
supervision 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 well-
settled rule that municipal actors need not meet the active-
supervision 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 pre-
emption 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 Labor-
Management 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.