FAA section 1 held to exempt some California truck drivers from FAA coverage in Nieto v. Fresno Beverage Co.

The arbitration battle lines have somewhat diminished in their spectacular scope, but that doesn’t mean the war is entirely over. Case in point: in Nieto v. Fresno Beverage Co. (certified for publication March 22, 2019), the Court of Appeal (Fifth Appellate District) affirmed a trial court ruling that found beverage company deliver drivers to be exempt from Federal Arbitration Act (9 U.S.C. §1 et seq., the “FAA”) by operation of the exemption in Section 1 for what the Supreme Court has denominated “transportation workers.”

The case is not too long of a read, but it nevertheless does a thorough job of reviewing decisions addressing the Section 1 exemption (see pages 6-13 for the state of affairs).

There is also a quick reminder in the discussion about waiver of arguments not raised in the Opening Brief.

Kenneth H. Yoon, Stephanie E. Yasuda, and Brian G. Lee of Yoon Law and Douglas Han, Shunt Tatavos-Gharajeh, and Daniel J. Par of Justice Law Corporation represented the prevailing plaintiff on appeal.

Perfunctory certification order reversed and sent back to the trial court in Myers v. Raley's

The standard of review governing certification orders is effectively unique to class actions. As the Supreme Court explained in Ayala v. Antelope Valley Newspapers, Inc. 59 Cal.4th 522 (2014): “We review the trial court’s actual reasons for granting or denying certification; if they are erroneous, we must reverse, whether or not other reasons not relied upon might have supported the ruling.” Id., at 530. In other words, only the stated reasons are reviewed under the abuse of discretion standard. And if a stated reason includes a legally erroneous provision, that, by definition, constitutes and abuse of discretion. The record is not searched for an alternative basis to affirm.

In Myers v. Rayey’s (March 12, 2019), the Court of appeal (Third Appellate District) [Yolo!] concluded that one paragraph of substance was insufficient to permit review, since, without a statement of reasoning and analysis, there is no way to meaningfully review what is simply an ultimate conclusion:

To turn to the record to concoct some basis for the trial court’s denial of certification is to abolish the relevant standard of review, ignore the trial court’s reasoning, and apply ordinary appellate review contrary to the legion of cases that prohibit appellate revisionism. This we cannot do.

Slip op., at 15. As part of its discussion of the insufficiency of a “perfunctory” order, the Court explicitly disagreed with Dailey v. Sears, Roebuck & Co., 214 Cal. App. 4th 974 (2013), which had affirmed an exceedingly terse certification denial order.

This hits close to home, as I was unsuccessful on an appeal of a certification order with about as much (or little) in the way of analysis. If I had been in front of this panel…. And if it weren’t for those meddling kids!

I also get the feeling when reading the statement of facts that the Court had a strong opinion about how things should turn out after round two but couldn’t actually say how things should turn out.