APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Denise J. Casper, U.S. District Judge]
Douglas S. Martland, Assistant Attorney General, with whom Maura Healey, Attorney General of Massachusetts, was on brief, for appellant.
David C. Casey, with whom Christopher B. Kaczmarek, Stephen T. Melnick, and Littler Mendelson, P.C. were on brief, for appellee.
Before Howard, Chief Judge, Selya and Lynch, Circuit Judges.
LYNCH, Circuit Judge.
The question in this case is whether the express preemption provision of the Federal Aviation Administration Authorization Act of 1994 ("FAAAA"), 49 U.S.C. § 14501(c)(1), preempts the application of "Prong 2" of the Massachusetts Independent Contractor Statute, Mass. Gen. Laws ch. 149, § 148B(a)(2), to the same-day delivery companies that constitute the Massachusetts Delivery Association ("MDA"). This court previously remanded this case to the district court for a determination, on review of the full evidentiary record, of whether Prong 2 is FAAAA-preempted because it "relate[s] to" the prices, routes, or services of the motor carriers. Mass. Delivery Ass'n v. Coakley (MDA II), 769 F.3d 11, 23 (1st Cir. 2014). On remand, the district court, at summary judgment, answered in the affirmative. Mass. Delivery Ass'n v. Healey, 117 F.Supp.3d 86, 97–98 (D. Mass. 2015).
After the filing of the appeal in this case, this court held in Schwann v. FedEx Ground Package System, Inc. that the FAAAA preempts the application of Prong 2 to the nationwide package delivery service FedEx. 813 F.3d 429, 432 (1st Cir. 2016). Applying the reasoning in Schwann, we affirm.
The MDA is a trade organization representing same-day delivery service companies in Massachusetts. The MDA brought this suit on behalf of its members, seeking a declaration that Prong 2 is preempted by the FAAAA as well as an injunction barring the Attorney General from enforcing Prong 2 against its members. The MDA chose one member, X Pressman Trucking & Courier, Inc. ("Xpressman"), as an exemplar for this litigation.
Xpressman offers its clients both scheduled-route and on-demand deliveries. For scheduled-route deliveries, packages are picked up and dropped off at regular times and places. Xpressman's scheduled routes are serviced by forty-six couriers. Xpressman selects scheduled-route couriers by soliciting bids through online advertisements and awarding the route to whoever advances the best bid. For on-demand deliveries, the times, locations, and total number of deliveries are variable and unpredictable. Each day, couriers provide Xpressman with their availability to make on-demand deliveries, and Xpressman matches on-demand delivery requests with available couriers. It was represented to us at oral argument that up to a dozen couriers submit their availability for on-demand deliveries each day and that that number comprises different individuals from day to day.
Xpressman considers its couriers to be independent contractors. Xpressman's couriers drive their own cars and trucks. They are paid for each route they complete and they do not receive benefits such as health insurance, retirement, or workers' compensation. Meanwhile, Xpressman has six full-time and two part-time workers, whom Xpressman classifies as employees, for administrative and warehouse duties. Those workers are paid on an hourly or salary basis, and they receive benefits such as health insurance, retirement, and workers' compensation.
The basic premise of the MDA's claim is that Massachusetts law forces Xpressman and other MDA members to designate their couriers as employees rather than as independent contractors, as its member companies have classified them. The relevant Massachusetts law is the Massachusetts Independent Contractor Statute, Mass. Gen. Laws ch. 149, § 148B, which establishes a three-prong test to determine who is an "employee" for the purposes of Massachusetts General Laws Chapters 149 and 151. A worker is considered an employee rather than an independent contractor unless the employer can meet all three prongs:
For the purpose of this chapter and chapter 151, an individual performing any service, except as authorized under this chapter, shall be considered to be an employee under those chapters unless:
(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the ...