Jaswinder Singh v. Uber Technologies Inc ( 2019 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 17-1397
_____________
JASWINDER SINGH,
on behalf of himself and all those similarly situated,
v.
UBER TECHNOLOGIES INC
Jaswinder Singh,
Appellant
______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. Action No. 3-16-cv-03044)
District Judge: Honorable Freda L. Wolfson
______________
Argued April 26, 2019
Before: GREENAWAY, JR., SHWARTZ, and PORTER,
Circuit Judges.
(Filed: September 11, 2019)
______________
Daniel A. Horowitz
Matthew D. Miller
Justin L. Swidler [ARGUED]
Swartz Swidler
1101 Kings Highway North
Suite 402
Cherry Hill, NJ 08034
Attorneys for Appellant
Theodore J. Boutrous, Jr.
Samuel E. Eckman
Theane D. Evangelis [ARGUED]
Gibson Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA, 90071
Joshua S. Lipshutz
Gibson Dunn & Crutcher
1050 Connecticut Avenue, N.W.
Washington, DC 20036
Paul C. Lantis
William J. Simmons
Littler Mendelson
1601 Cherry Street
Suite 1400, Three Parkway
Philadelphia, PA 19102
Attorneys for Appellee
_______________
OPINION OF THE COURT
_______________
2
GREENAWAY, JR., Circuit Judge.
Arbitration agreements are essentially contracts that
predetermine that a dispute between parties will be decided by
an arbitrator, rather than in court. In response to judicial
hostility toward these types of contracts, Congress passed the
Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1–16. The FAA
places certain arbitration agreements on equal footing with all
other contracts by requiring courts to enforce such agreements
according to their terms. Section 2 provides that the FAA
covers “a written provision in any maritime transaction or a
contract evidencing a transaction involving commerce,” id. §
2, but a provision in § 1 sets an outer limit, providing that
“nothing” in the FAA “shall apply to contracts of employment
of seamen, railroad employees, or any other class of workers
engaged in foreign or interstate commerce,” id. § 1 (“§ 1”).
This outer limit sets the stage for the case before us.
Jaswinder Singh brought this putative class action in the
Superior Court of New Jersey, Monmouth County, on behalf
of himself, and other similarly situated New Jersey Uber
drivers. He alleged that Uber Technologies, Inc. (“Uber”)
misclassified them as independent contractors as opposed to
employees, which resulted in their being deprived of overtime
compensation, and having to incur business expenses for the
benefit of Uber. Uber removed the case to federal court in the
District of New Jersey. It then moved for the District Court to
dismiss the case and compel Singh to have it decided by an
arbitrator, on the basis of an agreement to arbitrate. Singh
opposed the motion to compel arbitration on numerous
grounds, one of which was that the District Court did not have
the authority to compel arbitration under the FAA. He argued
that, to the extent that he had an agreement with Uber, it fell
3
within the ambit of the residual clause—the “any other class of
workers” portion—of § 1. In the least, Singh asked that he be
given the opportunity for discovery on the essential § 1 residual
clause inquiry, which is whether the class of workers to which
Singh belongs is “engaged in foreign or interstate commerce.”
Id.
The District Court granted the motion over Singh’s
objections. But it did not reach the engaged-in-interstate
commerce inquiry. Instead, the Court ruled that Singh did not
fall within the ambit of the residual clause of § 1 because that
clause only extends to transportation workers who transport
goods, not those who transport passengers. We disagree with
this reading. Consistent with our longstanding precedent, we
hold that the residual clause of § 1 may extend to a class of
transportation workers who transport passengers, so long as
they are engaged in interstate commerce or in work so closely
related thereto as to be in practical effect part of it. We will
therefore vacate the District Court’s order compelling
arbitration. In addition, because neither the Complaint nor
incorporated documents suffice to resolve the engaged-in-
interstate-commerce inquiry, we will remand this and the
remaining issues to the District Court for further proceedings
consistent with this opinion.
I. BACKGROUND
A. Legal
The FAA “place[s] arbitration agreements on equal
footing with all other contracts” by requiring courts to “enforce
[such] agreements according to their terms.” McDonald v.
Cashcall, Inc., 883 F.3d 220, 226 (3d Cir. 2018) (first
alteration in original) (citations omitted). So the statute
4
provides that, like any other contract, arbitration agreements
may be rendered unenforceable by grounds that exist at law or
in equity for revocation. See id.; 9 U.S.C. § 2. To the extent
that a particular ground implicates the threshold question of
whether the parties are bound by an agreement to arbitrate, it
is referred to as a gateway question of arbitrability and is
typically resolved in court. Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 84 (2002); Chesapeake Appalachia, LLC v.
Scout Petroleum, LLC, 809 F.3d 746, 756 (3d Cir. 2016).
Although this is the typical route, the parties may
contract around it, and agree to have even these questions
decided by an arbitrator. To do so, the arbitration agreement
need only include a clause—a delegation clause—that reserves
arbitrability questions for an arbitrator to decide. Rent-A-
Center, West, Inc. v. Jackson, 561 U.S. 63, 70, 72 (2010)
(“Rent-A-Center”). Where such a clause is included, courts
cannot decide threshold questions of arbitrability “unless a
party challenge[s] the delegation clause [specifically] and the
court concludes that the delegation clause is not enforceable.”
MacDonald, 883 F.3d at 226 (citations omitted). The rationale
is that a delegation clause is severable from the underlying
arbitration agreement such that it is separately entitled to FAA-
treatment—that is, unless specifically (and successfully)
challenged, the clause is in and of itself treated as a valid
contract that must be enforced under the FAA’s enforcement
provisions. See Rent-A-Center, 561 U.S. at 72.
All of this, of course, assumes that the FAA controls.
But what if it does not? Or, more precisely, who gets to decide
the question of whether the FAA applies where there is a
delegation clause? During the pendency of this appeal, the
Supreme Court answered this question, holding that courts
must be the ones to determine whether an agreement is
5
excluded from FAA coverage even where there is a delegation
clause. New Prime Inc. v. Oliveira, 139 S. Ct. 532, 538 (2019).
Specifically, §§ 1 and 2 of the FAA identify the subset
of arbitration agreements covered by the statute. Since they
come before the FAA’s enforcement clauses under §§ 3 and
4—which authorize a court to stay a proceeding and compel
arbitration—the Supreme Court reasoned that §§ 3 and 4
cannot apply to an arbitration agreement that is excluded from
the FAA’s coverage by the terms of §§ 1 and 2. Id. at 537–38.
Pursuant to the rationale offered by Rent-A-Center, the Court
viewed a delegation clause as “merely a specialized type of
arbitration agreement,” and, as a result, held that the same
reasoning applied. Id. at 538.
This background sets the stage for our case: the contract
between the parties contains an arbitration provision and a
delegation clause. If the contract is covered by the FAA, these
provisions might combine to require the parties to have much
of their dispute resolved by an arbitrator. However, the parties
disagree over whether their contract is excluded from the FAA
under the residual clause of § 1.
B. Procedural
1. Proceedings in the District Court
Singh brought this putative class action in the Superior
Court of New Jersey, Monmouth County, on behalf of himself
and other similarly situated New Jersey Uber drivers. He
alleged that Uber misclassified them as independent
contractors as opposed to employees, and that, as a result, Uber
deprived them of overtime compensation, and required them to
incur business expenses for the benefit of Uber. Uber removed
6
the action to federal court in the District of New Jersey. It then
moved to dismiss the action and compel arbitration pursuant to
the arbitration provision of an agreement between the parties
called the Rasier Software Sublicense Agreement (“Rasier
Agreement”).
In response to the motion, Singh argued that there was
no valid agreement between Uber and him, and, even if there
was, he was not bound by its arbitration provision for four
reasons: (1) Uber failed to meet its burden to show that the
provision was a constitutional waiver of the Seventh
Amendment right to a jury trial; (2) the provision is excluded
under the residual clause of § 1 of the FAA; (3) the provision
violated the National Labor Relations Act (“NLRA”), the
Norris-LaGuardia Act, and the New Jersey Wage and Hour
Law (“NJWHL”); and (4) the provision was unconscionable.
As to the residual clause of § 1 of the FAA specifically,
Singh argued that he had at least put forth enough to warrant
discovery on the question. He relied on our decision in
Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d
764 (3d Cir. 2013), to support this argument. There, we
recognized that our precedents suggested two possible
standards under which a motion to compel arbitration could be
decided—the motion to dismiss standard or the summary
judgment standard. Id. at 771–72. The two differ significantly,
as we accept as true the facts established by the pleadings—the
complaint and incorporated documents—when deciding the
former, but, for the latter, we require the party opposing the
motion to submit evidence, which is typically obtained through
discovery. See id. at 772 (citing Fed. R. Civ. P. 56(c)(1)(A)).
We held that the motion to dismiss standard applies to a
motion to compel arbitration where a party’s claims are
7
“subject to an enforceable arbitration clause”—that is, where
the existence of a valid agreement to arbitrate between the
parties is apparent from the face of the complaint or
incorporated documents. Id. at 774, 776. “But if the complaint
and its supporting documents are unclear” as to whether the
parties agreed to arbitrate, “or if the plaintiff has responded to
a motion to compel arbitration with additional facts sufficient
to place the agreement” in dispute, a “restricted inquiry into
factual issues [is] necessary . . . .” Id. at 774–75 (emphases
added) (internal quotation marks and citations omitted). The
motion to compel arbitration is judged under a summary
judgment standard if it is renewed after this inquiry. Id. at 775.
Uber asked the Court to reject this request for discovery
on the grounds that the residual clause of § 1 of the FAA only
applies to transportation workers that transport goods, the
parties’ agreement states that the FAA would govern, and that,
even if the FAA did not govern, the result would be the same
under the New Jersey Arbitration Act (“NJAA”), N.J. Stat.
Ann. §§ 2A:23B-1 to -32. In addition, Uber put forth that the
parties’ agreement contained a valid delegation clause, which,
unless successfully challenged, required that all the issues
Singh raised regarding the validity of their arbitration
agreement—including the § 1 residual clause issue—be
decided by an arbitrator.
The District Court ruled in Uber’s favor, without
addressing the discovery or delegation clause arguments.
It recognized that the parties had “agree[d] to have
[threshold issues] decided by an arbitrator through the
inclusion of a delegation clause within the arbitration
agreement,” App. 7, but nonetheless proceeded to address four
of the five issues presented by Singh. It determined that the
8
delegation clause was valid, that the parties had in fact entered
into a valid and enforceable arbitration agreement, and that the
residual clause of § 1 of the FAA does not extend to
transportation workers who transport passengers. It also found
that the arbitration provision did not violate the NLRA or the
other labor-related statutes, and was not unconscionable. It did
not decide whether the parties’ dispute fell within the scope of
the arbitration provision, on the basis that the delegation clause
required that this determination be “reserved for the arbitrator.”
App. 28.
2. Proceedings on Appeal
Singh appealed the District Court’s § 1 determination,
its determination that the arbitration provision did not violate
the NJWHL, its failure to address his Seventh Amendment
argument, and its rulings on unconscionability.1 In its response
brief on appeal, Uber primarily argued that Singh had waived
any issue as to the enforceability of the delegation clause, and,
as such, all of the issues Singh raises on appeal must be decided
by an arbitrator. Given New Prime, Uber now concedes that a
court has to resolve Singh’s § 1 argument as an antecedent
matter.
1
After the District Court’s decision, the Supreme Court
issued a ruling that foreclosed Singh’s NLRA and Norris-
LaGuardia Act arguments. In particular, the Supreme Court
held that the NLRA fell short of reflecting a clear and manifest
intent by Congress to displace the FAA, and that, “just as under
the NLRA, the [Norris-LaGuardia Act] does not conflict with
Congress’s directions favoring arbitration.” See Epic Sys.
Corp. v. Lewis, 138 S. Ct. 1612, 1624–30 (2018).
9
Section 1 of the FAA requires that we determine
whether the agreement between Singh and Uber qualifies as a
“contract[] of employment of seamen, railroad employees, or
any other class of workers engaged in foreign or interstate
commerce.” 9 U.S.C. § 1. Of course, there is no dispute as to
whether Uber drivers like Singh are seamen or railroad
employees. Rather, the dispute centers on § 1’s residual
clause—the “any other class of workers” portion—with Uber
arguing that the agreement between it and Singh does not
qualify as a “contract of employment,” Appellee Resp. Br. 19–
20, and, even if it did, Singh does not belong to a class of
workers engaged in interstate commerce because such drivers
transport passengers, and not goods, and they do so “only
locally,” Appellee Resp. Br. 20–26. New Prime eliminated
Uber’s “contract of employment” argument, see New Prime,
139 S.Ct at 541 (“Congress used the term ‘contracts of
employment’ in a broad sense to capture any contract for the
performance of work by workers.” (emphasis in original)), so
we are left with its transportation-of-goods and “engaged in
interstate commerce” arguments.
II. JURISDICTION AND STANDARD OF REVIEW
The District Court had jurisdiction pursuant to 28
U.S.C. §§ 1332(d) and 1453, and we have jurisdiction under
28 U.S.C. § 1291. We review the District Court’s order
compelling arbitration de novo, since it presents a question of
law. Reading Health Sys. v. Bear Stearns & Co., 900 F.3d 87,
100 n. 61 (3d Cir. 2018). We apply the same standard as the
District Court, so “we are first obliged to determine which
standard should have been applied.” Guidotti, 716 F.3d at 772.
10
A. The Framework for Deciding Which Standard
Recall that the two options are the motion to dismiss
standard under Rule 12(b)(6) and the summary judgment
standard under Rule 56, and that we set forth a framework for
determining which should apply to a motion to compel
arbitration in Guidotti. The centerpiece of that framework is
whether the existence of a valid agreement to arbitrate is
apparent from the face of the complaint or incorporated
documents. Id. at 774–76.
This is so because it represents a balancing of the
competing purposes of the FAA by fostering “efficient and
speedy dispute resolution” tempered by the “important aim” of
“enforc[ing] . . . private agreements” and the “significant role
courts play in interpreting the validity and scope of contract
provisions . . . .” Id. at 773 (internal quotation marks and
citations omitted). Notably, juxtaposed with Congress’s
“declaration of a liberal federal policy favoring arbitration
agreements,” id. (internal quotation marks and citation
omitted), § 4 of the FAA establishes that a court must be
“satisfied that the making of the agreement for arbitration or
failure to comply therewith is not in issue” before “mak[ing]
an order directing the parties to proceed to arbitration . . . .” 9
U.S.C. § 4. Thus, we determined that the interest in speedy
resolution needs no tempering where “the affirmative defense
of arbitrability of claims is apparent on the face of a complaint”
(or incorporated documents). Id. at 773–74 (internal quotation
marks and citation omitted). However, we recognized that “a
more deliberate pace is required” where the motion “does not
have as its predicate a complaint with the requisite clarity” as
to whether “the parties agreed to arbitrate.” Id. at 774 (internal
quotation marks and citation omitted).
11
A similar balancing is required with respect to the issue
presented here. Indeed, like the agreement-to-arbitrate issue
posed in § 4 of the FAA, the applicability of the residual clause
of § 1 is not merely “presumed to be [a] question[] for judicial
determination.” See id. at 773 (citation omitted). Rather, New
Prime establishes that a court must be satisfied that this clause
does not apply before making an order that the parties proceed
to arbitration pursuant to §§ 3 and 4 of the FAA. We therefore
determine that a “restricted inquiry” may be necessary to
resolve a motion to compel arbitration that presents an issue
regarding the applicability of the residual clause of § 1.
Specifically, where the issue of whether the residual
clause of § 1 of the FAA applies arises in a motion to compel
arbitration, the motion to dismiss standard applies if the
complaint and incorporated documents provide a sufficient
factual basis for deciding the issue. But where those
documents do not, or the plaintiff responds to the motion with
additional facts that place the issue in dispute, “the parties
should be entitled to discovery on the question of arbitrability
before a court entertains further briefing . . . ,” with an
application of the summary judgment standard to follow. Id.
at 776 (alteration in original) (internal quotation marks and
citation omitted).
B. Standard Applied by the District Court
Here, the District Court’s view was that the residual
clause of § 1 of the FAA does not extend to transportation
workers who transport passengers. So, to decide the § 1
residual clause inquiry, the fact that Uber drivers transport
passengers need only have been apparent from the face of the
Amended Complaint, from an exhibit attached to the Amended
Complaint, as a matter of public record, or from documents
12
incorporated or explicitly relied upon in the Amended
Complaint. See Guidotti, 716 F.3d at 772. Setting aside the
affidavit submitted by Uber as not qualifying as any of these,
the Amended Complaint and the Rasier Agreement each
independently establish that Uber drivers transport passengers.
See, e.g., Amended Compl. ¶ 18, ECF No. 7 (“Defendant offers
customers the ability to hail a car service driver via a mobile
application.” (emphasis added)); Rasier Agreement, App. 42
(characterizing Uber drivers as “providers of . . . peer-to-peer
. . . passenger transportation services . . .”) (emphasis added)).
Along those lines, the affidavit submitted by Singh in his
response to Uber’s motion does not place this issue in dispute,
but further establishes that Uber drivers transport passengers.
See, e.g., Singh Decl. ¶ 28 (“I regularly picked up customers .
. .”).
We therefore view the District Court’s decision as
applying a motion to dismiss standard on the issue of whether
the residual clause of § 1 of the FAA applies to transportation
workers that transport passengers.
III. DISCUSSION
For our part, as we alluded to, whether the residual
clause of § 1 applies in this case and operates to exclude the
Rasier Agreement (including the arbitration provision and
delegation clause) from FAA coverage is really a two-part
inquiry asking (1) if § 1 only applies to transportation workers
who transport goods, or also those who transport passengers,
and (2) whether Singh belongs to a class of workers that are
engaged in interstate commerce. The latter question is reached
only if the former is answered in the affirmative.
13
(A) We part company with the District Court and so
answer: the residual clause of § 1 is not limited to
transportation workers who transport goods, but may also
apply to those who transport passengers, so long as they are
engaged in interstate commerce or in work so closely related
thereto as to be in practical effect part of it.
(B) We then return to the Guidotti framework to
determine whether the engaged-in-interstate-commerce
inquiry can be resolved from the pleadings, and if so, whether
Singh’s submissions in response to the motion to compel
arbitration operate to place the issue in dispute. Since neither
the Amended Complaint nor incorporated documents suffice
for determining whether Singh belongs to a class of workers
that are engaged in interstate commerce or sufficiently related
work, we will ultimately remand for the District Court to
examine the issue, with instruction to permit limited discovery
before entertaining further briefing. If Uber chooses to reassert
its motion after this discovery is completed, the District Court
shall apply the summary judgment standard under Federal Rule
of Civil Procedure 56 and decide only this aspect of the § 1
residual clause inquiry, which will be dispositive as to whether
the FAA applies.2
2
Because the motion to dismiss the case and compel
arbitration was filed before discovery, and this case involves
consideration of a threshold issue concerning whether the FAA
even applies, Judge Shwartz does not agree that the framework
set forth in Guidotti is applicable but agrees that the case
should be remanded to allow the parties to conduct discovery
on whether Singh belongs to a “class of workers engaged in
14
And (C) we ultimately do not reach the remaining issues
raised by the parties because they are contingent on the FAA’s
applicability.
A. Transportation Workers who Transport
Passengers May be § 1 Exempt
1. Workers who Transport Passengers May be § 1
Exempt
Section 1 of the FAA provides that “nothing” in the
FAA “shall apply” to “contracts of employment of seamen,
railroad employees, or any other class of workers engaged in
foreign or interstate commerce.” 9 U.S.C. § 1. In our en banc
decision in Tenney Engineering, Inc. v. United Electrical
Radio & Machine Workers of America, (U.E.) Local 437, 207
F.2d 450, 452 (3d Cir. 1953), we held that, under the rule of
ejusdem generis,3 the residual clause of this provision only
includes those other classes of workers “who are actually
engaged in the movement of interstate or foreign commerce or
in work so closely related thereto as to be in practical effect
part of it.” In so holding, we reaffirmed our previous decisions
in Amalgamated Association Street Electric Railway & Motor
Coach Employees of America, Local Div. 1210 v. Pennsylvania
foreign or interstate commerce” for purposes of determining
whether the FAA exemption applies.
3
This is a statutory canon through which, “when a
statute sets out a series of specific items ending with a general
term, [the] general term is confined to covering subjects
comparable to the specifics it follows.” Hall St. Assocs., L.L.C.
v. Mattel, Inc., 552 U.S. 576, 586 (2008).
15
Greyhound Lines, 192 F.2d 310 (3d Cir. 1951) (“Greyhound
I”) and Pennsylvania Greyhound Lines v. Amalgamated
Association of Street, Electric Railway & Motor Coach
Employees of America, Division 1063, 193 F.2d 327 (3d Cir.
1952) (per curiam) (“Greyhound II”). Those cases held that
the collective bargaining agreement between a union and bus
line employees qualified as a contract of employment of a class
of workers engaged in interstate commerce. See Greyhound I,
192 F.2d at 313; Greyhound II, 193 F.2d at 328.
In Tenney, we had occasion to reconsider our holdings
in Greyhound I and Greyhound II. Then-Chief Judge Biggs
concurred in the judgment, but proposed that we should
overturn those decisions on two fronts: first, he argued that a
collective bargaining agreement should not be considered a
contract of employment, and second, that the residual clause of
§ 1 should encompass both those engaged in transporting
goods in foreign or interstate commerce and those, such as
manufacturing workers, that are engaged in the production of
goods for interstate commerce. Tenney, F.2d 454–55 (Biggs,
C.J., concurring). We did not adopt either view, but instead
affirmed Greyhound I and Greyhound II, characterizing the bus
line employees as “being directly engaged in the channels of
interstate transportation just as are railroad workers.” Id. at
453 (emphasis added).
Nearly fifty years later, the Supreme Court reached the
same conclusion, and held that the residual clause of § 1 only
operates to exclude from FAA coverage “contracts of
employment of transportation workers” who are engaged in
interstate commerce. Circuit City Stores, Inc. v. Adams, 532
U.S. 105, 118–19 (2001); see also Palcko v. Airborne Express,
Inc., 372 F.3d 588, 593 (3d Cir. 2004) (“[T]he Supreme
Court’s later decision in Circuit City essentially affirmed [our]
16
analysis [in Tenney].”). The Circuit City Court was presented
with the question of whether the residual clause of § 1 applies
to all contracts of employment, or simply those of
transportation workers. To resolve it, it took the textualist
approach we applied in Tenney, reasoning that, because the
phrase “any other class of workers engaged in . . . interstate
commerce” constitutes a residual clause following explicit
references to “seamen” and “railroad employees,” the maxim
of ejusdem generis requires that it be construed to only
embrace “objects similar in nature to those objects enumerated
by the preceding specific words.” Circuit City, 532 U.S. at114–15. As such, the Court held that the residual clause of § 1
only exempts the contracts of employment of transportation
workers. Id. at 119; see also New Prime, 139 S. Ct at 538
(“In Circuit City, we acknowledged that ‘Section 1 exempts
from the [Act] . . . contracts of employment of transportation
workers.’” (citation omitted)).
2. Uber Does Not Convince Us Otherwise
With the foregoing in tow, Uber endeavors to convince
us that the residual clause of § 1 should not apply to
transportation workers sufficiently engaged in interstate
commerce, but rather only those who transport goods in
interstate commerce.
a.
i.
Uber’s preferred course is not the text. On its face,
nothing in the residual clause of § 1 suggests that it is limited
to those who transport goods, to the exclusion of those who
17
transport passengers. In fact, the text indicates the opposite.4
Recall that the provision excludes “contracts of employment of
. . . any other class of workers engaged in foreign or interstate
commerce,” 9 U.S.C. § 1 (emphasis added), and that the
decision to narrow this clause to only transportation workers is
premised on the textual canon of interpretation, ejusdem
generis. In this context, this means that the residual clause of
§ 1 only includes those workers that are engaged in foreign or
interstate commerce in a manner similar to seamen and railroad
employees.
With that in mind, Uber cannot direct us to any
contemporary statutes or sources that define the terms
“seamen” and “railroad employees” to only include those who
transport goods. To the contrary, in its efforts to offer a
rationale for why Congress might have created a carve-out for
4
In this regard, we share our concurring colleague’s
inclination that, standing alone, the term “commerce” does not
inhere a goods-versus-passengers distinction. But ending the
analysis there would be inconsistent with our decision in
Tenney as well as the Supreme Court’s in Circuit City. Neither
turned on the meaning of the term “commerce” in a vacuum.
Indeed, had either done so, the residual clause of § 1 would
likely not have been limited to the employment contracts of
transportation workers. This is obviously not the case, and
ejusdem generis’s invocation is the culprit. See Circuit City,
532 U.S. at 114–16 (rejecting the notion that §§ 1 and 2 are
“coterminous” because “[c]onstruing the residual phrase to
exclude all employment contracts fails to give independent
effect to the statute’s enumeration of the specific categories of
workers which precedes it” (emphasis added)).
18
seamen and railroad employees, the Circuit City Court
referenced two contemporary statutes: the Transportation Act
of 1920 and the Railway Labor Act of 1926. Circuit City, 532
U.S. at 121. Each purported to resolve disputes between
carriers and their employees and, in so purporting, defined
“carrier” to include “sleeping car compan[ies],” which are
railway passenger cars.5 Transportation Act of 1920, Pub. L.
No. 66-152, § 300(1), 41 Stat. 456, 469; Railway Labor Act of
1926, Pub. L. No. 69-257, § 1, 44 Stat. 577, 577 (codified and
later repealed at 45 U.S.C. § 651).
In addition, the Supreme Court acknowledged the broad
sweep of these terms in New Prime. There, New Prime had
argued that the term “contracts of employment” does not
extend to independent contractor agreements. New Prime, 139
S.Ct at 538–39. However, the residual clause of § 1 purports
to apply to the contracts of employment of “any other class of
workers,” which is indisputably broader than those of
employees and suggests that independent-contractor
agreements were to be encompassed. Id. at 542. To overcome
5
The Transportation Act of 1920 and the Railway Labor
Act of 1926 also each defined “carrier” to include “any carrier
by railroad, subject to the Interstate Commerce Act” (“ICA”)
excluding local electrical rails. 41 Stat. 456, § 300(1); 44 Stat.
577, § 1, 46 U.S.C.§ 651 (repealed). The provision of the ICA
in turn applied “to any common carrier or carriers engaged in
the transportation of passengers or property wholly by railroad,
or partly by railroad and partly by water . . .” between states.
ICA, Pub. L. No. 49-104, § 1, 24 Stat. 379, 379 (1887).
19
that, New Prime pointed out that § 1 enumerates the contracts
of employment of “seamen” and “railroad employees,” which
it argued included “only employees in 1925.” Id. (emphasis in
original). The Court rejected this argument, characterizing it
as “rest[ing] on a precarious premise,” because, “[a]t the time
of the [FAA]’s passage,” even “shipboard surgeons who
tended to injured sailors were considered ‘seamen’ . . . .” Id.
at 542–43.6 The Court also referenced the Transportation Act
of 1920’s definition of “railroad employees” and the 1898
Erdman Act’s “equally broad understanding” of the term, the
latter of which encompassed “all persons actually engaged in
any capacity in train operation or train service of any
description.” Id. at 543 n.12 (emphasis added).7
6
The cases that the Court cited in support of this
proposition also clearly contemplated the presence of seamen
on passenger ships. See The Sea Lark, 14 F.2d 201, 201–02
(W.D.Wash.1926) (describing cooks, surgeons, and bartenders
as seamen, and holding that musicians on a boat used for
excursions were seamen); The Buena Ventura, 243 F. 797, 799
(S.D.N.Y. 1916) (discussing a case that “held that a warranty
to carry ‘30 seamen besides passengers’ meant that the 30
seamen included a cook, a surgeon, and other employe[e]s”
(citation omitted)); Allan v. State S.S. Co., 30 N.E. 482, 483–
84 (1892) (discussing the duty arising from Great Britain’s
Passenger Act of 1855 of “defendant[,] a common carrier of
passengers,” to employ a shipboard surgeon with an
appropriate supply of medicines).
7
As the Court explained, the Erdman Act was “enacted
to address disruptive railroad strikes at the end of the 19th
century.” New Prime, 139 S. Ct. at 543.
20
Thus, if anything, a textual approach to the residual
clause of § 1 suggests that it extends to both transportation
workers who transport goods as well as those who transport
passengers.
ii.
Precedent also fails to give Uber succor on this point.
All sides agree that, as it stands, our decisions in Tenney,
Greyhound I, and Greyhound II are unequivocal that the
residual clause of § 1 excludes the contracts of employment of
transportation workers who transport passengers from the
FAA. Equally, Circuit City essentially affirmed our ruling in
Tenney that the residual clause of § 1 of the FAA operates to
exclude the contracts of employment of transportation
workers. And, to some extent, New Prime affirmed our
Greyhound rulings that the term “contract of employment”
includes more than employment contracts in the modern, strict
sense. New Prime Inc., 139 S. Ct. at 539 (explaining that, at
the time of the FAA’s enactment, “dictionaries tended to treat
‘employment’ more or less as a synonym for ‘work[,’ and] . . .
did [not] distinguish between different kinds of work or
workers.”).
b.
So Uber clings to inapposite dicta and legislative
history, to no avail.
i.
It first ventures into Supreme Court dicta from Circuit
City. Specifically, in setting forth the issue presented on
appeal, the Supreme Court briefly reiterated the circuit split
21
between the Ninth Circuit and most other circuits, including
ours. It described most circuits as having concluded that the
residual clause of § 1 only excludes “transportation workers,
defined, for instance, as those workers ‘actually engaged in the
movement of goods in interstate commerce.’” Circuit City,
532 U.S. at 112 (citations omitted). The District Court doubled
down on this characterization, and further asserted that “[t]o
date, virtually every circuit having considered the issue has
found that [the residual clause of § 1] only applies to those
employees who are actually engaged in the movement of goods
as opposed to the transportation of people, in interstate
commerce.” App. 17. On this basis, the District Court sided
with Uber and disregarded our precedent as outdated and
unintentional. See App. 18 n.8 (setting aside Greyhound I and
Greyhound II as “primarily deal[ing] with the issue of whether
a collective bargaining agreement constitutes a contract of
employment—not whether employees who transport people,
as opposed to goods, fall within the scope of [§ 1].”).
We disagree.
As an initial matter, although “we pay due homage to
the Supreme Court’s well-considered dicta as pharoi that guide
our rulings,” our Court is bound by the holdings of Supreme
Court cases, not dicta. IFC Interconsult, AG v. Safeguard Int’l
Partners, LLC., 438 F.3d 298, 311 (3d Cir. 2006) (“IFC”)
(emphasis added). In IFC, we rejected a party’s argument that
the Supreme Court implicitly overturned our prior precedent
because it referred to that decision as being on the wrong side
of a circuit split. Id. at 310–11. Expelled in a footnote, we held
that this was “hardly a well-considered dictum[, as it] merely
illustrat[ed] a circuit split . . . .” Id. at 311.
22
The Circuit City dicta Uber relies on is of the same
token, for it also merely illustrates a circuit split. The language
appears in the section of the Court’s decision in which it
clarifies the issue before it as being whether the residual clause
of § 1 encompasses all contracts of employment, or only those
of transportation workers. Circuit City, 532 U.S. at 112–13.
The Court set out the division among the circuits by explaining
that, “[m]ost Courts of Appeals” had “conclude[d that] the
exclusion provision is limited to transportation workers,
defined, for instance, as those workers ‘actually engaged in the
movement of goods in interstate commerce.’” Circuit City,
532 U.S. at 112 (emphasis added) (internal quotation marks
and citations citation omitted). But the Ninth Circuit
interpreted the provision “to exclude all contracts of
employment from the reach of the FAA.” Id. The Supreme
Court’s only mention of these Courts of Appeals decisions in
the actual analysis is where the Court explains that its decision
that the residual clause of § 1 only extends to transportation
workers was in line with the majority view. See id.
Further, unlike IFC, the Court ultimately determined
that our precedent was on the right side of the split. It cited the
D.C. Circuit’s decision in Cole v. Burns International Security
Services, 105 F.3d 1465, 1471 (D.C. Cir. 1997), as indicating
the position of most Courts of Appeals. See Circuit City, 532
U.S. at 119. Notably, the portion of Cole that the Court
references string cites the prior Courts of Appeals decisions
that held the majority view, including our en banc decision in
Tenney. See Cole, 105 F.3d at 1471. The Supreme Court dicta
relied on by Uber is thus too far removed from what we would
characterize as well-considered. Circuit City did not overrule
our prior decisions.
23
We are also not persuaded that any decisions by our
sister circuits contradict ours in Tenney, Greyhound I, and
Greyhound II. Although Cole determined that the residual
clause of § 1 did not extend to a security guard at a train station
because he was not “engaged in the transportation of goods in
interstate commerce,” none of the Court of Appeals decisions
it cited held that the residual clause of § 1 only extended to
those who transported goods, and, as we set out earlier, Tenney
stood for the exact opposite proposition. Rather, like Cole, our
sister courts have only gone as far as to draw the line where
Circuit City did, despite passing references to goods.
Indeed, in one form or another, all were confronted with
the same question: whether the residual clause of § 1 covered
the contracts of employment of those who were not in the
transportation industry at all. See, e.g., Paladino v. Avnet
Comput. Techs., 134 F.3d 1054, 1061 (11th Cir. 1998)
(involving someone who provided technical support to
computer system salespeople) (Cox, J., concurring); Rojas v.
TK Communs., 87 F.3d 745, 747 (5th Cir. 1996) (involving a
disc jockey at a radio station); Asplundh Tree Expert Co. v.
Bates, 71 F.3d 592, 593–94, 596 (6th Cir. 1995) (involving the
controlling shareholder and chairman of a utility company);
O’Neil v. Hilton Head Hosp., 115 F.3d 272, 273–74 (4th Cir.
1997) (involving a respiratory therapist at a hospital);
Matthews v. Rollins Hudig Hall Co., 72 F.3d 50, 52, 53 n.3 (7th
Cir. 1995) (involving a consultant hired by a brokerage firm);
Miller Brewing Co. v. Brewery Workers Local Union No. 9,
AFL-CIO, 739 F.2d 1159, 1162 (7th Cir. 1984) (involving a
union representing the brewers in Milwaukee); Erving v.
Virginia Squires Basketball Club, 468 F.2d 1064, 1066 (2d Cir.
1972) (involving Julius Erving, the professional basketball
player famously known as “Dr. J.”). See also Lenz v. Yellow
24
Transp., Inc., 431 F.3d 348, 351 (8th Cir. 2005) (involving a
customer service representative for a transportation
company)8; Hill v. Rent-A-Center., Inc., 398 F.3d 1286, 1288
(11th Cir. 2005) (involving an account manager for a furniture
and appliance rental business).
ii.
As for legislative history, Uber returns us to Circuit
City, where the Supreme Court suggested that Congress might
have limited § 1 to seamen and railroad employees because
there were statutory dispute resolution schemes already in
place for such workers. Circuit City, 532 U.S. at 120–21.
Based on this suggestion, Uber argues that the absence of an
alternate dispute resolution scheme for Uber drivers means that
8
Uber relies heavily on Lenz, pointing out its various
references to “goods” in its analysis of whether a customer
service representative for a transportation company was a
transportation worker for purposes of FAA exemption. 431
F.3d at 352–53. Within the same analysis, the Lenz court
quoted another circuit court’s statement that “[n]umerous
courts” have defined “transportation workers” to include “bus
drivers and truck drivers.” Id. at 351 (quoting Am. Postal
Workers Union v. United States Postal Serv., 823 F.2d 466,
473 (11th Cir. 1987)). This seeming contradiction simply
demonstrates that the Lenz court, like all of the courts to
paraphrase Circuit City’s “goods” language in similar
circumstances, did not have the question of passengers versus
cargo before it, and simply used “goods” as a convenient
shorthand to discuss interstate commerce.
25
Congress did not intend § 1 to extend to such workers. The
problems are legion.
For one, prior to venturing into legislative history,
Circuit City makes clear that its decision did not at all rely on
this history, and cautioned against doing so where, as here, a
textual analysis is determinative. Id. at 119 (“As the
conclusion we reach today is directed by the text of § 1, we
need not assess the legislative history of the exclusion
provision.”). It then expressly noted that “the legislative record
on the § 1 exemption is quite sparse,” and comprises of
testimony before a Senate subcommittee, as opposed to
appearing in the official Senate and House Reports or arising
in a debate on the floor of either chamber. Id. at 120 (warning
that legislative history is “far more [problematic] when we
consult sources still more steps removed from the full Congress
and speculate upon the significance of the fact that a certain
interest group sponsored or opposed particular legislation”).
So, pressed by the respondent who argued that the
Court’s holding “attribute[d] an irrational intent to Congress,”
the Court merely speculated that one plausible explanation for
what otherwise seems like an out-of-place limitation is that, as
to these workers, Congress was certain that its commerce
power would extend, since it had previously regulated them.
Id. at 120–121. Notably, “[b]y the time the FAA was passed,
Congress had already enacted federal legislation providing for
the arbitration of disputes between seamen and their
employers.” Id. at 121 (citations omitted); see also New Prime,
139 S. Ct at 537 (characterizing this portion of § 1 as a “very
particular qualification” that may be explained by the
“prescribed alternative employment dispute resolution regimes
for many transportation workers,” which Congress may not
have wished to “unsettle” (internal quotation marks omitted)
26
(quoting Circuit City, 532 U.S. at 121)). If attempting to infer
Congress’ intent from testimony before a subcommittee of one
chamber is “particularly problematic,” Circuit City, 532 U.S.
at 119, doing so from mere judicial speculation is at least
equally imprudent. We refuse to go down that road. Instead,
we read the passage cited by Uber as merely combatting the
argument that there is no plausible explanation for the residual
clause of § 1 to be limited to transportation workers.
Another roadblock for Uber’s view is that Uber has
never framed the issue as whether § 1 extends to Uber drivers
specifically, but rather as whether it extends to transportation
workers who transport passengers. This is what the District
Court focused on. However, Circuit City’s reference to the
dispute resolution schemes in place for “seamen” and “railroad
employees” squarely cuts against the notion that the residual
clause of § 1 only extends to those who transport goods. As
the Court acknowledged in New Prime, the statutes setting
forth some of these schemes covered employees in the broadest
sense, with no distinction between those engaged in
transporting goods versus passengers. See New Prime, 139
S.Ct. at 539–40.
Worse yet, the rationale Circuit City offers as
explaining why the residual clause of § 1 would be tethered to
the enumerated clauses listing “seamen” and “railroad
workers” suggests that the residual clause is not limited to only
those workers for whom a dispute resolution scheme exists.
On this point, Circuit City explains that, “[i]t would be rational
for Congress to ensure that workers in general would be
covered by the provisions of the FAA, while reserving for itself
more specific legislation for those engaged in transportation.”
532 U.S. at 121 (citation omitted). It then proceeds to describe
the 1936 amendment to the Railway Labor Act as such
27
legislation, recognizing that the amendment was to include “air
carriers and their employees.” Id. (citation omitted). Setting
aside that air carriers and their employees are invariably
engaged in the transportation of passengers, this explanation
suggests that air carriers and their employees were covered by
§ 1 even before the Railway Labor Act was amended—that is,
before a dispute resolution scheme existed for them.9
9
Uber attributed a contrary reading to an unreported
Northern District of California decision, Veliz v. Cintas
Corporation, 2004 WL 2452851 (N.D. Cal. 2004). But Veliz
did not suggest that the existence of special arbitration
legislation should be dispositive. Rather, as we conclude, this
decision recognized that the terms “seamen” and “railroad
employees” are broad. See id. at *4 (relying on the Jones Act
and Shipping Commissioners Act of 1872 definition of
“seamen” to conclude that “seamen, whether they are in the
business of goods or not, have been found to be exempted from
arbitration under the FAA § 1”); id. (concluding that the
definition of railroad employees “appears to be broad[,] . . .
because of subsequent judicial interpretation of the term . . . in
other federal statutes, such as the Transportation Act of 1920
and Railway Labor Act of 1926”).
As a result, Veliz merely suggests that the existence of
special arbitration legislation be one of the factors in
determining whether the residual clause of § 1 applies, in
conjunction with a non-exhaustive list of other characteristics
thought to be possessed by seamen and/or railroad employees.
See id. at *7. Some of these characteristics speak to a factual
universe that is beyond our own. See id. (suggesting that courts
also consider whether a strike by the employee would interrupt
28
*****
In the end, we remain unswayed by Uber’s attempt to
drive us towards its imagined sunset. Consistent with our
decisions in Tenney, Greyhound I, and Greyhound II, we hold
that the residual clause of § 1 of the FAA may operate to
exclude from FAA coverage the contracts of employment of
all classes of transportation workers, so long as they are
engaged in interstate commerce, or in work so closely related
thereto as to be in practical effect part of it.
B. The District Court Will Decide in the First Instance
Whether the Class of Workers to Which Singh
Belongs are Engaged in Interstate Commerce
1. Discovery is Warranted
Our analysis stops here. The District Court did not
determine whether Singh’s class of transportation workers is
engaged in interstate commerce or sufficiently related work,
interstate commerce). Interestingly, however, three of the five
Veliz factors that we can determine on the record before us cut
in favor of concluding that the residual clause of § 1 may
extend to drivers like Singh. See id. (consisting of whether “the
vehicle itself is essential to the commercial enterprise of the
defendant-employer,” “[t]he nexus between the employee’s
job and the vehicle,” “[w]hether the employee is employed in
the transportation industry,” “[w]hether the employee is
directly responsible for the transporting of goods in interstate
commerce,” and “[w]hether . . . special arbitration legislation
already existed at the time the FAA was enacted” (internal
quotation marks omitted)).
29
nor could it. At this stage, a court may only make that
determination if the complaint and incorporated documents
suffice. If not, or if so and Singh’s opposition to the motion to
compel arbitration places the issue in dispute, discovery must
be allowed before entertaining further briefing on the question.
The latter course is warranted here. Unlike the issue of
whether Uber drivers transport goods, the pleadings say little
about whether the class of transportation workers to which
Singh belongs are engaged in interstate commerce or
sufficiently related work. The Amended Complaint is devoid
of any facts pertaining to the issue. In addition, Singh’s
submissions in opposition to the motion further place the issue
in dispute—in his affidavit, he avers that he frequently
transported passengers on the highway across state lines,
between New York and New Jersey. Singh Decl. ¶ 28, 29,
App. 34.10
10
Uber sought to counter this averment by representing
to the Court that “the undisputed evidence demonstrates Uber
operates on a localized, city-by-city basis.” Appellee Suppl.
Br. 3–4 (citing App. 36). However, Uber’s only support for
this averment is the affidavit it submitted, which merely states
that “[t]he Uber App is available to riders and transportation
providers in over 150 cities across the country,” Colman Decl.
¶ 5, App. 36, and is beyond the scope of what a court may
consider at this stage.
30
2. We Reject the Parties’ Efforts to Restrict the Engaged-
In-Interstate Commerce Inquiry to Their Contract or
General Knowledge about the Nature of the Work
At argument, each party suggested that there was ample
basis to find in their respective favors. Singh suggested that
we look to what the contract of employment between the
parties contemplates as determinative on the engage-in-
interstate-commerce inquiry. He then argued that the Rasier
Agreement implicitly, but fairly, contemplated a relationship
with drivers across all fifty states, and that encompassed
interstate travel. Uber, on the other hand, suggested that we
look to whether the character of the work performed by the
workers was inherently local (presumably from our general
knowledge about these drivers), and argued that this is the case
with drivers like Singh, even if they cross state lines from time
to time.
We cannot endorse either view. Although § 1 excludes
the “contracts of employment” of certain workers, nothing
suggests that those contracts ought to be dispositive as to what
constitutes those workers. The Supreme Court’s efforts in New
Prime and Circuit City to determine what constituted seamen
and railroad employees are instructive on this point. In both
instances, the Court did not resort to the employment contract,
but rather contemporary dictionaries and statutes that
purported to define these workers. We recognize that the
inquiry regarding § 1’s residual clause asks a court to look to
classes of workers rather than particular workers and is thus
materially different than the Supreme Court’s efforts to define
seamen and railroad employees. But this difference does not
relegate a court to private contracts as its only source. Nor
31
must its analysis hinge on any one particular factor, such as the
local nature of the work.11
The inquiry remains whether Singh belongs to a class of
transportation workers engaged in interstate commerce or in
work so closely related thereto as to be in practical effect part
of it. This inquiry can be informed by various factors. The
District Court may thus be equipped with a wide variety of
sources, including, but not limited to and in no particular order,
the contents of the parties’ agreement(s), information
regarding the industry in which the class of workers is engaged,
information regarding the work performed by those workers,
11
Uber referenced the Eleventh Circuit’s decision in
Hill v. Rent-A-Center, Inc. as supporting its suggestion, and to
argue that a ruling in Singh’s favor would trigger a circuit split.
However, the Eleventh Circuit was express that the residual
clause of § 1 did not apply in Hill because the employee at
issue—an account manager at Rent-A-Center—“[was] not a
transportation industry worker.” 398 F.3d at 1288. This was
premised on the fact that the account manager’s transportation
activities were incidental. Id. at 1289–90. The opposite is true
here—if anything is clear, it is that Uber drivers’ transportation
activities are more than incidental. It is the extent to which
their activities constitute engagement in interstate commerce
that is the question. On this question then, the notion of
incidental interstate travel does us no good. This is because,
even if we definitively drew the line at incidental interstate
travel (rather than viewing that as one, or even a primary
factor), the Amended Complaint and Rasier Agreement do not
provide us with the requisite facts to determine if incidental
travel is in fact what the class of transportation workers at issue
engage in.
32
and various texts—i.e., other laws, dictionaries, and
documents—that discuss the parties and the work.
We will therefore proceed with remanding this issue to
the District Court, along with instruction that it permit
discovery on the question before entertaining further briefing.
C. Remaining Issues
In one way or another, Singh’s arguments that the
arbitration agreement is unenforceable because of the Seventh
Amendment, the NJWHL, and New Jersey law on
unconscionability turn on the FAA’s applicability. We
therefore decline the parties’ invitation for us to opine on these
issues and leave it to the District Court to address any
remaining arguments it deems appropriate, once it determines
whether the FAA applies.
In that vein, we note that the District Court previously
found the delegation clause to be enforceable, and it
recognized that the clause reserved questions of arbitrability
for an arbitrator to decide. See App. 28. But the Court’s
opinion suggests that the only question it viewed as one of
arbitrability was “whether the parties’ disputes [fell] within the
scope of” their agreement to arbitrate. Id. Uber’s opening brief
properly takes issue with this narrow reading of the Rasier
Agreement’s delegation clause. See Rasier Agreement §
15.3(i), App. 56–57 (delegating “disputes arising out of or
relating to interpretation or application of [the] Arbitration
Provision, including enforceability, revocability, or validity”).
We instruct the District Court that, where the FAA is held to
apply, all other questions must be reserved for an arbitrator
unless it is determined that the question cannot be (as in the
33
case of the § 1 exemption/exclusion issue) or is not subject to
an enforceable delegation clause.
IV. CONCLUSION
For all the reasons set forth above, we will vacate the
order entered by the District Court and remand for further
proceedings consistent with this opinion.
34
PORTER, Circuit Judge, concurring in part and concurring in
the judgment.
I agree with the majority’s judgment and much of its
reasoning. I write separately, however, to explain why Uber’s
proposed goods-versus-passenger distinction does not track the
plain language of § 1 of the Federal Arbitration Act (“FAA”),
and to address some issues left on remand.
I
This appeal asks whether § 1’s residual clause—“any
other class of workers engaged in foreign or interstate
commerce”—includes workers who transport other people, or
only workers who transport physical goods. The majority holds
that it includes all transportation workers, no matter who (or
what) they transport. I concur, but I would reach this
conclusion for a different, simpler reason.1
1
The majority asserts that this Court answered this
question long ago, citing three of our decisions from the early
1950s. See Maj. Op. 14–15 (citing Amalgamated Ass’n of St.,
Elec. Ry. & Motor Coach Emp., Local Div. 1210 v. Pa.
Greyhound Lines (“Greyhound I”), 192 F.2d 310 (3d Cir.
1951); Pa. Greyhound Lines v. Amalgamated Ass’n of St., Elec.
Ry. & Motor Coach Emp., Div. 1063 (“Greyhound II”), 193
F.2d 327 (3d Cir. 1952); Tenney Eng’g, Inc. v. United Elec.
Radio & Mach. Workers, (U.E.) 437, 207 F.2d 450 (3d Cir.
1953)). I disagree that these cases answer the specific question
presented here.
Greyhound I addressed whether a collective bargaining
agreement was a “contract of employment” under § 1’s
exemption. 192 F.2d at 313. We held that it was. Id. We also
noted that, “while the situation existing in cases of seamen and
railroad employees clarifies the meaning of the statute[,] its
terms also include ‘any other classes of workers’ in interstate
commerce.” Id. at 313–14. The labor union of bus-line
employees, we said, was “[s]uch a class.” Id. at 314. Three
months later, in Greyhound II, we addressed the same question
for a “similar contract and a similar class of workers,” and
compelled the same result. 193 F.2d at 328.
Tenney addressed the issue decided nearly fifty years
later in Circuit City: “whether [the plaintiff]’s employees, who
1
When we interpret a statute, we start with its text. See,
e.g., Issa v. Sch. Dist. of Lancaster, 847 F.3d 121, 131 (3d Cir.
2017). Section 1 exempts from the FAA’s reach “contracts of
employment of seamen, railroad employees, or any other class
of workers engaged in foreign or interstate commerce.” 9
U.S.C. § 1. On its face, nothing in this text states any sort of
goods-passengers distinction.
Uber suggests that the phrase “engaged in foreign or
interstate commerce” is limited to the transportation of only
are engaged in the manufacture of goods for commerce and
plant maintenance incidental thereto, are to be regarded as a
‘class of workers engaged in foreign or interstate commerce’
within the meaning of the exclusionary clause.” See 207 F.2d
at 452. Presaging the Supreme Court in Circuit City, we held
that the residual clause “include[s] only those other classes of
workers who are likewise engaged directly in commerce[.]” Id.And that meant “only those other classes of workers who are
actually engaged in the movement of interstate or foreign
commerce or in work so closely related thereto as to be in
practical effect part of it.” Id. In so holding, we distinguished
the two Greyhound cases, “the bus line employees in those
cases being directly engaged in the channels of interstate
transportation just as are railroad workers.” Id. at 453.
None of these cases addressed the specific goods-
versus-passengers question presented here. At most, they
might have assumed an answer. But it is nowhere evident that
the parties in those cases ever crossed swords on this issue,
which makes dictum of any discussion or implication from us
on the point. Nor did we state or imply that we had forever
settled the limits of § 1’s residual clause. So although generally
we are bound by earlier precedential decisions of this Court, I
would not turn sixty-year-old assumptions into binding
precedent. See Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356, 363
(2006) (“[W]e are not bound to follow our dicta in a prior case
in which the point now at issue was not fully debated.”); Lopez
v. Monterey Cty., 525 U.S. 266, 281 (1999) (“[T]his Court is
not bound by its prior assumptions.”); Brecht v. Abrahamson,
507 U.S. 619, 630–31 (1993) (holding that when the Court has
“never squarely addressed the issue, and [has] at most assumed
the [legal conclusion], we are free to address the issue on the
merits”).
2
material goods. But that is nowhere in the provision’s plain
language. Instead, Uber would have us impliedly limit the
meaning of “commerce” in § 1 to the transportation of only
physical goods. That argument fails.
First, the term “commerce” is not normally limited to
the transportation of only physical goods, especially when
linked to Congress’s power under the Commerce Clause.2 See
Edwards v. California, 314 U.S. 160, 172 (1941) (“[I]t is
settled beyond question that the transportation of persons is
‘commerce’, within the meaning of that provision.”); United
States v. Hill, 248 U.S. 420, 423 (1919) (“[C]ommerce has
been held to include the transportation of persons and property
no less than the purchase, sale and exchange of
commodities.”); Hoke v. United States, 227 U.S. 308, 320
(1913) (“Commerce among the states, we have said, consists
of intercourse and traffic between their citizens, and includes
the transportation of persons and property.”).3
Second, Uber’s interpretation would give “commerce”
a different meaning in § 1 than it has in § 2. The latter invokes
Congress’s Commerce Clause power to set the broad reach of
2
This was the dominant understanding of “commerce”
when Congress passed the FAA in 1925. See, e.g., Commerce,
Bouvier’s Law Dictionary & Concise Encyclopedia (8th ed.
1914) (“The term ‘commerce’ comprehends more than a mere
exchange of goods; it embraces commercial intercourse in all
its branches, including transportation of passengers[.]”);
Commerce, Black’s Law Dictionary (2d ed. 1910)
(“Intercourse by way of trade and traffic between different
peoples or states and the citizens or inhabitants thereof,
including … the transportation of persons as well as of goods,
both by land and by sea.”); Henry C. Black, Handbook of
American Constitutional Law § 104, at 189 (2d ed. 1897)
(“[Commerce] is not limited to the transportation of freight, but
extends equally to passenger traffic.”).
3
In fact, the issue here is analogous to that presented
long ago in Gibbons v. Ogden, 22 U.S. 1 (1824). There, the
Supreme Court held that “commerce” is more than the mere
“interchange of commodities,” but includes passenger
transport by steamboat. See id. at 189.
3
the FAA: “A written provision in … a contract evidencing a
transaction involving commerce to settle by arbitration a
controversy….” 9 U.S.C. § 1 (emphasis added); see Allied-
Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 277 (1995)
(holding that, in § 2, the phrase “involving commerce” shows
Congress’s “intent to exercise [its] commerce power to the
full”). Section 1, in turn, carves out certain contracts from the
FAA’s scope: “nothing herein contained shall apply to
contracts of employment of … any other class of workers
engaged in … interstate commerce.” 9 U.S.C. § 1 (emphasis
added).
The Supreme Court has ascribed different meanings to
the modifiers “involving” in § 2 compared with “engaged in”
in § 1—the latter reflecting a “narrower” exercise of
Congress’s power—but the nature of the “commerce” in both
sections is the same. See Circuit City Stores, Inc. v. Adams, 532
U.S. 105, 115, 118 (2001) (“The plain meaning of the words
‘engaged in commerce’ is narrower than the more open-ended
formulations ‘affecting commerce’ and ‘involving
commerce.’” (citation omitted)). Indeed, it must be the same
because the Court held the subject constant to interpret the
differing modifiers. See id. at 115–17. And rightly so, given
that identical words in the same statute usually have identical
meanings. See United States v. EME Homer City Generation,
L.P., 727 F.3d 274, 294 (3d Cir. 2013) (citing IBP, Inc. v.
Alvarez, 546 U.S. 21, 34 (2005)); United States v. Torres, 383
F.3d 92, 102 (3d Cir. 2004).
Uber concedes (as it must) that “commerce” in § 2
includes the transportation of passengers. (Otherwise, Uber
would be unable to invoke the FAA in the first place.) Having
thus conceded, Uber undermines its contention that
“commerce” in § 1 does not also include passenger-
transporting activities. In short, the plain language of the FAA
does not allow for the implied distinction Uber tries to draw.
II
After deciding that passenger-transporting drivers may
fit within § 1’s exemption, the majority declares that its
analysis has ended. Yet the majority continues in section
III.B.2 to discuss in detail aspects of the issue that we are
4
remanding: whether Singh belongs to a “class of workers
engaged in … interstate commerce.” 9 U.S.C. § 1. The
majority says this question “can be informed by various
factors,” and directs the District Court to permit discovery
“before entertaining further briefing.” Maj. Op. 29. In my
view, this discussion is unmoored from relevant precedent,
tends to undermine settled principles of arbitration, and may
unnecessarily cloud the remaining issues on remand. So I do
not join section III.B.2 of the majority’s opinion, but write
separately to make two points.
First, I disagree that the parties must jump right into
discovery on remand. The Supreme Court has repeatedly
emphasized that “[t]he [FAA] calls for a summary and speedy
disposition of motions or petitions to enforce arbitration
clauses.” Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 29 (1983); see id. at 22 (noting “Congress’s
clear intent, in the [FAA], to move the parties to an arbitrable
dispute out of court and into arbitration as quickly and easily
as possible.”). In light of this overarching goal and the parties’
clear agreement to arbitrate their disputes, if there exists a valid
alternative basis on which the District Court could compel
arbitration, it may be more efficient to decide that question
first, before allowing discovery on the § 1 issue. See, e.g.,
Palcko v. Airborne Exp., Inc., 372 F.3d 588, 596 (3d Cir. 2004)
(enforcing FAA-exempt arbitration agreement under state
law); Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465, 1472 (D.C.
Cir. 1997) (“[W]e have little doubt that, even if an arbitration
agreement is outside the FAA, the agreement still may be
enforced and the arbitrator’s award still may be subject to
judicial review.”); Valdes v. Swift Transp. Co., Inc., 292 F.
Supp. 2d 524, 528–29 (S.D.N.Y. 2003) (collecting cases);
Mason-Dixon Lines, Inc. v. Local Union No. 560, Int’l Bhd. of
Teamsters, 443 F.2d 807, 809 (3d Cir. 1971) (“In our view, the
effect of Section 1 is merely to leave the arbitrability of
disputes in the excluded categories as if the Arbitration Act had
never been enacted.”).
Second, our decision here does not allow for wide-
ranging discovery whenever the § 1 exemption is at issue. The
majority seems equivocal on this point—describing the
relevant inquiry as both “restricted” and informed by “a wide
variety of sources.” Maj. Op. 11, 29. But abundant precedent
5
makes clear that any discovery on factual predicates to
arbitration must be a narrow, focused examination. See, e.g.,
Moses H. Cone, 460 U.S. at 22–23 (allowing “only restricted
inquiry into factual issues”); Guidotti v. Legal Helpers Debt
Resolution, LLC, 716 F.3d 764, 774 (3d Cir. 2013) (allowing
only “limited discovery” on a “narrow issue” (internal
quotation marks and citation omitted)); cf. Blair v. Scott
Specialty Gases, 283 F.3d 595, 609 (3d Cir. 2002)
(“[D]iscovery is ordinarily not undertaken at such an early
stage of a proceeding that is governed by an arbitration
agreement.”).
The need to limit any pre-arbitration discovery is
amplified here because of the shifted burden of proof and the
open legal question of what it means to belong to a “class of
workers engaged in … interstate commerce” under § 1. In
Guidotti, for example, the discovery focused on whether the
parties had specifically agreed to the arbitration clause at issue.
That was a well-defined factual question governed by definite
state-law contract principles. See 716 F.3d at 780. In that and
similar situations, the burden of proof stays with the party
seeking arbitration, which provides a natural incentive for
efficient discovery and motions practice. See, e.g., Ashbey v.
Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir.
2015).
Here, by contrast, things are reversed. Singh bears the
burden on remand to show why the District Court should
should not compel arbitration under the FAA, which may
create inefficient incentives in discovery. See Green Tree Fin.
Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000) (“[T]he party
resisting arbitration bears the burden of proving that the claims
at issue are unsuitable for arbitration.”); Gay v. CreditInform,
511 F.3d 369, 379 (3d Cir. 2007); Johnson v. W. Suburban
Bank, 225 F.3d 366, 370–71 (3d Cir. 2000). And the contours
of the § 1 question—whether Singh belongs to a “class of
workers engaged in … interstate commerce”—remain
undefined: Singh has not yet attempted to define the relevant
§ 1 “class of workers,” and his affidavit that triggers our
extension of Guidotti asserts only that he drove passengers
from the Newark Airport to New York.
6
For these reasons, although I concur in the judgment
and agree with much of the majority opinion, I do not join
section III.B.2.
7