Virginia Van Dusen v. Swift Transportation Co , 830 F.3d 893 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
VIRGINIA VAN DUSEN; JOSEPH No. 15-15257
SHEER; JOHN DOE 1, individually
and on behalf of all other D.C. No.
similarly situated persons, 2:10-cv-00899-JWS
Plaintiffs-Appellees,
v. OPINION
SWIFT TRANSPORTATION
COMPANY INCORPORATED;
INTERSTATE EQUIPMENT
LEASING INCORPORATED; CHAD
KILLIBREW; JERRY MOYES,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Arizona
John W. Sedwick, District Judge, Presiding
Argued and Submitted November 16, 2015
San Francisco, California
Filed July 26, 2016
Before: Sidney R. Thomas, Chief Judge and Sandra S.
Ikuta and Andrew D. Hurwitz, Circuit Judges.
2 VAN DUSEN V. SWIFT TRANSPORTATION
Opinion by Chief Judge Thomas;
Concurrence by Judge Ikuta
SUMMARY*
Arbitration / Appellate Jurisdiction
Dismissing an interlocutory appeal from a district court’s
case management order in a labor law case, the panel held
that the Federal Arbitration Act did not grant it jurisdiction to
hear the appeal.
In a prior appeal, the court of appeals held that the district
court, rather than an arbitrator, must decide whether the
dispute was exempt from arbitration under 9 U.S.C. § 1,
which provides that the Federal Arbitration Act does not
apply to contracts of workers engaged in foreign or interstate
commerce. On remand, the district court issued a scheduling
order for discovery and a trial on the § 1 issue.
The panel held that the district court’s order was not final
and was not subject to review under the collateral order
doctrine. In addition, the order was not reviewable under
9 U.S.C. § 16(a)(1)(B) on the basis that it had the practical
effect of denying a motion to compel arbitration.
Concurring, Judge Ikuta agreed with the majority’s
holding that the court lacked jurisdiction to hear an
interlocutory appeal from the district court’s case
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
VAN DUSEN V. SWIFT TRANSPORTATION 3
management order. She wrote that for the reasons explained
in her dissent to the panel’s other opinion in this matter, Van
Dusen v. Swift, No. 15-70592, — F.3d — (9th Cir. 2016), the
defendant nonetheless was entitled to a writ of mandamus.
COUNSEL
Ronald J. Holland (argued), Ellen M. Bronchetti, and Paul S.
Cowie; Sheppard, Mullin, Richter & Hampton LLP, San
Francisco, California; for Petitioners-Appellants.
Edward Tuddenham (argued), New York, New York; Dan
Getman and Lesley Tse, Getman & Sweeney PLLC, New
Paltz, New York; Jennifer Kroll and Susan Martin, Martin &
Bonnett PLLC, Phoenix, Arizona; for Plaintiffs-Appellants.
OPINION
THOMAS, Chief Judge:
We must determine whether the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 1 et seq., grants us jurisdiction to hear an
interlocutory appeal from a district court’s case management
order. We conclude it does not, and we dismiss the appeal for
lack of appellate jurisdiction.
I
Virginia Van Dusen and Joseph Sheer are interstate truck
drivers who entered into contracts with Swift Transportation
Company, Inc. (“Swift”) and Interstate Equipment Leasing,
Inc. (“Interstate”). Van Dusen and Sheer each agreed to drive
4 VAN DUSEN V. SWIFT TRANSPORTATION
trucks, Interstate agreed to finance the trucks, and Swift
agreed to pay Van Dusen and Sheer for their services. The
contracts designated Van Dusen and Sheer as independent
contractors, not employees. Each contract also contained a
clause to arbitrate “[a]ll disputes and claims arising under,
arising out of or relating to [the] [a]greement[s].”
Van Dusen eventually terminated her contract with Swift.
Swift separately terminated its contract with Sheer. Van
Dusen and Sheer (collectively “Van Dusen”) later filed a
collective and class action complaint against Swift, Interstate,
and senior executives at both companies (collectively
“Swift”). The complaint alleged that Swift misclassified Van
Dusen and others as independent contractors. The complaint
also alleged violations of the Fair Labor Standards Act,
29 U.S.C.A. § 201 et seq., the California Labor Code, New
York labor laws, state and federal minimum wage laws, and
laws prohibiting forced labor, among other claims.
The lawsuit was filed in the Southern District of New
York and later transferred to the District of Arizona. In
Arizona, Swift moved to compel arbitration and dismiss or
stay the district court action. Van Dusen objected that § 1 of
the FAA prevented the district court from compelling
arbitration. That section provides that the FAA does not
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. The district court
granted Swift’s motion to compel arbitration. The court also
determined that an arbitrator should decide whether the § 1
exemption applies to the parties’ agreement. The court
subsequently denied Van Dusen’s motion to reconsider or
certify an appeal.
VAN DUSEN V. SWIFT TRANSPORTATION 5
Van Dusen petitioned this Court for a writ of mandamus.
In re Van Dusen, 654 F.3d 838, 840 (9th Cir. 2011) (“Van
Dusen I”). Van Dusen argued that the district court
committed clear error when it referred the § 1 issue to the
arbitrator—that the issue should properly be decided by a
court. Id. We agreed with Van Dusen that the “the best
reading of the law requires the district court to assess whether
a [§] 1 exemption applies before ordering arbitration.” Id. at
846. This determination resolved the underlying legal
question. However, we concluded that the district court did
not clearly err because of “the lack of controlling precedent,”
which “render[ed] the question relatively close.” Id. The
petition was denied. Id.
Following Van Dusen I, Van Dusen moved for
reconsideration of the order compelling arbitration, or, in the
alternative, to certify an interlocutory appeal. The district
court denied the portion of the motion requesting
reconsideration, noting that it “continue[d] to believe its
original opinion” referring the § 1 inquiry to an arbitrator was
“correct, particularly in light of the fact that the parties agreed
to arbitrate questions of arbitrability.” The district court then
certified an interlocutory appeal.
On appeal, we clarified that the district court—not an
arbitrator—must decide the § 1 issue. Van Dusen v. Swift
Transp. Co., 544 F. App’x 724 (9th Cir. 2013) (“Van Dusen
II”). We concluded that the position in Van Dusen I was law
of the case and binding on the district court. Id. at 724. We
remanded with instructions to “determine whether the
Contractor Agreements between each appellant and Swift are
exempt under § 1 of the FAA before . . . consider[ing] Swift’s
motion to compel.” Id. Swift petitioned the Supreme Court
6 VAN DUSEN V. SWIFT TRANSPORTATION
for a writ of certiorari and was denied. Swift Transp. Co. v.
Van Dusen, 134 S. Ct. 2819 (2014).
The district court then set out to determine the § 1
exemption issue. It issued a scheduling order for discovery
and a trial to “determin[e] issues relating to plaintiffs’ status
as employees or independent contractors.” Swift moved for
an order to stay proceedings, including discovery, and for an
order setting a briefing schedule to determine the § 1 issue
without resort to discovery and trial.1 The court denied
Swift’s motion. It also concluded that the order was not
immediately appealable. This interlocutory appeal followed.
II
Pursuant to 28 U.S.C. § 1291, we only have appellate
jurisdiction over “final decisions” of district courts. Id.
Thus, with certain exceptions, we lack appellate jurisdiction
over interlocutory appeals from orders of the district court
issued before final judgment. Johnson v. Jones, 515 U.S.
304, 309 (1995). Congress, of course, may by statute invest
us with jurisdiction over certain interlocutory orders. District
courts may certify a decision for interlocutory appeal
pursuant to 28 U.S.C. § 1292(b) or certify a summary
judgment order as final under Fed. R. Civ P. 54(b).
The Supreme Court has also confirmed our appellate
jurisdiction over “a small category of decisions that, although
they do not end the litigation, must nonetheless be considered
1
Swift fashioned its motion as a “Motion to Determine Appropriate
Standard for Resolution of the Section 1 Exemption Issue.” The motion
requested that the district court “set a briefing schedule to determine the
section 1 exemption without resort to merits discovery and two trials.”
VAN DUSEN V. SWIFT TRANSPORTATION 7
‘final.’” Swint v. Chambers Cty. Comm’n, 514 U.S. 35, 42
(1995). This “collateral order doctrine” is a “practical
construction” of the concept of finality in 28 U.S.C. § 1291.
Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S.
863, 867 (1994) (quoting Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541, 546 (1949)). “That small category
includes only decisions that are conclusive, that resolve
important questions separate from the merits, and that are
effectively unreviewable on appeal from the final judgment
in the underlying action.” Swint, 514 U.S. at 42 (citing
Cohen, 337 U.S. at 546). In turn, we have given the concept
of “finality” the following practical construction: “A ruling is
final for purposes of § 1291 if it (1) is a full adjudication of
the issues, and (2) clearly evidences the judge’s intention that
it be the court’s final act in the matter.” Nat’l Distrib. Agency
v. Nationwide Mut. Ins. Co., 117 F.3d 432, 433 (9th Cir.
1997) (internal quotation marks omitted).
Here, we are presented with an interlocutory appeal from
a scheduling and case management order. The order was not
“a full adjudication of the issues,” nor did it “clearly
evidence[] the judge’s intention that it be the court’s final act
in the matter.” Id. The order was not “conclusive”; it did not
“resolve important questions separate from the merits”; nor
did it involve a decision “that [is] effectively unreviewable on
appeal from the final judgment in the underlying action.”
Swint, 514 U.S. at 42. Much to the contrary, it was a routine
order following remand from this Court establishing a
procedure for pre-discovery disclosure, and a schedule for
discovery, the filing of dispositive and nondispositive
motions, and a trial, if necessary. Thus, it does not fall within
that “small category” of orders subject to interlocutory review
under the collateral order doctrine.
8 VAN DUSEN V. SWIFT TRANSPORTATION
The district court did not certify the order for appeal.
Consequently, we are confronted with the remaining question
of whether Congress has by statute created an exception to
28 U.S.C. § 1291, and vested us with appellate jurisdiction
over this type of order.
Congress has, to be sure, granted us appellate jurisdiction
over an order denying a petition to compel arbitration.
9 U.S.C. § 16(a)(1)(B). However, the district court order did
not deny the petition to compel arbitration; it simply
established a case management plan for resolution of the § 1
exemption issue at a later date. We therefore lack appellate
jurisdiction under 9 U.S.C. § 16(a)(1)(B).
Swift argues that the district court’s scheduling order “has
the practical effect of denying a motion to compel,” giving
rise to jurisdiction. Swift’s argument is that discovery and
trial will cause the district court to make determinations on
merits issues in the underlying dispute. These
determinations, Swift claims, will have a preclusive effect on
an arbitrator if the case is ultimately sent to arbitration. As a
result, Swift argues, resolution on briefing alone is less
hostile to arbitration. And because the FAA favors
arbitration, the district court must use briefing to decide the
§ 1 issue. So when the district court denied Swift’s motion
proposing briefing, Swift says, it effectively denied a motion
to compel arbitration—giving rise to jurisdiction under
9 U.S.C. § 16(a)(1)(B).
This argument is unpersuasive. First, the district court
has expressly deferred making a decision on the motion to
compel arbitration. One cannot construe a case management
order designed to lead to a decision on a motion to compel
arbitration as a decision to deny the motion. The district
VAN DUSEN V. SWIFT TRANSPORTATION 9
court was simply establishing a decision-making mechanism,
not deciding the question on the merits.
Second, the text of the provision that Swift relies on is
plain: “[a]n appeal may be taken from . . . an order . . .
denying a petition under section 4 of this title to order
arbitration to proceed.” 9 U.S.C. § 16(a)(1)(B). In this case,
there was no order denying a petition to compel arbitration.
Jurisdiction does not obtain under the statute.
Third, we have never recognized an “effective denial”
theory that supplements appellate jurisdiction under 9 U.S.C.
§ 16. We interpret the text of FAA, including § 16, according
to its ordinary meaning. Green Tree Fin. Corp.-Ala. v.
Randolph, 531 U.S. 79, 86 (2000) (interpreting term in § 16
of the FAA according to its “ordinary meaning” where not
otherwise defined (citing Evans v. United States, 504 U.S.
255, 259–60 (1992)). In so doing, we do not add to the
jurisdictional provisions set forth by Congress. It is well
established that “statutes authorizing appeals are to be strictly
construed.” Office of Sen. Mark Dayton v. Hanson, 550 U.S.
511, 515 (2007) (quoting Perry Educ. Ass’n. v. Perry Local
Educators’ Assn., 460 U.S. 37, 43 (1983)); Stoneridge Inv.
Partners, LLC v. Sci.-Atlanta, 552 U.S. 148, 164 (2008) (it is
an “established principle that the jurisdiction of the federal
courts is carefully guarded against expansion by judicial
interpretation” (quoting Am. Fire & Cas. Co. v. Finn,
341 U.S. 6, 17 (1951)) (internal quotations omitted)). We
cannot expand the scope of § 16(a)(1)(B) to embrace an
“effective denial” theory based on an unrelated order.
Fourth, Swift identifies no case in which a federal court
of appeal assumes § 16(a)(1)(B) jurisdiction without an order
denying a petition to compel arbitration. In four of the five
10 VAN DUSEN V. SWIFT TRANSPORTATION
cases Swift cites, the district court denied a motion to
compel.2 Jurisdiction under § 16(a)(1)(B) makes sense in
those cases. In the fifth case, the district court ordered
arbitration and the court of appeals assumed jurisdiction
based on a separate provision of § 16.3 None of Swift’s
authorities support the proposition it advances today: that
§ 16(a)(1)(B) permits an appeal from a denial of a motion to
compel, where no denial actually exists.
Fifth, an “effective denial” theory is inconsistent with the
Supreme Court’s decision in Green Tree, 531 U.S. 79. Green
Tree establishes that an order compelling arbitration and
dismissing all of the claims before a district court may be
2
Bushley v. Credit Suisse First Boston, 360 F.3d 1149, 1151 (9th Cir.
2004) (“The district court . . . order . . . specif[ied] that [party’s] petition
to compel arbitration before the NASD was denied”); Microchip Tech.
Inc. v. U.S. Philips Corp., 367 F.3d 1350, 1353 (Fed. Cir. 2004) (“The
district court denied Philips’ motion to compel arbitration”); Sandvik AB
v. Advent Int’l Corp., 220 F.3d 99, 102 (3d Cir. 2000) (“Advent Funds
then moved to compel arbitration under the FAA. The District Court
refused . . . ”); Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 363
(7th Cir. 1999) (“the district court refused to compel arbitration” and
“there is no doubt from the record that the district court denied the
defendant’s motion and clearly meant to foreclose arbitration”).
3
Stedor Enterprises, Ltd. v. Armtex, Inc., 947 F.2d 727, 729 (4th Cir.
1991) (“the district court dismissed Stedor’s complaint and ordered the
parties to proceed with arbitration”). The Fourth Circuit determined that
jurisdiction obtained under a separate provision, § 16(a)(3), which permits
appeals following a final order. And though Stedor contains the language
that “an order that favors litigation over arbitration . . . is immediately
appealable,” id. at 730, the Supreme Court later rejected this argument in
Green Tree, 531 at 86 (Noting, for example, that “[s]ection 16(a)(3) . . .
preserves immediate appeal of any ‘final decision with respect to an
arbitration,’ regardless of whether the decision is favorable or hostile to
arbitration.”).
VAN DUSEN V. SWIFT TRANSPORTATION 11
appealed under § 16(a)(3). Id. at 89. Crucially, the Court
clarified that appeals under the FAA are limited to the
specific set of orders and decisions specified in § 16. Id. at
84 (“Section 16 of the Federal Arbitration Act . . . governs
appellate review of arbitration orders.”). The Court declined
to adopt the view that, based on the FAA’s policy, the Act
permits the appeal of any interlocutory order hostile to
arbitration, but prevents the appeal of interlocutory any order
that favors it. Id. at 86. To the contrary, appeals under the
Act are limited to those specified in § 16.
Swift makes essentially the same argument here that the
Court rejected in Green Tree: that it may invoke the policy of
the FAA to expand the scope of appellate jurisdiction in § 16.
Not so, says Green Tree. Review under § 16 is limited to
those types of orders specified in plain text of that section. A
contrary result would be inconsistent with Green Tree’s
statement that “[s]ection 16 . . . governs appellate review of
arbitration orders,” id. at 84, and with the prohibition against
judicial expansion of statutory grants of appellate jurisdiction.
Following Green Tree, other circuits have affirmed that
the scope of 9 U.S.C. § 16 is confined to the specific, limited
set of orders set forth in the statute. The Tenth Circuit has
concluded that “9 U.S.C. § 16 directs us to exercise
jurisdiction only over a specific set of orders.” Grosvenor v.
Qwest Corp., 733 F.3d 990, 999 (10th Cir. 2013). In that
case, the court concluded that a district court’s decision to go
to trial on a formation issue under § 4 of the FAA “cannot
mean that every subsequent order is immediately appealable.”
Id. The Tenth Circuit has also rejected the view that § 16
jurisdiction arises from “all motions founded at least in part
on arbitration agreements.” Conrad v. Phone Directories Co.,
585 F.3d 1376, 1382 (10th Cir. 2009). Instead, appellate
12 VAN DUSEN V. SWIFT TRANSPORTATION
jurisdiction under § 16 only “encompass[es] motions brought
explicitly pursuant to the FAA or those in which it is plainly
apparent that the applicant seeks only arbitration.” Id. The
First Circuit reached a similar conclusion in Campbell v. Gen.
Dynamics Gov’t Sys. Corp., 407 F.3d 546, 551 (1st Cir.
2005), where it held that because “[§] 16(a) clearly
enumerates the types of orders covered by the FAA’s various
jurisdictional shelters,” it is impermissible “to treat that
provision as a general mechanism permitting the immediate
appeal of any order hostile to arbitration.” The D.C. Circuit
has likewise rejected the argument that “any order hostile to
arbitration may be immediately appealed” because such an
interpretation “would significantly and improperly expand”
the scope of 9 U.S.C. § 16. Bombardier Corp. v. Nat’l R.R.
Passenger Corp., 333 F.3d 250, 254 (D.C. Cir. 2003).
We agree that appellate jurisdiction under 9 U.S.C.
§ 16(a) is confined to the types of orders that are specified in
the statute. There is no “effective denial” principle through
which a litigant can bootstrap its way into appellate
jurisdiction. An actual order denying a petition to compel
arbitration is required when a party invokes 9 U.S.C.
§ 16(a)(1)(B).
In sum, this is not an appeal from a “motion[] explicitly
brought under the FAA or unmistakably invoking its
remedies.” Conrad, 585 F.3d at 1382. Swift instead seeks
review of the district court’s case management order.
Because the district court did not “den[y] a petition . . . to
order arbitration to proceed,” there is no jurisdiction under
9 U.S.C. § 16(a)(1)(B).
VAN DUSEN V. SWIFT TRANSPORTATION 13
Absent statutory authorization, district court certification,
or application of the collateral doctrine, we lack appellate
jurisdiction over the appeal and must dismiss it.4
DISMISSED.
IKUTA, Circuit Judge, concurring:
The majority has issued two separate opinions in this
case. This opinion holds that we lack jurisdiction to hear an
interlocutory appeal from the district court’s case
management order. I agree with this conclusion.
But the majority has issued a second opinion denying
Swift’s petition for a writ of mandamus, see Van Dusen v.
Swift, No. 15-70592, — F.3d — (9th Cir. 2016), even though
the district court has made repeated errors and is forcing
Swift to litigate a matter that it may be entitled to arbitrate.
For the reasons explained in my dissent to that opinion, I
would hold that the extraordinary remedy of mandamus is
warranted in this case.
4
The motions for judicial notice of the existence of various district court
documents are GRANTED. See Docket Nos. 26, 37, 40.