Swift Transportation Co. v. Usdc-Azp , 830 F.3d 913 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
IN RE SWIFT TRANSPORTATION No. 15-70592
COMPANY INCORPORATED;
INTERSTATE EQUIPMENT D.C. No.
LEASING INCORPORATED; CHAD 2:10-cv-00899-JWS
KILLIBREW; JERRY MOYES,
OPINION
SWIFT TRANSPORTATION
COMPANY INCORPORATED;
INTERSTATE EQUIPMENT
LEASING INCORPORATED; CHAD
KILLIBREW; JERRY MOYES,
Petitioners,
v.
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA,
PHOENIX,
Respondent,
VIRGINIA VAN DUSEN,
individually and on behalf of all
other similarly situated persons;
JOSEPH SHEER, individually and
on behalf of all other similarly
situated persons; JOSE
MOTOLINA; VICKII SCHWALM;
PETER WOOD,
Real Parties in Interest.
2 IN RE SWIFT TRANSPORTATION
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.
Per Curiam Opinion;
Concurrence by Judge Hurwitz;
Dissent by Judge Ikuta
SUMMARY*
Arbitration / Mandamus
The panel denied a petition for a writ of mandamus in a
labor law case in which the defendants sought to compel
arbitration.
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
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
IN RE SWIFT TRANSPORTATION 3
commerce. On remand, the district court issued a scheduling
order for discovery and a trial on the § 1 issue.
In a companion appeal, Van Dusen v. Swift, No.
15-15257, the panel held that it lacked jurisdiction to review
the district court’s interlocutory scheduling order. Defendants
also sought a writ of mandamus ordering the district court to
vacate its order and decide defendants’ petition to compel
arbitration without discovery or trial.
The panel denied the mandamus petition because
defendants had a remedy in urging their position before the
district court in dispositive motions and in the form of direct
appeal following the issuance of a final order. Normal
litigation expense did not constitute sufficient prejudice to
warrant relief, and the discovery cost had already been
incurred. And, most crucially, the district court’s order was
not clearly erroneous.
Concurring, Judge Hurwitz wrote that the extraordinary
remedy of a writ of mandamus was not warranted.
Dissenting, Judge Ikuta wrote that a writ of mandamus
should be granted because the district court clearly erred in
ordering discovery, pretrial proceedings, and trial rather than
addressing the only legal issue before it¯whether the
workers’ contract was a “contract of employment” for
purposes of § 1 of the Federal Arbitration Act. She wrote that
other factors also weighed in favor of granting the writ.
4 IN RE SWIFT TRANSPORTATION
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
PER CURIAM:
In this companion case to Van Dusen v. Swift, No. 15-
15257 (“Van Dusen III”), Swift Transportation Company,
Inc., Interstate Equipment Leasing, Inc., and senior
executives at both companies (collectively “Swift”) seek a
writ of mandamus ordering the district court to vacate its case
management order and decide the petition to compel
arbitration without discovery or trial. We deny the petition
for a writ of mandamus.
I
The factual background of this case is set forth in some
detail in the opinion in Van Dusen III. In short, two interstate
truckers (collectively “Van Dusen”) entered into contracts
with Swift that designated them as independent contractors
and also contained a clause requiring them to arbitrate “[a]ll
disputes and claims arising under, arising out of or relating to
[the] [a]greement[s].” After contract termination, Van Dusen
IN RE SWIFT TRANSPORTATION 5
filed a collective and class action complaint against Swift
alleging that Swift misclassified Van Dusen and others as
independent contractors. Swift moved to compel arbitration
and dismiss or stay the district court action. Van Dusen
objected that § 1 of the Federal Arbitration Act prevented the
district court from compelling arbitration. The district court
granted Swift’s motion to compel arbitration. The court also
determined that an arbitrator should decide whether the § 1
exemption applies. The court subsequently denied Van
Dusen’s motion to reconsider or certify an appeal. 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”). In Van Dusen I, we held that the district court was
required to assess whether a § 1 exemption applies before
ordering arbitration. Id. at 846. We denied the mandamus
petition, holding that the district court had not committed
clear error because there was no controlling precedent. Id.
On remand, the district court denied Van Dusen’s motion for
reconsideration, reiterated its original opinion, and certified
an interlocutory appeal.
On appeal, we applied law of the case as determined by
Van Dusen I, and held that the district court, not an arbitrator,
should decide the § 1 exemption in the first instance. Van
Dusen v. Swift Transp. Co., 544 F. App’x 724 (9th Cir. 2013)
(“Van Dusen II”). 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. at 724. On
remand, the district court issued a case management order
that included a discovery schedule, motion deadlines, and set
a potential trial date. Swift moved the court for a stay of
proceedings and for an order determining the § 1 issue
without discovery or trial. Swift filed an interlocutory appeal,
6 IN RE SWIFT TRANSPORTATION
which we dismissed for lack of jurisdiction in Van Dusen III,
and this petition for a writ of mandamus.
II
“The writ of mandamus is a drastic and extraordinary
remedy reserved only for really extraordinary causes.” Van
Dusen I, 654 F.3d at 840 (quoting Ex Parte Fahey, 332 U.S.
258, 259–60 (1947) (internal quotations omitted)). Issuance
of the writ is “in large measure . . . a matter of the court’s
discretion.” Johnson v. Consumerinfo.com, Inc., 745 F.3d
1019, 1023 (9th Cir. 2014) (quoting United States v.
Sherman, 581 F.2d 1358, 1361 (9th Cir. 1978) (internal
quotations omitted)). We weigh five factors to determine
whether mandamus relief is appropriate. Bauman v. U.S.
Dist. Ct., 557 F.2d 650, 654–55 (9th Cir. 1977); see also In re
United States, 791 F.3d 945, 955 (9th Cir. 2015) (reiterating
Bauman factors). We consider whether:
(1) The party seeking the writ has no other
adequate means, such as a direct appeal, to
attain the relief he or she desires. (2) The
petitioner will be damaged or prejudiced in a
way not correctable on appeal. (This guideline
is closely related to the first.) (3) The district
court’s order is clearly erroneous as a matter
of law. (4) The district court’s order is an oft-
repeated error, or manifests a persistent
disregard of the federal rules. (5) The district
court’s order raises new and important
problems, or issues of law of first impression.
Bauman, 557 F.2d at 654–55 (citations omitted).
IN RE SWIFT TRANSPORTATION 7
These “factors are not exhaustive . . . and should not be
mechanically applied.” In re United States, 791 F.3d at 955
(internal quotations and citations omitted).
The first Bauman factor is whether there is any other
adequate means, such as a direct appeal, to attain the relief
the petitioner desires. Here, Swift has the remedy of direct
appeal of the district court’s final order denying or
compelling arbitration. The district court has not decided that
question, and it is by no means certain that the district court
will not ultimately compel arbitration on the basis of the
contractor agreements alone. The case management order
sets forth dates for the parties to file dispositive motions, and
the court has not determined whether there is any fact
deduced in discovery that would affect its determination of
whether arbitration should be compelled. Once the district
court has issued a final order with respect to arbitration, Swift
can appeal directly.
The second Bauman factor, which is closely related to the
first, examines whether the petitioner will be damaged or
prejudiced in a way not correctable on appeal. Swift argues
that “litigation of the § 1 exemption issue will determine the
ultimate issue raised by Plaintiffs’ claim.” But even if this
were the case, Swift can still appeal the district court’s final
order. Any prejudice from the legal effect of the § 1
determination is correctable on appeal.
Swift also argues that it will incur unnecessary litigation
expense if the district court proceeds with its case
management order. However, “litigation costs are a factor
weighing in favor of mandamus relief only in the most
extreme circumstances.” In re Orange, S.A., 818 F.3d 956,
964 (9th Cir. 2016) (citing Varsic v. U.S. Dist. Ct., 607 F.2d
8 IN RE SWIFT TRANSPORTATION
245, 251–52 (9th Cir. 1979)). Swift has not shown that the
expenses in this case are so outside the realm of normal
litigation expense as to be considered among the “most
extreme circumstances.” Further, discovery has now closed,
so the cost of discovery has already been incurred and is not
correctable by mandamus relief. The second Bauman factor
weighs against Swift.
The third Bauman factor is whether the district court’s
order is clearly erroneous as a matter of law. This factor is
the most important for our consideration. “While all the
factors need not be present to issue the writ . . . the absence
of factor three—clear error as a matter of law—will always
defeat a petition for mandamus.” In re United States,
791 F.3d at 955 (internal quotations and citations omitted).
See Van Dusen I, 654 F.3d at 841 (“clear error as a matter of
law . . . is a necessary condition for granting a writ of
mandamus” (citing Hernandez v. Tanninen, 604 F.3d 1095,
1099 (9th Cir. 2010)).
Clear error is a highly deferential standard of review. Van
Dusen I, 654 F.3d at 841 (citing Cal. Dep’t of Water Res. v.
Powerex Corp., 533 F.3d 1087, 1092 (9th Cir. 2008)). We
“will not grant mandamus relief simply because a district
court commits an error, even one that would ultimately
require reversal on appeal.” Id. at 845 (quoting Wilson v.
U.S. Dist. Ct., 103 F.3d 828, 830 (9th Cir. 1996)). Instead,
“we must have a definite and firm conviction that the district
court’s interpretation . . . was incorrect.” Id. at 841 (internal
quotations omitted) (quoting DeGeorge v. U.S. Dist. Ct.,
219 F.3d 930, 936 (9th Cir. 2000)).
It is well established that “[t]he absence of controlling
precedent weighs strongly against a finding of clear error.”
IN RE SWIFT TRANSPORTATION 9
Van Dusen I, 654 F.3d at 845 (citations omitted). If “no prior
Ninth Circuit authority prohibited the course taken by the
district court, its ruling is not clearly erroneous.” In re
Morgan, 506 F.3d 705, 713 (9th Cir. 2007). Further, “a
question of first impression not yet addressed by any circuit
court in a published opinion . . . cannot satisfy the third . . .
Bauman factor[ ], requiring a showing of a clear . . . error by
the district court.” Medhekar v. U.S. Dist. Ct., 99 F.3d 325,
327 (9th Cir. 1996).
The district court did not commit clear error when it
issued its case management order. It did so in response to our
instructions in Van Dusen II that “the district court must
determine whether the Contractor Agreements between each
appellant and Swift are exempt under § 1 of the FAA before
it may consider Swift's motion to compel.” 544 F. App’x at
724. Crucially, in neither Van Dusen I nor Van Dusen II did
we instruct the district court to make the § 1 determination in
a certain way. Certainly our opinions did not direct the
district court to decide the issue on “briefing alone,” as Swift
contends. Therefore, when the district court sought to resolve
the § 1 question through discovery and a trial, it did not
contravene our instructions. The district court’s management
and planning order is not clearly erroneous on the basis of our
opinions in this case.
Nor is the district court’s case management order contrary
to other precedents of the Supreme Court or this Circuit.
Further, there do not appear to be any decisions from our
sister circuits on the question of whether the FAA compels a
certain procedural choice in a district court’s § 1
determination. The absence of precedent weighs heavily
against finding clear error. In re Morgan, 506 F.3d at 713.
Accordingly, we cannot say that the district court committed
10 IN RE SWIFT TRANSPORTATION
clear error. Van Dusen I, 654 F.3d at 845; Medhekar, 99 F.3d
at 327.
The fourth Bauman factor is whether the district court’s
order is an oft-repeated error, or manifests a persistent
disregard of the federal rules. Given the lack of precedent,
we cannot say that the alleged error is “oft-repeated.” And
the issuance of a case management order is not only
consistent with, but required by, the federal rules. See Fed.
R. Civ. P. 16(b).
The final Bauman factor is whether the district court’s
order raises new and important problems, or issues of law of
first impression. The question of whether the FAA compels
district courts to decide § 1 exemptions on the basis of
briefing alone is an issue of first impression, so this factor
weighs in favor of Swift. However, Swift does have a
remedy in the form of direct appeal to make its argument.
In sum, the Bauman factors weigh against the grant of
mandamus relief. Swift has a remedy in urging its position
before the district court in dispositive motions and, if the
district court is adverse to Swift, in the form of direct appeal
following the issuance of a final order. Normal litigation
expense does not constitute sufficient prejudice to warrant
relief, and the discovery cost has already been incurred. Most
crucially, in the absence of controlling precedent, the district
court order was not clearly erroneous. The district court’s
order is not an “oft-repeated error,” if indeed it is an error at
all, and certainly does not manifest a persistent disregard of
the federal rules. Although the question may be one of first
impression, Swift has a remedy. Therefore, applying the
IN RE SWIFT TRANSPORTATION 11
Bauman factors, we conclude that Swift is not entitled to the
extraordinary relief of the issuance of a writ of mandamus.1
PETITION DENIED.
HURWITZ, Circuit Judge, concurring:
If this were a direct appeal from a district court order
denying Swift’s motion to compel arbitration, I might agree
with Judge Ikuta that the issue before the district court is one
of law not requiring discovery. But, because the district
judge has neither granted nor denied Swift’s motion, there is
no appealable order. What is before us, rather, is a petition
for mandamus.
“Mandamus is a drastic remedy and is to be used only in
extraordinary circumstances.” Johnson v. Consumerinfo.com,
Inc., 745 F.3d 1019, 1023 (9th Cir. 2014) (quoting United
States v. Sherman, 581 F.2d 1358, 1361 (9th Cir. 1978)).
Here, virtually nothing would be gained by granting the writ.
The district court will shortly decide whether Van Dusen’s
contract is one of employment under the Federal Arbitration
Act, 9 U.S.C. § 1. If the court decides that it is not, it will
order arbitration, mooting the mandamus petition. And, if the
court finds that Van Dusen’s contract is one of employment
and denies the motion to compel arbitration, Swift can appeal.
Id. § 16(a)(1)(B). Even assuming, as Judge Ikuta
persuasively argues, that the issue before the district court
could have been resolved without discovery, discovery is now
1
Van Dusen’s motions to take judicial notice of the existence of various
district court documents are GRANTED. See Docket Nos. 9, 13.
12 IN RE SWIFT TRANSPORTATION
complete. There is no extraordinary need to interrupt the
proceedings below.
IKUTA, Circuit Judge, dissenting:
Interstate truck driver Van Dusen signed an agreement
with Swift designating Van Dusen as an independent
contractor. The agreement also stated that the parties would
arbitrate any dispute. Van Dusen now says that she was
actually an employee and the contract was really one of
employment, so it was exempt from the Federal Arbitration
Act (FAA). We have twice before given this district court a
single task: Decide whether the agreement falls into the
category of “contracts of employment” for purposes of the
FAA. Instead, six years after our first ruling, the district
court is erroneously requiring the parties to undertake an
evidentiary hearing on the merits to decide whether Van
Dusen is functionally an employee. Under the circumstances
of this case, the extraordinary remedy of a writ of mandamus
is warranted.
I
Van Dusen entered into a contractor agreement with Swift
for the interstate transportation of freight. The parties agreed
that Van Dusen was an independent contractor who would
“determine the method, means and manner of performing
work and services” under the agreement and could provide
the same services for others. The parties also bargained to
arbitrate “[a]ll disputes and claims arising under, arising out
of or relating to” the contractor agreement, “including the
arbitrability of disputes between the parties.”
IN RE SWIFT TRANSPORTATION 13
Notwithstanding this agreement, Van Dusen and other
interstate truckers brought a lawsuit in 2009 claiming that
they were functionally employees and that Swift had violated
the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, and
state wage laws by failing to pay them minimum wages
(including overtime) and by making unlawful deductions
from their wages. Van Dusen sought to certify a class of
essentially all truckers who had driven under a contract with
Swift since 2006.
Swift immediately moved to compel arbitration of these
claims as provided in the contractor agreement. Van Dusen
moved to block arbitration on the ground that the agreements
themselves were exempt from arbitration under § 1 of the
FAA, which states, “nothing herein contained 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. Van Dusen claimed that the
contractor agreements for interstate transportation of freight
were “contracts of employment.”
The district court initially concluded that the arbitrator
should decide whether the form agreements were “contracts
of employment.” We disagreed. See In re Van Dusen,
654 F.3d 838 (9th Cir. 2011) (Van Dusen I). Instead, we
concluded that § 1 “explicitly carves out a category of cases
exempt from the provisions of the Act,” and therefore “a
district court has no authority to compel arbitration” where
§ 1 “exempts the underlying contract from the FAA’s
provisions.” Id. at 843. Although we declined to grant Van
Dusen’s mandamus petition, we sent the case back to the
district court expressly holding that the district court must
decide, as a matter of law, whether the contractor agreement
14 IN RE SWIFT TRANSPORTATION
between Swift and Van Dusen was “of the kind” that is
exempt from the FAA. Id. at 844.
Instead of making this legal determination, the district
court granted Van Dusen’s motion for certification of an
interlocutory appeal. When the case came back to us with the
same question, whether a district court should assess whether
a § 1 exemption applies, we unsurprisingly did not change
our mind. We stated that our prior ruling was law of the case
and law of the circuit, and we remanded to the district court
to determine whether the contractor agreement was exempt
under § 1. Van Dusen v. Swift Transp. Co., Inc., 544 F.
App’x 724 (9th Cir. 2013) (Van Dusen II).
On remand, the district court did not follow our direction.
Instead of addressing the only legal issue before it—whether
the form contract is “a contract of employment” for purposes
of § 1—the district court issued a scheduling order for
discovery, pretrial proceedings, and trial. The purpose of the
proceedings was to determine one of the key substantive
issues on dispute between the parties: the “plaintiffs’ status as
employees or independent contractors.” Applying judicial
interpretations of the scope of the FLSA, the district court
held that its determination depended on the working
relationship between Van Dusen and Swift, including such
factors as “the employer’s right to control the work, the
individual’s opportunity to earn profits from the work, the
individual’s investment in equipment and material needed for
the work, whether the work requires a specialized skill, and
whether the work done by the individual is an integral part of
the employer’s business.” The district court relied on Real v.
Driscoll Strawberry Assocs., Inc., 603 F.2d 748, 754 (9th Cir.
1979), which lays out the relevant factors for determining
IN RE SWIFT TRANSPORTATION 15
whether a person is an employee or independent contractor
under the FLSA.
II
The district court erred in adopting this approach. Under
the “expansive interpretation of the definitions of ‘employer’
and ‘employee’ under the FLSA,” the contract between the
parties is merely a factor to consider; it is not conclusive
regarding whether there is an employer-employee relationship
between the parties for purposes of the FLSA. Id.
“Economic realities, not contractual labels, determine
employment status for the remedial purposes of the FLSA.”
Id. at 755.
But the district court was not called upon to address the
“economic realities” of the relationship between Van Dusen
and Swift. The only issue before the district court is a legal
one. As we have explained, § 1 “explicitly carves out a
category of cases exempt from the provisions of the Act,”
Van Dusen I, 654 F.3d at 843; see also Bernhardt v.
Polygraphic Co. of Am., 350 U.S. 198, 201 (1956) (holding
that the language of the FAA makes clear that Congress chose
certain “kind[s] of agreement[s]” to be brought under federal
regulation and exempted others); Prima Paint Corp. v. Flood
& Conklin Mfg. Co., 388 U.S. 395, 401–02 & n.9 (1967)
(holding that § 1 exempts certain “categories of contracts
otherwise within the Arbitration Act”). Contrary to the
expansive definition of employer under the FLSA, we give
§ 1 a “narrow construction,” Circuit City Stores, Inc. v.
Adams, 532 U.S. 105, 118 (2001), and do not read “contracts
of employment” expansively to mean any contract between
parties in an employment relationship, see Terrebonne v. K-
Sea Transp. Corp., 477 F.3d 271, 278–80 (5th Cir. 2007).
16 IN RE SWIFT TRANSPORTATION
Determining whether a contract qualifies as a “contract of
employment” requires a categorical approach that focuses
solely on the words of the contract and the definition of the
relevant category. We have previously undertaken the task of
determining whether, as a matter of law, a contract was an
employment contract. See Modzelewski v. Resolution Trust
Corp., 14 F.3d 1374 (9th Cir. 1994). In Modzelewski,
“employment contract” was not defined in ERISA or the
applicable regulations, so we turned to Black’s Law
Dictionary, which defined “employment contract” as “an
agreement setting forth ‘terms and conditions’ of
employment.” Id. at 1376. We then reviewed the terms and
conditions contained in the relevant contract. These terms
prohibited “the employee” from maintaining “other
employment without the employer’s consent”; required the
employee to “devote all his working time and ability” to the
employer; created “a covenant not to compete after retirement
or termination as a condition of receiving benefits”; and
authorized the employer “to discharge for cause and voids all
benefits” if the covenant not to compete was breached. Id. at
1376. We determined that “the agreements in question
clearly contain terms related directly to employment, and
hence are also employment contracts.” Id. at 1377. We did
not analyze the “economic realities” of the relationship
between the parties to the contract.
The district court should have followed a similar
approach. It should have first defined “contract of
employment” for purposes of the FAA using standard tools
of statutory construction. The court should then have
determined whether the contract includes terms and
conditions of employment. This information is clear on the
face of the contract. Categorizing the nature of a contract
requires only the examination of its terms; in no event is there
IN RE SWIFT TRANSPORTATION 17
a need to conduct discovery and a trial to consider the
“economic realities” of the relationship of the parties to the
contract.
Indeed, by requiring the parties to litigate the underlying
substance of Van Dusen’s claim—whether the economic
realities of Van Dusen’s work for Swift made Van Dusen an
employee for purposes of the FLSA—the district court risks
depriving Swift of the benefits of its contract.1 If it turns out
that the contractor agreement is not a “contract of
employment,” it is subject to the FAA, and Van Dusen is
bound by her bargain to arbitrate all disputes, including any
question regarding whether the disputes are arbitrable. The
court’s failure to make the legal determination whether the
FAA is applicable potentially defeats Swift’s rights under the
contract and undermines the policies of the FAA and “the
unmistakably clear congressional purpose that the arbitration
procedure, when selected by the parties to a contract, be
speedy and not subject to delay and obstruction in the courts.”
Prima Paint, 388 U.S. at 404. Swift has already spent seven
years and countless dollars litigating an issue that it may very
well have the right to arbitrate.
1
Contrary to Judge Hurwitz’s concurring opinion, there is still much at
stake in this case. Although discovery is complete, the district court’s
scheduling order anticipates a five day trial to determine the relationship
of the parties. Our granting the writ would limit the scope of the district
court’s inquiry to the proper legal question and save the parties the
substantial costs of trial. Moreover, the argument made by the majority
and Judge Hurwitz that we should not grant mandamus because
“discovery has now closed,” Maj. op. at 8, is less than compelling when
it is our delay in issuing a decision in this case that allowed discovery to
be completed.
18 IN RE SWIFT TRANSPORTATION
III
Under the circumstances of this case, where the district
court has declined to make the key legal decision three times
over the span of six years, the extraordinary remedy of
mandamus is warranted. To determine whether the petitioner
has established a right to this remedy, we consider the five
factors from Bauman v. U.S. Dist. Court, 557 F.2d 650 (9th
Cir. 1977):
(1) Whether the petitioner has other adequate
means, such as a direct appeal, to attain the
relief he or she desires; (2) whether the
petitioner will be damaged or prejudiced in a
way not correctable on appeal; (3) whether the
district court's order is clearly erroneous as a
matter of law; (4) whether the district court's
order makes an oft-repeated error, or
manifests a persistent disregard of the federal
rules; and (5) whether the district court’s
order raises new and important problems, or
legal issues of first impression.
In re Perez, 749 F.3d 849, 854–55 (9th Cir. 2014) (internal
quotation marks omitted). “The factors are not to be
mechanically applied; we are neither compelled to grant the
writ when all five factors are present, nor prohibited from
doing so when fewer than five, or only one, are present.” In
re Sussex, 781 F.3d 1065, 1071 (9th Cir. 2015) (internal
quotation marks omitted).
We have held that “the absence of factor three—clear
error as a matter of law—will always defeat a petition for
mandamus.” DeGeorge v. U.S. Dist. Court for Cent. Dist. of
IN RE SWIFT TRANSPORTATION 19
Cal., 219 F.3d 930, 934 (9th Cir. 2000). As explained above,
there is no doubt that the district court’s order scheduling
discovery and trial is clearly erroneous.
The remaining Bauman factors likewise weigh in favor of
granting the remedy. Van Dusen does not dispute that the
first two Bauman factors are satisfied. The district court’s
order is not appealable, and therefore Swift has no adequate
means to obtain review. See Valenzuela-Gonzalez v. U.S.
Dist. Court for Dist. of Ariz., 915 F.2d 1276, 1279 (9th Cir.
1990). And because Swift cannot immediately appeal the
district court’s order, it must proceed with discovery and trial
to determine “plaintiffs’ status as employees or independent
contractors,” the very issue it seeks to arbitrate. Moreover, an
appeal after litigating the key issue in the case would be
meaningless. Swift will have already lost the benefit of its
bargain, the contractual right to arbitration.
This case also satisfies the fourth and fifth Bauman
factors. The district court’s order makes an “oft-repeated
error, or manifests a persistent disregard of the federal rules.”
As the history of this case shows, the district court has
repeated the same error three times. Twice before we
explained that the district court must determine whether the
contractor agreement falls into the category of “contracts of
employment.” Van Dusen I, 654 F.3d at 843–44; Van Dusen
II, 544 F. App’x 724. This is the third time it has
misunderstood our direction, and it is necessary for us to step
in to correct this error. Moreover, this exact issue has arisen
frequently in district courts, and district courts often
erroneously look to the relationship of the parties in
determining whether the contract is one of employment. See,
e.g., Doe v. Swift Transp. Co., 2015 WL 274092, at *3 (D.
Ariz. Jan. 22, 2015); Cilluffo v. Cent. Refrigerated Servs.,
20 IN RE SWIFT TRANSPORTATION
Inc., 2012 WL 8523507, at *4–5 (C.D. Cal. Sept. 24, 2012);
Owner-Operator Indep. Drivers Ass'n, Inc. v. Swift Transp.
Co., 288 F. Supp. 2d 1033, 1034 (D. Ariz. 2003); but see
Owner-Operator Indep. Drivers Ass'n v. C.R. England, Inc.,
325 F. Supp. 2d 1252, 1258 (D. Utah 2004) (looking only to
the contract).
Finally, this case presents a novel and important issue of
law. We have not yet explained in a published opinion how
a court must proceed when a party to a contract containing an
arbitration agreement challenges the contract on the ground
that it is exempt under § 1. A failure to address this issue and
correct the district court’s erroneous approach may encourage
plaintiffs in many different contexts to sidestep an agreement
to arbitrate by strategically claiming that their contract is
exempt and that it is necessary to litigate the key merits issue
outside of arbitration.
Because the Bauman factors weigh in favor of granting
Swift’s petition and mandamus is clearly warranted in this
case, I dissent.