In 2018, the Federal Motor Carrier Safety Administration (FMCSA) decided to preempt California’s meal and rest break rules (MRB rules) for truck drivers who are subject to federal regulations. The U.S. Court of Appeals for the Ninth Circuit ruled that the FMCSA’s decision was a lawful exercise of its power.
Johel Valiente and Ashraf Aiad were hourly truck drivers for Swift Transportation Company. They and other drivers filed a class action lawsuit against Swift alleging violations of California’s MRB rules and derivative state-law claims.
Thereafter, the FMCSA decided to preempt California’s MRB rules. A U.S. district court then granted summary judgment and dismissed the drivers’ lawsuit on the grounds that the court no longer had the authority to enforce the preempted regulations, even though the lawsuit was filed before the FMCSA’s preemption decision. The drivers appealed to the Ninth Circuit.
The Ninth Circuit identified a tension between two general legal rules: 1) a court is to apply the law in effect at the time it renders its decision, and 2) retroactivity is not favored in the law. The tension between those two rules was paramount in this case because the court: 1) could no longer apply the preempted law that the truckers had relied upon; and 2) could not decide a case retroactively on the new FMCSA decision, due to concerns of fair notice, reasonable reliance, and settled expectations.
The test federal courts use to reconcile this tension is known as the Landgraf framework. First, a court must determine “whether Congress has expressly prescribed the statute’s proper reach”. If the relevant change in the law is the result of an agency action, courts must find both: 1) congressional authorization for the agency to impose retroactive rules; and 2) agency intent for the rules in question to apply retroactively. If this is so, then the new rules apply retroactively.
If no such intent is clear, then the court must assess whether the action would have an impermissible retroactive effect, that is, whether a retroactive ruling would impair rights under existing laws or create new obligations or duties in respect to past transactions. If this is so, courts must then only apply the new laws prospectively to new cases.
Here, the Ninth Circuit found that, because of the phrasing of the federal legislation that created the FMCSA, Congress intended for the FMCSA to have the power to halt the enforcement of state laws. Moreover, the Ninth Circuit found that because the FMCSA expressly intended for its preemption decision to apply to pending lawsuits, the preemption of California’s MRB rules meant that the drivers’ case could not go forward.
Valiente v. Swift Transportation Co. of Arizona, LLC (9th Cir. 2022) 54 F.4th 581, 583.
Note: This case illustrates the interaction of federal and California law. Knowing whether federal law may apply is critical to properly managing a workforce.