Dilts v. Penske Logistics: Ninth Circuit Holds that Federal Law Does Not Preempt California Meal and Rest Period Requirements

The Federal Aviation Administration Authorization Act of 1994 (FAAAA) provides: “States may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). In Dilts v. Penske Logistics, LLC, ___ F.3d ___ (9th Cir. 7/9/14), the Ninth Circuit considered whether the FAAAA preempts California's meal and rest period requirements. The Court held that it does not, reasoning as follows:

Under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (detailed discussion here), state laws allow some flexibility with respect to the timing and circumstances of meal breaks. Slip op. at 7-8.

In determining the preemptive scope of the FAAAA, one must recognize that "everything is related to everything else," and the FAAAA does not go so far as to preempt state laws that affect prices, routes, or services in “only a tenuous, remote, or peripheral manner, such as state laws forbidding gambling.” Slip op. at 9-10.

The legislative history of the FAAAA shows that the principal purpose of the FAAAA was “to prevent States from undermining federal deregulation of interstate trucking” through a “patchwork” of state regulations. Slip op. at 10-18.

"Congress did not intend to preempt generally applicable state transportation, safety, welfare, or business rules that do not otherwise regulate prices, routes, or services." Slip op. at 13. "Generally applicable background regulations that are several steps removed from prices, routes, or services, such as prevailing wage laws or safety regulations, are not preempted, even if employers must factor those provisions into their decisions about the prices that they set, the routes that they use, or the services that they provide." Slip op. at 16.

California's meal and rest period requirements are not preempted because they apply broadly to hundreds of industries and "do not set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly." Slip op. at 18-14.

The opinion is available here.