In Re Swift Transportation, No. 15-70592 (9th Cir. 7/26/16): No To Mandamus.
In a prior appeal, the 9th Circuit held that the district court, rather than the arbitrator, must decide whether the dispute was exempt from arbitration under 9 U.S.C., section 1. That section of the Federal Arbitration Act provides that the FAA does not apply to contracts of workers engaged in foreign or interstate commerce. The plaintiffs, who had brought labor law claims, alleged among other things, that they had been wrongly classified as independent contractors, that they were really employees, and thus, that they were exempt from the FAA and the requirement to arbitrate. However, instead of deciding whether the dispute was exempt under the FAA, the district court issued a scheduling order for discovery and a trial on the section 1 issue. Swift sought a writ of mandamus in the 9th Circuit, an action that resulted in a per curiam opinion, a concurring opinion, and a dissent.
The panel denied the mandamus petition. The defendants could present their position before the district court in dispositive motions and directly appeal a final order. Normal litigation expense did not constitute enough prejudice to warrant relief. And the district court’s order was not clearly erroneous, because “whether the FAA compels district courts to decide section 1 exemptions on the basis of briefing alone is an issue of first impression . . . “
Judge Hurwitz, concurring, seemed to adopt a “mountain out of a molehill” approach, finding nothing extraordinary to justify mandamus. If the district court decided that the workers’ contract was not one of employment, it would order arbitration, mooting mandamus. And if the court found the contract was one of employment, Swift could appeal. Since discovery was complete, it made no practical difference even if the section 1 issue could be resolved without discovery.
Dissenting, Judge Ikuta argued that the section 1 issue could be resolved without discovery, that the district court failed to make the legal determination requested by the 9th circuit, and that the section 1 issue presented “a novel and important issue of law,” such that mandamus was justified.
Above: Statue of a punter outside Veterans' Stadium, Philadelphia, Pennsylvania. Carol M. Highsmith, photographer. Library of Congress.
Van Dusen v. Swift Transportation, No. 15-15257 (9th Cir. 7/26/16): No To Appellate Jurisdiction.
In Van Dusen, the 9th Circuit panel held that the FAA did not grant it jurisdiction to hear an interlocutory appeal from the district court’s case management order. The district judge had neither granted nor denied Swift’s motion. The district court’s order was not final, was not subject to review under the collateral order doctrine, and was not reviewable on the basis that it had the practical effect of denying a motion to compel arbitration.
This time, Judge Ikuta concurred that the court lacked jurisdiction to hear an interlocutory appeal from the district court’s case management order. However, for the reasons stated in her dissent in In Re Swift Transportation, she would have held that the remedy of mandamus was warranted.