Dilts v. Penske Logistics, Inc.

State laws are not preempted by the Federal Aviation Administration Authorization Act of 1994 unless proven to have a “significant impact” on prices, routes and services.

In this class-action suit, Plaintiffs are a group of certified drivers that are employed as truck drivers by Penske Logistics, LLC (“Penske”). Plaintiffs brought this suit alleging that their employers consistently violate the “meal and rest break laws” in the state of California. Specifically, Plaintiffs claim that the California mandated 30-minute lunch break that they are legally required to take has been pre-programmed into their time cards, but the company does not insure that the drivers are actually receiving their breaks. The district court held that the state “meal and rest break laws” are preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). The FAAAA forbids states from passing laws that are related to the logistics of any transportation motor carrier. Finding that break laws were closely related to the logistics of operations, the district court granted summary judgment for Penske. On appeal, the Ninth Circuit looked to congressional intent. The panel pointed out that the California break laws at issue here are not the sort of laws that are intended to be preempted by the FAAAA. The break laws are not closely related enough to “prices, routes, or services that Congress intended to preempt.” The break laws in question are merely fundamental background rules that every employer in the state of California must follow. Therefore, the panel held that state laws like the California break laws are not preempted by the FAAAA unless proven to have a “significant impact” on prices, routes and services, which the law in question does not. REVERSED and REMANDED.