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Ege v. Express Messenger Systems Inc.

United States District Court, W.D. Washington, Seattle

December 9, 2019

ABDIRIZAQ EGE, ABDIRAHIM FARAH, and ABDULKADIR HASSAN, and on behalf of other members of the general public similarly situated, Plaintiffs,
v.
EXPRESS MESSENGER SYSTEMS, INC., a Delaware corporation doing business as ONTRAC; and DOES 1 through 100, inclusive, Defendants.

          ORDER DENYING PLAINTIFFS' MOTION FOR RELIEF UNDER RULE 60(B)

          ROBERT S. LASNIK UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on plaintiffs' motion for relief under Federal Rule of Civil Procedure (“Rule”) 60(b). Dkt. #36. For the following reasons, plaintiffs' motion is DENIED.

         BACKGROUND

         Plaintiffs were commercial truck drivers for OnTrac, which operates a regional package delivery service. Dkt. #1-2 (Compl.) at ¶ 2. They brought various wage claims under Washington law. Each named plaintiff had entered into an Owner/Operator Agreement (“Agreement”) with Subcontracting Concepts CT LLC (“SCI”), a transportation logistics company, between October 2011 and May 2014. Each Agreement contained an arbitration provision. See Dkt. #23. OnTrac did not sign the Agreements, but argued that it was a third-party beneficiary to them, and that the arbitration provisions therefore applied to plaintiffs' wage and employment claims in their action. On January 10, 2017, this Court granted OnTrac's motion to dismiss and compel arbitration. Id. It concluded that OnTrac was a third-party beneficiary to the Agreements, that the Agreements were subject to the Federal Arbitration Act (“FAA”), and that the arbitration provision applied to the instant action. Id. at 4-10.

         Plaintiffs timely appealed the Court's dismissal on February 9, 2017. Dkt. #25. On October 17, 2018, approximately four months after filing their opening brief with the Ninth Circuit, plaintiffs moved to stay the appeal based on a then-pending case before the Supreme Court, New Prime Inc. v. Oliveira, No. 17-340. Dkt. #37 (Banerjee Decl.) at ¶ 2; see Ex. A, Dkt. #36-1; see also Pls.' Opening Br., Ege v. Express Messenger Sys., Inc., No. 17-35123, 2017 WL 2782383 (9th Cir. June 21, 2017). The Ninth Circuit denied the motion to stay and affirmed this Court's dismissal of the action on December 7, 2018. Dkt. #28. New Prime was decided on January 15, 2019. New Prime Inc. v. Oliveira, 139 S.Ct. 532 (2019). Plaintiffs now seek reconsideration of the dismissal of their action in light of the Supreme Court's decision in New Prime. Dkt. #36.

         In New Prime, Mr. Oliveira filed a class action lawsuit arguing that New Prime, an interstate trucking company, denied its independent contractor drivers lawful wages. New Prime, 139 S.Ct. at 536. The contracts between the drivers and New Prime mandated arbitration, but Mr. Oliveira argued that the FAA did not authorize the court to enter an order compelling it, because § 1 of the FAA states that “‘nothing herein' may be used to compel arbitration in disputes involving the ‘contracts of employment' of certain transportation workers.” Id. (citing 9 U.S.C. § 1). Mr. Oliveira argued that his agreement with New Prime to drive trucks qualified as a “contract[] of employment of … [a] worker[] engaged in … interstate commerce” and that the district court therefore lacked authority to compel arbitration. Id. (quoting 9 U.S.C. § 1). The Supreme Court held that, first, a “court should decide for itself whether § 1's ‘contracts of employment' exclusion applies before ordering arbitration.” Id. at 537. In order “to invoke its statutory powers under §§ 3 and 4 to stay litigation and compel arbitration according to a contract's terms, a court must first know whether the contract itself falls within or beyond the boundaries of §§ 1 and 2.” Id. Second, it held that “Congress used the term ‘contracts of employment' in a broad sense to capture any contract for the performance of work by workers.” Id. at 541 (emphasis in original). This includes contracts with independent contractors. Id. Plaintiffs now argue that the dismissal of their case should be reconsidered.

         DISCUSSION

         A. The Law of the Case Doctrine

         The law of the case doctrine “requires courts to follow a decision of an appellate court on a legal issue in all later proceedings in the same case.” United States v. Cade, 236 F.3d 463, 467-68 (9th Cir. 2000) (citation omitted). OnTrac argues that the Ninth Circuit's decision on appeal bars this litigation. Dkt. #38 at 6-7.

         There is an exception to the law of the case doctrine “where intervening controlling authority makes reconsideration appropriate.” United States v. Bad Marriage, 439 F.3d 534, 538 (9th Cir. 2006) (citing Minidoka Irrigation Dist. v. Dep't of Interior, 406 F.3d 567, 573 (9th Cir. 2005)). Plaintiffs assert that this exception applies here, arguing that dismissal of their case should be reconsidered following the Supreme Court's decision in New Prime. The Ninth Circuit did not expressly consider the merits of the § 1 exemption issue in its decision, though OnTrac argues it decided “by necessary implication” that the outcome of New Prime would not impact plaintiffs' appeal when it summarily denied plaintiffs' motion to stay. See Dkt. #38 at 6-8; see also Snow-Erlin v. United States, 470 F.3d 804, 807 (9th Cir. 2006) (citing Milgard Tempering, Inc. v. Selas Corp. of Am., 902 F.2d 703, 715 (9th Cir. 1990)); Dkt. #28 at 4. Because the Ninth Circuit's disposition leaves the reasoning underlying its denial of the motion to stay ambiguous, the Court will consider the merits of plaintiffs' Rule 60(b) motion.

         B. Entitlement to Relief under Rule 60(b)

         Rule 60(b) provides, On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:

         (1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for ...

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