Air Transport Association of America, Inc. v. The Washington Department of Labor and Industries

AIR TRANSPORT ASSOCIATION OF AMERICA, INC., DBA Airlines for America, Plaintiff-Appellant, v. THE WASHINGTON DEPARTMENT OF LABOR AND INDUSTRIES; JOEL SACKS, in his official capacity as Director of the Department of Labor and Industries, Defendants-Appellees, ASSOCIATION OF FLIGHT ATTENDANTS - COMMUNICATION WORKERS OF AMERICA, AFL-CIO, Intervenor-Defendant-Appellee.

No. 19-35937

United States Court of Appeals, Ninth Circuit

July 29, 2021

NOT FOR PUBLICATION

Argued and Submitted November 17, 2020 Seattle, Washington.

Appeal from the United States District Court for the Western District of Washington D.C. No. 3:18-cv-05092-RBL, Ronald B Leighton, District Judge, Presiding

Before: GOULD and FRIEDLAND, Circuit Judges, and BOUGH ^[**] District Judge.

ORDER

The Memorandum Disposition filed on May 21, 2021, is amended as set out in the attached Amended Memorandum Disposition filed concurrently with this order. With the concurrently filed amended memorandum, Judges Gould and Friedland have voted to deny the petition for rehearing en banc, and Judge Bough so recommends. The full court has been advised of the petition for rehearing en banc, and no judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35. The petition for rehearing en banc is DENIED.

No further petitions for panel rehearing or rehearing en banc will be entertained.

AMENDED MEMORANDUM^[*]

The Air Transport Association (d/b/a "Airlines for America" or "A4A") has brought this action against Washington's Department of Labor and Industries ("L&I"), seeking to enjoin enforcement of Washington's law governing paid sick leave, Wash. Rev Code § 49.46. 210 (2021).^[1] A4A argues that applying the paid sick leave law (the "PSL") to its members' flight attendants and pilots ("flight crew") is preempted by the Airline Deregulation Act, 49 U.S.C. § 41713, and violates the dormant Commerce Clause.^[2] The parties filed cross-motions for summary judgment, and the district court granted L&I's motion. We affirm.

In 2016, voters in Washington enacted a ballot initiative that established a right to paid sick leave "to protect public health and allow workers to care for the health of themselves and their families." Wash. Rev. Code § 49.46.005. The PSL requires that employers provide Washington-based employees at least one hour of paid sick leave for every forty hours worked. Id. § 49.46.210(1)(a). In addition, the law prohibits employers from penalizing employees for using sick leave-such as through a disciplinary point system-or requiring medical verification for sick leave absences of fewer than three days. Id. § 49.46.210(3); Wash. Admin. Code § 296-128-660(1).

A4A argues that compliance with the PSL will deprive the airlines of their "most important" tools for minimizing flight crew shortages, including disciplinary point systems and medical verification requirements, thereby causing flight delays and cancellations. In support, A4A points to Virgin America's experience complying with New York City's Earned Sick Time Act ("ESTA"), which contains provisions similar to those in the PSL.^[3] A4A's expert estimated that Virgin America's compliance with the ESTA led to a "cabin crew delay rate" increase of .16 percentage points for the first two years and 1.2 percentage points for the seven months thereafter.

1. The Airline Deregulation Act ("ADA") does not preempt the application of the PSL to A4A's members' flight crew. The ADA preempts state laws "related to a price, route, or service of an air carrier." 49 U.S.C. § 41713(b). State laws that affect rates, routes, or services in "too tenuous, remote, or peripheral a manner" are not preempted. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 390 (1992) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 100 n.21 (1983)). We have held that generally applicable labor regulations are too tenuously related to airlines' services to be preempted by the Act. See Ward v. United Airlines, Inc., 986 F.3d 1234, 1243 (9th Cir. 2021) ("Laws that apply to airline employees only as they apply to all members of the general public typically fall into th[e] non-preempted category."). The PSL is no exception.

A4A argues that, unlike the wage statement law at issue in Ward, the PSL "operates in close proximity to the traveling public." The proper inquiry is whether the PSL itself "binds the [airlines] to a particular price, route, or service." Bernstein v. Virgin Am., Inc., __ F.4th __, 2021 WL 3047171, at *9 (9th Cir. 2021) (quoting Dilts v. Penske Logistics, LLC, 769 F.3d 637, 646 (9th Cir. 2014)). The PSL regulates the airline-employee relationship in a way that may ultimately affect the airlines' competitive decisions in the free market. But because the PSL does not regulate the airline-customer relationship or otherwise bind the airlines to a particular price, route, or service, it is not preempted by the ADA. See Air Transp. Ass'n v. City & County of San Francisco, 266 F.3d 1064, 1074 (9th Cir. 2001).

2. As applied to A4A's members' flight crew, the PSL does not violate the dormant Commerce Clause. To survive L&I's motion for summary judgment, A4A must show that there is a genuine issue of material fact as to whether complying with the PSL would impose a "substantial burden on interstate commerce," and if so, whether the burden on interstate commerce would be "clearly excessive in relation to the putative local benefits."^[4] Nat'l Ass'n of Optometrists & Opticians v. Harris, 682 F.3d 1144, 1155-56 (9th Cir. 2012) (citing Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)). Viewing the evidence in the light most favorable to A4A, we hold that the evidence does not demonstrate that requiring A4A's members to comply with the PSL would impose a substantial burden on interstate commerce.

A4A argues that Virgin America's experience complying with the ESTA shows that complying with the PSL would increase unexpected employee absences, which would result in increased flight delays and cancellations. Even assuming that complying with the PSL would lead to the same result for A4A's members that Virgin America experienced complying with the ESTA, A4A's expert's conclusions are insufficient to raise a genuine issue of material fact. A 1.2 percentage point increase in flight delays-with many of those delays lasting fewer than fourteen minutes-is not a substantial burden on interstate commerce for dormant Commerce Clause purposes, particularly for an industry that anticipates delays at much higher rates under ordinary circumstances. A4A's other arguments about the effects of complying with sick leave policies in other states fail for the same reason, and they are based solely on anecdotes.

Separately A4A argues that complying with multiple states' paid sick leave laws would be impossible or prohibitively expensive for its members. We rejected a similar argument in Ward. We explained that "[t]o prevail on this contention," airlines must show that the challenged law "regulates in an area that requires national uniformity." Ward, 986 F.3d at 1242. Like the wage statement laws at issue in Ward, paid sick leave laws are not among the "aspects of the interstate transportation industry that require national uniformity." Id. Although A4A has submitted evidence that complying with paid sick leave laws may result in some increase in flight delays and cancellations, this evidence falls short of demonstrating that complying with the PSL will "severely disrupt operation of...