NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 11 2024
FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
DEJA NAIR, No. 23-15582
Plaintiff-Appellee, D.C. No. 2:22-cv-00331-DAD-JDP v.
MEDLINE INDUSTRIES, LP, FKA MEMORANDUM* Medline Industries, Inc.; MEDLINE INDUSTRIES HOLDINGS, LP, A Delaware Limited Partnership,
Defendants-Appellants.
Appeal from the United States District Court for the Eastern District of California Dale A. Drozd, District Judge, Presiding
Argued and Submitted July 29, 2024 San Francisco, California
Before: R. NELSON, FORREST, and SANCHEZ, Circuit Judges. Concurrence by Judge R. NELSON.
Medline Industries, Inc., Medline Industries Holdings, LP, and Medline
Industries, LP (collectively, Medline) appeal the district court’s order denying its
motion to compel arbitration of Deja Nair’s individual employment claims and to
dismiss Nair’s non-individual claims related to her position as a Warehouse
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Operator at Medline’s warehouse in Tracy, California. We review the district
court’s decision to grant or deny a motion to compel arbitration de novo. Stover v.
Experian Holdings, Inc., 978 F.3d 1082, 1085 (9th Cir. 2020). We review “the
validity and scope of an arbitration clause de novo and the factual findings
underlying the district court’s decision for clear error.” Knutson v. Sirius XM
Radio Inc., 771 F.3d 559, 564 (9th Cir. 2014) (internal quotation marks and
citation omitted). We have jurisdiction under 9 U.S.C. § 16(a)(1)(B), and we
affirm.
Under the Federal Arbitration Act (FAA), arbitration agreements “shall be
valid, irrevocable, and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C. § 2. However, § 1 exempts
from the FAA employment contracts of “seamen, railroad employees, or any other
class of workers engaged in foreign or interstate commerce.” Id. § 1. To
determine if a contract is exempt from arbitration under § 1, we first define the
“class of workers” to which the plaintiff belongs, and then determine if that class
of workers is engaged in foreign or interstate commerce. Sw. Airlines Co. v.
Saxon, 596 U.S. 450, 455 (2022); see Ortiz v. Randstad Inhouse Servs., LLC, 95
F.4th 1152, 1159–60 (9th Cir. 2024) (describing and applying the two-step
analysis). The Supreme Court recently clarified that Medline itself does not need
to be in the transportation industry for the transportation exemption to apply.
2 Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 252 (2024). Rather,
Nair is “a member of a ‘class of workers’ based on what she does at [Medline], not
what [Medline] does generally.” Saxon, 596 U.S. at 456.
The district court did not err in finding that Nair is exempt under § 1 of the
FAA. Nair belongs to a class of workers who frequently package, move, load,
unload, and ship medical supplies at Medline’s warehouses for delivery to
interstate customers. See id. at 455–59. Although the district court should not
have considered the “Dealer Drop Ship Program” in the absence of any evidence
that the program existed at the time of Nair’s employment, there was more than
sufficient evidence elsewhere in the record to support the district court’s finding
that Nair belongs to a class of warehouse operator workers who were engaged in
interstate commerce.
Nair alleged in her declaration that she worked every day in the “shipping
dock” where she “spent 100% of [her] time stacking pallets and wrapping them in
saran wrap to load onto trucks.” She alleged that she loaded the delivery trucks
every day with pallets that were prepared “for shipping to destinations in and
outside of California,” including to Reno, Nevada. On one occasion, she spoke to
a truck driver who informed Nair that he traveled daily from the Tracy, California
warehouse to Reno, Nevada to make his Medline deliveries. As a new employee,
Nair watched “training videos [that] explained how [Medline] ships medical
3 supplies throughout the country, and how [Medline] expected warehouse operators
like [Nair] to ship and pack medical supplies for transport to various destinations
throughout the United States.” The training showed a map of the United States
indicating several of Medline’s distribution centers are located outside of
California.
Medline argues that Nair has not proffered sufficient evidence that she
handled goods that moved in interstate commerce, but it does not contest Nair’s
description of her role at the company or offer evidence to rebut it. See Lopez v.
Aircraft Serv. Int’l, Inc., 107 F.4th 1096, 1098 (9th Cir. July 19, 2024) (noting that
the “district court observed that [the employer] did not contest [the employee’s]
description of his work [as an airplane fuel technician], or offer additional evidence
about the nature of that work” as stated in the employee’s declaration) (internal
quotation marks omitted). On the contrary, Medline acknowledges that it
manufactures only around 80,000 of the 500,000 products it provides to its
customers. Before the district court, Medline conceded that it “provides its clients
with medical supplies, equipment, and health services distributed all over the
nation and internationally.” Medline acknowledged that Warehouse Operators like
Nair “might load pallets onto a trailer for shipment or unload pallets from a trailer
with incoming merchandise.” In its totality, this evidence is sufficient to indicate
4 that Nair “play[ed] a tangible and meaningful role in [the] progress [of Medline’s
goods] through the channels of interstate commerce.” Ortiz, 95 F.4th at 1160.
Because she packaged and loaded goods that traveled in interstate
commerce, Nair falls within a class of worker that “at least play[s] a direct and
necessary role in the free flow of goods across borders.” Saxon, 596 U.S. at 458
(internal quotation marks and citation omitted). Accordingly, the district court did
not err in finding that Nair is part of a class of class of workers engaged in
interstate commerce under § 1 of the FAA, and properly denied Medline’s motion
to compel arbitration.1
AFFIRMED.
1 Because the transportation worker exception applies, we do not address Medline’s remaining arguments on appeal that (1) any remaining issues regarding the enforceability of the arbitration provision, other than the transportation worker exemption, must be decided by the arbitrator pursuant to the agreement’s delegation clause, (2) the class action waiver of the Arbitration Provision is enforceable, and (3) Nair’s representative Private Attorneys General Act (PAGA) claim should be stayed pending arbitration of Nair’s individual claims.
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 11 2024
FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
DEJA NAIR, No. 23-15582
Plaintiff-Appellee, D.C. No. 2:22-cv-00331-DAD-JDP v.
MEDLINE INDUSTRIES, LP, FKA MEMORANDUM* Medline Industries, Inc.; MEDLINE INDUSTRIES HOLDINGS, LP, A Delaware Limited Partnership,
Defendants-Appellants.
Appeal from the United States District Court for the Eastern District of California Dale A. Drozd, District Judge, Presiding
Argued and Submitted July 29, 2024 San Francisco, California
Before: R. NELSON, FORREST, and SANCHEZ, Circuit Judges. Concurrence by Judge R. NELSON.
Medline Industries, Inc., Medline Industries Holdings, LP, and Medline
Industries, LP (collectively, Medline) appeal the district court’s order denying its
motion to compel arbitration of Deja Nair’s individual employment claims and to
dismiss Nair’s non-individual claims related to her position as a Warehouse
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Operator at Medline’s warehouse in Tracy, California. We review the district
court’s decision to grant or deny a motion to compel arbitration de novo. Stover v.
Experian Holdings, Inc., 978 F.3d 1082, 1085 (9th Cir. 2020). We review “the
validity and scope of an arbitration clause de novo and the factual findings
underlying the district court’s decision for clear error.” Knutson v. Sirius XM
Radio Inc., 771 F.3d 559, 564 (9th Cir. 2014) (internal quotation marks and
citation omitted). We have jurisdiction under 9 U.S.C. § 16(a)(1)(B), and we
affirm.
Under the Federal Arbitration Act (FAA), arbitration agreements “shall be
valid, irrevocable, and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C. § 2. However, § 1 exempts
from the FAA employment contracts of “seamen, railroad employees, or any other
class of workers engaged in foreign or interstate commerce.” Id. § 1. To
determine if a contract is exempt from arbitration under § 1, we first define the
“class of workers” to which the plaintiff belongs, and then determine if that class
of workers is engaged in foreign or interstate commerce. Sw. Airlines Co. v.
Saxon, 596 U.S. 450, 455 (2022); see Ortiz v. Randstad Inhouse Servs., LLC, 95
F.4th 1152, 1159–60 (9th Cir. 2024) (describing and applying the two-step
analysis). The Supreme Court recently clarified that Medline itself does not need
to be in the transportation industry for the transportation exemption to apply.
2 Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 252 (2024). Rather,
Nair is “a member of a ‘class of workers’ based on what she does at [Medline], not
what [Medline] does generally.” Saxon, 596 U.S. at 456.
The district court did not err in finding that Nair is exempt under § 1 of the
FAA. Nair belongs to a class of workers who frequently package, move, load,
unload, and ship medical supplies at Medline’s warehouses for delivery to
interstate customers. See id. at 455–59. Although the district court should not
have considered the “Dealer Drop Ship Program” in the absence of any evidence
that the program existed at the time of Nair’s employment, there was more than
sufficient evidence elsewhere in the record to support the district court’s finding
that Nair belongs to a class of warehouse operator workers who were engaged in
interstate commerce.
Nair alleged in her declaration that she worked every day in the “shipping
dock” where she “spent 100% of [her] time stacking pallets and wrapping them in
saran wrap to load onto trucks.” She alleged that she loaded the delivery trucks
every day with pallets that were prepared “for shipping to destinations in and
outside of California,” including to Reno, Nevada. On one occasion, she spoke to
a truck driver who informed Nair that he traveled daily from the Tracy, California
warehouse to Reno, Nevada to make his Medline deliveries. As a new employee,
Nair watched “training videos [that] explained how [Medline] ships medical
3 supplies throughout the country, and how [Medline] expected warehouse operators
like [Nair] to ship and pack medical supplies for transport to various destinations
throughout the United States.” The training showed a map of the United States
indicating several of Medline’s distribution centers are located outside of
California.
Medline argues that Nair has not proffered sufficient evidence that she
handled goods that moved in interstate commerce, but it does not contest Nair’s
description of her role at the company or offer evidence to rebut it. See Lopez v.
Aircraft Serv. Int’l, Inc., 107 F.4th 1096, 1098 (9th Cir. July 19, 2024) (noting that
the “district court observed that [the employer] did not contest [the employee’s]
description of his work [as an airplane fuel technician], or offer additional evidence
about the nature of that work” as stated in the employee’s declaration) (internal
quotation marks omitted). On the contrary, Medline acknowledges that it
manufactures only around 80,000 of the 500,000 products it provides to its
customers. Before the district court, Medline conceded that it “provides its clients
with medical supplies, equipment, and health services distributed all over the
nation and internationally.” Medline acknowledged that Warehouse Operators like
Nair “might load pallets onto a trailer for shipment or unload pallets from a trailer
with incoming merchandise.” In its totality, this evidence is sufficient to indicate
4 that Nair “play[ed] a tangible and meaningful role in [the] progress [of Medline’s
goods] through the channels of interstate commerce.” Ortiz, 95 F.4th at 1160.
Because she packaged and loaded goods that traveled in interstate
commerce, Nair falls within a class of worker that “at least play[s] a direct and
necessary role in the free flow of goods across borders.” Saxon, 596 U.S. at 458
(internal quotation marks and citation omitted). Accordingly, the district court did
not err in finding that Nair is part of a class of class of workers engaged in
interstate commerce under § 1 of the FAA, and properly denied Medline’s motion
to compel arbitration.1
AFFIRMED.
1 Because the transportation worker exception applies, we do not address Medline’s remaining arguments on appeal that (1) any remaining issues regarding the enforceability of the arbitration provision, other than the transportation worker exemption, must be decided by the arbitrator pursuant to the agreement’s delegation clause, (2) the class action waiver of the Arbitration Provision is enforceable, and (3) Nair’s representative Private Attorneys General Act (PAGA) claim should be stayed pending arbitration of Nair’s individual claims.
5 FILED Nair v. Medline Industries, L.P., No. 23-15582 SEP 11 2024 MOLLY C. DWYER, CLERK R. Nelson, Circuit Judge, concurring: U.S. COURT OF APPEALS
I write separately to emphasize that we should exercise caution before
extending some of our precedent. In prior cases, we have considered whether certain
workers are part of an unbroken “stream of commerce” in deciding whether they fall
within the transportation-worker exemption of the Federal Arbitration Act,
9 U.S.C. § 1. See Rittmann v. Amazon.com, Inc., 971 F.3d 904, 916 (9th Cir. 2020)
(citation omitted). To conduct this stream-of-commerce inquiry, we considered
myriad factors, including the perceived “practical, economic continuity in the
generation of goods and services,” id. at 913 (same), as well as considerations such
as where goods “come to rest,” id. at 916.
These judicially created tests risk taking on a life of their own. At bottom,
courts are easily lured by the flexibility of multi-part judicial tests and stray from the
predictable rigidity of the statutory text. Going forward, we should take great care
to reorient our legal analysis of the transportation-worker exemption by hewing to
the statutory text, applying the meaningful-variation and ejusdem generis canons to
determine whether a worker “play[s] a direct and ‘necessary role in the free flow of
goods’ across borders.” Sw. Airlines Co. v. Saxon, 596 U.S. 450, 458 (2022) (quoting
Circuit City Stores v. Adams, 532 U.S. 105, 121 (2001)). I concur because the
majority here faithfully applies this statutory analysis.