Issue link: https://read.dmtmag.com/i/164136
Cover Story the FAAAA. . . . Id., at [*55]. The effect of Massachusetts' unprecedented change in independent contractor law is to create a barrier of entry for interstate carriers and place an undue burden on market competition, which is foreclosed by the FAAAA." Id., at [*58]. Notably, the Sanchez Court was aware of the very recent Martins decision. Acknowledging it was reaching a different conclusion than in Martins, the Sanchez Court noted "Martins did not present the same substantive analysis the Court has applied in this case," Id., at [*61], distinguishing preemption of the plaintiffs' common law claims (in Martins) rather than the Section 148B statutory claim. The Court also noted "the Martins court did not have the benefit of the substantial evidentiary record that this Court has before it. The overwhelming evidence here conclusively demonstrates that Section 148B's enforcement against interstate motor carriers significantly impacts prices, routes and services." Id. The Court in Sanchez further explained that "the arguments made by the defendant in Martins with respect to pricing were posited differently, such that the Court did not analyze Section 148B's effect on [the] carriers' pricing through the same lens. The defendant in Martins merely argued that Section 148B affected the rates paid to drivers rather than carriers' costs, which in turn are passed on to customers through prices, which then affect the routes and services offered in the marketplace." Id., at [*63]. Finally, the Sanchez Court noted "Martins failed to consider Section 148B's distinct and restrictive independent contractor test, which if allowed to stand, would permit other states to adopt their own untraditional tests for independent contractor status, creating a patchwork of state laws nested in the guise of labor laws, which have the effect of dictating the types of employment relationship to be used in the marketplace. This is entirely inconsistent with the FAAAA's objectives." Id. With the decisions in Martins and Sanchez at odds with each other and within a week of the decision in Sanchez, this FAAAA preemption issue was addressed in yet a third case. In Massachusetts Delivery Association v. Coakley, Civil Action No. 10-11521-DJC, also pending in the U.S. District Court for the District of Massachusetts ("MDA"), the plaintiff trade association, which consists mostly of small parcel motor carriers who rely heavily on the use of owner-operators, sued Massachusetts' Attorney General seeking a judgment declaring that the second, "Prong 2" requirement of Section 148B is preempted by the FAAAA. On April 10, 2013 the parties' cross-motions for summary judgment in MDA were argued before the Court, Judge Denise Casper, who was aware of both the Martins and Sanchez decisions. Thus, it remains to be seen how the "tiebreaker" decision will be cast on the issue of FAAAA preemption of Section 148B. As of this writing, there has not yet been a decision on the MDA motions. The only thing certain at this point is that motor carriers in Massachusetts will have to wait a while longer for these cases to percolate up to the circuit courts – or perhaps higher – to learn whether they can use independent contractor drivers in Massachusetts without risk of the severe consequences imposed by the state law. OO Endnotes: Some creative motor carriers have argued, unsuccessfully, that they really are not "motor carriers" but merely provide a platform or some other intermediate means by which the driver carries out his delivery business. If that were the case, the driver would be the "motor carrier" and the motor carrier would be acting as a transportation broker – but of course, the bills of lading are in the carrier's name and all other attributes of a motor carrier are typically present. 2013 U.S. Dist. LEXIS 45753 (D. Mass. 2013). 2013 U.S. Dist. LEXIS 49174 (E. D. Va. 2013). The lawsuit was originally filed in Massachusetts. Due to a forum selection clause in the operating agreement, the Massachusetts action was dismissed and re-filed in Virginia. A notice of appeal was filed on April 9, 2013. Lasership submitted evidence of the difference in its revenue and profits by using owner-operators as opposed to what those figures would be if it were enforced to re-classify its drivers as employees and the significantly higher operating costs it would incur by having to pay health and workers' compensation insurance for the drivers / owner operator / September 2013 / / 26 OO 0913 text.indd 26 8/7/13 8:30 AM