By Daniel Wiessner
(Reuters) - U.S. appeals court judges on Tuesday said a recent U.S. Supreme Court ruling involving Southwest Airlines (NYSE:LUV) baggage handlers does not support Domino's Pizza (NYSE:DPZ) LLC's bid to force class action wage claims by delivery drivers into arbitration.
The three-judge 9th U.S. Circuit Court of Appeals panel in Seattle appeared unlikely to disturb its 2022 ruling that Domino's drivers are engaged in interstate commerce, exempting them from a federal law that requires the enforcement of agreements to bring legal claims in arbitration rather than court.
The drivers, who allege various wage law violations, pick up pizza ingredients at local warehouses and deliver them to Domino's franchises.
The issue is important because workers are much less likely to pursue claims individually in arbitration than they are to join class actions that can result in multimillion-dollar payouts.
The Supreme Court remanded Domino's case to the 9th Circuit to reconsider its decision in light of the high court's June 2022 ruling in Saxon v. Southwest Airlines.
The justices in that case said Southwest baggage handler supervisors are engaged in interstate commerce because they routinely load cargo onto planes that cross state lines.
But on Tuesday, the 9th Circuit judges said they did not see how the Southwest ruling made any difference in Domino's case. All three judges cited a footnote in the Southwest decision that said the Supreme Court was not addressing workers who are "further removed from the channels of interstate commerce or the actual crossing of borders."
"Both sides are arguing this is a slam drunk for them, but Saxon seems pretty irrelevant to me to decide this case," Circuit Judge Andrew Hurwitz said.
Circuit Judge Barrington Parker similarly said that in light of the Supreme Court's footnote, "I'm not clear what work we've got to do on this particular case."
Norman Leon, who represents Domino's, said the Supreme Court's key holding was that the arbitration exemption depends on the type of work employees perform, and not on the nature of the employer's business.
He said the 9th Circuit last year had focused on the fact that Domino's is in the business of delivering pizzas to customers, and not that the drivers were merely making local deliveries.
Aashish Desai, a lawyer for the drivers, countered that their work was part of a continuous flow of goods across state lines.
"Domino's has hired the big rig drivers (and) set up the supply chain," Desai said. "Whatever brief period of time the goods sit at the warehouse is irrelevant."
The panel includes Circuit Judge Kim Wardlaw.
The case is Carmona v. Domino's Pizza LLC, 9th U.S. Circuit Court of Appeals, No. 21-55009.
For the plaintiffs: Aashish Desai of Desai Law Firm
For Domino's: Norman Leon of DLA Piper
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