[00:00:00] Speaker 03:
All right, welcome to the Ninth Circuit.

[00:00:02] Speaker 03:
Thank you for hearing this case remotely by video.

[00:00:09] Speaker 03:
We rescheduled it, obviously, after the Supreme Court decision came down in Bissonnette.

[00:00:16] Speaker 03:
and we're now ready to proceed with the case set for argument today, Nair versus Medline Industries, case number 23-15582.

[00:00:27] Speaker 03:
Just remember, we've got 15 minutes per side, and let us know if you wanna reserve time for rebuttal, and we'll, we've got a little bit of time today, because you're the only case set for argument, so.

[00:00:40] Speaker 03:
We'll go ahead and hear first from, is it Mr. Grude?

[00:00:45] Speaker 04:
It is, Your Honor.

[00:00:46] Speaker 04:
Thank you.

[00:00:47] Speaker 04:
May it please the Court.

[00:00:48] Speaker 04:
Stephen Groot for the Medline Appellants, and I would like to reserve three minutes for rebuttal, please.

[00:00:54] Speaker 04:
The Lord Court committed reversible air here by finding that plaintiffs along to a class of workers who played a direct and necessary role in interstate commerce in the face of the evidence that failed to demonstrate that plaintiff loaded trucks that were frequently bound

[00:01:10] Speaker 04:
for interstate commerce or that the class of workers, the warehouse operators frequently perform duties beyond production related duties so that they could be viewed as playing a direct and necessary role in interstate commerce.

[00:01:25] Speaker 04:
And this case is distinguishable from fact in

[00:01:29] Speaker 04:
Because yes, like the plaintiff in Saxon, plaintiff loaded trucks, but the difference is here, there's insufficient evidence to show that the trucks were frequently bound for out of state with the goods.

[00:01:41] Speaker 03:
Can I, I want to walk through this a little bit because I read, I mean, we're relying on Saxon, which obviously is the Supreme Court case, but we've also got our prior case in Ritman.

[00:01:52] Speaker 03:
I've spent a fair bit of time trying to understand Ritman and it's not entirely clear.

[00:01:57] Speaker 03:
I'm interested in your reading of it.

[00:01:59] Speaker 03:
One reading of Ritman is we look at the whole stream of commerce, meaning where the products come from, then they come to the warehouse, and then when they leave.

[00:02:11] Speaker 03:
Do you read Ritman that way or do you read it more narrowly?

[00:02:15] Speaker 04:
Not exactly, Your Honor.

[00:02:16] Speaker 04:
I think Ripman and Ortiz both stand for the proposition that when the goods are already in the flow of interstate commerce and the person is handling them, then the courts have found in those two scenarios, last mile delivery drivers, interstate,

[00:02:31] Speaker 04:
and in the case of Ortiz, a warehouse worker, that they're engaged in interstate commerce.

[00:02:36] Speaker 04:
But the difference here is the goods were manufactured in California.

[00:02:41] Speaker 03:
Well, okay, let's stop right there.

[00:02:44] Speaker 03:
You say they were manufactured in California.

[00:02:45] Speaker 03:
As I understand it, the record says about 15% of the goods were manufactured in California.

[00:02:51] Speaker 03:
The Medline produced 15%.

[00:02:53] Speaker 03:
Do I have that wrong?

[00:02:55] Speaker 04:
Yeah, I don't know where that is in the record, Your Honor.

[00:02:57] Speaker 04:
I'm referring specifically to Plaintiff's Declaration and the record

[00:03:00] Speaker 04:
record page 34 and excuse me page 33

[00:03:04] Speaker 04:
in paragraph three of her declaration, quote, I packaged medical devices and other items, defended, manufactured at its Tracy, California warehouse and loaded them.

[00:03:15] Speaker 03:
I see.

[00:03:15] Speaker 03:
Okay.

[00:03:16] Speaker 03:
Okay.

[00:03:16] Speaker 03:
So that's, that's interesting.

[00:03:18] Speaker 03:
So that is her specifically.

[00:03:20] Speaker 03:
And that's a good, that's a good point.

[00:03:22] Speaker 03:
But do we are when is this analysis limited to her specific duties or the class of workers of which she's a part of their specific duties?

[00:03:32] Speaker 04:
It's both, Your Honor.

[00:03:33] Speaker 04:
It's the class of workers.

[00:03:34] Speaker 04:
And that's where it gets even, I think, better for us and not as good for the appellant, because a couple things on the evidence on the warehouse operator duties.

[00:03:42] Speaker 04:
First, she summarized the warehouse operator duties that purportedly came from a job description that she didn't attach to her declaration.

[00:03:51] Speaker 04:
And then Mr. Spivak attached warehouse duties from a job posting a year later for a different location, Rialto, California.

[00:03:58] Speaker 04:
But be that as it may, even if we just accept them as face value,

[00:04:01] Speaker 04:
and I think that's one of the errors the district court made.

[00:04:09] Speaker 04:
If you look at the district court's decision on page eight of the record, on page eight, the court specifically says, in his declaration, plaintiff attorney David Spivak has attached a job description posted on defendants website for warehouse operator at their Medline warehouse in Rialto, California.

[00:04:28] Speaker 04:
And then this is the part where I think he goes wrong.

[00:04:30] Speaker 04:
And I think that's one of the errors that the district court made.

[00:04:32] Speaker 04:
which indicates that interstate movement of goods was part of a warehouse operator's general duties.

[00:04:37] Speaker 04:
So there's nothing in there at all that talks about crossing of state lines or anything.

[00:04:42] Speaker 03:
Let me focus you in on paragraph four of her declaration where Nair says,

[00:04:54] Speaker 03:
Oh, a different team.

[00:04:56] Speaker 03:
I guess I hadn't picked up on that.

[00:04:57] Speaker 03:
A different team of defendants workers prepared the pallets for me.

[00:05:01] Speaker 03:
Oh yeah, to arrange in the truck trailers for shipping to destinations in and outside of California.

[00:05:10] Speaker 03:
Why isn't that enough to bring it into interstate commerce?

[00:05:14] Speaker 03:
Because she says that she was loading trucks, as I read this, she was loading trucks that shipped to destinations both in and outside of California.

[00:05:26] Speaker 04:
for two reasons, Your Honor.

[00:05:27] Speaker 04:
One, it lacks foundation, but putting that aside, it doesn't say with what frequency shipments are going out of state.

[00:05:36] Speaker 04:
And so this is more aligned with the gig economy case, whether it be

[00:05:41] Speaker 04:
The media auto from the circuit or Wallace from the second circuit and some district court decisions that basically say what was from Grubhub and Uber and Postmate drivers may cross state lines.

[00:05:53] Speaker 04:
That's incidental to the class of workers.

[00:05:56] Speaker 01:
Could I ask Mr. Good, you know, her declaration also talks about speaking to a truck driver who said that his, you know, one of the shipments that she prepared was for a truck driver who drove to Reno, and that he said that he does this same drive on a daily basis.

[00:06:13] Speaker 01:
And so I guess my question is, one of the things that the district court found was that her declaration establishes that she loads and works on pallets that head out to interstate travel on a daily basis.

[00:06:29] Speaker 01:
Aren't we supposed to look at that under a clear error standard?

[00:06:33] Speaker 04:
Yes, Your Honor, the standard is correct, but the premise of what Your Honor said respectfully is incorrect.

[00:06:39] Speaker 04:
The paragraph three of her declaration doesn't quite say that she loaded the pallets onto the truck of that particular Nevada driver.

[00:06:47] Speaker 04:
She actually says,

[00:06:48] Speaker 04:
that the driver on one occasion told her, and she says that she loads trucks.

[00:06:53] Speaker 04:
She never said she loaded his trucks.

[00:06:55] Speaker 04:
She never says with what frequency, how many trucks a day she loads, how much of the load is going to Nevada.

[00:07:01] Speaker 04:
Just hypothetically, let's say she loaded a truck and every single delivery was in California, except for one last stop in Reno.

[00:07:09] Speaker 04:
I'm making up numbers here, but let's say there was three California stops.

[00:07:12] Speaker 04:
and one in Reno, are we to say now that every case where something just crossed the state lines even once, that they're frequently engaged in interstate government?

[00:07:22] Speaker 01:
Let me ask you this, because we recently had the Lopez decision come out a few days ago, and that was about a person who fueled airplanes that traveled both interstate and domestically.

[00:07:37] Speaker 01:
The court wasn't engaging in some kind of analysis of how many airplanes were flying to local destinations versus interstate destinations.

[00:07:46] Speaker 01:
It was enough that this worker was working with the channels of commerce to satisfy the requirements for the exemption.

[00:07:56] Speaker 01:
I guess my question is, what case would you align on for the proposition that a plaintiff has to specify which trucks are going where on a frequency basis in order to satisfy the exemption?

[00:08:12] Speaker 04:
It's not necessarily that the plaintiff has to show that for themselves, but the plaintiff has to show that a class of workers is engaged in interstate commerce.

[00:08:21] Speaker 04:
So the cases I would rely on for that general proposition, Your Honor just stated, are the gig economy cases like Imediato from the First Circuit, Wallace from the Seventh Circuit, and even Lopez versus Cintas in the Fifth Circuit.

[00:08:34] Speaker 04:
or they basically say if it's if it's predominantly interest state it's not enough that there's some it that some small portion of the class of workers is dealing with goods that cross state lines here's the problem with the lopez case though i i would agree with you and if if this was in the fifth circuit

[00:08:53] Speaker 03:
You might well have an easy case, but Lopez specifically mentioned that Ritman went the other way.

[00:09:01] Speaker 03:
And that's what I'm struggling with is we seem to have a circuit split.

[00:09:04] Speaker 03:
At least, I mean, whether the circuit split is on the specific issue that affects us, I don't know in this case.

[00:09:11] Speaker 03:
But I'm not sure how much you can rely on Lopez when the Ninth Circuit seems to have rejected that already.

[00:09:17] Speaker 04:
Fair enough, your honor.

[00:09:18] Speaker 04:
And I do agree there's a circuit split.

[00:09:19] Speaker 04:
And as your honors probably know, there's a petition requesting review of Ortiz before the U.S.

[00:09:25] Speaker 04:
Supreme Court, which has not been ruled upon yet.

[00:09:28] Speaker 04:
But either way, the fundamental difference with Ritman and with Ortiz, for that matter, which, you know, I recognize this court is bound by at this juncture,

[00:09:36] Speaker 04:
is that the goods

[00:09:53] Speaker 04:
they still qualified for the exemption.

[00:09:56] Speaker 04:
And in Ortiz, it was undisputed that the products were coming from overseas and elsewhere, and they were handling them to be turned around and flipped.

[00:10:03] Speaker 04:
Here we have these products originating in California at the location, and we have super flimsy evidence that the products were actually going interesting.

[00:10:15] Speaker 04:
And actually, I think the inference is reasonable.

[00:10:17] Speaker 00:
Can I interrupt you for a second?

[00:10:20] Speaker 00:
What is the burden of

[00:10:22] Speaker 00:
not the burden.

[00:10:24] Speaker 00:
What is the standard of proof that you think the district court needed to apply?

[00:10:27] Speaker 00:
It seems most of our cases talk about the legal standard.

[00:10:31] Speaker 00:
that you've got workers directly involved in the transportation of goods.

[00:10:34] Speaker 00:
I'm not quite sure where, what authority there is in terms of what's the evidentiary standard.

[00:10:40] Speaker 00:
Is it a preponderance?

[00:10:42] Speaker 04:
It is.

[00:10:42] Speaker 04:
It is, Your Honor.

[00:10:43] Speaker 04:
It's a preponderance of the evidence standard that plaintiff had to establish when she was engaged in interstate commerce.

[00:10:48] Speaker 04:
And then you get into the, when she had a class of workers that she belongs to were engaged in interstate commerce.

[00:10:54] Speaker 04:
And then you get into the standard of what it means to be

[00:10:56] Speaker 04:
engaged in their state commerce and Sachs then instructs us that the class has to be frequently engaged.

[00:11:03] Speaker 04:
It talks about direct and necessary role.

[00:11:07] Speaker 00:
So I mean, I don't think you would dispute, right, that the workers here are involved in the movement of goods.

[00:11:12] Speaker 00:
Your only dispute is where the goods going.

[00:11:15] Speaker 04:
Correct.

[00:11:16] Speaker 04:
That's one of my disputes, but I agree with your first point, Your Honor.

[00:11:21] Speaker 04:
My other dispute is that plaintiff didn't put it in the evidence that the warehouse operators had a whole load trucks, but I agree with what Your Honor said so far.

[00:11:31] Speaker 01:
So let me ask this because there's other evidence that the district court pointed to about the dealer program and advertisements by Medline that it has 43 or more nationwide distribution centers and that it does in fact distribute throughout the country.

[00:11:52] Speaker 01:
So is it the case that Medline is only manufacturing in California and sending goods out?

[00:12:00] Speaker 04:
No, Your Honor.

[00:12:01] Speaker 04:
But in this case, on this record, the products at this plane of touch were manufactured in California.

[00:12:07] Speaker 04:
And on the second point, I think all that stuff about the dealer drop program and et cetera was a lot more relevant before Bissonnette when we were arguing over whether Medline's a transportation company.

[00:12:19] Speaker 04:
If the court is to draw any reasonable inference from having 43 distribution centers,

[00:12:23] Speaker 04:
it's that they don't need any crossing state lines most of the time because they have enough distribution centers to be, you know, facilitating their local sales.

[00:12:33] Speaker 01:
Does Medline ever bring goods into California from interstate in order to sell to California customers or to distribute to California customers?

[00:12:47] Speaker 04:
It's not on the record, so I don't know for sure.

[00:12:49] Speaker 04:
I mean, I think the inference is that they bring materials in to be manufactured there, at least.

[00:12:53] Speaker 04:
And with that, I'm happy to answer any other questions.

[00:12:56] Speaker 03:
We'll give you time.

[00:12:58] Speaker 03:
I think Judge Forrest had a question, and then I've got a couple questions as well.

[00:13:02] Speaker 03:
And we'll give you time.

[00:13:03] Speaker 03:
Don't worry.

[00:13:04] Speaker 03:
Thank you.

[00:13:04] Speaker 00:
So I wanted to go back to the part of the declaration that you read, which I think you read to say that the goods that this worker is involved with were manufactured in the Tracy, California location.

[00:13:15] Speaker 00:
Is that how you read what you read to us?

[00:13:18] Speaker 02:
Yes.

[00:13:19] Speaker 00:
Because I read that as her saying that she was loading things in the Tracy, California location, not that the things she was loading were manufactured there.

[00:13:31] Speaker 04:
Respectfully, Your Honor, it says, defendant manufactured at its Tracy, California warehouse.

[00:13:36] Speaker 04:
It does say that.

[00:13:37] Speaker 00:
I hadn't picked that up.

[00:13:38] Speaker 00:
Read the whole sentence.

[00:13:39] Speaker 00:
Read the whole sentence.

[00:13:40] Speaker 04:
I packaged medical devices and other items defendant manufactured in its Tracy, California warehouse and loaded them onto trucks that were traveling to various destinations.

[00:13:50] Speaker 00:
I read that as I load these things that the defendant manufactured and I'm loading them in Tracy, California because it says otherwise.

[00:13:58] Speaker 00:
I mean, there's nothing in the record to establish.

[00:14:01] Speaker 00:
Oh, I see.

[00:14:02] Speaker 00:
That is a manufacturing location.

[00:14:06] Speaker 03:
Yeah, that's a good point.

[00:14:07] Speaker 03:
Because I wanted to point you along that same line, ER 139 records says that Medline manufactures only 15% of its products.

[00:14:21] Speaker 03:
As I understand it, it's got a product line of about 5,000 products.

[00:14:24] Speaker 03:
About 15% of those are manufactured by Medline, presumably in California.

[00:14:31] Speaker 03:
But that means that there's a whole bunch of these that are manufactured by third parties.

[00:14:39] Speaker 04:
Yeah, I mean, I think that's fair.

[00:14:40] Speaker 04:
I think the numbers are off in the sense that I think it's 80,000 that they manufacture against 500,000, but your percentages are near your arm.

[00:14:49] Speaker 03:
But it does say other items defendant manufactured.

[00:14:54] Speaker 03:
Is the shipment split up that way where you're like, hey, our manufactured items are sent out through this warehouse?

[00:15:01] Speaker 03:
not the other 85% that are not manufactured are sent out by another warehouse?

[00:15:09] Speaker 04:
I just don't know your honor and you know I have the same record you do unfortunately or fortunately as chase may be um and uh and so that you know that's what I've been working with here

[00:15:20] Speaker 04:
Um, unless the court has other questions for me at this moment, I'd like to reserve the rest of my time.

[00:15:25] Speaker 03:
Is there anything, is there any evidence of what, at least the items that are manufactured by Medline, are they all manufactured in California?

[00:15:35] Speaker 03:
Do we even know the answer to that?

[00:15:38] Speaker 03:
I don't know for certain, ma'am.

[00:15:39] Speaker 03:
I don't believe that to be the case.

[00:15:40] Speaker 03:
Okay.

[00:15:42] Speaker 03:
Okay.

[00:15:44] Speaker 03:
Okay.

[00:15:44] Speaker 03:
Yeah, we'll give you time, unless there's more questions.

[00:15:48] Speaker 03:
Thank you.

[00:15:53] Speaker 03:
Mr. Spivak?

[00:15:58] Speaker 03:
You're on mute.

[00:16:02] Speaker 02:
Good morning and may it please the court.

[00:16:04] Speaker 02:
I'm David Spivak and I will be arguing for Desjardins.

[00:16:08] Speaker 02:
She is the appellee and the plaintiff in the court below.

[00:16:11] Speaker 02:
I'd start by saying that the district court got this one right and I'd like to go directly to address some of the points that the court has raised with Mr.

[00:16:20] Speaker 02:
Grood, which I think are the elephant in the room in this case, is there after Bissonnette and the decisions that preceded some kind of quantification standard that's been set up either by the Supreme Court of the United States or the Ninth Circuit where a plaintiff

[00:16:39] Speaker 02:
who is attempting to show that she is an interstate commerce worker, an interstate transportation worker, must show that a specific percentage of the products that she is responsible for moving or touching made it out of state versus those that did not.

[00:16:59] Speaker 02:
And I don't think there has been such a test, and I don't think it's a problem here.

[00:17:03] Speaker 03:
In fact, I think it's such a test

[00:17:07] Speaker 03:
Can I ask?

[00:17:08] Speaker 03:
You may be right about that, and we'll have to grapple with that.

[00:17:11] Speaker 03:
But I wanted to ask some specific questions.

[00:17:14] Speaker 03:
First of all, about this dealer.

[00:17:17] Speaker 03:
Here's the problem.

[00:17:19] Speaker 03:
I don't think we have a good sense from the record of actually how this stuff works.

[00:17:24] Speaker 03:
You heard some of the questioning.

[00:17:26] Speaker 03:
Where are the products manufactured?

[00:17:28] Speaker 03:
I hadn't focused on this, but it is true that at paragraph three, she says, I packaged medical devices and other items defendant-manufactured.

[00:17:39] Speaker 03:
Now, whether it's manufactured at its Tracy, California warehouse, or whether it's just the defendant-manufactured, that seems to narrow this down to the products.

[00:17:49] Speaker 03:
She may have been inaccurate in her affidavit,

[00:17:52] Speaker 03:
But this seems to narrow down the products that we're looking at here because from what I read from ER 139, Medline only manufactures 15% of its products.

[00:18:04] Speaker 03:
We don't even know, unless you can point us, are those 15% of products that Medline manufactures, are those all manufactured in California or some of those shipped interstate?

[00:18:17] Speaker 02:
Well, it's not in the record, Your Honor, and what we do have in the record, however, it's sufficient for the court in the court below to have satisfied everyone else that there was enough going into interstate transportation in this particular case.

[00:18:33] Speaker 02:
Well, can I ask about that?

[00:18:35] Speaker 03:
I want to push back a little bit because what the district court said, it relied on the dealer prop ship program.

[00:18:45] Speaker 03:
But the evidence that the district court relied on was marketing materials from the website that weren't even posted till a year after she worked there.

[00:18:57] Speaker 03:
Is there any evidence in the record that this dealer prop ship program was in place while Mayor was working there?

[00:19:06] Speaker 03:
Is there any evidence that as to how it operates, was she loading trucks

[00:19:12] Speaker 03:
consistent with the dealer prop ship program or was she loading trucks differently?

[00:19:19] Speaker 02:
But there isn't evidence in support of the court's first point about whether this program was in place or not where my client worked.

[00:19:26] Speaker 02:
But I think it's irrelevant in view of the entire record below.

[00:19:30] Speaker 03:
If you look at my client's death, the Russians... But you would agree that if... Hold on.

[00:19:33] Speaker 03:
Wait.

[00:19:34] Speaker 03:
Back up.

[00:19:34] Speaker 03:
You would agree with me then that the district court probably should not have relied on the dealer brought ship program because that is not probative as to what Nair's responsibilities were.

[00:19:49] Speaker 02:
I think if you look at the entire record, it is probative, Your Honor.

[00:19:53] Speaker 02:
That was simply one example of the significant level of interstate shipping.

[00:19:58] Speaker 03:
Let's go through the other example.

[00:19:59] Speaker 03:
The other example is the Reno truck driver.

[00:20:03] Speaker 03:
Now, there's a couple of ways to look at this.

[00:20:06] Speaker 03:
Number one, I think what we just heard was there's no evidence that Nair actually loaded a truck that was headed to Reno.

[00:20:15] Speaker 03:
She apparently, if you read this, she talked to a truck driver who said that he came in every day to and from Reno.

[00:20:22] Speaker 03:
There's no evidence that she loaded that truck.

[00:20:26] Speaker 03:
Now, here's my first question.

[00:20:27] Speaker 03:
Does that matter?

[00:20:29] Speaker 03:
Or can we assume that whether or not Nair personally loaded that truck, the class of workers of which she was a part of loaded that truck?

[00:20:41] Speaker 02:
Your Honor, I think you can only assume that she loaded the truck based on the way her declaration is written.

[00:20:47] Speaker 02:
She says that one of the things she did in loading these trucks, which she said she did every day and all day, along with many other workers she observed, was to look at destination lists, and that's referenced in her declaration.

[00:21:00] Speaker 02:
And these destination lists, one of which said Reno, Nevada.

[00:21:03] Speaker 02:
Then you get to the driver and she happens to speak to one of these drivers of the trucks that she's loading and other workers like her are loading at the Tracy distribution center.

[00:21:14] Speaker 02:
And he says, I'm taking things to Reno every day.

[00:21:18] Speaker 02:
I think the only fair assumption or inference that can be drawn from this is that she is putting these things on the trucks in pallets along with the aid of other workers that are then being taken by the drivers working for Medline to go to many places, including out of the state of California.

[00:21:37] Speaker 01:
And you draw this from the fact that she

[00:21:42] Speaker 01:
Because as she's at the shipping dock, she knows the destinations of where these things are going.

[00:21:47] Speaker 01:
And so that's how you're connecting it to the conversation with that driver.

[00:21:53] Speaker 02:
Correct, Your Honor.

[00:21:54] Speaker 02:
She does know to a certain extent because she's looking at the destination sheets.

[00:21:58] Speaker 02:
How well she's paying attention to it and quantifying it to determine how much of this is within the state versus over the borders is a question we were unable to answer with our witness in the court below.

[00:22:09] Speaker 03:
But I don't think we need to.

[00:22:12] Speaker 03:
Why weren't you able to answer that?

[00:22:14] Speaker 03:
That's where I'm struggling here, because I'm hesitant.

[00:22:17] Speaker 03:
Look, I'm hesitant to just allow all these inferences to come in.

[00:22:22] Speaker 03:
I mean, maybe that's the way it should go.

[00:22:24] Speaker 03:
Maybe under Ritman, we've sort of, maybe we've eliminated the need even to draw these inferences.

[00:22:31] Speaker 03:
But it seems to me she knew where the destiny, she was seeing the destination list.

[00:22:36] Speaker 03:
Did you ask for discovery of the destination lists?

[00:22:40] Speaker 02:
That's exactly what we did, Your Honor.

[00:22:42] Speaker 02:
In our opposition, and you can see this in our memorandum points and authorities, we said, look, there is a dispute between the parties here.

[00:22:50] Speaker 02:
Let us conduct discovery on this subject so we can figure out whether our client is truly an interstate transportation worker or not.

[00:22:58] Speaker 02:
And of course, implicit in that is how much contact she's having with products of Medline that are going over the borders.

[00:23:06] Speaker 02:
The defendant didn't take us up on it, nor did the court below.

[00:23:10] Speaker 02:
And I think what the court below said was, you don't need to do that because Mr. Epperson's declaration, the head of human resources,

[00:23:18] Speaker 02:
makes it abundantly clear that these guys are putting things on trucks all day and shipping things.

[00:23:24] Speaker 02:
This is what warehouse operators do, whether they're in reality or not.

[00:23:28] Speaker 02:
He doesn't distinguish.

[00:23:29] Speaker 02:
He says this is what they're all doing.

[00:23:32] Speaker 02:
And I believe that, combined with my client's declaration about

[00:23:38] Speaker 02:
what she observed on the lists and who she spoke to who were drivers and the training program she talked about in her declaration where she says she was expected by Medline

[00:23:51] Speaker 02:
to ship things not only in California, but nationwide.

[00:23:57] Speaker 02:
The very arbitration agreement that we are talking about in this case, the premise of it is that this is a company that sends things both domestically and internationally.

[00:24:08] Speaker 02:
Mr. Epperson makes that clear.

[00:24:10] Speaker 02:
The defendant makes that clear in their MPA.

[00:24:13] Speaker 02:
The defendant here, or the appellant here, is simply trying to hold plaintiff's feet to the fire for a record that is in some ways paltry due to the defendant's own making.

[00:24:27] Speaker 02:
The defendant in the Epperson Declaration had every opportunity.

[00:24:29] Speaker 03:
Well, but it sounds like the district, counsel, it sounds like the district court, though, also didn't allow discovery.

[00:24:35] Speaker 03:
And one way to handle this, I'm not sure that it's where we need to go, but one way to handle this would be to send it back down and say no.

[00:24:42] Speaker 03:
We do need discovery because the record is not clear.

[00:24:47] Speaker 03:
It may well be that your client is ultimately able to bear her burden by leaps and bounds.

[00:24:57] Speaker 03:
I have some concern about whether this satisfies that based on what we're reading now.

[00:25:04] Speaker 03:
It would have been better to have a little bit more discovery.

[00:25:07] Speaker 03:
I'm not faulting you for that, but I wonder if we need to send a message that it's not enough just to kind of do a gut check.

[00:25:14] Speaker 03:
We need to actually look at this stuff and figure it out.

[00:25:18] Speaker 03:
Let me ask you this.

[00:25:20] Speaker 03:
Let's say, because what we also don't know, let's get back to where you started, that there's no

[00:25:26] Speaker 03:
there's no comparative, the frequency isn't important.

[00:25:32] Speaker 03:
So if, your position would be if a hundred shipments went out every day, 99 of them went within California from Tracy warehouse, and then this one truck, she happens to talk to the one truck driver who goes to Reno every day, your position would be that would be enough, no matter what, right?

[00:25:50] Speaker 02:
Combined with the training she received, which is recounted in her declaration, it is more than enough, including the destination sheet and including the fact that this is a company that says in its arbitration agreement, which we know predates the other materials in question, that they are shipping domestically and internationally.

[00:26:11] Speaker 02:
There is no doubt things are going elsewhere.

[00:26:14] Speaker 02:
And it doesn't matter if my client is at the beginning of the journey, the middle of the journey, or the end.

[00:26:20] Speaker 02:
There can be nothing more intimately connected with interstate commerce, as we know from the Birch decision, which even predates the FAA, than somebody who is loading cargo.

[00:26:32] Speaker 02:
And she, unlike a gig worker, is doing that every single day, going into trucks that are traveling this 200-mile journey from Tracy to Reno, Nevada, among other places.

[00:26:45] Speaker 02:
If we get into a quantification battle in the courts below, this will run into the very problem that Bissonette was concerned with.

[00:26:54] Speaker 02:
Bissonette was concerned with something comparable.

[00:26:58] Speaker 02:
How do we determine whether a company is a delivery company or a pizza company?

[00:27:03] Speaker 02:
How do we determine those things?

[00:27:04] Speaker 02:
Do we want these simple motions to arbitration to be converted into these discovery-intensive, slow mini-trials in which we go through manifest after manifest after manifest to calculate how much one worker versus another was responsible for packages going over the borders or staying within the borders?

[00:27:26] Speaker 02:
This won't be a simple arbitration motion anymore.

[00:27:29] Speaker 02:
This will be a trial.

[00:27:31] Speaker 01:
Let me ask this, Mr. Spivak.

[00:27:32] Speaker 01:
I'm not sure that we're even in a quantification battle, because I haven't seen anything on the record from MEDLINE to suggest that it is only shipping within the state of California.

[00:27:44] Speaker 01:
And so I go back to our recent case in Lopez, where the district court there said that the evidence that the plaintiff put forward was uncontradicted by the defendants.

[00:27:57] Speaker 01:
And here, the district court said something similar, that there was no evidence to contradict what plaintiff was saying about the movement in interstate.

[00:28:06] Speaker 01:
So do we even need to get into a quantification issue if there isn't any evidence to juxtapose or to suggest from Medline that he was actually only shipping within the state, you know, from his Tracy warehouse, for example?

[00:28:23] Speaker 02:
We don't, Your Honor, because my client has said enough in her declaration, and Mr. Epperson has said enough in his declaration, which does not contradict in any remote sense what my client says about the work she did every day and the work she observed the other warehouse operators, the members of the class, that she was observing every day.

[00:28:44] Speaker 02:
So I think we have more than enough here, and I just think to try to-

[00:28:49] Speaker 03:
I just want to push back on that a little bit, because on the one hand, you didn't even need discovery, right?

[00:28:55] Speaker 03:
She read these manifests.

[00:28:57] Speaker 03:
She could have put in her declaration, hey, I know these were going to Nevada and Idaho and Arizona.

[00:29:06] Speaker 03:
She didn't do any of that.

[00:29:08] Speaker 03:
I mean, it's interesting that she didn't make this a little easier on the record.

[00:29:16] Speaker 02:
I believe she did enough of that, Your Honor, by saying they went everywhere.

[00:29:21] Speaker 02:
They didn't just go within the state of California.

[00:29:24] Speaker 02:
They went out of the state.

[00:29:25] Speaker 02:
The one she could remember was Reno, Nevada.

[00:29:28] Speaker 02:
But again, consider the vantage point of my client, Mr. Epperson, the Director of Human Resources, was in a much better position to marshal the evidence on this score and chose not to do so in response to my client's declaration.

[00:29:41] Speaker 02:
My client was, as a simple warehouse worker that she was, able to say long after her employment ended, I remember this much.

[00:29:52] Speaker 02:
I remember I was trained and it was an expectation that I would be shipping within the state, without in the state, that I moved things on the trucks every day.

[00:30:00] Speaker 02:
I saw a destination list that talked about things going throughout the country.

[00:30:04] Speaker 02:
And one place I remember specifically was the Renona Vapor.

[00:30:07] Speaker 02:
Perhaps the reason she remembers that so well was this discussion she recounts about the truck driver reporting to her that he was leaving that warehouse every day, destined for Reno, Nevada.

[00:30:20] Speaker 03:
We are not at the- Can I ask you, if we just had paragraph four of her affidavit, let's say this was all that was in the record, and she said, I arranged on truck trailers for shipping to destinations in and outside of California.

[00:30:35] Speaker 03:
Would that be enough on its own setting?

[00:30:37] Speaker 03:
Let's say we rejected all the other evidence.

[00:30:41] Speaker 03:
Would that be enough to find interstate commerce here based on that statement alone?

[00:30:47] Speaker 03:
It would because she says every day.

[00:30:50] Speaker 03:
And then your position is, if Medline doesn't agree with that, she's met her burden, then Medline can come back and say, well, this is what she said, but let's look at how this actually works.

[00:31:01] Speaker 03:
And that's not accurate.

[00:31:03] Speaker 02:
Absolutely.

[00:31:04] Speaker 02:
They could have taken me up on my offer of discovery.

[00:31:06] Speaker 02:
They could have taken depositions.

[00:31:08] Speaker 02:
They could have done what Uber did in Capri at all.

[00:31:11] Speaker 02:
And we can't forget that Uber and Caprio marshaled evidence of the number of drives that went to airports, 10.1%.

[00:31:18] Speaker 02:
They marshaled the number of drives that left the state of California, 2.5%.

[00:31:24] Speaker 02:
We're not in that territory.

[00:31:26] Speaker 02:
My client wasn't doing something incidental and casual by moving things onto trucks.

[00:31:31] Speaker 02:
This was daily for her, what she and the class of workers she intends to represent were doing every day of the week.

[00:31:38] Speaker 02:
And we know if it's happening every day, it's a lot more than 2.5%.

[00:31:44] Speaker 02:
The kind of hair splitting the defendant would ask us to get into without having beefed up the record as it could have in the court below would simply create a problem for every other arbitration motion that ends up before this court on appeal, which is exactly what's going to happen if we have these enormous discovery battles in the courts below about

[00:32:06] Speaker 03:
I'm sensitive to what you're saying, but I'm also sensitive to the idea that we don't want to read the interstate requirement as just a minor hurdle that is a nuisance.

[00:32:18] Speaker 03:
I mean, it has some meaning.

[00:32:20] Speaker 03:
And so, I mean, there should be a requirement, a threshold requirement to meet it.

[00:32:28] Speaker 03:
Maybe you have here.

[00:32:30] Speaker 03:
but you understand the balance that we're trying to weigh here.

[00:32:33] Speaker 03:
We don't want these to turn into battle royales, but we also want to make sure that there's evidence in the record that it actually is interstate commerce.

[00:32:42] Speaker 02:
And you're honored to answer your question.

[00:32:44] Speaker 02:
If Mr. Epperson, hypothetically speaking, had said in his declaration, we never ship from that Tracy warehouse to anywhere outside the bounds of the state of California.

[00:32:54] Speaker 02:
And my client had said nothing about where the products were going.

[00:32:57] Speaker 02:
We wouldn't be here.

[00:32:58] Speaker 02:
I would have lost in the court below.

[00:33:01] Speaker 02:
But those aren't our facts.

[00:33:02] Speaker 02:
Our facts are substantially more on the subject of interstate transportation.

[00:33:07] Speaker 02:
And my client, if we look at the Ortiz case, which I think is the closest to ours,

[00:33:11] Speaker 02:
Ortiz was moving things just a few feet, admittedly, a very small distance within a warehouse.

[00:33:18] Speaker 02:
We don't even know if he moved things anywhere near the trucks just within the warehouse.

[00:33:22] Speaker 02:
And the Ninth Circuit determined that that was sufficient.

[00:33:25] Speaker 02:
I can't see by any stretch of the imagination how, with the amount my client has set on the subject of interstate transportation in this case, that she would be denied the benefits of the exemption as Mr. Ortiz was in that case.

[00:33:40] Speaker 03:
Thank you, Council, unless any of my colleagues have other questions.

[00:33:45] Speaker 03:
Mr. Grood, we'll give you two minutes for rebuttal.

[00:33:49] Speaker 03:
Thank you, Your Honors.

[00:33:52] Speaker 04:
Your Honors, first, the question is not whether the company is in interstate commerce.

[00:33:57] Speaker 04:
The question is that Saxon asked the Court and us to look at is what the class of workers is.

[00:34:02] Speaker 04:
And the class of workers have to be frequently engaged in interstate commerce.

[00:34:06] Speaker 04:
Just Nelson pointed out, the plaintiff was in a position to declare this.

[00:34:11] Speaker 04:
If you look at paragraph five on page 34 of the record, the paragraph is incredibly detailed about how she organized the packages, put the labels on them, organized them by the destinations.

[00:34:22] Speaker 04:
And then in the end, it's a big load up, and all it says is, after I loaded the pallets onto the truck trailers, the truck drivers would transport them to various destinations.

[00:34:34] Speaker 04:
It doesn't even say various destinations

[00:34:36] Speaker 04:
in and outside of California there.

[00:34:38] Speaker 04:
It just says various destinations.

[00:34:40] Speaker 04:
I submit that the declaration was carefully crafted because the reality was the only evidence of Nevada that the plaintiff had was this reported conversation with a driver.

[00:34:53] Speaker 04:
Additionally, Your Honors,

[00:34:56] Speaker 04:
There has to be, there does have to be some quantification.

[00:35:01] Speaker 03:
It can't just be none.

[00:35:01] Speaker 03:
What about Mr. Grude, what about the suggestion that she's met some sort of prima facie requirement?

[00:35:08] Speaker 03:
She does say, we shipped it to destinations in and outside of California.

[00:35:13] Speaker 03:
She does say that at least one truck was going daily between Reno and Tracy.

[00:35:20] Speaker 03:
Why doesn't that shift the burden to you?

[00:35:23] Speaker 03:
And you could have put in an affidavit just saying, we don't do this.

[00:35:26] Speaker 03:
I mean, you sort of seem to be hiding behind the ball.

[00:35:29] Speaker 03:
My fear is if we took you up and remanded this to the district court, my suspicion is there'd be plenty of evidence.

[00:35:36] Speaker 03:
These shipments were going outside of California.

[00:35:39] Speaker 04:
There's two questions I'd like to answer, Your Honor, that you just posed that I'm not sure in 19 seconds we'll get it done.

[00:35:44] Speaker 04:
The first is on the on the declaration.

[00:35:46] Speaker 04:
I just want to point out we had one week for a reply in a 16 page opposition that asserted about 20 challenges to to Arbitrability.

[00:35:54] Speaker 04:
Only one page is on the transportation worker exemption.

[00:35:57] Speaker 04:
It wasn't really a real practical place to focus the efforts on the evidence at that point, particularly before the Ortiz case hadn't even come out.

[00:36:06] Speaker 04:
It was unheard of to have a warehouse, you know, associate person, you know, be a transportation worker exemption.

[00:36:12] Speaker 04:
Mr. Spivak was essentially trying to create new law at that point based on Saxon.

[00:36:17] Speaker 04:
And on your honor's other question, which now I lost.

[00:36:21] Speaker 03:
I'm sorry.

[00:36:21] Speaker 03:
Well, my other question was, let's say we did remand this back down.

[00:36:26] Speaker 03:
My suspicion, and I want to give you an opportunity to correct me, is that there would be plenty of evidence that these shipments were going interstate and intrastate.

[00:36:37] Speaker 04:
I actually don't know the answer to that, Your Honor, but I will just say, if you look at the record on page 136, where plaintiff asked the court to allow for discovery, it's not as broad as Mr. Spivak makes it sound.

[00:36:49] Speaker 04:
In there, he actually says,

[00:36:52] Speaker 04:
He makes some quotes from Mr. Epperson's declaration, but the quotes he makes, none of that plain of dispute to that point, that the warehouse operators are nearly always working in a Medline facility, meaning they're not driving off somewhere, and that they're putting away incoming inventory, picking product, packing it, repacking or staging it,

[00:37:10] Speaker 04:
And so all he asks for is that before the court decide that he should have an opportunity to depose Mr. Epperson or others before the court credits Mr. Epperson's declaration.

[00:37:20] Speaker 04:
They haven't argued that Mr. Epperson's declaration is not credible.

[00:37:23] Speaker 04:
They're just claiming that it wasn't enough.

[00:37:24] Speaker 04:
So it's not, they really haven't asked for the type of discovery that your, that your honors have been talking about today.

[00:37:30] Speaker 01:
So can I ask, you know, if this declaration were just paragraph four, you know, there may be issues with it.

[00:37:37] Speaker 01:
But paragraph 12 about the training video.

[00:37:41] Speaker 01:
It kind of makes it hard to judge Nelson's point, to think that somehow there is not interstate commerce happening.

[00:37:49] Speaker 01:
I mean, you have a training video that explains defendantship, the expectation that the class of workers that plaintiff is involved in is going to ship medical supplies throughout the country, and they show a map of the United States.

[00:38:06] Speaker 01:
with all of the defendant's facilities throughout the United States.

[00:38:10] Speaker 01:
And this is being shown to people, to warehouse operators at its Tracy facility.

[00:38:14] Speaker 01:
So why isn't it reasonable to infer that that's actually what happens?

[00:38:18] Speaker 01:
That consistent with the plaintiff's declaration, it is actually going to destinations outside of California.

[00:38:26] Speaker 04:
Because I think the presumption is the training video is being used across the country for everybody.

[00:38:32] Speaker 04:
And obviously, you would expect to have probably differences in places like the tri-state area of New York or something.

[00:38:38] Speaker 04:
You might somewhere else.

[00:38:40] Speaker 04:
And ultimately, the legal standard is what the plaintiff, you know, what the class of workers here did and what the plaintiff did.

[00:38:46] Speaker 04:
And so we look at her evidence.

[00:38:47] Speaker 04:
The evidence about her allegedly

[00:38:51] Speaker 04:
And again, if we're under the, if we made assumptions that it went to Nevada once out of 100 or once out of 30, I don't think it would be enough under the line of cases I've already discussed.

[00:38:56] Speaker 04:
And again, if we're under the, if we made assumptions that it went to Nevada once out of 100 or once out of 30, I don't think it would be enough under the line of cases I've already discussed.

[00:39:07] Speaker 04:
at the beginning, where goods are manufactured in California, say ingredients come from outside of California, they're manufactured in California, and then they're delivered in California, but some people in the group sometimes cross state lines.

[00:39:21] Speaker 04:
That's even, I think, a stronger case for interstate commerce than we have here, because she's not the one driving, yet the courts have found that the class of workers are not engaged in interstate commerce.

[00:39:31] Speaker 04:
I see my time is more than up.

[00:39:33] Speaker 04:
I'm happy to answer any questions.

[00:39:35] Speaker 04:
I'll submit, Your Honors.

[00:39:36] Speaker 03:
Okay, thank you.

[00:39:38] Speaker 03:
Thank you to both counsel for your arguments in this interesting case.

[00:39:41] Speaker 03:
The case is now submitted and that resolves our arguments for the day.

[00:39:46] Speaker 03:
Thank you.