In Godfrey v, Oakland Port Services Corp., which was decided on October 28, 2014, the California Court of Appeal issued a published decision holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt California’s meal and rest period requirements. The case is significant because it is the latest California decision holding that the FAAAA does not preempt California’s wage and hour laws.

The decision relies primarily upon the Ninth Circuit Court of Appeal’s recent decision in Dilts v. Penske Logistics, LLC and the California Supreme Court’s decision in Harris v. Pac Anchor Transportation, Inc., both of which rejected challenges to California laws based upon FAAAA preemption. The decisions in Dilts and Pac Anchor each present a questionable analysis of FAAAA preemption not shared by other federal courts. Nonetheless, unless and until the Supreme Court of the United States grants review in either Dilts or Pac Anchor, these cases cast doubt as to whether transportation and logistics companies operating in California may use the FAAAA for protection from the application of California’s restrictive minimum wage, meal and rest period, and recordkeeping requirements.

Lavon Godfrey and Gary Gilbert were employed as truck drivers for Oakland Port Services Corp., which was doing business as AB Trucking. Godfrey and Gilbert initiated a class action lawsuit against the company, alleging that “AB did not pay its drivers for all hours worked, misclassified some drivers as non-employee trainees and did not pay them at all, and failed to provide required meal and rest breaks.”

The plaintiffs sought certification of the class of drivers who performed work for AB out of its Oakland, California facility. The trial court granted the plaintiffs’ class certification motion, and the case proceeded to a bench trial. The court awarded the class a total of $964,557.08, in addition to attorneys’ fees, litigation expenses, and class representative enhancements.

AB appealed arguing that federal law—the FAAAA—preempts application of California’s law on meal and rest break requirements to motor carriers. The FAAAA’s preemption clause restricts states from enacting or enforcing laws “related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” AB claimed that California’s meal and rest break laws have a significant impact on prices, routes, and services.

In addition, AB argued that the court order granting class certification was unsupported by substantial evidence, that the court should have reserved individual determinations of damages for the claims administration process, and that AB’s drivers are expressly excluded from coverage under Industrial Welfare Commission (IWC) Order No. 9-2001. The California Court of Appeal rejected AB’s preemption argument and its other arguments and affirmed the judgment of the trial court.