Unreported / Non-Citable
Background
California delivery drivers Jordan Orozco Madero and Esteban Orosco sued McLane Foodservice for overtime and related wage violations. The district court granted McLane partial summary judgment on the federal Fair Labor Standards Act claim, finding the drivers exempt under the Motor Carrier Act because their work was part of interstate transportation.
After disposing of the federal claim, the court dismissed the remaining California claims without prejudice, concluding that diversity jurisdiction was absent. The drivers appealed the overtime ruling, and McLane cross-appealed the jurisdictional dismissal.
The Court’s Holding
The Ninth Circuit affirmed the Motor Carrier Act exemption. Interstate character turns on the shipper’s fixed and persisting intent when goods begin their journey, not simply on whether an individual driver crosses a state line. The record showed the relevant products moved through McLane’s California facility as part of a practical continuity of interstate movement, placing the drivers within the exemption from federal overtime rules.
The panel reversed the jurisdictional ruling. The complaint’s allegations and evidence did not establish to a legal certainty that the amount in controversy fell below the statutory threshold. Because diversity jurisdiction existed, the district court retained authority over the California wage claims even after the federal claim was resolved. The case was returned for those state-law claims to proceed.
Key Takeaways
- Drivers who travel only within California may still fall under the Motor Carrier Act exemption when their deliveries are part of a continuous interstate movement.
- The shipper’s intent and the practical path of the goods are central to the exemption analysis.
- Defeating diversity jurisdiction requires more than speculation that the plaintiff ultimately will recover less than $75,000.
- Dismissal of the federal claim does not eliminate independently established diversity jurisdiction over state claims.
- The decision is unpublished but offers a useful roadmap for discovery concerning shipping patterns and the amount in controversy.
Why It Matters
California logistics employers should not assume that local routes either automatically qualify for or fall outside the federal exemption. Records showing where products originate, how long they pause at a warehouse, customer commitments, and the shipper’s distribution plan can decide the issue.
Employees may still have substantial California-law claims even when the federal overtime claim fails. Counsel on both sides should calculate the amount in controversy early and preserve evidence supporting federal jurisdiction, because a change in the federal merits does not necessarily send the case back to state court.