                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUN 22 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

DELIVERY EXPRESS INC.,                          No.    16-35543

                Plaintiff-Appellant,            D.C. No. 3:15-cv-05842-BHS

 v.
                                                MEMORANDUM*
JOEL SACKS, in his capacity as the
Director of Washington State Department of
Labor & Industries, an agency of the
executive department of the State of
Washington; et al.,

                Defendants-Appellees.

                   Appeal from the United States District Court
                     for the Western District of Washington
                   Benjamin H. Settle, District Judge, Presiding

                             Submitted May 8, 2018**
                               Seattle, Washington

Before: GOULD and IKUTA, Circuit Judges, and FREUDENTHAL,*** District
Judge.


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
              The Honorable Nancy D. Freudenthal, United States District Judge for
the District of Wyoming, sitting by designation.
      The Washington State Department of Labor and Industries (DOLI) imposed

workers’ compensation premiums and penalties for violations of workers’

compensation laws on Delivery Express Inc. (DEI). DEI then brought a

declaratory judgment action claiming that the workers’ compensation laws in

Washington State, codified in Title 51 of the Revised Code of Washington, are pre-

empted by the Federal Aviation Administration Authorization Act (FAAAA),

which prevents states from “enact[ing] or enforc[ing] any law, rule, regulation,

standard, or other provision having the force and effect of law relating to intrastate

rates, intrastate routes, or intrastate services of any freight forwarder or broker.”

49 U.S.C. § 14501(b)(1). The district court granted summary judgment to DOLI,

concluding that the workers’ compensation laws are not pre-empted. We affirm.

      We have held that where a challenged law does not directly refer to rates

routes or services, the relevant question is “whether the provision, directly or

indirectly, binds the carrier to a particular price, route or service and thereby

interferes with the competitive market forces in the industry.” Dilts v. Penske

Logistics, LLC, 769 F.3d 637, 646 (9th Cir. 2014) (citation omitted). “[G]enerally

applicable background regulations that are several steps removed from prices,

routes, or services” are not pre-empted by the FAAAA, “even if they raise the

overall cost of doing business or require a carrier to re-direct or reroute some

equipment.” Id.


                                           2
        In Dilts we held that California meal and rest break provisions were not pre-

empted. Id. at 647. Similarly, in Californians for Safe & Competitive Dump Truck

Transp. v. Mendonca, 152 F.3d 1184 (9th Cir. 1998), we held that California

prevailing wage laws were not pre-empted. Id. at 1189. The workers’

compensation law challenged here is not meaningfully distinguishable from the

meal and rest break provisions in Dilts, or the prevailing wage law in Mendonca.

The Washington workers’ compensation law is a generally applicable background

provision that applies across many industries. It makes no references to rates,

routes, or services. And any incidental effect that it has on rates, routes, or services

is remote at best. Such generally applicable employment laws that operate “several

steps removed from prices, routes, or services” do not interfere with Congress’s

deregulatory goals, because they create a level playing field in which competitive

market forces can operate. See Dilts, 769 F.3d at 646, 649; Mendonca, 152 F.3d at

1189.

        DEI also argues that the workers’ compensation law is pre-empted because it

creates a “patchwork” of different state regulations, and that this is contrary to the

purpose of the FAAAA. We have rejected this argument in the past, and held that

the prohibition on patchwork laws only relates to laws that are otherwise

sufficiently related to prices, routes, or services. Dilts, 769 F.3d at 647 (“The fact




                                           3
that laws may differ from state to state is not, on its own, cause for FAAAA

preemption.”).1 That same principle applies here.

        AFFIRMED.




1
    Appellees’ Motion to Take Judicial Notice (Dkt. 22) is DENIED.

                                         4
