Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 1 of 11 1 Honorable Robert S. Lasnik 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 11 12 13 14 15 CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA, and Case No. 17-cv-00370-RSL RASIER, LLC v. Plaintiffs, JOINT STATUS REPORT AND DISCOVERY PLAN CITY OF SEATTLE et al. Defendants. 16 17 18 19 Plaintiffs and Defendants (“Seattle”) submit this Joint Status Report and Discovery Plan, in accordance with this Court’s order of September 25, 2018. 20 1. 21 Plaintiffs’ statement of the case. 22 This facial challenge to Seattle’s collective-bargaining ordinance is on remand from the 23 Ninth Circuit. That court held that the ordinance does not qualify for state-action immunity from 24 federal antitrust law. With that key issue decided, the primary remaining merits question is 25 whether the ordinance purports to authorize price fixing. Plaintiffs believe that this can be resolved 26 through summary judgment without the need for discovery. Statement of the nature and complexity of the case Joint Status Report and Discovery Plan - 1 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 2 of 11 1 Seattle’s ordinance authorizes for-hire drivers who contract with ride-referral services to 2 unionize. It then mandates collective bargaining between drivers’ unions and referral services to 3 establish the price and other terms in the drivers’ contracts. Plaintiffs assert two claims: (1) the 4 ordinance is preempted by Section 1 of the Sherman Antitrust Act, and (2) the enactment and 5 implementation of the ordinance constitutes a threatened violation of Section 1 of the Sherman 6 Antitrust Act. The primary basis for both claims is that the ordinance authorizes for-hire drivers— 7 who are direct competitors of one another—to conspire to fix prices for the use of ride-referral 8 services, constituting a per se unreasonable restraint of trade. Seattle contends that collective- 9 bargaining over prices by for-hire drivers is not per se illegal under the Sherman Act. 10 The procedural history is as follows. The original complaint, filed by plaintiff Chamber of 11 Commerce of the United States of America, asserted eight claims, raising challenges to the 12 ordinance under both federal and state law. (Doc. 1.) The Chamber subsequently amended the 13 complaint to add Rasier, LLC, as a plaintiff. (Doc. 53.) Rasier contracts with for-hire drivers in 14 Seattle to provide ride-referral services and is a wholly owned subsidiary of Uber Technologies, 15 Inc. 16 The Chamber moved for a preliminary injunction based in part on its antitrust claims. 17 (Doc. 2.) For those claims, Seattle’s sole argument was that state-action immunity shielded the 18 ordinance from federal antitrust law. This Court preliminarily enjoined the ordinance, rejecting 19 Seattle’s state-action immunity defense. (Doc. 49.) Meanwhile, Seattle moved to dismiss all 20 claims. (Doc. 42.) After briefing and argument, this Court reversed its position on state-action 21 immunity, dissolved the preliminary injunction, and granted Seattle’s motion in its entirety. (Doc. 22 66.) This Court then denied Plaintiffs’ motion for an injunction pending appeal. (Doc. 74.) 23 Plaintiffs appealed the dismissal of the antitrust claims and claims asserting preemption 24 under federal labor law. A motions panel of the Ninth Circuit granted an injunction pending appeal. 25 On the merits, a different three-judge panel unanimously reversed this Court’s dismissal of the 26 antitrust claims. It held that the ordinance satisfies neither of the two required elements for stateJoint Status Report and Discovery Plan - 2 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 3 of 11 1 action immunity, and therefore must comply with federal antitrust law. (Doc. 78.) The court 2 affirmed the dismissal of the labor preemption claims. Seattle petitioned for panel rehearing or en 3 banc review of the state-action immunity issue, and the Ninth Circuit denied the petition. 4 On remand back to this Court, the only remaining claims are Plaintiffs’ two antitrust claims. 5 The only significant issue is a straightforward legal question: whether collective bargaining by for- 6 hire drivers under the ordinance constitutes illegal price fixing or any other per se violation of 7 Section 1 of the Sherman Act. Plaintiffs believe this question can be resolved on summary 8 judgment without the need for discovery. 9 horizontal price fixing authorized by the ordinance is per se illegal irrespective of the 10 characterization of the relationship between driver coordinators and drivers, the nature of the 11 market for for-hire transportation services in Seattle, or the market power (or lack thereof) 12 exercised by driver coordinators and drivers. As the Ninth Circuit held in this case, “price-fixing 13 agreements between two or more competitors, otherwise known as horizontal price-fixing 14 agreements, fall into the category of arrangements that are per se unlawful,” and thus do not 15 “require[] an examination of the circumstances underlying a particular economic practice.” 16 Chamber of Commerce v. City of Seattle, 890 F.3d 769, 780 (9th Cir. 2018) (internal quotation 17 marks omitted); see also, e.g., Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 18 886 (2007) (“The per se rule, treating categories of restraints as necessarily illegal, eliminates the 19 need to study the reasonableness of an individual restraint in light of the real market forces at 20 work.”); Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 986 (9th Cir. 2000) (“When a 21 per se violation such as horizontal price fixing has occurred, there is no need to define a relevant 22 market or to show that the defendants had power within the market.”). Seattle takes the position 23 that discovery is needed to develop facts in opposition to this position. Specifically, Plaintiffs take the position that the 24 25 26 Joint Status Report and Discovery Plan - 3 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 4 of 11 1 In order to avoid burdensome and potentially needless discovery, including potential third- 2 party discovery,1 the parties have stipulated and agreed to defer any discovery until after the filing 3 of a motion for summary judgment by Plaintiffs and the Court’s resolution of any motion for 4 discovery under Rule 56(d) that may be filed by Seattle in accordance with the briefing schedule 5 set forth below. 6 7 Seattle has further agreed not to enforce the ordinance until this Court enters final judgment in this case. 8 Seattle’s statement of the case. 9 The ordinance challenged in this proceeding creates a process through which for-hire 10 drivers who contract with certain companies, such as Uber, Lyft and Eastside For Hire, can 11 designate an “exclusive driver representative” to engage in collective negotiations over certain 12 terms and conditions of the drivers’ contractual relationship with those companies, including “best 13 practices regarding vehicles equipment standards; safe driving practices; the manner in which the 14 driver coordinator will conduct criminal background checks of all prospective drivers; the nature 15 and amount of payments to be made by, or withheld from, the driver coordinator to or by the 16 drivers; minimum hours of work, conditions of work, and applicable rules.” SMC 6.310.735.H.1. 17 Any resulting agreement is subject to review and approval by a City official before it can take 18 effect, and even then, it can only take effect where a positive determination is made that the 19 agreement is consistent with purpose and goals of the ordinance. 20 Only two claims remain in this case, both of which are facial challenges: (1) that the 21 ordinance is preempted by Section 1 of the Sherman Antitrust Act, and (2) that the enactment and 22 possible implementation of the ordinance constitutes a threatened violation of Section 1 of the 23 Sherman Antitrust Act. Seattle maintains that Plaintiffs’ antitrust claims are viable only if the 24 25 26 Seattle has asserted that plaintiff Chamber of Commerce may have obligations to respond to discovery directed at its member companies. However, the Chamber exercises no control over its members and lacks the power to compel them to participate in discovery. 1 Joint Status Report and Discovery Plan - 4 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 5 of 11 1 ordinance authorizes or requires conduct that constitutes a per se violation of federal antitrust law. 2 Seattle and Plaintiffs disagree, however, about the nature scope of the questions presented to this 3 Court in connection with evaluation of that threshold issue. 4 Seattle takes the position that discovery may be needed to develop facts relevant to this 5 Court’s determination of whether the conduct authorized by the ordinance constitutes a per se 6 violation of the Sherman Act. Seattle does not agree that such conduct involves a form of 7 “horizontal price fixing” subject to per se invalidation under federal antitrust law. 2 Discovery is 8 necessary to determine, for example, whether the for-hire drivers’ collective negotiations over “the 9 nature and amount of payments to be made by, or withheld from, the driver coordinator to or by 10 the drivers” primarily involve negotiations over the price of their labor, and thus fall within the 11 “labor exemption” to federal antitrust law, such that they are subject to neither a per se rule 12 prohibiting horizontal price fixing nor even a challenge premised on the “rule of reason.” See, e.g., 13 15 U.S.C. § 17 (“The labor of a human being is not a commodity or article of commerce.”); see 14 also, e.g., Brief of Amicus Curiae Professor Samuel Estreicher in Support of Defendants- 15 Appellees, Dkt. # 66, Chamber of Commerce v. Seattle, 9th Cir. Case No. 17-35640 (Dec. 8, 2017). 16 Discovery is also necessary to determine whether the nature of the market for for-hire 17 transportation services in Seattle makes treating the driver’s collective conduct as horizontal price 18 fixing and applying a rule of per se invalidity inappropriate. Relevant discovery will address topics 19 including, but not limited to, the manner in which companies potentially subject to the ordinance 20 contract with and otherwise interact with drivers to provide for-hire services and the market power 21 exercised by those companies and their drivers, respectively. See, e.g., Brief of Law and Business 22 23 24 25 26 Although Plaintiffs cite portions of the Ninth Circuit’s opinion describing such horizontal price fixing as per se unlawful, the Ninth Circuit was careful to express no opinion regarding whether the conduct authorized by the ordinance involves such horizontal price fixing. See Chamber of Commerce, 890 F.3d at 781 (accepting “without reaching the merits of the question, that the ordinance authorizes a per se antitrust violation,” and stating that “[t]he parties may address on remand which mode of antitrust analysis—the per se rule of illegality or the rule of reason— applies.”). 2 Joint Status Report and Discovery Plan - 5 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 6 of 11 1 Professors as Amici Curiae in Support of the Defendants-Appellees & in Support of Affirmance, 2 Dkt. #68, Chamber of Commerce v. Seattle, 9th Cir. Case No. 17-35640 (Dec. 8, 2017). 3 In light of the parties disagreement about whether and what discovery is required to 4 determine whether a rule of per se invalidity applies to conduct authorized by the ordinance, the 5 City agrees to defer issuing formal discovery, including written discovery and depositions, until 6 after the filing of a motion for summary judgment by Plaintiffs and after the Court’s resolution of 7 any motion for discovery under Rule 56(d) that may be filed by Seattle, in accordance with the 8 briefing schedule set forth below. In addition, Seattle agrees to refrain from issuing immediate 9 discovery because Plaintiffs agree not to oppose any request for relief under Federal Rule of Civil 10 Procedure 56(d) on the basis that the City has not yet sought discovery. 11 Finally, while the City can issue party discovery to Rasier, the City has concerns with the 12 other plaintiff’s position that because it is an associational plaintiff, it has no obligation under the 13 discovery rules to assist the City in seeking discovery from its purported members, Lyft and 14 Eastside For Hire. 15 2. 16 The parties do not anticipate joining any additional parties. 17 3. 18 No. 19 4. 20 There are no related cases pending in this or other jurisdictions. 21 5. 22 Plaintiffs’ position. 23 Plaintiffs do not believe any discovery or initial disclosures are necessary, as this is a facial 24 challenge to a municipal ordinance that presents a purely legal issue, and Plaintiffs do not seek 25 damages. Plaintiffs reserve the right to rely in their motion for summary judgment on material 26 facts about which there are or can be no genuine dispute. Proposed deadline for joining parties Statement regarding consent to referral to magistrate judge Related cases Initial disclosures Joint Status Report and Discovery Plan - 6 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 7 of 11 1 Seattle’s position. 2 Seattle takes the position that discovery is needed and has made initial disclosures. 3 Plaintiffs did not provide Seattle with initial disclosures, and instead sent Seattle a letter saying 4 that because discovery was unnecessary, there was no need for them to provide Seattle with such 5 disclosures. Seattle further takes the position that Plaintiffs’ failure to make initial disclosures 6 waives any right of Plaintiffs to submit any documents or other evidence in support of its 7 anticipated summary judgment motion. In addition, to the extent Plaintiffs attempt to introduce 8 evidence from either Lyft or Eastside For Hire, Seattle takes the position that introducing such 9 evidence is improper given the Chamber’s position that it has no obligation under the discovery 10 rules to assist Seattle in obtaining discovery from the Chamber’s members. 11 6. 12 The parties agree to defer consideration of the use of expert witnesses and the need for a 13 Timing and form of expert and pretrial disclosures trial until after the resolution of a motion for summary judgment filed by Plaintiffs. 14 7. 15 The parties disagree about the need for discovery, but hereby agree and stipulate to defer 16 any discovery until the Court’s resolution of a motion for discovery under Rule 56(d) that may be 17 filed by Seattle after Plaintiffs file a motion for summary judgment, in accordance with the briefing 18 schedule set forth below. Plaintiffs agree not to oppose any request for relief under Rule 56(d) on 19 the basis that the City has not yet sought discovery. Subjects, timing, and potential phasing of discovery 20 8. 21 The parties do not anticipate any issues regarding preservation of discoverable material. 22 9. 23 The parties agree to work cooperatively to address any issues relating to ESI, including to 24 Agreements and issues relating to preservation Electronically stored information (“ESI”) determine whether there is any need for additional agreements or ESI protocols in this case. 25 26 Joint Status Report and Discovery Plan - 7 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 8 of 11 1 10. Privilege and work-product issues 2 The parties do not expect any significant or unusual privilege or work-product issues to 3 arise in this matter. The parties agree to work cooperatively to address these issues should they 4 arise. 5 11. 6 The parties agree that Rule 26(b)(5)(B) of the Federal Rules of Civil Procedure and Rule 7 502(b) of the Federal Rules of Evidence adequately protect each party from inadvertent disclosure 8 of privileged information. 9 12. Inadvertent disclosure of privileged information Changes to limitations on discovery 10 At this time, the parties agree that no changes to the limitations on discovery are necessary. 11 13. 12 The parties agree to not establish a discovery cutoff at this time. See supra Item 7. 13 14. 14 The parties agree to defer any discovery until after the resolution of a motion for discovery 15 under Rule 56(d) to be filed by Seattle after Plaintiffs file a motion for summary judgment. The 16 parties have agreed to the following schedule for these motions and for Seattle’s answer to the 17 complaint: Discovery cutoff Suggestions for prompt and efficient resolution 18 Seattle’s Answer: November 13, 2018 19 Plaintiffs’ Motion for Summary Judgement: December 7, 2018 20 Seattle’s Rule 56(d) Motion: December 21, 2018 21 Plaintiffs’ Opposition to Rule 56(d) Motion: January 16, 2019 22 Seattle’s Reply in Support of Rule 56(d) Motion: January 30, 2019 23 In the event the Court issues an order denying Seattle’s Rule 56(d) motion, Seattle will file 24 its opposition to Plaintiffs’ motion for summary judgment no later than three weeks after such 25 order, and Plaintiffs will file their reply in support of their motion for summary judgment no later 26 than two weeks after the filing of Seattle’s opposition. Joint Status Report and Discovery Plan - 8 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 9 of 11 1 If Seattle elects not to file a Rule 56(d) motion, then Seattle will file its opposition to 2 Plaintiffs’ motion for summary judgment by January 11, 2019, and Plaintiffs will file their reply 3 in support of the motion for summary judgment by February 1, 2019. 4 15. 5 The parties do not plan to participate in alternative dispute resolution. 6 16. 7 The parties agree to defer consideration of whether a trial is necessary until after the 8 9 10 11 Alternative dispute resolution Trial date resolution of a motion for summary judgment filed by Plaintiffs. 17. Jury or non-jury trial The parties agree to defer consideration of whether a trial is necessary until after the resolution of a motion for summary judgment filed by Plaintiffs. 12 18. 13 The parties agree to defer consideration of whether a trial is necessary until after the 14 Length of trial resolution of a motion for summary judgment filed by Plaintiffs. 15 19. 16 Plaintiffs submitted their respective corporate disclosure statements on October 26, 2018. Rule 7.1 disclosures 17 18 19 20 21 22 23 24 25 26 Joint Status Report and Discovery Plan - 9 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 10 of 11 1 Dated: October 26, 2018 Respectfully submitted, 2 3 By: 4 8 Robert J. Maguire, WSBA 29909 Douglas C. Ross, WSBA 12811 DAVIS WRIGHT TREMAINE Suite 2200 1201 Third Avenue Seattle, WA 98101 (206) 622-3150 (206) 757-7700 FAX robmaguire@dwt.com 9 Attorneys for Plaintiff Rasier, LLC 5 6 7 s/ Robert J. Maguire 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 By: /s/Michael K. Ryan PETER S. HOLMES Seattle City Attorney GREGORY C. NARVER MICHAEL K. RYAN SARA O’CONNOR-KRISS Assistant City Attorneys Seattle City Attorney’s Office 701 Fifth Avenue, Suite 2050 Seattle, WA 98104 (206) 684-8200 STEPHEN P. BERZON STACEY M. LEYTON P. CASEY PITTS Altshuler Berzon LLP 177 Post Street, Suite 300 San Francisco, CA 94108 (415) 421-7151 Attorneys for Defendants City of Seattle et al. By: s/ Timothy J. O’Connell Timothy J. O’Connell, WSBA 15372 STOEL RIVES LLP 600 University Street, Suite 3600 Seattle, WA 98101 (206) 624-0900 (206) 386-7500 FAX Tim.oconnell@stoel.com Michael A. Carvin (D.C. Bar No. 366784) (pro hac vice) Christian G. Vergonis (D.C. Bar No. 483293) (pro hac vice) Jacqueline M. Holmes (D.C. Bar No. 450357) (pro hac vice) Robert Stander (D.C. Bar No. 1028454) (pro hac vice) JONES DAY 51 Louisiana Avenue, N.W. Washington, D.C. 20001 (202) 879-3939 (202) 616-1700 FAX mcarvin@jonesday.com Steven P. Lehotsky (D.C. Bar No. 992725) (pro hac vice) U.S. CHAMBER LITIGATION CENTER 1615 H Street, N.W. Washington, D.C. 20062 (202) 463-3187 slehotsky@uschamber.com Attorneys for Plaintiff Chamber of Commerce of the United States of America 26 Joint Status Report and Discovery Plan - 10 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900 Case 2:17-cv-00370-RSL Document 90 Filed 10/26/18 Page 11 of 11 1 2 3 4 5 CERTIFICATE OF SERVICE I hereby certify that on October 26, 2018, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the parties who have appeared in this case. 6 7 8 DATED: October 26, 2018 at Seattle, Washington. 9 STOEL RIVES LLP 10 s/ Timothy J. O’Connell Timothy J. O’Connell, WSBA No. 15372 600 University Street, Suite 3600 Seattle, WA 98101 Telephone: (206) 624-0900 Facsimile: (206) 386-7500 Email: tim.oconnell@stoel.com 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Joint Status Report and Discovery Plan - 11 Case No. 17-cv-00370-RSL S TOEL RIVES LLP A TTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone ( 206) 624-0900