Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 1 of 30 Page ID #:291
`
`XAVIER BECERRA
`Attorney General of California
`TAMAR PACHTER
`Supervising Deputy Attorney General
`JOSE A. ZELIDON-ZEPEDA
`Deputy Attorney General
`State Bar No. 227108
`455 Golden Gate Avenue, Suite 11000
`San Francisco, CA 94102-7004
`Telephone: (415) 510-3879
`Fax: (415) 703-1234
`E-mail: Jose.ZelidonZepeda@doj.ca.gov
`Attorneys for the State of California and Attorney
`General Xavier Becerra, in his official capacity
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`
`WESTERN DIVISION
`
`
`
`LYDIA OLSON; et al.,
`
`2:19-CV-10956-DMG-RAO
`
`v.
`
`Plaintiffs,
`
`DEFENDANTS’ OPPOSITION TO
`PLAINTIFFS’ MOTION FOR A
`PRELIMINARY INJUNCTION
`
`STATE OF CALIFORNIA; et al.,
`
`Defendants.
`
`February 7, 2020
`Date:
`2:00 P.M.
`Time:
`Courtroom: 8C, 8th Floor
`Judge:
`Hon. Dolly M. Gee
`Trial Date: None set
`Action Filed: December 30, 2019
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 2 of 30 Page ID #:292
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`TABLE OF CONTENTS
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`Page
`Introduction ................................................................................................................ 1
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`Background ................................................................................................................ 2
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`A. Dynamex and AB 5. .................................................................................... 2
`
`B. Allegations of the Complaint. .................................................................... 4
`Legal Standard ........................................................................................................... 5
`Argument ................................................................................................................... 6
`
`I. Plaintiffs Are Unlikely to Succeed on the Merits of Their Equal
`Protection Claim. ............................................................................................. 6
`
`A. Under Applicable Rational Basis Review, Plaintiffs’ Equal
`Protection Claims Fail. .......................................................................... 6
`B. Opinions Expressed in News Reports and Social Media
`Commentary Are Not Grounds for an Equal Protection Claim. ........... 8
`C. AB 5’s Limited Exemptions Do Not Support Plaintiffs’
`Equal Protection Claim. ...................................................................... 11
`II. Plaintiffs Are Unlikely to Succeed on the Merits of Their Due
`Process and Contract Clause Claims. ............................................................ 13
`
`A. AB 5 Properly Regulates Employment Rights and
`Relationships Generally, Not Choice of Occupation. ......................... 13
`B. The Contract Clause Does Not Insulate Business from
`Regulation or Regulatory Change. ...................................................... 15
`III. Plaintiffs’ Delay in Seeking Injunctive Relief Undermines Their
`Claim of Irreparable Harm, and the Balance of Equities Tips in
`Defendants’ Favor. ........................................................................................ 17
`IV. The Public Interest Weighs Against a Preliminary Injunction. ............. 20
`
`Conclusion ............................................................................................................... 22
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 3 of 30 Page ID #:293
`
`TABLE OF AUTHORITIES
`
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`Page
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`CASES
`
`3570 East Foothill Blvd., Inc. v. City of Pasadena
`912 F. Supp. 1257 (C.D. Cal. 1995) ...................................................................... 6
`
`Alexander v. FedEx Ground Package Sys., Inc.
`765 F.3d 981 (9th Cir. 2014) ......................................................................... 14, 16
`
`Alliance for the Wild Rockies v. Cottrell
`632 F.3d 1127 (9th Cir. 2011) ............................................................................... 6
`
`Allied Concrete & Supply Co. v. Baker
`904 F.3d 1053 (9th Cir. 2018) ............................................................................. 12
`
`Anderson v. U.S.
`612 F.2d 1112 (9th Cir. 1979) ......................................................................... 6, 20
`
`Angelotti Chiropractic v. Baker
`791 F.3d 1075 (9th Cir. 2015) ............................................................................. 11
`
`Burford v. Sun Oil Co.
`319 U.S. 315 (1943) ............................................................................................ 22
`
`City of Cleburne v. Cleburne Living Ctr.
`473 U.S. 432 (1985) .......................................................................................... 6, 7
`
`Coalition for Econ. Equity v. Wilson
`122 F.3d 718 (9th Cir. 1997) ............................................................................... 20
`
`Conn v. Gabbert
`526 U.S. 286 (1999) ............................................................................................ 13
`
`Cornwell v. Hamilton
`80 F. Supp. 2d 1101 (S.D. Cal. 1999) ................................................................. 14
`
`Cotter v. Lyft, Inc.
`60 F. Supp. 3d 1067 (N.D. Cal. 2015)................................................................... 5
`
`Doe v. Uber Technologies, Inc.
`184 F. Supp. 3d 774 (N.D. Cal. 2016)............................................................. 5, 16
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 4 of 30 Page ID #:294
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`Dymo Indus., Inc. v. Tapeprinter, Inc.
`326 F.2d 141 (9th Cir. 1964) ................................................................................. 5
`
`Page
`
`Dynamex Operations West v. Superior Court
`4 Cal. 5th 903 (Cal. 2018) ............................................................................ passim
`
`Energy Reserves Grp., Inc. v. Kansas Power & Light Co.
`459 U.S. 400 (1983) ...................................................................................... 15, 16
`
`Engquist v. Or. Dep’t of Agric.
`478 F.3d 985 (9th Cir. 2007) ............................................................................... 14
`
`Erotic Serv. Provider Legal Educ. and Research Project v. Gascon
`880 F.3d 450 (9th Cir. 2018) ............................................................................... 14
`
`FCC v. Beach Communications, Inc.
`508 U.S. 307 (1993) .......................................................................................... 7, 8
`
`First Franklin Fin. Corp. v. Franklin First Fin. Ltd.
`356 F. Supp. 2d 1048 (N.D. Cal. 2005)............................................................... 19
`
`Fort Halifax Packing Co., Inc. v. Coyne
`482 U.S. 1 (1987) ................................................................................................ 17
`
`Fowler Packing Co., Inc. v. Lanier
`844 F.3d 809 (9th Cir. 2016) ......................................................................... 11, 12
`
`Franceschi v. Yee
`887 F.3d 927 (9th Cir. 2018) ......................................................................... 13, 14
`
`Fund for Animals v. Lujan
`962 F.2d 1391 (9th Cir. 1992) ............................................................................. 21
`
`Gallinger v. Becerra
`898 F.3d 1012 (9th Cir. 2018) ......................................................................... 9, 11
`
`Ganley v. Claeys
`2 Cal. 2d 266 (Cal. 1935) .................................................................................... 14
`
`Golden Gate Restaurant Ass’n v. City & Cty. of San Francisco
`512 F.3d 1112 (9th Cir. 2008) ....................................................................... 20, 22
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 5 of 30 Page ID #:295
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`TABLE OF AUTHORITIES
`(continued)
`
`
`Halverson v. Skagit Cty.
`42 F.3d 1257 (9th Cir. 1994) ............................................................................... 13
`
`Page
`
`Hardesty v. Sacramento Metro. Air Quality Mgmt. Dist.
`307 F. Supp. 3d 1010 (E.D. Cal. 2018) ............................................................... 14
`
`Hertzberg v. Dignity Partners, Inc.
`191 F.3d 1076 (9th Cir. 1999) ............................................................................... 9
`
`In re Kelly
`841 F.2d 908 (9th Cir. 1988) ................................................................................. 9
`
`K-2 Ski Co. v. Head Ski Co.
`467 F.2d 1087 (9th Cir. 1972) ......................................................................... 4, 16
`
`Kiva Health Brands LLC v. Kiva Brands Inc.
`402 F. Supp.3d 877 (N.D. Cal. 2019) .................................................................. 19
`
`Kobell v. Suburban Lines, Inc.
`731 F.2d 1076 (3d Cir. 1984) .............................................................................. 19
`
`Manduley v. Super. Ct.
`27 Cal. 4th 537 (Cal. 2002) ................................................................................... 8
`
`Maryland v. King
`567 U.S. 1301 (2012) .................................................................................... 20, 22
`
`Metromedia Broad. Corp. v. MGM/UA Entm’t Co, Inc.
`611 F. Supp. 415 (C.D. Cal. 1985) ...................................................................... 19
`
`Mountain Water Co. v. Montana Dep’t of Pub. Serv. Regulation
`919 F.2d 593 (9th Cir. 1990) ............................................................................... 10
`
`Narayan v. EGL, Inc.
`616 F.3d 895 (9th Cir. 2010) ............................................................................... 16
`
`Nordlinger v. Hahn
`505 U.S 1 (1992) ............................................................................................... 7, 8
`
`O’Connor v. Uber Technologies, Inc.
`82 F. Supp. 3d 1133 (N.D. Cal. 2015)............................................................. 5, 16
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 6 of 30 Page ID #:296
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`TABLE OF AUTHORITIES
`(continued)
`
`
`Miller for and on behalf of N.L.R.B. v. Cal. Pac. Medic. Ctr.
`991 F.2d 536 (9th Cir. 1993) ............................................................................... 19
`
`Page
`
`Owens v. City of Signal Hill
`154 Cal. App. 3d 123 (Cal. Ct. App. 1984) ......................................................... 15
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`People v. Cruz
`207 Cal. App. 4th 664 (Cal. Ct. App. 2012) ......................................................... 8
`
`Prime Healthcare Services, Inc. v. Harris
`No. 16-cv-00778-GPS, 2017 WL 3525169 (S.D. Cal. Aug. 16,
`2017) .................................................................................................................... 12
`
`Pro-Eco, Inc. v. Board of Comm’rs of Jay Cty., Ind.
`57 F.3d 505 (7th Cir. 1995) ................................................................................... 9
`
`Purdy & Fitzpatrick v. State
`71 Cal. 2d 566 (Cal. 1969) .................................................................................. 14
`
`Romer v. Evans
`517 U.S. 620 (1996) ............................................................................................ 10
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`RUI One Corp. v. City of Berkeley
`371 F.3d 1137 (9th Cir. 2004) ......................................................................... 8, 17
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`Sanchez v. City of Reno
`914 F. Supp. 2d 1079 (E.D. Cal. 2012) ............................................................... 15
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`Stormans, Inc. v. Selecky
`586 F.3d 1109 (9th Cir. 2009) ......................................................................... 6, 21
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`Truax v. Raich
`239 U.S. 33 (1915) .............................................................................................. 14
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`U.S. Dep’t of Agriculture v. Moreno
`413 U.S. 528 (1973) ............................................................................................ 10
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`U.S. v. Ninety Three Firearms
`330 F.3d 414 (6th Cir. 2003) ................................................................................. 9
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 7 of 30 Page ID #:297
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`TABLE OF AUTHORITIES
`(continued)
`
`
`U.S. v. Wilde
`74 F. Supp. 3d 1092 (N.D. Cal. 2014)................................................................. 10
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`Page
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`U.S.A. Express Cab, LLC v. City of San Jose
`No. C-07-06171-RMW, 2007 WL 4612926 (N.D. Cal. Dec. 31,
`2007) ...................................................................................................................... 4
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`Washington Health Care Ass’n v. Arnold-Williams
`601 F. Supp. 2d 1224 (W.D. Wash. 2009) .......................................................... 15
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`Weinberger v. Romero-Barcelo
`456 U.S. 305 (1982) ............................................................................................ 21
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`Western States Trucking Ass’n v. Schoorl
`377 F. Supp. 3d 1056 (E.D. Cal. 2019) ......................................................... 15, 18
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`Winter v. Nat. Res. Def. Council, Inc.
`555 U.S. 7 (2008) .............................................................................................. 5, 6
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`STATUTES
`
`California Labor Code
`§ 2750.3(a)(1) .................................................................................................... 3, 8
`§ 2750.3(b) ....................................................................................................... 3, 12
`§ 3351(i) ............................................................................................................ 3, 8
`
`CONSTITUTIONAL PROVISIONS
`
`California Constitution ......................................................................................... 8, 15
`
`United States Constitution
`Fourteenth Amendment ................................................................................ passim
`Article I, § 10, cl. 1 ........................................................................................ 15, 17
`
`OTHER AUTHORITIES
`
`California Assembly Bill 5 (AB 5)
`§ 1(c) ............................................................................................................ 3, 7, 21
`§ 1(e) ............................................................................................................ 3, 7, 21
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 8 of 30 Page ID #:298
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`TABLE OF AUTHORITIES
`(continued)
`
`
`Judy Lin, What happens to Uber and Lyft drivers if AB 5 becomes
`law? KQED News (Sept. 6, 2019),
`https://www.kqed.org/news/11772787/what-happens-to-uber-and-
`lyft-drivers-if-ab-5-passes ............................................................................... 4, 18
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`Page
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`Sarah Thomason, Ken Jacobs & Sharon Jan, Estimating the Coverage
`of California’s New AB 5 Law, UC Berkeley Labor Center Data
`Brief (Nov. 12, 2019), http://laborcenter.berkeley.edu/estimating-
`the-coverage-of-californias-new-ab-5-law/ ......................................................... 13
`
`Aarian Marshall, Uber and Lyft Fight a Law They Say Doesn’t Apply
`to Them, Wired (Oct. 31, 2019), https://www.wired.com/story/uber-
`lyft-fight-law-say-doesnt-apply/ ............................................................................ 4
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`Sophia Bollage, New California law will redefine who is an employee.
`What does it mean for you?, Sacramento Bee (Sept. 18, 2019) .......................... 11
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`Alexia Fernandez Campbell, Gig Workers’ Win in California Is a
`Victory for Workers Everywhere, Vox (Sept. 11, 2019)
`https://www.vox.com/2019/9/11/20851034/california-ab-5-
`workers-labor-unions ....................................................................................... 3, 18
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 9 of 30 Page ID #:299
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`INTRODUCTION
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`
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`The Legislature determined that widespread and systematic employer
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`misclassification of workers as independent contractors, instead of as employees,
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`was exploiting working Californians by denying them significant statutory labor
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`protections. To combat this persistent problem, the Legislature passed AB 5, which
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`codified and expanded the application of the “ABC” test that the California
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`Supreme Court adopted in April 2018 to simplify determinations of employment
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`status. Under the ABC test, workers are considered employees rather than
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`independent contractors unless their hiring entity satisfies three criteria. Joined by
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`two “independent service providers,” Plaintiffs Uber and Postmates here challenge
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`this legislative scheme, arguing that it is irrational, ineffective, and violates a host
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`of state and federal constitutional guarantees. They now move for preliminary
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`injunctive relief to enjoin the law in its entirety.
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`The Court should deny the motion for a preliminary injunction. Plaintiffs are
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`unlikely to prevail on the merits of their claims. They argue that AB 5 is invalid
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`because the statutory scheme singles out “app-based” companies. However,
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`Plaintiffs’ equal protection claim fails because nothing in the law targets such
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`companies, and Plaintiffs fail to explain how it impermissibly discriminates. At
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`heart, Plaintiffs question the wisdom and effectiveness of AB 5, but that is a
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`legislative policy determination, not viable grounds for a constitutional challenge.
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`Moreover, the ABC test about which they primarily complain has been in effect
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`since April 2018, when the California Supreme Court adopted the test in Dynamex.
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`Indeed, Plaintiffs waited until the last possible moment before AB 5 went into
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`effect before filing suit, and now seek preliminary relief against a law that was
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`passed over three months ago. They do not persuasively explain any of this delay,
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`which is alone sufficient reason to deny a preliminary injunction.
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 10 of 30 Page ID
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`BACKGROUND
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`A. DYNAMEX AND AB 5.
`The distinction between workers classified as employees and those classified
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`
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`as independent contractors is significant because under California law employers
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`have obligations to employees that are not afforded to independent contractors. See
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`Dynamex Operations West v. Superior Court, 4 Cal. 5th 903, 912 (Cal. 2018). In
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`April 2018, the California Supreme Court held that courts must apply the ABC test
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`to determine whether a worker is classified as an employee for certain purposes
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`under California’s labor laws. Id. at 916. Dynamex noted that the “critically
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`important objectives” of wage and hour laws, including ensuring low income
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`workers’ wages and conditions despite their weak bargaining power, “support a
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`very broad definition of the workers” who fall within the employee classification.
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`Id. at 952. Similarly, a broad definition benefits “those law-abiding businesses that
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`comply with the obligations imposed” by state labor laws, “ensuring that such
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`responsible companies are not hurt by unfair competition from competitor
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`businesses that utilize substandard employment practices.” Id. Lastly, the ABC
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`test also benefits “the public at large, because if the wage orders’ obligations are not
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`fulfilled, the public often will be left to assume the responsibility of the ill effects to
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`workers and their families resulting from substandard wages or unhealthy and
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`unsafe working conditions.” Id. at 953.
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`Under this test, a worker is considered an employee, rather than an
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`independent contractor, unless the hiring entity establishes: (a) that the worker is
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`“free from the control and direction of the hirer in connection with the performance
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`of the work, both under the contract for the performance of such work and in fact;”
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`(b) that the worker “performs work that is outside the usual course of the hiring
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`entity’s business;” and (c) that the worker is “customarily engaged in an
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`independently established trade, occupation, or business of the same nature as the
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`work performed for the hiring entity.” Id. at 916-17.
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 11 of 30 Page ID
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`
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`On September 18, 2019, nearly 17 months after Plaintiffs had already been
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`subject to the ABC test, California enacted AB 5, which became effective January
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`1, 2020. The Legislature found that “[t]he misclassification of workers as
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`independent contractors has been a significant factor in the erosion of the middle
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`class and the rise in income inequality.” (AB 5 § 1(c).) In enacting AB 5, the
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`Legislature intended “to ensure workers who are currently exploited by being
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`misclassified as independent contractors instead of recognized as employees have
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`the basic rights and protections they deserve under the law,” including minimum
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`wage, workers’ compensation, unemployment insurance, paid sick leave, and paid
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`family leave. (Id. § 1(e).) By codifying the ABC test, AB 5 “restores these
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`important protections to potentially several million workers who have been denied
`these basic workplace rights that all employees are entitled to under the law.” (Id.)1
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`
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`AB 5 codifies the ABC test adopted in Dynamex, and extends its use to
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`contexts beyond those at issue in Dynamex, to include (among other things)
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`workers’ compensation, unemployment insurance, and disability insurance. Cal.
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`Lab. Code, § 2750.3(a)(1); id. § 3351(i). It also created limited statutory
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`exemptions for certain kinds of work, including individuals licensed by the
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`California Department of Insurance; physicians, surgeons, and other licensed
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`medical professionals; and other licensed occupations, including lawyers, architects
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`and engineers. Cal. Lab. Code § 2750.3(b).
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`Plaintiff Uber lobbied extensively against the law, and attempted to obtain an
`exemption.2 Shortly after AB 5 was enacted, Uber and Postmates (among others)
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`1 The problem of misclassified employees is not isolated. “When state tax
`investigators audited about 8,000 California businesses, in 2017, they discovered
`nearly half a million employees had been misclassified or otherwise left off
`payrolls.” Alexia Fernandez Campbell, Gig Workers’ Win in California Is a
`Victory for Workers Everywhere, Vox (Sept. 11, 2019)
`https://www.vox.com/2019/9/11/20851034/california-ab-5-workers-labor-unions.
`2 Alexia Fernandez Campbell, Gig Workers’ Win in California Is a Victory
`for Workers Everywhere, Vox (Sept. 11, 2019)
`https://www.vox.com/2019/9/11/20851034/california-ab-5-workers-labor-unions
`(“Uber and Lyft, in particular, had been lobbying for an exemption to the bill in the
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 12 of 30 Page ID
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`submitted a proposed initiative seeking to shield their businesses from the impact of
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`AB 5. This initiative, entitled “Changes in Employment Classification Rules for
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`App-Based Transportation and Delivery Drivers,” was submitted on October 29,
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`2019. (Decl. J. Zelidon-Zepeda Opp. Mot. Prelim. Inj., Exh. 2.) According to news
`stories, major gig employers pledged $60 to $90 million to support this measure.3
`Uber has also asserted publicly that AB 5 does not apply to its drivers.4
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`B. ALLEGATIONS OF THE COMPLAINT.5
`Plaintiffs Uber and Postmates (the Company Plaintiffs) operate application-
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`based platforms to deliver transportation services to individual consumers. (ECF
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`No. 1 at ¶¶ 32-33.) Plaintiffs Olson and Perez are individuals who use app-based
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`platforms of Uber and Postmates to get leads for passenger and delivery requests.
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`(Id. at 13 ¶¶ 30-31.) Plaintiffs challenge AB 5 as “vague” and “incoherent,” and
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`contend that it does not further the Legislature’s goals. (Id. at 8 ¶ 19.) They argue
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`that AB 5 requires the Company Plaintiffs to fundamentally restructure their
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`business model, thus imposing economic, administrative and other costs. (Id. at 8-9
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`¶ 20.)
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`The complaint notes that AB 5 has numerous exemptions, and alleges that
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`“[t]he legislature added these carve-outs to AB 5 solely for interest groups and
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`Senate.”).
`3 Judy Lin, What happens to Uber and Lyft drivers if AB 5 becomes law?,
`KQED News (Sept. 6, 2019), https://www.kqed.org/news/11772787/what-happens-
`to-uber-and-lyft-drivers-if-ab-5-passes.
`4 Aarian Marshall, Uber and Lyft Fight a Law They Say Doesn’t Apply to
`Them, Wired (Oct. 31, 2019), https://www.wired.com/story/uber-lyft-fight-law-say-
`doesnt-apply/ (“Uber counsel Tony West said last month the company believes it
`will not be legally required to treat California drivers as employees after the law
`takes effect.”).
`5 The complaint is unverified, and thus does not constitute competent
`evidence to support Plaintiffs’ motion for a preliminary injunction. See K-2 Ski Co.
`v. Head Ski Co., 467 F.2d 1087, 1088 (9th Cir. 1972); U.S.A. Express Cab, LLC v.
`City of San Jose, No. C-07-06171-RMW, 2007 WL 4612926, at *1 n.1 (N.D. Cal.
`Dec. 31, 2007) (“As a preliminary matter, an application for a temporary restraining
`order or preliminary injunction cannot be supported by an unverified complaint.”).
`These allegations are set forth solely to frame Plaintiffs’ claims, and not for the
`truth of the assertions.
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 13 of 30 Page ID
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`labor.” (ECF No. 1 at 18 ¶ 54.) “The statutory exemptions carve out most types of
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`workers traditionally considered to be independent contractors, with a glaring and
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`intentional exception: app-based independent services providers.” (Id. ¶ 56.) The
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`complaint alleges no facts supporting the conclusion that these workers were
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`“traditionally considered to be independent contractors” other than a citation to one
`court decision. (Id. ¶ 55.)6 Plaintiffs cite alleged inconsistencies or purported
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`irrationality in AB 5’s exemptions, and complain that the law “does not identify any
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`data, studies, reports, or other justification or explanation for its exemptions.” (Id.
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`at 21 ¶¶ 59-60.) Plaintiffs also conclude, without alleging any facts, that “many of
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`the exemptions [were included] as political favors or to politically favored groups
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`without any valid legislative purpose or rational basis.” (Id. ¶ 61.)
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`Plaintiffs allege that AB 5 violates a litany of state and federal constitutional
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`provisions (ECF No. 1 at 35-37), and seek declaratory and injunctive relief. For
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`purposes of their preliminary injunction request, Plaintiffs focus on their Equal
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`Protection, Due Process, and Contract Clause claims. (See generally ECF No. 14-
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`1.)
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`LEGAL STANDARD
`“A preliminary injunction is an extraordinary remedy never awarded as of
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`right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008); Dymo Indus.,
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`Inc. v. Tapeprinter, Inc., 326 F.2d 141, 143 (9th Cir. 1964) (per curiam). In seeking
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`one, Plaintiffs must demonstrate that they are likely to succeed on the merits of
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`their claims, that they are likely to suffer irreparable harm without preliminary
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`relief, that the balance of equities tips in their favor, and that an injunction is in the
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`6 Notably, multiple court decisions have rejected attempts by app-based
`employers to dismiss claims that their drivers are employees, concluding that there
`are disputed issues of fact. O’Connor v. Uber Technologies, Inc., 82 F. Supp. 3d
`1133, 1138 (N.D. Cal. 2015); see also Doe v. Uber Technologies, Inc., 184 F. Supp.
`3d 774, 783 (N.D. Cal. 2016) (in action by customers alleging sexual assault by
`Uber drivers, holding at motion to dismiss stage that plaintiffs “alleged sufficient
`facts that employment relationship may plausibly exist”); Cotter v. Lyft, Inc., 60 F.
`Supp. 3d 1067 (N.D. Cal. 2015) (holding that genuine issue of material fact
`whether carrier improperly classified drivers as independent contractors).
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`Case 2:19-cv-10956-DMG-RAO Document 21-1 Filed 01/17/20 Page 14 of 30 Page ID
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`public interest. Winter, 555 U.S. at 20; Alliance for the Wild Rockies v. Cottrell,
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`632 F.3d 1127, 1135 (9th Cir. 2011). Contrary to Plaintiffs’ arguments, it is not
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`enough to demonstrate that their legal claims raise “a fair chance of success on the
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`merits.” (ECF No. 14-1 at 6.) “The proper legal standard for preliminary
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`injunctive relief requires a party to demonstrate ‘that he is likely to succeed on the
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`merits, that he is likely to suffer irreparable harm in the absence of preliminary
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`relief, that the balance of equities tips in his favor, and that an injunction is in the
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`public interest.’” Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009)
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`(citing Winter).
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`Moreover, because Plaintiffs seek a preliminary injunction to change the
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`status quo, they must carry “a heavy burden of persuasion.” 3570 East Foothill
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`Blvd., Inc. v. City of Pasadena, 912 F. Supp. 1257, 1260 (C.D. Cal. 1995). As
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`noted above, the “ABC” test has been the status quo since April 2018. “Mandatory
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`preliminary relief, which goes well beyond simply maintaining the status quo
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`pendente lite, is particularly disfavored, and should not be issued unless the facts
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`and law clearly favor the moving party.” Anderson v. U.S., 612 F.2d 1112, 1114
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`(9th Cir. 1979) (citation omitted).
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`ARGUMENT
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`I. PLAINTIFFS ARE UNLIKELY TO SUCCEED ON THE MERITS OF
`THEIR EQUAL PROTECTION CLAIM.
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`A. UNDER APPLICABLE RATIONAL BASIS REVIEW, PLAINTIFFS’ EQUAL
`PROTECTION CLAIMS FAIL.
`Plaintiffs claim that AB 5 violates their equal protection rights. (ECF No. 14-
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`1 at 7.) The Equal Protection Clause forbids the government from “deny[ing] to
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`any person within its jurisdiction the equal protection of the laws.” City of
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`Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 439 (1985). It is clear that, “unless
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`a [statutory] classification warrants some form of heightened review because it
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`jeopardizes exercise of a fundamental right or categorizes on the basis of an
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`inherently suspect characteristic, the Equal Protection Clause requires only that the
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`classification rationally further a legitimate state interest.” Nordlinger v. Hahn, 505
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`U.S 1, 10 (1992). Plaintiffs’ equal protection claim is not likely to succeed on the
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`merits because AB 5 is an employment regulation of general applicability that does
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`not classify according to any suspect class and is therefore subject to deferential
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`rational basis review. AB 5 satisfies such review as a matter of law.
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`Absent a suspect class, distinctions drawn in legislation are subject to rational
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`basis review. FCC v. Beach Communications, Inc., 508 U.S. 307, 313 (1993).
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`Under this standard, “legislation is presum