Attorney general’s brief may indicate post-Prop 22 stance

Attorney General Xavier Becerra called ride-sharing companies' bid for a rehearing on a preliminary injunction request premature, giving an indication how he believes the case could be impacted by the passage of a ballot measure that rejected much of the state's gig worker law.

Uber and Lyft asked the 1st District Court of Appeal to reconsider a ruling requiring the companies to comply with Assembly Bill 5 and reclassify their drivers as employees instead of independent contractors. The appeal came shortly after voters passed Proposition 22, which would create an exception to AB5 for app-based drivers.

San Francisco Superior Court Judge Ethan P. Schulman issued the preliminary injunction against Uber and Lyft in August and the appellate court upheld his ruling in October. People v. Uber, A160706 (Cal. App. 1st Dist., filed Aug. 17, 2020).

"The fact that the election results will be certified after the court's opinion is slated to become final -- renders rehearing premature and illogical," the attorney general wrote in response to the ride sharing companies' motion for reconsideration.

There are no previous similar circumstances to support Uber's and Lyft's requests for a rehearing and it is not up to the appellate court to be the first to interpret Proposition 22, the attorney general's brief argued. A trial court should interpret the proposition, "which is appropriately suited to decide, in the first instance, the effect of Proposition 22 on the preliminary injunction," according to the brief.

David A. Lowe, who represents employees as a partner at Rudy, Exelrod, Zieff & Lowe LLP, said the state government is trying to figure out the correct reaction to the success of Proposition 22, given that legal challenges are likely.

"I think it's a commonsense approach to the issue," Lowe said. "It is basically telling the Court of Appeal, 'You don't have to change anything.' It can be sent back to the trial court and the trial court is in a good position to assess if what the parties are asking for should be modified, and then it can go back up to the court of appeal if anybody disagrees."

According to Daniel H. Handman, who represents employers as a partner at Hirschfeld Kraemer LLP, the passage of Proposition 22 took the wind out of the sails for the state.

"I would say it doesn't affect any decisions not yet made as to whether what Uber and Lyft and Postmates did in the past were legal," Handman said. "But what it does do is it makes it very difficult for the state and the cities to say, "Well, now you have to be forced to reclassify your workers," because the voters have spoken.

Given that the response does not argue that the injunction should not be lifted at some point, Handman said it appears Becerra is "kicking the can down the road" until the vote is certified on Dec. 11.

Even if he successfully argues that the injunction should not be lifted until the vote is certified and that it is not up to the appellate court to make a decision, the proposition will already be in effect at that time, Handman said.

"So, if they win, it will be something of an empty victory," Handman said. "Because they lost at the ballot box."

But according to Lowe, if the court approves a rehearing, it could impact future litigation, depending on the ruling.

"Whether this will impact other litigation depends on whether the Court of Appeal grants a rehearing or not," Lowe said. "If they don't, then I would say not much. If they do grant rehearing, it could have a significant impact depending on how broad an opinion the Court of Appeal decides to issue."