Is Uber and Lyft appeal live or moot, post Proposition 22?

A week after a three-judge federal panel heard oral argument on whether the passage of Proposition 22 mooted some proceedings in a driver misclassification case, the judges ordered attorneys for the state, Uber, and Postmates to submit additional briefing on the matter, citing their lingering confusion on "whether this appeal presents an 'actual or live controversy.'"

Last week's oral argument concerned Uber and Postmates' appeal of a district court's decision to reject their preliminary injunction motion earlier this year. The companies' motion had asked the court to stop state entities from enforcing Assembly Bill 5, the labor law that automatically classifies workers as employees unless they pass a three-pronged "ABC" test.

On Nov. 3, California voters approved Proposition 22, an Uber, Lyft, and DoorDash-backed ballot measure which exempts rideshare drivers from the statute. Olson v. California, 20-55267 (9th Cir., filed Mar. 10, 2020).

Issued Tuesday, the 9th U.S. Circuit Court of Appeals judges' order gave both sides 14 days to submit additional briefing on "whether Proposition 22 or any actions taken subsequent to its enactment have mooted this appeal," and how the ballot measure's passage could impact enforcement actions against Uber and Postmates, "the prospect of future enforcement actions against appellants based on AB 5 irrespective of Proposition 22," and more.

During oral argument last week, Theane Evangelis, a partner at Gibson, Dunn & Crutcher LLP who represents the gig worker companies, said the appeal is absolutely "still a live controversy" despite the passage of Proposition 22.

"First, Proposition 22 has not taken effect yet. It will very soon, but several government actors -- including defendant Attorney General Becerra -- continue to attempt to enforce Assembly Bill 5 both for monetary relief before Proposition 22 and even for forward-looking injunctive relief," she said.

"Just three days after Proposition 22 passed, the California Division of Labor Standards Enforcement ... filed a complaint seeking an injunction under AB 5 against plaintiff Uber," Evangelis added. "The San Francisco district attorney refused to withdraw a request for preliminary injunction against another network company, DoorDash, just a couple days after Proposition 22 passed. The state is continuing to seek ... relief."

"It baffles the mind," she said.

But Deputy Attorney General Jose Zelidon-Zepeda took a different stance. "Proposition 22 will become effective in the middle of December. ... The plaintiffs' claim for prospective injunctive relief in this case is moot because ... absent a challenge, Prop. 22 will be the law," he said. "The plaintiffs will not be subject to the 'ABC' test under AB 5. The court cannot fashion any relief that they sought in the preliminary injunction, namely prospective request to enjoin application of AB 5 to them."

-- Jessica Mach