UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT FLI-LO FALCON, LLC; STEEL No. 22-35818 CITY EAGLES CORP.; STELVIO TRANSPORT, LLC, D.C. No. Plaintiffs-Appellants, 2:22-cv-00441- RSM-MLP v. AMAZON.COM, INC.; AMAZON OPINION LOGISTICS, INC., Defendants-Appellees.

Appeal from the United States District Court for the Western District of Washington Ricardo S. Martinez, District Judge, Presiding

Argued and Submitted August 24, 2023 Portland, Oregon

Filed April 10, 2024 Before: Mark J. Bennett, Lawrence VanDyke, and Holly A. Thomas, Circuit Judges.

Opinion by Judge Bennett; Concurrence by Judge H.A. Thomas 2 FLI-LO FALCON, LLC V. AMAZON.COM, INC.

SUMMARY *

Federal Arbitration Act

The panel affirmed the district court’s order granting Amazon’s motion to compel arbitration and dismissing without prejudice a case arising from a dispute between Amazon and the delivery service partners (DSP) with whom it contracts to provide local delivery services. Plaintiffs are or were business entities who entered into Delivery Service Program Agreements (“DSP Agreements”) with Amazon that contained an arbitration provision (“Arbitration Agreement”), providing that disputes arising from DSP Agreements would be resolved by binding arbitration conducted by the American Arbitration Association (“AAA”) rather than in court. The Federal Arbitration Act (“FAA”) governs arbitration agreements in contracts evidencing a transaction involving commerce. Section I of the FAA, the “transportation worker exemption,” exempts from the FAA’s coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The panel held that Section I’s transportation worker exemption did not extend to business entities or to commercial contracts like the DSP Agreement. No business entity is similar in nature to the actual human * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. FLI-LO FALCON, LLC V. AMAZON.COM, INC. 3

workers enumerated by the text of the transportation worker exemption, and Section I’s residual clause referring to “any other class of workers” did not extend to business entities like plaintiffs. The panel rejected plaintiffs’ argument that even if they were not eligible for Section I’s transportation worker exemption, the Arbitration Agreement should not be enforced against them because it is unconscionable. The Arbitration Agreement contained a Delegation Provision, which incorporated AAA rules delegating threshold issues to the arbitrator. The panel assumed, without deciding, that plaintiffs sufficiently challenged the Delegation Provision itself as unconscionable, and that plaintiffs’ assertion that they lacked business sophistication was relevant. The panel nevertheless rejected plaintiffs’ unconscionability challenge because plaintiffs failed to create a dispute of material fact regarding their sophistication. The panel concluded that the Delegation Provision was between sophisticated parties, incorporated the AAA rules, and therefore must be enforced. Thus, plaintiffs’ remaining unconscionability arguments directed at the Arbitration Agreement as a whole must be decided by the arbitrator. Concurring in part and concurring in the judgment, Judge H.A. Thomas agreed with the majority that (1) plaintiffs are not eligible for the FAA’s transportation worker exemption, and (2) plaintiffs’ challenge to their arbitration agreements’ delegation clauses was foreclosed because the record revealed no dispute of material fact r