A federal district court in New York has held that limousine drivers are not within the narrow class of transportation workers exempted from the scope of the Federal Arbitration Act (FAA), noting that such drivers are not dedicated to the interstate transport of physical goods.

In Kowalewski v. Samandarov, No. 07 Civ. 6706 (RJS), 2008 WL 4694610 (S.D.N.Y. Oct. 23, 2008), Americar entered into contracts with Kowalewski and other drivers to lease and operate limousines. The contracts contained an arbitration agreement. A dispute arose, and the drivers sued Americar for RICO violations, deceptive trade practices, fraudulent inducement, breach of contract, and fraud. Americar moved to compel arbitration of the claims.

In opposing arbitration, the drivers first argued that the FAA excluded certain transportation workers, including limousine drivers, from its scope. 9 U.S.C. § 1 (excluding classes of workers "engaged in foreign or interstate commerce"). Citing the Supreme Court's decision in Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 112 (2001), the Court held that this exception was "narrow" and did not include limousine drivers.

Distinguishing the transportation of people from the transportation of goods, the Court found the application of the FAA's "transportation exception" turned on whether the worker is "dedicated to the interstate shipment of physical goods." Because a limousine driver's interstate transportation of goods is merely incidental to the transportation of persons, the Court held that the FAA applied to a limousine driver's contract. Compare, e.g., Erving v. Virginia Squires Basketball Club, 468 F.2d 1064, 1069 (2d Cir. 1972) (interstate services by a travelling basketball player does not involve goods and does not invoke exception), with, e.g., Palcko v. Airborne Express, 372 F.3d 588, 593-94 (3d Cir. 2004) (truck drivers primarily transport goods and fall within the exception).

Having determined that the arbitration agreement did not come within the FAA's exception for "interstate commerce" workers, the Court issued an order compelling arbitration.