unempl.ins.rep. Cch 21,737 in Re Philip E. Brown, Formerly Dba J & B Produce Co., a Co-Partnership, Debtor. Philip E. Brown v. State of California
Opinion
Opinion
Pregerson, J.
The Bankruptcy Court for the Central District of California granted an injunction against California’s assessment of unemployment taxes, disability taxes, and personal income withholding taxes against Philip E. Brown measured by the compensation he paid to certain truck drivers. The bankruptcy court’s order was based on a finding that the drivers were independent contractors and not Brown’s employees, and thus, Brown was not liable for the taxes. The district court affirmed the bankruptcy court. Applying a de novo standard of review to undisputed facts, we conclude that the drivers were employees and not independent contractors. We therefore reverse the district court’s order affirming the bankruptcy court’s granting of an injunction.
FACTS
Brown, formerly doing business as J & B Produce Company, was a nonregulated carrier of farm produce by highway. Dealing exclusively with Riteway Enterprises, Inc., a produce transportation broker, J & B trucked produce from the west to the east coast of the United States. To transport the produce, J & B used: (a) trucks it owned, (b) trucks it leased, and (c) trucks owned by drivers who hauled for J & B.