American Trucking Association v. Los Angeles

Jun 13: In the U.S. Supreme Court, Case No. 11-798. Appealed from the U.S. Court of Appeals, Ninth Circuit [See WIMS 9/27/11]. In this unanimous High Court decision, the Justices consider whether Federal law preempts certain provisions of an agreement that trucking companies must sign before they can transport cargo at the Port of Los Angeles. The Supreme Court concludes that "the Federal Aviation Administration Authorization Act of 1994 (FAAAA) expressly preempts two of the contract's provisions, which require such a company to develop an off-street parking plan and display designated placards on its vehicles." However, the High Court declines "to decide in the case's present, pre-enforcement posture whether, under Castle v. Hayes Freight Lines, Inc., 348 U. S. 61 (1954), federal law governing licenses for interstate motor carriers prevents the Port from using the agreement's penalty clause to punish violations of other,non-preempted provisions."

 

    Explaining further, the unanimous Court says, ". . .the kind of enforcement ATA [American Trucking Association] fears, and believes inconsistent with Castle, might never come to pass at all. In these circumstances, we decide not to decide ATA's Castle-based challenge. That claim, by its nature, attacks the Port's enforcement scheme. But given the preenforcement posture of this case, we cannot tell what that scheme entails. It might look like the one forbidden in Castle (as ATA anticipates), or else it might not (as the Port assures us). We see no reason to take a guess now about what the Port will do later. There will be time enough to address the Castle question when, if ever, the Port enforces its agreement in a way arguably violating that decision. " The Court said, ". . .the Castle question because the case's pre-enforcement posture obscures the nature of the agreement's remedial scheme, rendering any decision at this point a shot in the dark." 

 

    The Castle v. Hayes Freight Lines, Inc., case of 1954 held that Illinois could not bar a Federally licensed motor carrier from its highways for prior violations of state safety regulations. The parties here dispute whether Castle restricts the Port's remedial authority. The Port echoes the Ninth Circuit's view that banning a truck from "all of a State's freeways" is meaningfully different from denying it "access to a single Port." ATA responds that because the Port is a "crucial channel of interstate commerce," Castle applies to it just as much as to roads.

 

    ATA President and CEO Bill Graves hailed the opinion and said, "We are gratified that, at the conclusion of many years of litigation, the highest court in the land unanimously agreed with ATA on these rules. Our position has always been that the Port's attempt to regulate drayage operators -- in ways that had nothing to do with its efforts to improve air quality at the Port -- was inconsistent with Congress' command that the trucking industry be shaped by market forces, rather than an incompatible patchwork of state and local regulations. The decision is sure to send a signal to any other cities who may have been considering similar programs which would impermissibly regulate the port trucking industry."

 

    ATA characterized the case saying, at issue was the Port's attempt to impose so-called "concession agreements" on drayage operators wishing to move goods in and out of the Port. The Federal Aviation Administration Authorization Act prohibits the enforcement of any state or local "law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier." The question before the Supreme Court was whether certain provisions of the concession agreements that undisputedly "related to a price, route, or service" of motor carriers nevertheless escaped preemption because the Port asserted that it imposed these requirements to serve its "business interest" in expanding the Port, rather than in an effort to regulate the drayage market.

 

    ATA indicates that the Court concluded that, whatever the Port's asserted motivation, the concession agreements amounted to "classic regulatory authority" and thus fell within the scope of the FAAAA's preemption provision. It observed that the concession agreements, while technically contracts between the Port and trucking companies, were not the "result merely of the parties' voluntary commitments."  Rather, the Port compelled trucking companies to enter into the contracts as a condition of access to the Port, by "wielding coercive power over private parties, backed by the threat of criminal punishment."  By imposing the concession agreements through coercion rather than "ordinary bargaining," Los Angeles was "performing its prototypical regulatory role."

 

    Access the complete opinion (click here). Access the Supreme Court docket (click here). Access the merit and amicus briefs in the case (click here). Access the complete Ninth Circuit opinion and dissent (click here). Access a release from ATA (click here). [#Air, #Transport, #CA9, #SupCt]

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