Am. Trucking Ass'ns, Inc. v. City of L. A.

• Decision Date: 13 June 2013
• Docket Number: No. 11–798.,11–798.
• Citation: 186 L.Ed.2d 177,569 U.S. 641,133 S.Ct. 2096
• Parties: AMERICAN TRUCKING ASSOCIATIONS, INC., Petitioner v. CITY OF LOS ANGELES, CALIFORNIA, et al.
• Court: U.S. Supreme Court

569 U.S. 641

133 S.Ct. 2096

186 L.Ed.2d 177

AMERICAN TRUCKING ASSOCIATIONS, INC., Petitioner

v.CITY OF LOS ANGELES, CALIFORNIA, et al.

No. 11–798.

Supreme Court of the United States

Argued April 16, 2013.

Decided June 13, 2013.

Daniel N. Lerman, Washington, DC, for Petitioner.

John F. Bash, for the United States as amicus curiae, by special leave of the Court, supporting the Petitioner.

Steven S. Rosenthal, Washington, DC, for Respondents.

Prasad Sharma, Richard Pianka, American Trucking Associations, Inc., Arlington, VA, Roy T. Englert, Jr., Alan Untereiner, Daniel N. Lerman, Counsel of Record, Leif Overvold, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Washington, DC, for Petitioner.

Melissa Lin Perrella, Counsel of Record, David Pettit, Natural Resources Defense Council, Inc., Santa Monica, CA, for Respondents Natural Resources Defense Council, Inc., Sierra Club, and Coalition for Clean Air, Inc.

Carmen A. Trutanich, Janna B. Sidley, Joy M. Crose, Simon M. Kann, LA City Attorney's Office, San Pedro, CA, Steven S. Rosenthal, Counsel of Record, Alan K. Palmer, Susanna Y. Chu, Kaye Scholer LLP, Washington, DC, for Respondents the City of Los Angeles, the Harbor Department of the City of Los Angeles, and the Board of Harbor Commissioners of the City of Los Angeles.

Justice KAGAN delivered the opinion of the Court.

In this case, we 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. We hold 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. We decline to decide in the case's present, pre-enforcement posture whether, under Castle v. Hayes Freight Lines, Inc., 348 U.S. 61, 75 S.Ct. 191, 99 L.Ed. 68 (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.

I

A

The Port of Los Angeles, a division of the City of Los Angeles, is the largest port in the country. The Port owns marine terminal facilities, which it leases to "terminal operators" (such as shipping lines and stevedoring companies) that load cargo onto and unload it from docking ships. Short-haul trucks, called "drayage trucks," move the cargo into and out of the Port. The trucking companies providing those drayage services are all federally licensed motor carriers. Before the events giving rise to this case, they contracted with terminal operators to transport cargo, but did not enter into agreements with the Port itself.

The City's Board of Harbor Commissioners runs the Port pursuant to a municipal ordinance known as a tariff, which sets out various regulations and charges. In the late 1990's, the Board decided to enlarge the Port's facilities to accommodate more ships. Neighborhood and environmental groups objected to the proposed expansion, arguing that it would increase congestion and air pollution and decrease safety in the surrounding area. A lawsuit they brought, and another they threatened, stymied the Board's development project for almost 10 years.

To address the community's concerns, the Board implemented a Clean Truck Program beginning in 2007. Among other actions, the Board devised a standard-form "concession agreement" to govern the relationship between the Port and any trucking company seeking to operate on the premises. Under that contract, a company may transport cargo at the Port in exchange for complying with various requirements. The two directly at issue here compel the company to (1) affix a placard on each truck with a phone number for reporting environmental or safety concerns (You've seen the type: "How am I driving? 213–867–5309") and (2) submit a plan listing off-street parking locations for each truck when not in service. Three other provisions in the agreement, formerly disputed in this litigation, relate to the company's financial capacity, its maintenance of trucks, and its employment of drivers.

The Board then amended the Port's tariff to ensure that every company providing drayage services at the facility would enter into the concession agreement. The mechanism the Board employed is a criminal prohibition on terminal operators. The amended tariff provides that "no Terminal Operator shall permit access into any Terminal in the Port of Los Angeles to any Drayage Truck unless such Drayage Truck is registered under a Concession [Agreement]." App. 105. A violation of that provision—which occurs "each and every day" a terminal operator provides access to an unregistered truck—is a misdemeanor. Id., at 86. It is punishable by a fine of up to $500 or a prison sentence of up to six months. Id., at 85–86.

The concession agreement itself spells out penalties for any signatory trucking company that violates its requirements. When a company commits a "Minor Default," the Port may issue a warning letter or order the company to undertake "corrective action," complete a "course of ... training," or pay the costs of the Port's investigation. Id., at 81–82. When a company commits a "Major Default," the Port may also suspend or revoke the company's right to provide drayage services at the Port. Id., at 82. The agreement, however, does not specify which breaches of the contract qualify as "Major," rather than "Minor." And the parties agree that the Port has never suspended or revoked a trucking company's license to operate at the Port for a prior violation of one of the contract provisions involved in this case. See Tr. of Oral Arg. 42–43, 49–51.

B

Petitioner American Trucking Associations, Inc. (ATA), is a national trade association representing the trucking industry, including drayage companies that operate at the Port. ATA filed suit against the Port and City, seeking an injunction against the five provisions of the concession agreement discussed above. The complaint principally contended that § 14501(c)(1) of the FAAAA expressly preempts those requirements. That statutory section states:

"[A] State [or local government] may not enact or enforce a law, regulation, or other provision having the force and effectof law related to a price, route, or service of any motor carrier ... with respect to the transportation of property." 49 U.S.C. § 14501(c)(1).¹

ATA also offered a back-up argument: Even if the requirements are valid, ATA claimed, the Port may not enforce them by withdrawing a defaulting company's right to operate at the Port. That argument rested on Castle v. Hayes Freight Lines, Inc., 348 U.S. 61, 75 S.Ct. 191, 99 L.Ed. 68 (1954), which held that Illinois could not bar a federally licensed motor carrier from its highways for prior violations of state safety regulations. We reasoned in Castle that the State's action conflicted with federal law providing for certification of motor carriers; and ATA argued here that a similar conflict would inhere in applying the concession agreement to suspend or revoke a trucking company's privileges. Following a bench trial, the District Court held that neither § 14501(c)(1) nor Castle prevents the Port from proceeding with any part of its Clean Truck Program.

The Court of Appeals for the Ninth Circuit mainly affirmed. Most important for our purposes, the court held that § 14501(c)(1) does not preempt the agreement's placard and parking requirements because they do not " ‘ha[ve] the force and effect of law.’ " 660 F.3d 384, 395 (2011) (quoting § 14501(c)(1) ). The court reasoned that those requirements, rather than regulating the drayage market, advance the Port's own "business interest" in "managing its facilities." Id., at 401. Both provisions were "designed to address [a] specific proprietary problem[ ]"—the need to "increase the community good-will necessary to facilitate Port expansion." Id., at 406–407; see id., at 409. The Ninth Circuit also held the agreement's financial-capacity and truck-maintenance provisions not preempted, for reasons not relevant here.² Section 14501(c)(1), the court decided, preempts only the contract's employment provision. Finally, the Ninth Circuit rejected ATA's claim that Castle bars the Port from applying the agreement's penalty clause to withdraw a trucking company's right to operate at the facility. The court thought Castle inapplicable because of the narrower exclusion in this case: "Unlike a ban on using all of a State's freeways," the court reasoned, "a limitation on access to a single Port does not prohibit motor carriers" from generally participating in interstate commerce. 660 F.3d, at 403.

We granted certiorari to resolve two questions: first, whether § 14501(c)(1) of the FAAAA preempts the concession agreement's placard and parking provisions; and second, whether Castle precludes reliance on the agreement's penalty clause to suspend or revoke a trucking company's privileges. See 568 U.S. ––––, 133 S.Ct. 927, 184 L.Ed.2d 718 (2013). Contrary to the Ninth Circuit, we hold that the placard and parking requirements are preempted as "provision[s] having the force and effect of law." That determination does not obviate the enforcement issue arising from Castle because the Ninth Circuit's rulings upholding the agreement's financial-capacity and truck-maintenance provisions have now become final;³ accordingly, the Port could try to apply its penalty provision to trucking companies that have violated those surviving requirements. But we nonetheless decline to address 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.

II

Section 14501(c)(1), once again, preempts a state "law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... with respect to...