American Trucking Ass'Ns v. City of Los Angeles

• Decision Date: 20 March 2009
• Docket Number: No. 08-56503.,08-56503.
• Citation: 559 F.3d 1046
• Parties: AMERICAN TRUCKING ASSOCIATIONS, INC., Plaintiff-Appellant, v. The CITY OF LOS ANGELES; The Harbor Department of the City of Los Angeles; The Board of Harbor Commissioners of the City of Los Angeles; The City of Long Beach; The Harbor Department of the City of Long Beach; The Board of Harbor Commissioners of the City of Long Beach, Defendants-Appellees, Natural Resources Defense Council; Sierra Club; Coalition for Clean Air, Inc., Defendant-intervenors-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

559 F.3d 1046

AMERICAN TRUCKING ASSOCIATIONS, INC., Plaintiff-Appellant, v. The CITY OF LOS ANGELES; The Harbor Department of the City of Los Angeles; The Board of Harbor Commissioners of the City of Los Angeles; The City of Long Beach; The Harbor Department of the City of Long Beach; The Board of Harbor Commissioners of the City of Long Beach, Defendants-Appellees, Natural Resources Defense Council; Sierra Club; Coalition for Clean Air, Inc., Defendant-intervenors-Appellees.

No. 08-56503.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 4, 2009.

Filed March 20, 2009.

Christopher C. McNatt Jr., Scopelitis, Garvin, Light, Hanson & Feary, LLP, Pasadena, CA; W. Stephen Cannon, Seth D.

Greenstein, Stephen S. Anderson, Jr., Constantine Cannon LLP, Washington, DC; Robert Digges, American Trucking Associations, Inc., Arlington, VA, for the plaintiff-appellant.

C. Jonathan Benner, Troutman Sanders, LLP, Washington, DC; Steven S. Rosenthal, Kaye Scholer LLP, Washington, DC, for the defendants-appellees.

David Pettit, Natural Resources Defense Council, Santa Monica, CA, for the intervenors-appellees.

Karyn A. Booth, Thompson Hine LLP, Washington, DC, for the amicus, The National Industrial Transportation League.

Melissa N. Patterson, Department of Justice, Appellate Staff Civil Division, Washington, DC, for the amicus, the United States of America.

Timothy R. Patterson, Office of the Attorney General of California, Oakland, CA, for the amicus, the State of California.

Jeffrey Bossert Clark, Kirkland & Ellis, LLP, Washington, DC, for the amicus, National Association of Waterfront Employers.

Appeal from the United States District Court for the Central District of California, Christina A. Snyder, District Judge, Presiding. D.C. No. 2:08-CV-04920-CAS-CT.

Before ROBERT R. BEEZER, FERDINAND F. FERNANDEZ, and RICHARD A. PAEZ, Circuit Judges.

OPINION

FERNANDEZ, Circuit Judge:

INTRODUCTION

American Trucking Associations, Inc. ("ATA"), a non-profit national trade association for the trucking industry, appeals from the district court's refusal to preliminarily enjoin the implementation of mandatory concession agreements for drayage trucking services at the Port of Los Angeles¹ and the Port of Long Beach² (together the "Ports"). ATA sought to enjoin the programs as preempted by the Federal Aviation Administration Authorization Act, 49 U.S.C. § 14501(c)(the "FAAA Act"), because they improperly attempted to regulate the "price, route, or service of any motor carrier." 49 U.S.C. § 14501(c)(1). The district court concluded that the agreements likely fell within a statutory exception preserving the "safety regulatory authority of a State with respect to motor vehicles." Id. § 14501(c)(2)(A). It also concluded that ATA failed to demonstrate irreparable harm absent an injunction and that the balance of hardships and public interest weighed against imposing an injunction.³ We reverse and remand.

BACKGROUND

The Ports of Los Angeles and Long Beach are contiguous and effectively form a single port on San Pedro Bay bisected by the Los Angeles-Long Beach city boundary. They occupy land that was granted by the State of California to the Cities of Los Angeles and Long Beach via the California Tidelands Act, and the Ports hold the land in trust for the benefit of the people of California. Each Port is managed by its respective Board of Harbor Commissioners. The Ports act as "landlords" by developing terminal facilities that are then leased to shipping lines and stevedoring companies. The Ports' revenue comes from fees those operators pay to occupy port space.

The Port of Los Angeles handles more containerized cargo than any other domestic port and the two ports combined handle over 40% of the containerized goods in United States foreign commerce. Motor carriers,⁴ like the constituents of ATA (which has tens of thousands of affiliated members), dray this cargo from ships to customers, to off-dock terminals, or to railheads for further transport. Motor carriers do not contract with the Ports; instead, they contract directly with end-users, ocean carriers, railroads, or others in the transport chain. ATA members rely largely on independent truck owner-operators as subcontractors to provide drayage at the Ports. One Port study estimated that 85% of drayage drivers are independent contractors, rather than employees, and ATA estimates that number as closer to 98%.

Each Port's respective Drayage Services Concession Agreement ("Concession agreement") requirements went into effect on October 1, 2008, as part of the Ports' Clean Trucks Program. The Program is composed of three main parts: (1) a progressive truck ban that prohibits pre-1989 trucks; (2) the Concession agreements; and (3) a container fee to finance the billions of dollars necessary to subsidize modernizing the truck fleet. The Los Angeles Board's tariff Order No. 6956, adopted at the same time as the resolution approving the Los Angeles Port Concession agreement, states that the Concession agreement was designed to:

(a) further the improvement of air quality at the Port, (b) create an efficient, reliable supply of drayage services to the Port for the sustainable future, (c) establish performance criteria for providers of drayage services that promote the Port's business objectives, (d) ensure sufficient supply of drayage drivers, by improvement of wages, benefits, and working conditions, (e) enhance Port security and safety, and (f) reduce negative impacts on the local community.

The Ports admit that environmental concerns were the "principal motivating factor" of the Clean Trucks Program.⁵

Though similar, the Concession agreements differ in some respects. The Port of Los Angeles Concession agreement requires that motor carriers: (1) remain licensed and in good standing while operating at the Port; (2) enter, verify, and update identifying information for each truck and driver; (3) ensure that permitted trucks are equipped with a Radio Frequency Identification Device to be read when a truck enters a terminal; (4) transition over the course of five years from independent-contractor drivers to employees of each licensed motor carrier;⁶ (5) provide off-street parking outside the Port and (6) submit a maintenance and parking plan for each truck. Each permitted motor carrier must also comply with federal and state law, must obtain automobile liability insurance and worker's compensation insurance, and must agree to safety and security inspections and audits and file numerous reports. Each carrier must pay an initial $2,500 concession fee and a $100 annual administration fee per truck.

The Concession agreement for the Port of Long Beach requires that permitted motor carriers: (1) comply with state and federal law; (2) enter and update information for trucks and drivers; (3) ensure that permitted trucks are equipped with a Radio Frequency Identification Device; (4) provide proof that it informs drivers of available health insurance; (5) ensure that drivers properly maintain trucks and comply with laws regulating on-street parking and truck routes; (6) maintain general liability and automobile liability insurance; (7) permit safety and security inspections; (8) must agree to audits and file numerous reports; and (9) pay an initial $250 fee and $100 annual fee per truck. The Concession agreement for the Port of Long Beach does not include the provision requiring transition from independent contractors to employee-drivers. Nor does it require off-street parking of trucks.

Both agreements require motor carriers to give hiring preferences to drivers with port service histories and post openings with the Ports' Workforce Development Office. Both agreements require financial disclosures: They compel publicly held companies to disclose annual reports, SEC filings, and pending legal actions, and privately held companies to disclose balance sheets, income tax statements, and pending legal actions.

The Ports claim that the Concession agreements address security concerns. For example, the Ports say that they have little good information on trucks and drivers, and the driver and truck tracking measures address that gap. In the promulgation history of the Clean Trucks Program, the Los Angeles Board stated that the Concession agreement requirement was "designed to assure ongoing safety [and] security" and would yield "increased safety and security [through] accountability and control of the Concessionaires as employers of their employee drivers to a degree not possible with casual or independent drivers...." Los Angeles Board Resolution 6522. The Port of Los Angeles's Deputy Executive Director stated:

[T]he drayage concession contracts provide the Port with the tools to better secure itself from threats involving the use of heavy-duty trucks as a means to transport illicit or dangerous materials into or out of the Port. The concession contracts enhance Port security by contractually allowing [the Port of Los Angeles] to: (1) collect identifying information for the driver, the truck, the cargo, and the responsible company for each truck entering [the Port's] terminals; (2) correlate each piece of information with the other pieces for a given truck visit; and (3) make one entity, the [motor carrier], which is the entity coordinating drayage truck movements, wholly responsible for providing the information and verifying its accuracy.

The Los Angeles Board included the independent contractor phase-out based on stated concerns that "[s]erious and long-standing safety problems also exist as a consequence of unsafe, negligent or reckless driving of trucks on the Port or on public roads and highways accessing the Port," and seeks to shift the access and identity tracking to motor carriers because it is "more practical and effective to require that motor carriers enforce such requirements against their own drivers." Los Angeles Board Resolution 6522. The Board...