American Trucking v. City of Los Angeles

Decision Date09 September 2008
Docket NumberNo. CV 08-04920 CAS (CTx).,CV 08-04920 CAS (CTx).
Citation577 F.Supp.2d 1110
PartiesAMERICAN TRUCKING ASSOCIATIONS, INC., Plaintiff, v. The CITY OF LOS ANGELES, et al., Defendants.
CourtU.S. District Court — Central District of California

Christopher C. McNatt, Jr., Scopelitis Garvin Light Hanson and Feary LLP, Pasadena, CA, Richard O. Levine, Seth D. Greenstein, Stephen S. Anderson, Jr., W. Stephen Cannon, Constantine Cannon LLP, Washington, DC, Robert Digges, Jr., American Trucking Associations Inc., Arlington, VA, for Plaintiff.

Bryant S. Delgadillo, Kaye Scholer, Los Angeles, CA, Paul L. Gale, Ross Dixon and Bell LLP, Irvine, CA, Adriano Martinez, David R. Pettit, Melissa Lin Perrella, Natural Resources Defense Council, Santa Monica, CA, for Defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

CHRISTINA A. SNYDER, District Judge.

I. INTRODUCTION AND BACKGROUND

Defendant City of Los Angeles owns and operates the Port of Los Angeles. Compl. ¶ 12; Opp'n at 4. Defendant City of Long Beach owns and operates the Port of Long Beach. Compl. ¶ 12; Opp'n at 4. The Port of Los Angeles and the Port of Long Beach ("the Ports") form a single contiguous port area along San Pedro Bay in Los Angeles County. Mot. at 4; Opp'n at 2. Authority to manage the assets of the port and craft rules governing port-related activities in each city is invested in defendants Board of Harbor Commissioners of the City of Los Angeles and Board of Harbor Commissioners of the City of Long Beach. Opp'n ¶ 4; Compl. ¶ 8.

Cargo is carried to and from the Ports through a process of "drayage," whereby cargo containers are unloaded from ships and loaded onto truck trailers, from which they are "drayed" by motor carriers to customers, off-dock terminals, or railheads. Compl. ¶ 14. Motor carriers provide these drayage services through contracts with end users of the cargo, or through contracts with ocean carriers. Compl. ¶ 14.

Plaintiff American Trucking Associations, Inc. ("ATA") is the non-profit national trade association for the trucking industry. Compl. ¶ 7. Intermodal Motor Carriers Conference ("IMCC") is an affiliated conference of the ATA, and counts among its members several motor carriers who provide drayage services to the Ports of Los Angeles and Long Beach. Compl. ¶ 7.

On December 7, 2007, the California Air Resources Board ("CARB") adopted rules to limit the emissions from diesel trucks providing drayage services at California ports. Compl. ¶ 26. Around this same time, the Ports developed a Clean Air Action Plan ("CAAP"). Opp'n at 3. Included in the CAAP was the Clean Trucks Program, a multi-faceted program designed to reduce the emissions of trucks providing drayage services to the Ports. Opp'n at 3.

Under the auspices of the Clean Trucks Program, the Ports adopted tariff amendments mandating that all drayage trucks that service the Ports must meet the Environmental Protection Agency ("EPA") 2007 truck emissions standards by 2012. Opp'n at 6. The Ports also adopted tariff amendments instituting a "Clean Truck Fee," to be paid by the beneficial cargo owner of merchandise leaving the ports, proceeds from which would be used to help finance the retrofits and truck replacements necessitated by the truck ban. Opp'n at 7.

On March 20, 2008, defendant Los Angeles Harbor Board adopted an order which provides that "beginning October 1, 2008, at 8:00 am, 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 from the Port of Los Angeles ..." Compl. ¶ 19. On February 19, 2008, defendant Long Beach Harbor Board similarly mandated that drayage trucks would be required to hold a concession agreement with the City of Long Beach in order to enter the Port of Long Beach beginning on October 1, 2008. Compl. ¶ 22.

The Los Angeles and Long Beach concession agreements contain many of the same requirements. Specifically, each concession agreement dictates that motor carriers accessing the Port must (1) remain licensed and in good standing; (2) enter, verify, and update identifying information into the Port's Drayage Truck Registry ("Registry") for each truck and for each driver accessing the Port; (3) be responsible for the compliance and performance of their drivers who access the Port; (4) cause all trucks to comply with the Clean Trucks Program; (5) comply with parking restrictions and submit for approval a parking plan for trucks accessing the Port; (6) submit a truck maintenance plan; (7) comply with truck safety and operations regulations, and make available all records required for compliance with existing regulatory programs, including documents on driver qualifications; (8) ensure that each of its drivers has a valid Transportation Worker Identification Card ("TWIC"); (9) ensure that each of its trucks has a Radio Frequency Identification Device ("RFID") connected to the Registry so that the relevant information is available when the truck enters the Port; (10) ensure that all trucks comply with security laws and regulations; (11) ensure that all trucks post placards providing a phone number to allow the public to report emissions and safety concerns; (12) implement necessary technology required by the concession or the Clean Trucks Program; and (13) ensure that they have the financial capability to execute the concession agreements. Los Angeles Concession Agreement (LACA) at 2-4; Long Beach Concession Agreement (LBCA) at 2-3.

In addition, the Los Angeles concession agreement requires that motor carriers fully transition away from independent contractor drivers, mandating that by December 31, 2013, all of the drivers accessing the port must be employees of the motor carrier rather than independent contractors. LACA at 2. To accomplish this, the concession agreement provides for a gradual phase-in period, with a first benchmark provision requiring that, by December 21, 2009, 20 percent of drivers used by any motor carrier signing a concession agreement be employees rather than independent contractors. LACA at 2-3. The Long Beach concession agreement, by contrast, does not require a transition away from independent contractor drivers, but does require that motor carriers give hiring preference to drivers with a history of providing drayage services to the Port. LBCA at 2.

Under the Los Angeles concession agreement, motor carriers must also pay an initial $2500 refundable fee, with a $100 non-refundable annual administrative fee per truck. LACA at 9. Under the Long Beach plan, motor carriers must pay an initial $250 application fee and a $100 annual administrative fee per truck. LBCA at 7. The two plans also require that motor carriers carry and provide to their drivers varying forms of insurance. Opp'n at 9.

On July 28, 2008, plaintiff American Trucking Association, Inc. ("ATA") filed the complaint in this action against defendants City of Los Angeles, Harbor Department of the City of Los Angeles, Board of Harbor Commissioners of the City of Los Angeles, City of Long Beach, Harbor Department of the City of Long Beach, and Board of Harbor Commissioners of the City of Long Beach. The first and second claims of the complaint allege that the Los Angeles and Long Beach concession agreements violate the Supremacy Clause and the Federal Aviation Administration Authorization Act of 1994 ("the FAAA"). The third claim alleges that the concession agreements place an undue burden on and discriminate against the right of plaintiff motor carriers to engage in interstate commerce.

On July 30, 2008, plaintiff filed a motion for preliminary injunction on counts one and two of plaintiff's complaint. On August 20, 2008, defendants filed their opposition. A reply was filed on August 29, 2008. A hearing was held on September 8, 2008. After carefully considering the arguments set forth by the parties, the Court finds and concludes as follows.

II. LEGAL STANDARD

A preliminary injunction is appropriate when the moving party shows either (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in the moving party's favor. See Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987). These are not two distinct tests, but rather "the opposite ends of a single `continuum in which the required showing of harm varies inversely with the required showing of meritoriousness.'" Id. A "serious question" is one on which the movant "has a fair chance of success on the merits." Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1421 (9th Cir.1984).

III. DISCUSSION
A. LIKELIHOOD OF SUCCESS ON THE MERITS

Plaintiff argues for a preliminary injunction on the basis that the concession agreements are preempted by the FAAA.

1. STATUTORY BASIS FOR PREMPTION

"Federal preemption occurs when: (1) Congress enacts a statute that explicitly preempts state law; (2) state law actually conflicts with federal law; or (3) federal law occupies a legislative field to such an extent that it is reasonable to conclude the Congress left no room for state regulation in that field." Tocher v. City of Santa Ana, 219 F.3d 1040, 1045-46 (9th Cir.2000), abrogated on other grounds, Tillison v. City of San Diego, 406 F.3d 1126, 1127 (9th Cir.2005). When a statute provides a reliable indication that Congress intended to preempt state and local regulation, "the scope of federal preemption is determined by the statute." Id. at 1046.

Congress enacted the FAAA to achieve deregulation of the motor carrier industry, and therefore, included a "broad preemption statute." Id. The statute provides that, with regard to motor carriers, "a State, political subdivision of a State, or political authority of two or more States may not enact...

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