Californians For Safe & Competitive Dump Truck Transp. v. Mendonca

Decision Date21 August 1998
Docket NumberAFL-CI,No. 97-16026,I,97-16026
PartiesFed. Carr. Cas. P 84,071, 136 Lab.Cas. P 58,456, 4 Wage & Hour Cas.2d (BNA) 1483, 98 Cal. Daily Op. Serv. 6519, 98 Daily Journal D.A.R. 9055 CALIFORNIANS FOR SAFE AND COMPETITIVE DUMP TRUCK TRANSPORTATION; Lindeman Brothers, Inc.; Yuba Trucking, Inc., Plaintiffs-Appellants, v. Roberta E. MENDONCA; Lloyd W. Aubry, Jr.; James W. Van Loben Sels; California Department of Transportation; California Department of Industrial Relations; California Department of Labor, Defendants-Appellees, and International Brotherhood of Teamsters,ntervenor-Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Ellis Ross Anderson, Anderson, Donovan & Poole, San Francisco, California, for plaintiffs-appellants.

Miles E. Locker, Department of Industrial Relations, Irene B. Moy, Department of Transportation, San Francisco, California, for defendants-appellees.

Mary Lynne Werlwas, Scott A. Kronland, Altshuler, Berzon, Nussbaum, Berzon & Rubin, San Francisco, California, for intervenor-defendant-appellee.

Appeal from the United States District Court for the Northern District of California; Marilyn H. Patel, District Judge, Presiding. D.C. No. CV-96-03430-MHP.

Before: SNEED and TROTT, Circuit Judges, and WALLACH, * Judge.

SNEED, Circuit Judge:

The issue before us is whether the Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. § 14501 et seq. ("FAAA Act") preempts enforcement of California's Prevailing Wage Law, Cal. Lab.Code §§ 1770-80 ("CPWL"). We hold that it does not do so.

The language and structure of the FAAA Act does not evidence a clear and manifest intent on the part of Congress to preempt the CPWL. Although CPWL is not entirely unrelated "to a price, route or service of ... motor carriers," the teachings of recent Supreme Court cases make clear that a state law dealing with matters traditionally within its police powers, and having no more than an indirect, remote, and tenuous effect on motor carriers, are not preempted. Such is the case here. Thus, we affirm the district court's dismissal of plaintiffs' complaint.


Plaintiffs Californians for Safe & Competitive Dump Truck Transportation, Lindeman Brothers, Inc. and Yuba Trucking, Inc. (collectively "Dump Truck") 1 are public works contractors who provide transportation-related services on publicly-funded projects within California. The defendants (collectively "Mendonca") are several California agencies and their agents in whom the State of California vests the statutory authority to enforce CPWL.

Since 1937, when CPWL was enacted, California has required contractors and subcontractors who are awarded public works contracts to pay their workers "not less than the general prevailing rate ... for work of a similar character in the locality in which the public work is performed." See Cal. Lab.Code § 1771. 2 Failure to pay prevailing wages results in the assessment of penalties against the contractor. See Cal. Lab.Code § 1775. Mendonca assessed Dump Truck various penalties after it failed to pay its workers the prevailing wage.

On September 20, 1996, Dump Truck filed suit in the district court seeking both declaratory and injunctive relief. Dump Truck claimed that enforcement of CPWL violated the Supremacy Clause because the FAAA Act preempted CPWL. Jurisdiction was based on the existence of federal questions and the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202.

On October 18, 1996, Mendonca filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6), and, in late 1996, the International Brotherhood of Teamsters ("IBT") sought leave to intervene as a defendant. Dump Truck opposed both motions. The district court granted IBT's motion to intervene and, thereafter, granted Mendonca's motion to dismiss after the district court concluded that CPWL was not preempted. The district court entered final judgment, and Dump Truck timely appeals the district court's ruling on the preemption issue as well as its decision to grant IBT's motion to intervene.


We have jurisdiction over this appeal under 28 U.S.C. § 1291. A district court's decision regarding preemption is reviewed de novo. Gee v. Southwest Airlines, 110 F.3d 1400, 1404 (9th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 301, 139 L.Ed.2d 232 (1997).

Part I: The District Court's Dismissal of the Complaint

Dump Truck contends that the plain meaning of the FAAA Act's preemption clause, the intent of Congress, and the Supreme Court's "broad interpretation" of the ADA's preemption clause, compel a conclusion that the FAAA Act preempts CPWL. Dump Truck therefore asserts that the district court erred by dismissing its complaint under Fed.R.Civ.P. 12(b)(6).

We commence with the assumption that state laws dealing with matters traditionally within a state's police powers are not to be preempted unless Congress's intent to do so is clear and manifest. See Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947). The Supreme Court has indicated that CPWL is an example of state action in a field long regulated by the states. See California Div.

of Labor Standards Enforcement v. Dillingham Constr., Inc., 519 U.S. 316, 117 S.Ct. 832, 835, 840, 136 L.Ed.2d 791 (1997). Thus, the crux of this case is whether Congress exhibited a clear and manifest intent to preempt CPWL.

Nonetheless, to determine Congressional intent, we first must consult the text of the FAAA Act, as well as its structure and purpose. We are mindful of the Supreme Court's admonition that "preemption may be either express or implied, and is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992).

1. The Text of the FAAA Act

On January 1, 1995, Section 601 of the FAAA Act became federal law. As a general matter, this section preempts a wide range of state regulation of intrastate motor carriage. It provides:

(c) Motor carriers of property. (1) General Rule. Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a 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 the transportation of property.

49 U.S.C. § 14501(c)(1)(1997) (emphasis added). Paragraphs (2) and (3) exempt a number of types of state regulations and controls. See 49 U.S.C. § 14501(c)(2), (3). None of the exemptions, however, apply here. Beyond this, the text offers little else in the way of definition or direction as to the FAAA Act's preemptive scope.

2. The Legislative History of the FAAA Act

Congress apparently regarded the preemption clause of the FAAA Act as a way of solving two major problems facing interstate commerce. First, Congress believed that across-the-board deregulation was in the public interest as well as necessary to eliminate non-uniform state regulations of motor carriers which had caused "significant inefficiencies, increased costs, reduction of competition, inhibition of innovation and technology, and curtail[ed] the expansion of markets." H.R. Conf. Rep. No. 103-677, at 86-88 (1994), reprinted in 1994 U.S.C.C.A.N. 1715, 1758-60.

Second, by enacting a preemption provision identical to an existing provision deregulating air carriers (the Airline Deregulation Act ("ADA")), Congress sought to "even the playing field" between air carriers and motor carriers. Id. at 85, 1994 U.S.C.C.A.N. at 1757, 1759. This imbalance arose out of this court's decision in Federal Express Corp. v. California Pub. Utils. Comm'n, 936 F.2d 1075 (9th Cir.1991). By holding that Federal Express fit within the ADA's definition of "air carrier," this court concluded that California's intrastate economic regulations of the carrier's shipping activities were preempted. As a result, air-based shippers gained a sizeable advantage over their more regulated, ground-based shipping competitors. By preempting the states' authority to regulate motor carriers, Congress sought to balance the regulatory "inequity" produced by the ADA's preemption of the states' authority to regulate air carriers. See H.R. Conf. Rep. No. 103-677, at 87 (1994), reprinted in 1994 U.S.C.C.A.N. at 1759.

It is revealing to note that Congress identified forty-one jurisdictions which regulated intrastate prices, routes and services, followed by ten jurisdictions which did not regulate in these areas. See H.R. Conf. Rep. 103-677, at 86 (1994), reprinted in 1994 U.S.C.C.A.N. at 1758. Of the ten jurisdictions which Congress found did not regulate intrastate prices, routes and services, seven of these jurisdictions had, and continue to have, general prevailing wage laws substantially similar to CPWL. 3

This portion of the legislative history constitutes indirect evidence that Congress did not intend to preempt CPWL. This perception is reinforced by the absence of any positive indication in the legislative history that Congress intended preemption in this area of traditional state power. See Travelers, 514 U.S. at 655, 115 S.Ct. 1671.

3. Recent Cases Interpreting the "Related To" Language

While this legislative history counsels against preemption in this case, we draw additional support from recent Supreme Court cases interpreting the preemptive scope of the ADA and ERISA preemption clauses. To repeat, these cases instruct that state regulation in an area of traditional state power having no more than an indirect, remote, or tenuous effect on a motor carriers' prices, routes, and services are not preempted.

The Supreme Court's first encounter with the ADA's preemption clause was Morales v. Trans World...

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