American Trucking Ass’n v. Los Angeles: Preemption at Issue in SCOTUS Appeal

Guest Commentary

Hon. James H. Burnley IV, Venable LLP*

On March 26, the U.S. Supreme Court invited the Solicitor General of the United States to weigh in on whether the Court should review the U.S. Court of Appeals for the Ninth Circuit’s decision in American Trucking Associations, Inc. v. City of Los Angeles, California, et al. (No. 11-798).  This case and recent development should be of interest to any business that relies upon federal preemption.  They should find disturbing the Ninth Circuit’s insistence on neutering the effect of preemption through narrow construction of statutory text and broad construction of exceptions that cannot be found in text and have no place in the preemption analysis.  In effect, the Ninth Circuit has again ignored the express written determination of Congress and substituted its judgment to favor a limited number of special interest groups. 

This case began as a result of the Ports of Los Angeles and Long Beach adopting Concession Plans that impose mandates on trucks and operators doing business at the ports as part of the Ports’ Clean Trucks Program.  Purportedly aimed at improving the surrounding environment, the initiative contained mandates wholly unrelated to the environment, such as a mandate to use only employee drivers – thus banning owner-operators.  Other provisions that directly regulated motor carriers included:  1) submitting an off-street parking plan with parking locations for all permitted trucks; 2) ensuring maintenance according to manufacturer’s specifications; 3) posting placards on permitted trucks with number for the public to call with concerns about emissions, safety, and compliance; and 4) demonstrating to the Port’s satisfaction that the concessionaire is financially capable.

The American Trucking Associations (ATA) challenged these provisions – without challenging the provisions that were directly related to environmental goals – as impermissible under the Federal Aviation Administration Authorization Act (FAAAA), which preempts non-federal regulations related to a price, route, or service of a motor carrier.  The FAAAA’s preemptive language is similar to the preemptive language in ERISA and the Airline Deregulation Act, and was construed broadly by the Supreme Court in Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364 (2008). 

In a previous appeal (of the district court’s denial of ATA’s request for preliminary injunction), a different panel of the Ninth Circuit concluded that it could “hardly be doubted” that the challenged provisions are “related to” a price, route, or service of a motor carrier.  That panel directed the trial court to determine whether any of the provisions were saved by the express safety exception in the preemption clause of the FAAAA.  At trial, the district court concluded that the provisions were saved because – in its view – the Port was acting as a “market participant,” and some of the provisions were not “related to” the price, route or service of a motor carrier.

On appeal of that decision, a divided panel of the Ninth Circuit construed the “related to” language extremely narrowly, in contrast to the Supreme Court’s decision in Rowe.  In addition, the panel utilized an exceedingly broad reading of a market participant exception to preemption that cannot be found in the text of the FAAAA, or in federal preemption doctrine generally.  While the panel held that the ban on owner-operators was preempted, it concluded that the other challenged requirements were not.

ATA petitioned for certiorari in an attempt to ensure that the Ninth Circuit’s decision does not pave the way for a “back door” means for states to create the incompatible patchwork of regulation that the FAAAA was intended to preclude.  The broad market participant preemption exception created by the Ninth Circuit – which arose in dormant Commerce Clause cases to determine whether a state’s action is regulation at all – could become the exception that swallows the rule if it is left unchecked.  The implications, of course, go beyond the trucking industry, and potentially affect any industry that Congress has chosen to regulate through a uniform federal approach.

Since this proceeding began in 2008, several noteworthy developments have transpired.  All of the challenged provisions have been held in abeyance, yet the Port of Los Angeles has met its environmental emissions goals more than two years ahead of schedule.  The Port of Long Beach settled its case in 2009, eliminating the challenged provisions, and has similarly met its environmental goals ahead of schedule.  Therefore, it is clear that the legal gymnastics the district court and the divided panel of the Ninth Circuit employed were not necessary to achieve the stated environmental objectives. 

*Mr. Burnley is a partner in the Washington, D.C. office of the law firm Venable LLP.  He served as U.S. Secretary of Transportation from 1987 to 1989.  He is also a member of WLF’s Legal Policy Advisory Board.