Port of L.A. Trucking Contracts an Overreach by Local Government, says ATA at Supreme Court
“The port is invoking the full coercive power of the State to impose conditions on motor carriers, and that is exactly what Congress sought to prevent,” said Daniel Lerman, counsel for the American Trucking Associations, in oral arguments before the Supreme Court April 16. In American Trucking Associations v. City of Los Angeles, the ATA is challenging the Port of Los Angeles’ “concession contracts” for licensed motor carriers operating drayage trucks that bring freight in and out of the port.
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Two provisions are still at issue -- the right of the port to require off-street parking plans from truck companies, and the requirement that trucks display placards while on port property referring the public to a phone number to report safety or emissions concerns. The 9th U.S. Circuit Court of Appeals had upheld both requirements, among several others, because they are not preempted by Federal Aviation Administration Authorization Act (FAAAA) restrictions on state-level regulation of trucking, and the port was in any case a business-oriented “market participant.”
According to the City of Los Angeles’ brief, the concession contracts were put in place in 2006 as part of the Clean Truck Program. Several expansion plans had been thwarted by local opposition to pollution at the Port of Los Angeles, and the requirements were implemented to assuage those concerns.
State and Local Governments Can Only Regulate Safety of Motor Carriers, Says ATA
The ATA argued that state governments are precluded from imposing non-safety related regulations on motor carriers by the FAAAA. That law says a State “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 … .” According to the ATA, the concession contract requirements are related to a price, route, or service, and have the force of law because criminal charges can be brought against terminal operators that conduct business with carriers that have broken the contracts. “This court has stated, when there’s an express preemption clause, the plain language of the clause defines the scope of Congress’ intent,” said Lerman.
The concession contract provisions are also counter to the precedent set in Castle v. Hayes Freight Lines, where the Supreme Court said States “cannot enforce otherwise valid requirements through a partial suspension of a motor carriers federally granted right to operate in interstate commerce,” argued the ATA. “That is precisely the authority that the Port is claiming here” by threatening to restrict access to the Port of Los Angeles, said Lerman.
Port a Business Entity; Regs Necessary to Grow Port, Says City of L.A.
But according to the City of Los Angeles, the concession agreements do not have the “force of law,” because the criminal charges would not be directly against the carriers. So the FAAAA’s preemption of state regulation doesn’t apply, it said. The Castle precedent was invalid too, because the law it was based on hasn’t been in effect for decades.
And even if the regulation was related to a price route, or service, which the City disputed, the Port was within its rights to impose the requirements because it is a business entity regulating its own property, it said. “And we are not talking about expansive control here, but some modicum of control over who enters our land,” said Steven Rosenthal, counsel for the City of Los Angeles. “The owner of the land has to have some type of control of the type which ATA and the government say we can’t have control over.”
“The Port undertook these actions as a reasonable and genuine response to the needs to build and grow a port,” Rosenthal said. “If we are prohibited from taking what are substantively limited actions to control trucking, then essentially we’re going to be in a posture in which this Port will be disabled by its surrounding community from doing what it needs to do to compete.”
Government Supports ATA Motor Carriers
The government disputed the economic necessity of the requirements in an amicus brief in support of the ATA. “There are a lot of things that ports and other municipal entities can do to address environmental concerns,” said John Bash, assistant to the Solicitor General
The government also rejected the Port’s argument that the rules did not have the force of law. “We accept the Port’s statement in their brief on fact value that the original penalties would only fall on the marine terminal operators,” Bash said. “But, like Petitioner, we don’t think that makes a difference,” he said.
And the Port is not really a business entity acting on its own interests, the government said. “This port authority, like I think virtually all other port authorities in charge of these massive container ports, holds land much like a highway commission in trust for the public,” said Bash. The measures of the port’s success, referred to in the lower courts’ opinions and in the City’s brief. are not business metrics like shareholder value and dividends, but are measures of the economic vitality of the L.A. region, he said. “That is not the mark of a commercial enterprise. It’s the mark of a regulatory body, said Bash. “It’s something a mayoral candidate may point to.”
A Transcript of the oral arguments is available (here).
Briefs from the case are available (here).