The ruling, which is certain to send shock waves throughout the trucking industry because it could lead to the unionization of harbor truckers, will most likely be appealed by the American Trucking Associations, the plaintiff in the two-year-old case.
U.S. District Court Judge Christina A. Snyder ruled although federal preemption law prohibits state and local entities from regulating the rates, routes and services of motor carriers engaged in interstate commerce, the Port of Los Angeles can mandate certain requirements on truckers under a “market participant” exception to that law.
The Los Angeles judge said the port, in order to expand and protect its assets in competition with other ports, must promote a healthy harbor trucking industry and one that reduces pollution. Otherwise, environmental and community groups, which had blocked port expansion dating back to 2001, would continue to block port growth through litigation. She determined the port adopted the concession agreement in the Clean Truck Program “as a business necessity,” and therefore the concession requirements fall under the market participant exception to the motor carrier provision of the Federal Aviation Administration Authorization Act.
Also, the port subsidized the purchase of dozens of costly new clean trucks. The port argued that the employee-driver mandate conserves the administrative costs of the Clean Truck Program and protects the port’s investment in clean trucks by encouraging financially-stable motor carriers to work in the harbor.
By mandating that harbor truckers hire truckers as employees, rather than allowing motor carriers to contract with independent owner-operator drivers, the port will make it easier for the Teamsters to organize the drivers. Unions, by law, cannot organize independent contractors, but are free to attempt to organize companies with direct employees.
ATA attorneys in the trial in late April in Los Angeles argued the port is not a market participant because it does not contract for trucking services, and in fact is paying itself back for its investment in clean trucks through a fee imposed on non-compliant trucks calling at the port.
Port of Los Angeles Executive Director Geraldine Knatz lauded the ruling. “We are extremely pleased that our concession program was upheld by the court ruling, including accountability of motor carriers,” she said.
Judge Snyder has been overturned by an appeals court before: She rejected a trucking industry request last year for a restraining order against portions of the law and an appellate court sent the request back to her with a direction to grant the order.
Posted 2010-09-10 and updated on Sep 30, 2010 10:27pm by bill(the journal of commerce)