Friday, April 29, 2011

Ninth Circuit Sets Date for SoCal Truck Plan Hearing

The US Ninth Circuit Court of Appeals has set June 10 as the date it will hear arguments in the long-running case pitting the trucking industry against portions of the Port of Los Angeles drayage modernization program.

While both the American Trucking Associations, representing the trucking industry, and the port have already filed their written arguments over the appeal with the court, both sides will appear to answer questions from a three-member appellate panel whose members will be announced in late May or early June. As much of the material has been submitted or covered in other stages of the litigation, the appeals hearing is not expected to last more than a few hours. No rules state how long the panel has to reach its final ruling, though a final determination is likely at any time within a few months following the hearing. The case, regardless of who wins, is expected to wind up before the US Supreme Court.

The original ATA suit centers around a Los Angeles port truck program that took effect in October 2008 requiring port-servicing drayage firms to sign so-called concession agreements to gain access to port terminals. Firms without such an access license are barred from entering port facilities. The truck plan was originally conceived by the port (along with neighboring Port of Long Beach) as a means to bar older polluting trucks and force port-servicing trucking firms to use newer and cleaner burning vehicles, thereby cutting port-generated diesel emissions.

However, Los Angeles port officials independently included non-environmental criteria in the Los Angeles concession agreements, such as financial, maintenance, insurance, safety, parking and labor criteria. Critics of the truck program's non-environmental components, such as the employee-mandate, have accused the port of engaging in social engineering above and beyond their role as a governmental entity.

The Port of Long Beach, which helped develop the truck plan and was a defendant in the original ATA lawsuit, reached a court-approved settlement with the ATA in 2009 that allowed the Long Beach port to implement all of the environmental aspects of the truck plan, as well as most of the non-environmental aspects. The Long Beach version of the truck plan never called for an employee-only mandate.

The ATA, which represents more than 37,000 trucking firms nationwide, first filed suit in federal District Court against the port in July 2008 arguing that some of the non-environmental portions of the port's Clean Truck Program, including the employee-mandate, violate the Supremacy Clause of the US Constitution and federal laws governing interstate commerce.

After a lengthy court battle through 2008 and 2009 that saw the contested portions of the truck plan enjoined by the court, District Court Judge Christina Snyder ultimately ruled in favor of the port on Sept. 15, 2010, finding that while the portions of the port truck program under argument did violate federal law, the port was exempt from the federal regulations.

Judge Snyder's ruling hinged on the concept of market participation. She determined that the port, through its truck program, was operating as a participant in the local port drayage market and not simply as a regulatory agency. As a market participant, Judge Snyder said, the port is exempt from the cited federal regulations under federal preemption guidelines.

In its appeal to the Ninth Circuit, the ATA reiterated its original arguments from the lower court case that the port is not a market participant and asked the appellate panel to overturn Judge Snyder's ruling.

The port's January 31 response filing with the appeals court argued that due to pressure from environmental and community groups, the port was unable to move forward with infrastructure development without addressing the issue of truck pollution. The truck plan, according to the filing, was a necessary action to protect and further the port's business interests. Because the port was acting to the furtherance of its commercial interests, the port was acting as a commercial enterprise, and thus a market participant--not a regulatory agency.

The ATA's February 15 rebuttal response to the port filing argued that the port has built their case on two fallacious notions: first, that an overarching “market participant” doctrine overshadows both the federal preemption statute and interstate commerce laws; and, second, that the port was acting like a business when it attempted to regulate which drayage firms can and can not service the port.

The ATA contends that District Judge Snyder erroneously relied on the market participation concept and that because the port does not contract any drayage service nor even own any trucks, it is not a participant in the drayage industry and therefore not exempt from federal regulation. The ATA filing also argues that simply by implementing the truck plan--which is regulatory in nature--the port is acting as a regulatory entity, not as a commercial participant in the drayage industry as Judge Snyder ruled.

The litigation has drawn national attention as a potential precedent-setting case that could either reinforce federal supremacy over interstate trucking or set the stage for other ports to set their own local trucking regulations. Numerous ports across the nation are either in the process of implementing or developing trucking programs similar to the Los Angeles program.

Despite the litigation and the enjoined parts of the plan, the environmental portions of the trucking plan have been tremendously successful. Due in no small part to a more than $650 million out-of-pocket fleet turnover by the trucking industry since 2008, the ports estimate that more than 90 percent of the Southern California drayage fleet trucks are now 2007 or newer model year vehicles. Air pollution generated by drayage trucks, according to the ports, has been slashed by more than 80 percent since the truck program started.