Friday, June 10, 2011

Ninth Circuit to Hear SoCal Truck Plan Appeal

The US Ninth Circuit Court of Appeals is set to hear oral arguments Friday in the nearly three-year-long case pitting the trucking industry against portions of the Port of Los Angeles' so-called Clean Trucks Program.

Both the American Trucking Association, representing more than 37,000 trucking firms nationwide, and the port will appear to present oral arguments and answer questions from a three-member appellate panel. Because much of the material on both sides 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 prevails, is expected to wind up before the US Supreme Court and set a precedent that could impact ports throughout the nation.

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 a mandate that truckers must be employees of trucking firms and not independent owner operators, violate the Supremacy Clause of the US Constitution and federal laws governing interstate commerce.

District Court Judge Christina Snyder, after a nearly two year court battle, 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 ruled 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. This role as a market participant, Judge Snyder said, exempted the port from the cited federal regulations.

In its appeal to the Ninth Circuit, the ATA reiterated its original arguments to the lower court that the port is not a market participant and the trade group 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 maintains 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, the port 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, invalidating its claim as a market participant 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 define 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.

The environmental portions of the trucking plan, which began in October 2008, have been tremendously successful. The port has spent more than $70 million to incentivize or purchase clean trucks and the neighboring Port of Long Beach – which is not involved in the litigation – has spent just over $33 million. The majority of the 10,000 clean trucks now servicing the two ports have been financed by a more than $650 million out-of-pocket investment by the trucking industry since 2008.

The two 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.