A federal appeals panel on Monday ruled that the Port of Los Angeles cannot require thousands of port-servicing independent truckers to become trucking firm employees, dealing a major victory to the American Trucking Associations and a major setback to International Brotherhood of Teamsters efforts to unionize the drayage drivers.
In a unanimous ruling, a three-member United States Ninth Circuit Court of Appeals panel dismissed the port's argument that the port was a "market participant" in the drayage industry. Without the "market participant" claim, the court found that the port's employee-only mandate is not exempt from federal interstate commerce laws and permanently enjoined the mandate.
ATA President and CEO Bill Graves hailed the decision as a major victory for the trucking industry and consumers. The ATA, which represents some 37,000 members, is the largest national trade group for the trucking industry.
"By throwing out the [independent trucker] ban," Graves said, "the court has ensured that competition, not government regulation, will establish motor carrier's rates, routes, and services. This is a win for all involved; trucking companies; small business owner-operators; freight shippers; and ultimately average American consumers."
The appellate panel split 2-1 in favor of the port on four other minor issues opposed by the ATA, including an off-street parking provision, financial capability requirement, maintenance provision, and placard requirement.
The provisions, said the ATA in a statement, "although potentially administratively burdensome and costly, have a comparatively minor impact on trucking company port operations."
Los Angeles officials saw the split decision as both a victory and a defeat.
"We are pleased that almost all aspects of our concession program have again been upheld by the...Ninth Circuit," port executive director Geraldine Knatz said.
"The measures upheld in this ruling allow for significant accountability from the trucking companies that call at the [port]."
Los Angeles Mayor Antonio Villaraigosa, a major promoter of the employee-only mandate, took issue with the portion of the ruling in favor of the ATA.
"By failing to uphold the employee driver provision, today’s ruling hurts the long-term sustainability of the Clean Truck Program," Villaraigosa said.
"While we are deeply disappointed in the employee driver ruling, other components of today’s decision keep us on a path of green growth by ensuring that trucking companies that contract with the [port] are required to maintain a clean trucking fleet."
The case now heads back to US District Court Judge Christina Snyder, with instructions from the appellate panel to ignore the "market participation" argument that had formed the basis of her ruling last year that the port could move forward with the employee-only mandate.
It is expected that Judge Snyder, as she has done in the past regarding Ninth Circuit remands, will follow the appellate court's guidelines and also permanently bar the employee-mandate.
The port's final option following such a ruling by Judge Snyder would be an appeal to the US Supreme Court.
The case began in 2008 when the port approved implementation of its "Clean Truck Program," developed in conjunction with the neighboring Port of Long Beach from late 2006 to early 2008. The program sought to phase out the roughly 19,000 highly polluting trucks servicing the two ports with 2007-or-newer model year trucks. The program hinged on requiring trucking firms to sign so-called "concession agreements" to gain access to the port facilities. In addition to requiring trucking firms to abide by the programs' truck model year standards, the concession agreements included various ports-defined criteria. While both ports' truck programs were similar, the Los Angeles version included the employee-only mandate.
The industry has pointed out that independent operators – which make up more than 80 percent of the two ports drivers – are barred from unionizing and the promotion of the truck program employee-mandate is an admitted effort by the International Brotherhood of Teamsters to organize the port drivers.
Indeed, the idea of an employee-only mandate in the truck program was first suggested to Mayor Villaraigosa, a former union organizer, by Teamsters President James Hoffa during a 2006 meeting. The mandate was subsequently incorporated into the then-developing truck program.
The ATA filed suit in federal court over five of the concession requirements shortly before the two ports implemented their versions of the program on Oct. 1, 2008.
While supporting the environmental goals of the truck plans as embodied in the older truck model phase outs, the ATA argued that the five concession agreement criteria were preempted by federal law which holds authority over local regulation in the case of interstate commerce.
The ATA was initially denied a preliminary injunction against the five components by Judge Snyder. In this initial test of the ATA arguments against the truck program, Judge Snyder held that the "market participation" doctrine did not apply.
Judge Snyder's ruling was then overturned by the Ninth Circuit and on remand to the lower court, Judge Snyder issued an injunction against three concession agreement criteria: the employee-only mandate; a requirement that each trucking firm implement an off-street parking plan; and, that each trucking firm prove its financial capability to follow the concession agreement terms.
Judge Snyder also denied an injunction against two additional criteria: a requirement that trucking firms have a verified truck maintenance plan in place, and that each permitted truck bear an informational placard.
At the time, both ports were still defendants in the case, but a December 2009 agreement between Long Beach officials and the ATA removed Long Beach from the case. Under the agreement, trucking firms wishing to service the Long Beach port must agree to register with the port and comply with all environmental, safety and security requirements. In exchange, the trucking firms are provided with a transponder that permits access to port facilities.
Long Beach officials at the time cited that the agreement allowed the port to achieve what it needed to allow the environmental goals of its version of the truck program to move forward while de-tangling the port from the costly litigation.
Following a full trial on the ATA case in 2010, Judge Snyder ruled that the Los Angeles port could include all five criteria in the truck program concession agreements. Her September 2010 ruling was based on her interpretation that the port was a "market participant" in the local drayage industry, the same concept she dismissed in the earlier injunction ruling. As a "market participant," Judge Snyder said, the port fell outside the authority of the applicable federal law.
Judge Snyder reinstated the injunction against the five criteria later the same month, pending review by the Ninth Circuit.
The lengthy litigation, which has cost the Port of Los Angeles more than $1 million in legal fees, has not slowed the core environmental goals of the programs at either port.
Since the 2008 implementation of the two ports' programs, the combination of millions of dollars in incentives from the ports, and a more than $700 million investment by the trucking industry, has resulted in the rapid transition of the local drayage fleet to a predominantly 2007-or-newer model year fleet.
The two ports estimate that about 95 percent of the gates moves at the two ports are now done by 2007-or-newer model year trucks. In addition, about 87 percent of the roughly 11,000 trucks currently servicing the two ports now meet the 2007-or-newer model year standard. A final phase of the truck program, set for implementation at the end of this year, will ban all remaining pre-2007 trucks.
This rapid modernization of the local drayage fleet resulted in a dramatic, and equally rapid, reduction of ports-generated diesel truck emissions. At the start of 2010, the truck programs had already cut drayage diesel emissions by 80 percent – a goal the ports had not originally predicted to surpass until 2012. When compared to the baseline year of 2005, truck emissions at the two ports are currently down nearly 90 percent.
Port officials at both ports have referred to the truck programs as an overwhelming environmental success.
Tuesday, September 27, 2011
