Ruling reverses district court’s denial of injunction
The U.S. Court of Appeals for the Ninth Circuit last month delivered a major victory to the American Trucking Associations in its ongoing litigation against the ports of Los Angeles and Long Beach. A three-judge panel ruled that the federal district court should have granted ATA’s request – at least in part – for an injunction against the concession agreements in place at the ports.
“In short, motor carriers should not be required to adhere to the various unconstitutional provisions in the Ports’ agreements, and are likely to suffer irrevocably if forced to do that or give up their businesses,” the court’s opinion said. The appeals court left open the possibility, however, that the federal district court could leave portions of the concessions in place while enjoining other pieces of the agreements.
The appeals court particularly was troubled by the Port of Los Angeles’ concession agreement, saying it is “the most disruptive and is likely to cause the most harm.” The key difference between the two is that the Los Angeles concession agreement forces motor carriers to phase out their use of independent contractors.
If the Port of Los Angeles proceeded with that measure pending litigation, “the carrier will be forced to incur large costs which, if it manages to survive those, will disrupt and change the whole nature of its business in ways that most likely cannot be compensated with damages alone,” the appeals court ruled.
A key question in the litigation is whether the ports’ concessions fall within the safety regulatory exception of the federal motor carrier preemption law. Regarding the Port of Los Angeles’ claims in support of its phase-out of independent contractors, the appeals court declared, “We see little safety-related merit in those thread-paper arguments, which denigrate small businesses and insist that individuals should work for large employers or not at all.” The Los Angeles concession also includes an on-street parking ban, which the appeals court said is unlikely to be “genuinely responsive to safety.”
Both concession agreements require numerous financial disclosures from motor carriers, including annual reports, Securities and Exchange Commission filings, balance sheets, income tax statements and pending legal actions. The appeals said it was unlikely that the financial disclosure requirements in both ports’ agreements could be justified “under any conceivable safety rationale.” The court likewise faulted a provision in the Port of Long Beach agreement requiring motor carriers to notify drivers of available health insurance. “Again, this has no discernable safety purpose.”
As of Oct. 1, 2008, any motor carrier out of compliance with a port’s concession agreement had been barred from entering that port, a situation ATA argued has caused motor carriers to suffer both short- and long-term capital losses and injuries to business goodwill. ATA had not challenged the ports’ Clean Truck Program (CTP), which bans older trucks and uses a container fee to subsidize the purchase of newer, cleaner trucks.
Trucking sheds 33,400 jobs in February
Payroll employment in the for-hire trucking industry plunged 2.5 percent in February from January on a seasonally adjusted basis when 33,400 employees lost their jobs, according to preliminary figures released last month by the Bureau of Labor Statistics. With a contracting manufacturing sector and continued declines in housing starts, key drivers of trucking activity are in severe decline.
The rate of decline far exceeded that of the 0.5 percent employment decline in the overall economy. Trucking employment was down 1.8 percent in January, 1.3 percent in December and just less than 1 percent in November; each decline was the highest recorded monthly percentage drop at the time except for April 1994 during a Teamsters strike.
Since October, trucking employment is down 6.4 percent. Trucking employment is down 11.8 percent from its peak of 1.45 million in January 2007, according to BLS figures. The 1.28 million trucking employees in February was the lowest number of employees in the industry since the end of 1996.
Hours rules challenged in court
As expected, the Federal Motor Carrier Safety Administration faces its third legal challenge this decade regarding its hours-of-service regulations. Public Citizen, the Advocates for Highway and Auto Safety, the Truck Safety Coalition and the Teamsters Union filed a petition March 9 with the U.S. Court of Appeals for the District of Columbia Circuit for review of FMCSA’s Nov. 19 final rule, which formally retained the rules already in place.
The March 9 court filing was procedural and doesn’t state the case against the regulations. However, the arguments of the plaintiffs are clear from past comments and from a letter they sent U.S. Transportation Secretary Ray LaHood on the same day. In that letter, the groups recounted some of the findings of the federal appeals court in 2004 and 2007 when it invalidated the hours-of-service rules in place at the time. They called on USDOT to “direct FMCSA to commence a new HOS rulemaking without delay.”
