Though trucking remains exempt, another court favors A.B. 5 applying to trucking

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A second state court in California has ruled that federal law does not preempt that law that would effectively outlaw the leased owner-operator model in the state.
A second state court in California has ruled that federal law does not preempt that law that would effectively outlaw the leased owner-operator model in the state.

Trucking news and briefs for Tuesday, April 6, 2021: 

Another Calif. court opinion goes in favor of A.B. 5 applying to trucking
While the trucking industry’s larger case against California’s A.B. 5 law on motor carriers and owner-operators is still unfolding in a federal district court, a second state court in California has ruled that federal law does not preempt a law that would effectively outlaw the leased owner-operator model in the state.

Trucking has been operating under an exemption from A.B. 5 since the beginning of 2020, when the law went into effect. A lawsuit by the California Trucking Associations against the law is still in progress, and an injunction is in place until that lawsuit plays out.  

A 1994 statute set by the Federal Aviation Administration Authorization Act (F4A or FAAAA) says federal laws preempt any state-level laws that would “interfere with prices, routes and services” of motor carriers. That’s the statute that CTA and its attorneys are pressing the courts to uphold against A.B. 5 as it relates to trucking.

California’s Second District Court of Appeal last week, however, ruled to the contrary, saying the F4A provision does not preempt any state rules that apply the ABC test for independent contractors. In hearing a case involving truck drivers who sued drayage company East Coast Transport over alleged misclassification, the appeals court said previous court rulings, including one involving drayage carrier Cal Cartage at the end of 2020, led to this ruling that F4A does not preempt A.B. 5.

The outcome of CTA's case against A.B. 5 is still unknown, as the U.S. 9th Circuit Court of Appeals decides to either uphold or end the preliminary injunction issued by the U.S. District Court in Southern California.

Groups pledge to fight towing, staged-accident fraud
The American Trucking Associations, along with the American Property Casualty Insurance Association and the Coalition Against Insurance Fraud are teaming up to promote the passage of legislation to “tackle the scourge of towing fraud and staged vehicle accidents across the country,” the groups said in a press release.

A recent ATA survey of nearly 200 motor carriers found that 77% of respondents cited law enforcement referrals as their primary issue when selecting a towing company, and 70% of surveyed carriers reported facing serious issues with getting their cargo released after a tow.

“The partnership brings the nation's largest property-casualty insurance and trucking associations together and pairs them with the Coalition’s formidable consumer interest credibility and voice in the field of insurance fraud,” Coalition Executive Director Matthew Smith said. “When it comes to changing the landscape for policy holders in the specific arena of towing and staged accident fraud with these three organizations, the possibilities are endless.”

The partnership is partly in response to an ongoing staged-crash ring in New Orleans in which a number of trucking companies were targeted.

“Our members are increasingly concerned with the impact predatory towing and staged accidents are having on their ability to conduct business,” said ATA Chair Sherri Garner Brumbaugh, president and CEO of Garner Transportation Group, Findlay, Ohio. “By joining with APCIA and the Coalition Against Insurance Fraud, we are confident we can put an end to these unscrupulous and unethical practices.”

Additionally, the groups said towing companies “are abusing insurers and crash victims” by showing up unauthorized to crash scenes to tow unsuspecting vehicles for high rates.

Daimler recalling 11k Freightliner, Western Star trucks
Daimler Trucks North America is recalling more than 11,000 trucks in two separate recalls – one affecting the clutch assembly and one affecting the wiring harness – according to National Highway Traffic Safety Administration documents.

One recall affects approximately 6,105 model year 2021 Freightliner Cascadia and Western Star 4700 trucks in which the clutch flange could break. If flange failure occurs, loose parts could fall into the clutch pressure plate assembly, resulting in clutch disengagement.

DTNA will notify owners, and dealers will replace the clutch on the affected trucks. Owners can contact DTNA customer service at 1-800-547-0712 with recall number FL-881. NHTSA’s recall number is 21V-209.

The other recall affects approximately 5,111 model year 2019-2021 Western Star 4700 and 5700 models in which the ground harness wiring may be undersized and may cause a connector to melt, which could stall the engine.

Daimler will notify owners, and dealers will replace the ground harness for free. DTNA’s recall number is FL-880, and NHTSA’s recall number is 21V-206.

Hankook increasing tire prices
Hankook Tire has announced a price increase of up to 5% for dealers on Commercial Truck Tire products sold in the U.S. Additionally, a price increase will occur on all aftermarket fleet programs. This will be effective on shipments on or after May 1, 2021.

The increase is based on increasing logistics, raw material cost and other market factors that have affected internal costs. Dealers and fleet customers will receive additional information, and questions can be addressed to account managers as needed.