FMC finds SoCal truck program anticompetitive, seeks injunction

FMC finds SoCal truck program anticompetitive, seeks injunction The Federal Maritime Commission on Wednesday concluded that portions of the Southern California ports' truck re-regulation program violate federal law and voted to file an injunction against the program with the U.S. District Court for the District of Columbia.
   In a 2-1 vote, the commission concluded the ports of Long Beach and Los Angeles have likely violated the Shipping Act of 1984 by mandating that Southern California motor carriers obtain ports-issued access licenses under the truck program. The FMC said the access licenses are likely to reduce competition and consequently 'produce an unreasonable increase in transportation cost or unreasonable reduction in service.'
   The ports and proponents of the truck program have argued its environmental benefits, namely the reduction of ports-generated diesel emissions from trucks, outweigh the potential increases in transportation costs.
   The majority opinion of the commission disagreed, concluding that the 'reduction in competition resulting from certain agreement-related activities will result in substantial transportation cost increases, beyond what is necessary to generate the public benefits asserted by the ports.'
   In its decision, the commission said it believes that 'surgical removal of substantially anticompetitive elements' of the truck program will not prevent the two neighboring ports from implementing the clean air portions of the truck program.
   The truck program, which began implementation on Oct. 1, seeks to cut ports-generated truck pollution by replacing the drayage fleet of trucks servicing the two ports with 2007 or newer models.
   The most contentious portion of the truck program, which has elicited a federal lawsuit by the American Trucking Associations, is a requirement by the ports that all motor carriers must sign so-called 'concession agreements' to continue accessing the ports. The ports-defined language of the agreements requires that motor carriers agree to a host of stipulations, including providing internal business data to the ports, agreeing not to park trucks on city streets, and in the case of the Los Angeles port, agreeing not to hire independent owner-operator drivers.
   The employee-only mandate was specifically singled out by the FMC decision Wednesday as one of the anticompetitive aspects of the truck program. In reaching its decision, the commission relied on the results of an investigation it began nearly a month ago into possible Shipping Act violations of the truck program.
   The FMC is charged under the Shipping Act with evaluating the potential anticompetitive impacts of all antitrust waivers filed with the commission. The two ports filed three such waivers with the FMC over the past three years regarding the truck program, as well as several waiver amendments. The commission's investigation, and their Wednesday decision, grew out of a truck program waiver filed by the two ports earlier this year.
   Shortly after the FMC decision was announced, the Port of Long Beach called a special closed-door meeting of the port's governing board at 4 p.m. Thursday to discuss the 'initiation of litigation' against the port and a case of 'significant exposure to litigation' by the port. The required public notice did not specify what the litigation was. The Long Beach port did not issue a response to the FMC action.
   Officials from the Port of Los Angeles said in a response to the FMC's decision that it is confidant the federal court will reject the commission's request for an injunction against the truck program.
   'We believe the Federal Maritime Commission fundamentally misunderstands the nature of the Clean Trucks Program and the action under section 6(h) of the Shipping Act of 1984 is not appropriate,' said Geraldine Knatz, executive director of the Los Angeles port.
   A request by the ATA in its federal suit against the same components of the truck program was rejected by a District Court in Los Angeles. A Ninth Circuit Court of Appeals later refused to grant an emergency injunction request by the ATA in the same case.
   The ATA, along with amicus partners the U.S. Justice and Transportation departments, the National Industrial Transportation League and the National Association of Waterfront Employers, continue to move forward with the case in the Ninth Circuit. A decision by the Ninth Circuit is expected sometime next month.
   The National Resources Defense Council, a co-defendant with the ports in the ATA suit, said Wednesday the FMC is violating several federal environmental laws by pursuing an injunction against the truck program.
   'The commission is siding with a filthy industry and blocking the path to clean air and public health. The ports have a right and obligation to keep dirty trucks off of their property, and the commission should get out of the way,' said NRDC Executive Director Peter Lehner.
   In their decision to move against the truck program, FMC commissioners Harold Creel and Rebecca Dye said the commission must ensure that the nation's 'foreign trades operate free from substantially anticompetitive activities. The shipping public should be afforded the full benefit of the protections of the Shipping Act of 1984.' ' Keith Higginbotham