Judge rules against ATA in SoCal truck plan suit

Judge rules against ATA in SoCal truck plan suit A federal judge Monday issued a tentative ruling denying an injunction request by the American Trucking Associations to block portions of a $2.4 billion trucking re-regulation plan set to be implemented by the ports of Long Beach and Los Angeles on Oct. 1.
   District Court Judge Christina Snyder ruled that portions of the truck plan related to security exempted the ports from violating federal law. Snyder is considering arguments made by both sides Monday in rebuttal of the tentative ruling and promised to issue a final ruling by Thursday.
   Although members of the defendants’ team were visibly pleased with the decision, the ports had no comment of the proceedings.
   “The judge has made her ruling,” said City of Los Angeles General Counsel Thomas Russell. “However, we are still studying the ruling and await her final decision.”
   In the tentative ruling, Snyder found that ATA's primary argument, that the ports’ plan to require access licenses from local motor carriers after Oct. 1, was superseded by federal law. She said the access license might force motor carriers “to change their rates, routes or service in a way the market would not otherwise dictate.”
   Because the ports’ access licenses were regulatory in nature, there was significant likelihood that the ATA would succeed in arguing preemption, she said.
   In addition, Snyder found ATA was also likely to prove the ports were not engaged in the motor carrier “market,” and thus could not argue the “market participant” exemption under law.
   However, in the argument of whether the ports fell outside of the federal preemptions statutes due to a legal exemption called the “safety exception” the judge ruled against ATA.
   Snyder found ATA fell short on four issues related to the 'safety exception' including an ATA argument that the California Highway Patrol has regulatory authority over the trucks. She also rebuffed an argument that federal laws supersede any local or state authority.
   The judge did not hear evidence pointing out that the ports did not refer to any security issues related to the truck plan during the past three years.
   ATA said following the hearing that if the judge upholds the tentative ruling, it would appeal the case to the Ninth Circuit Court of Appeals.

Truck Plan. The Long Beach and Los Angeles ports’ truck plan, set to take effect Oct. 1, seeks to cut ports-generated diesel pollution by replacing or retrofitting the privately owned and operated fleet of trucks that move containers in and out of facilities at the two ports.
   The original plan, introduced early last year, called for ports-supplied grants, incentives and subsidies to assist the more than 1,300 motor carriers that service the ports to upgrade the local fleet of nearly 17,000 local short-haul, or drayage, trucks.
   To be eligible for ports-provided funds under the plan and to continue working in the ports after Oct. 1, motor carriers must obtain a ports-mandated access license, called a concession agreement. Motor carriers must submit detailed accounts and information on their firms and agree to a laundry list of operating criteria, defined in slightly different ways by each port. In the case of the Los Angeles port, these criteria include agreeing to only hire per-hour employee drivers and not independent owner-operator drivers. The Long Beach port did not mandate any employment requirements for drivers.

Lawsuit. ATA, which represents more than 37,000 trucking firms nationwide, filed suit against the two Southern California ports in U.S. Central District Court on July 28 arguing the ports’ access license component violates federal interstate commerce laws. A week later, ATA asked Snyder to issue a preliminary injunction against the truck plan’s access license component citing immediate harm to the trucking industry if the truck plan is implemented.
   ATA's injunction request and Snyder’s injunction ruling do not address two additional key portions of the truck plan-a rule banning all pre-1989 trucks from entering the two ports and the collection of a $35-per-TEU tax to pay for the plan. Officials from the two ports, despite now pursuing their own versions of the access licensing plan, remain adamant that the ban and container tax will begin as scheduled on Oct. 1.
   In addition, Snyder’s ruling only dealt with the injunction request and did not address ATA’s full lawsuit against the two ports’ truck plan. ATA officials said Monday that despite the injunction, the full lawsuit, which seeks to permanently strike down the access license component of the truck plan, would continue to move forward in the court.
   The National Retail Federation and a coalition of environmental groups were originally scheduled to be part of the injunction hearing, however, Snyder ruled Thursday on their individual motions to join the suit on opposite sides of the case and cancelled the two groups’ portion of the hearing — The National Retail Federation, the nation’s largest retail trade association in support of the ATA position, as a “friend of the court;” the coalition of the Natural Resources Defense Council, the Sierra Club, and the Coalition for Clean Air as intervenors, are full co-defendants of the ATA suit.
   Despite the fact that the Southern California ports and their respective city halls were named as defendants by the ATA in the lawsuit against the plan, the general outline of the plan was actually presented to the ports by the International Brotherhood of Teamsters.
   In the summer of 2006, Teamster President James Hoffa, Jr. outlined his union’s ideas of a truck plan to Los Angeles Mayor Antonio Villaraigosa. Hoffa’s plan, which has a stated goal of organizing drayage drivers at the nation’s major ports, mirrored the access license scenario ultimately taken by the two ports.
   Currently, nearly 90 percent of the nearly 17,000 ports-servicing drivers are independent owner-operators. Without a change in the status of these drivers to that of per-hour employees hired by the trucking firms, the Teamsters can not, by law, organize the drivers.
   The Teamsters and a coalition of environmental, labor, and social justice groups affiliated with the union, became the plan’s first and most ardent supporters. This coalition includes the NRDC, the Sierra Club and the CCA, among others.
   Since the port-truck plan's inception, nearly 40 different industry groups have written to either the ports or the two cities’ mayors stating opposition to the plan.
   ATA and other industry groups also have raised concerns about the to the Federal Maritime Commission. The FMC's lead counsel was in court Monday to observe the injunction hearing and offer information to the court if requested.
   Earlier this year, the federal Department of Transportation’s Maritime Administration also warned the two ports to proceed carefully in adopting details of the truck plan. The MarAd letter encouraged the ports to work with the industry to avoid litigation that might impact the flow of commerce across the nation.
   Two economic impact studies commissioned by the ports found that the truck plan would eliminate hundreds of local trucking firms and thousands of trucking industry jobs.
   Available on the ports’ Web sites, the analyses detailed that 50 percent of the truck companies with fewer than 10 trucks, a total of 123 firms, would be put out of business. More than 180 firms with 11 to 25 trucks would be displaced, nearly 65 firms with 25 to 75 trucks would be lost, and eight firms with more than 75 trucks would disappear due to the truck plan.
   All told, the studies found that that 376 trucking companies would vanish, along with some 2,250 back office and support jobs. The studies did not detail exactly how many truck driver positions would be lost as a result of forcing out the 376 firms. However, a rough calculation using numbers in the studies suggests that at least 4,400 driver positions would be eliminated by the plan.
   In addition, private industry analysts predict that, all told, the plan will add $250 to $500 per container in additional costs, according to a California Trucking Association study conducted in 2006. ' Keith Higginbotham