WASHINGTON (CN) - The U.S. Supreme Court said it will decide whether the Port of Los Angeles can force trucking companies to employ their drivers rather than hiring contractors.
The case went to Washington on Friday on appeal from the port after receiving an unfavorable ruling to its "grow green" plans from the 9th Circuit.
Trying to expand with limited environmental impact, the port has required since 2008 concession agreements from all companies operating drayage trucks. Local citizens and environmental groups had successfully halted the port's expansion plans for a decade over pollution concerns. One study cited in the court record found that, compared with other Southern Californians, people living near the port had a 60 percent greater risk of developing cancer.
The port began the initiative to "grow green" in 2006, with the goal of reducing its total emissions 45 percent by 2012. One of the port's primary tools for achieving this goal is the Clean Truck Program.
The 14-point program includes a progressive ban on older trucks, and provides grants to trucking companies to replace or retrofit more than 16,000 polluting old trucks. It also slaps penalties on those noncompliant outfits. Another rule, the employee-driver provision, requires port concessionaires to transition from owner-operators to 100 percent employee drivers over five years.
Port officials argued that the employee-driver provision responded to the inability of most independent truckers to pay to replace or retrofit their trucks. They estimate that some 10 to 20 percent of independent drayage truckers would not be able to comply with the new rules, and worried that this reality would one day disrupt business.
Trucking-industry advocate American Trucking Association filed a federal complaint against Los Angles, the port operator, and others, alleging that federal deregulation laws pre-empt many provisions of the Clean Truck Program.
After obtaining a preliminary injunction against several provisions of the concession agreements, the group challenged five specific provisions at trial.
U.S. District Judge Christina Snyder ruled in Los Angeles sided wholly with the city, but a three-judge panel of 9th Circuit partly reversed in September 2011.
The panel found that federal law pre-empts the employee-driver provision because it improperly allows the port to dictate the hiring practices of its concessionaires - even if the port is subsidizing many of their trucks.
Writing in dissent, Judge N.R. Smith argued that pre-emption applies to four of the five provisions that the trucking group challenged.
The 9th Circuit made a small change to its ruling
in October 2011.
In taking up the case Friday, the Supreme Court identified two questions it will resolve on appeal.
The city has asked whether an unexpressed "market participant" qualifies for an exemption from a law enacted under the Federal Aviation Administration Authorization Act of 1994 that bars local regulation of motor carrier prices, routes or services with respect to the transportation of property. If such an exemption exists, Los Angeles says it beats the pre-emption clause.
The court will also consider whether barring federally licensed motor carriers from port access constitutes a partial suspension of the motor carriers' federal registration, violating the 1964 precedent of Castle v. Hayes Freight Lines