US opposes parts of Los Angeles, Long Beach port concession plans

By: | at 08:00 PM | Ports & Terminals  

The US Department of Justice yesterday took the unusual step of filing an amicus brief in support of the American Trucking Associations’ challenge to the Ports of Los Angeles and Long Beach’s Concession Plans. The litigation before the US Court of Appeals for the Ninth Circuit involves the issue of whether the regulation of motor carrier operations at the ports violates federal law that preempts state and local laws that impact motor carrier rates, routes, and services. The Justice Department submitted the brief because Congress has delegated to the US Department of Transportation the authority to implement that federal preemption provision. The application of the provision “is a matter of critical concern to the federal government,” the brief said.

ATA President and CEO Bill Graves welcomed the federal government’s participation in the case, commenting that its involvement underscores how important it is to ensure that the interstate motor carrier industry is free from a patchwork of burdensome local regulations. “Congress understood that motor carriers cannot efficiently compete if states and localities are free to impose burdensome regulatory regimes controlling their operations. And Congress also noted that when motor carriers compete efficiently, consumers benefit,” Graves said. Graves also reiterated that the trucking industry is not challenging the environmental programs and goals instituted by the ports, only the Concession Plans that impose needless economic regulation in an effort to reshape the motor carrier industry that services the ports.

The ATA litigation is currently before the Ninth Circuit in an appeal of a District Court’s refusal to enjoin the Concession Plans pending a final ruling on the Plan’s merits. The District Court determined that the Plans directly impact motor carrier rates, routes, and services, but found them to be protected from preemption because they advanced generally port safety and security interests. The federal preemption provision exempts from its reach state regulation of motor vehicle safety. However, as the Justice Department brief observes, motor vehicle safety is a “circumscribed realm” that “does not encompass requirements loosely based in a general notion of public safety.” The federal government brief then notes that the broad construction made by the District Court would “permit the exception to swallow the rule” and points out several aspects of the Concession Plans that clearly have no relationship to motor vehicle safety and squarely fall within the scope of the preemption. These include prohibiting the use of independent contractors and imposing financial oversight of carriers granted concessions.

The ATA position was also supported by amicus filings by the National Industrial Transportation League and the National Association of Waterfront Employers NAWE. NIT League, representing the position of international shippers, explained that the Concession Plans “interfere with federal regulatory systems designed to enhance our nation’s international and interstate commerce by imposing artificial barriers to and reducing competition among drayage operators.” That interference, NIT League argued, will ultimately “undermin[e] the competitiveness of US companies and jeopardiz[e] jobs and the domestic economy.” The NAWE brief focuses upon the Federal Maritime Commission’s interest in the case and the Concession Plan’s violation of Shipping Act provisions.

Following completion of the briefing schedule and a possible oral argument, the Ninth Circuit will consider whether the District Court erred in its application of the motor vehicle safety exception and whether the lower court appropriately analyzed the question of the harm to motor carriers under the Concession Plans. A Ninth Circuit ruling is likely to take the form of a remand to the District Court with instructions on the proper scope of the safety exemption and guidance on the irreparable harm issue.


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