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The U.S. Supreme Court ruled June 13 that provisions of the Los Angeles Port's Clean Truck Program that are backed by criminal penalties are preempted by federal law (American Trucking Ass'ns Inc. v. City of Los Angeles, U.S., No. 11-798, 6/13/13).
At issue are motor carrier agreements containing concessions to manage diesel emissions required for access to ports. The program required off-street parking plans to reduce truck idling and the posting of placards on trucks that provide a phone number so the public can report concerns about diesel emissions and safety. Those provisions were backed by criminal sanctions.
The court's ruling invalidates the port's requirement for trucks to display the placards and submit the off-street parking plans.
In a unanimous opinion, the court held that concession agreements required by the port as part of its Clean Truck Program are preempted by the Federal Aviation Administration Authorization Act of 1994.
The act preempts state and local laws or other actions having the force and effect of law “related to a price, route, or service of any motor carrier.”
The port had argued that as contract requirements, the agreements did not have the force and effect of law. However, the court found that the contracts did not stand alone and that the port exercised regulatory authority, including criminal sanctions in imposing the placard and parking requirements.
The port amended its tariff, a form of municipal ordinance, the court said, to prohibit terminal operators from permitting short-haul drayage trucks to access port terminals without such concession agreements. Violation of the tariff subjected operators to fines or a prison sentence of up to six months.
The contracts were part of a government program wielding “coercive power” over private parties and backed by the threat of criminal punishment, the court said. This constitutes action “having the force and effect of law,” the court said.
Two other provisions of the clean truck program relating to financial capacity and truck maintenance also were challenged by the American Trucking Associations, which brought the lawsuit. They alleged that under Castle v. Hayes Freight Lines, 348 U.S. 61 (1954), the port lacks authority to suspend or revoke the right of companies that fail to comply with either provision from operating on the premises.
The court, however, found that it had no basis for finding that the port would ever use the agreement's penalty provision in a manner that would conflict with the ruling of Castle. Given the pre-enforcement posture of the case, the court decided not to address this challenge.
ATA is a national trade association representing the trucking industry, including drayage companies that operate in the port.
The port is a division of the City of Los Angeles and the largest port in the country. It owns marine terminal facilities which it leases to terminal operators such as shipping lines and stevedoring companies that load cargo onto and off of docking ships, the court said. Short-haul trucks called drayage trucks move cargo into and out of the port, the court said.
In 2007, the port implemented a Clean Truck Program including concession agreements which trucking companies had to enter into with the port to access the port. ATA challenged the agreements, which were mostly upheld by the district court and the U.S. Court of Appeals for the Ninth Circuit (American Trucking Ass'ns v. City of Los Angeles, 660 F.3d 384 (9th Cir. 2011); 42 ER 2178, 9/30/11).
The Supreme Court's decision reversed the Ninth Circuit's decision in part.
In a written statement, the American Trucking Associations applauded the ruling, saying it “rejected burdensome operational mandates” the port had sought to impose on interstate commerce.
“The decision is sure to send a signal to any other cities who may have been considering similar programs which would impermissibly regulate the port trucking industry,” ATA President and Chief Executive Officer Bill Graves said.
“We are gratified that, at the conclusion of many years of litigation, the highest court in the land unanimously agreed with ATA on these rules,” Graves said. “Our position has always been that the Port's attempt to regulate drayage operators--in ways that had nothing to do with its efforts to improve air quality at Port--was inconsistent with Congress' command that the trucking industry be shaped by market forces, rather than an incompatible patchwork of state and local regulations.”
Port of Los Angeles spokesman Phillip Sanfield said the concession agreements “are an important component” of the Clean Truck Program. Port officials are reviewing the decision to determine its impact on the program, he said.
Los Angeles Mayor Antonio Villaraigosa said the city is reviewing the ruling, “but we intend to continue our efforts to clean LA's port to the extent the law allows.”
“The program to improve air quality at the Port of Los Angeles is the most extensive effort to clean up a port in the world, helping to make LA the cleanest and greenest big city in the U.S.,” Villaraigosa said in a written statement. “Our Clean Truck Program has reduced harmful truck emissions by 91 [percent].’’
The Natural Resources Defense Council, which intervened in the case on behalf of the Sierra Club and other advocacy groups, said the decision leaves in place key elements of the Clean Truck Program, including the requirements that the trucks be properly maintained.
NRDC attorney David Pettit said the court's ruling “was very narrow.”
The court rejected ATA's claims in its legal briefs that the market participation exception does not apply to the Federal Aviation Administration Authorization Act, he told BNA.
Also, the court rejected the industry's “argument that the [act] and Castle together mean that the port can't have a concession agreement,” and “it did not go down the road suggested by ATA's counsel at oral argument that the [act] and Castle bar the port's progressive truck ban.”
One important provision in the Clean Truck Program bans older diesel trucks and requires progressively cleaner trucks.
Melissa Lin Perrella, another NRDC attorney involved in the case, told BNA that while the court found the port cannot impose criminal penalties for failure to display placards and submit off-street parking plans, the decision does allow the port to bar noncompliant trucks from the port.
“Today's ruling recognizes the importance of reducing air pollution while preserving the Port's authority to implement a strong safety and public health truck program which will save lives,” Perrella said. “We will continue to hold the Port of Los Angeles responsible for cleaning up its pollution.”
Justice Elena Kagan wrote the opinion. Justice Clarence Thomas wrote a separate concurrence to highlight his concerns about the constitutionality of the act to regulate and pre-empt purely intrastate transportation.
Thomas wrote that although the respondents waived any argument that Congress lacks authority under the U.S. Constitution to regulate the placards and parking arrangements of drayage trucks using the port, he doubts that Congress has the authority to do so.
Daniel Lerman, an attorney with Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP in Washington, D.C., represented ATA during oral arguments April 16 (44 ER 1131, 4/19/13).
Steven S. Rosenthal of Kaye Scholer LLP in Washington, D.C., represented the port, and Assistant Solicitor General John F. Bash represented the federal government as amicus curiae in support of the trucking association during the oral arguments.
The opinion by the U.S. Supreme Court in American Trucking Ass'ns Inc. v. City of Los Angeles is available at http://www.supremecourt.gov/opinions/12pdf/11-798_anbf.pdf.
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