The U.S. Court of Appeals for the Ninth Circuit on Friday, March 20, ruled in favor of the American Trucking Associations in its lawsuit seeking an injunction against the ports of Los Angeles and Long Beach concession plans. The three-judge panel ruled unanimously to remand the case to the U.S. District Court and indicated that the judge should grant ATA an injunction against all or part of the concession plans.
“In short, motor carriers should not be required to adhere to the various unconstitutional provisions in the Ports’ (concession) agreements, and are likely to suffer irrevocably if forced to do that or give up their businesses,” the court’s opinion said. ATA had not challenged the ports’ Clean Truck Program (CTP), which bans older trucks and uses a container fee to subsidize the purchase of newer, cleaner trucks.
“We are extremely pleased with the decision,” says Robert Digges Jr., ATA vice president and chief counsel. “The judges understood that most of the elements of the plans are not about safety, but rather are a regulatory effort by the ports to create what they believe would be a more efficient drayage system.”
As of Oct. 1, 2008, any motor carrier out of compliance with a port’s concession agreement had been barred from entering that port, a situation ATA argued has caused motor carriers to suffer both short- and long-term capital losses and injuries to business goodwill.
“The court clearly understood the plight of the motor carriers and the no-win situation that the concession plans present them — refuse to comply and lose their customers and possibly their businesses, or comply and bear the costs of totally restructuring their business model,” Digges says.
The appeals court’s instructions to the federal district court made clear that many elements of the concession plans must be enjoined, but leaves it to the federal district court as to whether the entire concession plans should be halted.
The appeals court particularly was troubled by the Port of Los Angeles’ concession agreement, saying it is “the most disruptive and is likely to cause the most harm.” The key difference between the two is that the Los Angeles concession agreement forces motor carriers to phase out their use of independent contractors. If the Port of Los Angeles was able to proceed with that measure pending litigation, “the carrier will be forced to incur large costs which, if it manages to survive those, will disrupt and change the whole nature of its business in ways that most likely cannot be compensated with damages alone,” the appeals court ruled.
