Supreme Court Issues Decision on Port of Los Angeles’s Clean Truck Program
Date: June 14, 2013
On June 13, 2013, the U.S. Supreme Court issued a decision in American Trucking Associations v. City of Los Angeles, No. 11-798, unanimously holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempts the placard and parking requirements of the concession agreement that the Port of Los Angeles sought to impose on drayage trucks under its Clean Truck Program. This decision confirms that ports cannot use involuntary agreements to regulate motor carriage.
The Clean Truck Program of the Port of Los Angeles required motor carriers to sign a concession agreement before transporting cargo at the Port. The agreement requires, among other things, that the carriers develop an off-street parking plan and display certain placards on their vehicles. The agreement also contains a penalty provision that permits the Port to punish a carrier for violations of the agreement’s provisions. To enforce the concession agreement requirement, the Port amended its tariff to make it a crime for terminal operators at the Port to permit access to drayage trucks that have not entered the agreement.
The FAAAA preempts a state “law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . with respect to transportation of property.” According to the Court, the agreement’s parking and placarding requirements had the force and effect of law because the Port used the threat of criminal punishment, instead of ordinary bargaining, to impose the requirements. The Court contrasted the requirements to those in a private contract with a state, which were derived from ordinary bargaining and in which the state acts in a proprietary mode as a market actor.
The Court declined to resolve a separate issue of whether the Port could rely on the portions of the agreement’s penalty clause that permit the suspension or revocation of the right to provide drayage services. While the Court noted that a state may not take action that would amount to a suspension or revocation of an interstate motor carrier’s federal operating authority for prior violations of trucking regulations, it found that the factual record in this case was insufficient to determine whether the Port intended to apply the penalty clause to past violations of the agreement’s requirements.
Please contact Thompson Hine’s Transportation Practice Group with any questions regarding this decision.
FOR MORE INFORMATION
For more information, please contact:
Karyn A. Booth
Jason D. Tutrone