RESPONDENT: The City of Los Angeles, the Harbor Department of the City of Los Angeles, and the Board of Harbor Commissioners of the City of Los Angeles
LOCATION: The Port of Los Angeles Harbor Commission
DOCKET NO.: 11-798
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 569 US (2013)
GRANTED: Jan 11, 2013
ARGUED: Apr 16, 2013
DECIDED: Jun 13, 2013
Daniel N. Lerman - for the petitioner
John F. Bash - Assistant to the Solicitor General, Department of Justice, for the United States, as amicus curiae, supporting the petitioner
Steven S. Rosenthal - for the respondents
Facts of the case
In 1997, the Port of Los Angeles ("the Port") introduced a plan to expand its cargo terminals to better accommodate its high shipping volume. Following public concern that the plan could significantly increase air pollution, the Board of Harbor Commissioners adopted a Clean Air Action Plan ("CAAP"). The CAAP aimed to reduce emissions and specifically targeted the Port's drayage truck business. Roughly 16,000 drayage trucks regularly serve the Port, transporting goods between customers and the cargo terminals. Beginning in 2008, the CAAP banned drayage trucks from the Port, unless the carriers entered into a series of concession agreements. These agreements imposed a progressive ban on older trucks and provided incentives for drayage truck operators to convert their aging fleets to cleaner trucks.
American Trucking Associations ("ATA"), a national association of motor carriers, challenged several provisions within the concession agreements and brought suit against the City of Los Angeles and its Harbor Department. ATA argued that the Federal Aviation Administration Authorization Act ("FAAA") preempted the agreements. The FAAA Act prohibits a state from enacting any regulation related to the "price, route, or service of any motor carrier." ATA claimed that the concession agreements amounted to such a regulation. ATA further argued that the State could not limit a federally licensed motor carrier's access to a port.
The district court disagreed with ATA and held that none of the provisions were preempted; ATA appealed. The United States Court of Appeals for the Ninth Circuit affirmed in part and reversed in part. The appellate court determined that when the Port was acting as a market participant, rather than a market regulator, the FAAA Act did not apply. ATA appealed to the Supreme Court of the United States, which granted certiorari limited to the two questions below.
Can a municipal government limit the activities of motor carriers when it acts as a market participant, as opposed to a market regulator?
Can a municipal government bar federally licensed motor carriers from access to a port?
Media for American Trucking Associations v. City of Los AngelesAudio Transcription for Oral Argument - April 16, 2013 in American Trucking Associations v. City of Los Angeles
Audio Transcription for Opinion Announcement - June 13, 2013 in American Trucking Associations v. City of Los Angeles
John G. Roberts, Jr.:
Justice Kagan has our opinion this morning in case 11-798, American Trucking Associations versus The City of Los Angeles.
This case concerns the preemption of trucking regulations at the port of Los Angeles.
It's our second case this term about the preemptive scope of the Federal Aviation Administration Authorization Act or FAAAA.
That's quite a lot of A's, so I'm going to call it F4A for short.
The Los Angeles Port is the largest port in the country.
It's run by a Board of Harbor Commissioners under a city ordinance known as a tariff.
The port owns marine terminal facilities which at leases the terminal operators that load and unload cargo from docking ships.
Short-haul trucks called drayage trucks assist in those operations by moving cargo into and out of the port.
In 2007 and response to neighbors concerns about traffic pollution and safety, the port implemented a clean truck program.
As part of that program, the port developed the standard form agreement containing a number of requirements.
Two of those requirements are important here.
One requires trucking companies to display a placard on each truck with a phone number for reporting concerns.
The other requires companies to submit an off-street parking plan.
The other provisions of the agreement deal with things like a company's financial capacity, truck maintenance, and employment of drivers.
To make sure the drayage companies enter into the agreement, the poor amended it's tariff which again, that's municipal law to make it a criminal offense for a terminal operator to grant access to any company that didn't sign the agreement.
Each violation is punishable by up to six months in prison.
The petitioner here, American Trucking Association or ATA is a trade group that represents most of the trucking companies at the port.
ATA filed suit arguing primarily that the F4A preempts that is invalidates the placard and parking requirements in the agreement.
The District Court found out that neither provision was preempted and the Ninth Circuit affirmed.
Today we reverse the Ninth Circuit's decision and hold that the placard and parking provisions of the agreement are preempted.
The F4A preempts any state or local provision having the force and effect of law that deals with trucking prices, routes, or services.
That's so those matters are the special providence of the federal government.
We've held in the past that language of that kind, the force and effect of law language, draws a line between a government's exercise of regulatory authority and its own proprietary participation in a market.
Actions that fall on the regulatory side of the line are preempted.
The Congress has made a decision that states and localities are not to be involved in those matters, but those on the proprietary side of the line where the state or locality is operating just as a commercial actor would or not preempted.
Now, the boundaries of that line might sometimes be fuzzy, but the outcome here is quite clear.
The port exercise classic regulatory authority.
It forced terminal operators and through them trucking companies to alter their conduct by means of a criminal prohibition backed by the treat of imprisonment.
That counts as action having the force and effect of law if anything does.
There is also another question in this case whether our decision in a -- in a case called Castle versus Hayes Freight Lines, prevents the port from enforcing other none preemptive provisions of the agreement by borrowing trucks from the port.