ATA suit seeks to block portions of SoCal ports truck plan
The nation's largest trucking association plans filed a federal lawsuit Monday seeking to block implementation of a $2 billion-plus trucking re-regulation plan developed by the nation's two busiest ports.
Filed in U.S. District Court in Los Angeles by the American Trucking Association, the suit alleges the five-year trucking plan jointly created by the ports of Long Beach and Los Angeles seeks to preempt federal laws governing interstate commerce by requiring drayage drivers to obtain ports-issued access licenses to enter port facilities. These so-called 'concession agreements' mandated by the ports under the plan are at the heart of ATA's suit. The association, which represents more than 37,000 U.S. trucking firms, argues the truck plan also seeks to illegally reverse many aspects of federal trucking deregulation efforts that first became law in 1980.
| Graves |
The ports have wrangled with the transportation and shipping industry over details of the plan since the ports first introduced it in April 2007. The suit's filing makes good on more than a year of ATA legal warnings to the ports regarding the non-environmental portions of the plan. Moreover, ATA and ports may not be alone on the opposite sides of the suit for long. American Shipper has also learned that the National Industrial Transportation League is planning to join the suit in support of ATA's position. The National Resources Defense Council, an environmental group, has said it will seek to join the suit on behalf of the ports.
Neither side contests the need to clean up the ports-servicing trucking fleet of nearly 17,000 diesel trucks — a major contributor to the ports being listed as the largest single source of diesel pollution in the Southern California area. ATA and most of the transportation industry have supported the environmental portions of the so-called Clean Trucks Plan, which includes a ports' ban on older model year trucks and a container tax imposed by the ports to pay for the truck replacements.
Late last year, the two ports adopted slightly differing versions of the truck plan — Los Angeles requiring that truckers under the plan be per-hour employees while Long Beach allowed for the continued use of independent owner-operators. Both versions, however, maintain the concession agreements as a key component of the plan.
ATA has said it believes the truck plan would lead to the elimination of independent owner-operator drivers in the two ports, which make up more than 80 percent of the current fleet of drivers. The group also believes that contrary to the ports' opinions, the concession agreements have very little to do with environmental mitigation programs.
If successful, the ATA suit could bring to a halt more than a year's worth of political and outside pressure on the ports to reshape the way trucking operates within the Southern California drayage industry. It could also prevent the loss of thousands of truck driver and trucking firm jobs, which the two ports acknowledge would occur under their vision of the truck plan and which Port of Los Angeles officials list as a direct goal of their employee-only version of the plan.
The ports counter that the trucking plan, under development for nearly 20 months, seeks nothing more than the creation of a stable workforce and an environmentally friendly drayage fleet to service the two ports' marine terminal facilities. Port officials have said numerous times that the truck plan has been reviewed by 'the nation's finest legal minds,' and is 'bulletproof.'
'The trucking system serving our ports is broken and cannot be permanently fixed without a major transformation,' Geraldine Knatz, Port of Los Angeles executive director, said recently.
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| Kantz |
The two ports also differ on whether the plan itself could operate without the concession agreements at the heart of the ATA lawsuit. Los Angeles port officials have repeatedly said the concession agreements and labor components are key to the overall truck plan. Long Beach port officials, while hoping to include the concession model in their version of the plan, also admit that the environmental portions of the plan could move forward without the concession agreements.
'We are using the concession model because it has been proven at airports, so we don't think that is particularly precedent setting,' Long Beach Harbor Commission President James Hankla told American Shipper last week. 'But, yes, we believe that (the truck plan) is contrary to one (legal) theory, but I think there are other theories that find us very comfortable within the four corners of the law.'
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| Hankle |
According to ATA, the court will provide 30 days after the filing for the ports to respond to the allegations. The ATA would have a similar response period to address the ports responses. The judge would then rule on the injunction sought by ATA against the non-environmental portions of the trucking plan. According to ATA, though, the group could ask for an expedited decision on the injunction, due to the truck plan's looming start date.
At the heart of ATA's lawsuit is a question of local versus federal authority.
ATA claims the two port authorities are attempting to regulate what is reserved to the federal government in the U.S. Constitution, while the two ports claim they have the authority to do whatever needed at a local level to quickly reverse years of neglect on mitigating ports-generated pollution.
'We are challenging only the intrusive and unnecessary regulatory structure being created under the concession plans,” said Curtis Whalen, executive director of the ATA's Intermodal Motor Carriers Conference. 'As Congress recognized when it created price, routes and services preemption, regulatory schemes like the 'concession plans' burden interstate commerce and are bad for the American economy.'
Specifically, the ATA suit alleges that the ports are violating the federal statutory provision (49 U.S.C. ' 14501), which prohibits states or their political subdivisions such as the port authorities from enacting or enforcing a legal requirement that is 'related to a price, route or service of any motor carrier.'
ATA argues the ports have done this in numerous places by approving various regulations during the adoption of the full truck plan. These include requirements that trucking firms under the plan:
' Submit detailed truck-maintenance plans to the ports.
' Abide by ports-defined safety and parking plans.
' Adhere to ports-defined equipment marking and tracking.
' Provide detailed financial information to the ports.
' Adhere to ports-defined routing mandates.
' Allow for periodic business reviews and audits by port officials.
The suit also argues that the U.S. Supreme Court's recent unanimous decision in Rowe v. New Hampshire Motor Transport Association supports ATA's assertion that local authority actions, such as the 'concession agreements' attempts to substitute 'governmental commands for 'competitive market forces' in determining the services that a motor carrier will provide,' are preempted by federal authority.
The concern of ATA and others in the transportation industry centers on the precedent that the Southern California truck plan may set and how it could lead to a major shift in the way trucking is done in the United States.
Proponents of the ATA action believe that if the truck plan is allowed to move forward unopposed, it may lead to a 'patchwork' of local authority rules governing trucking.
The Port of Oakland is already considering a similar truck plan that is being pushed by the same labor and social groups that supported the Los Angeles-Long Beach plan.
'There is nothing to prevent other jurisdictions from imposing their own requirements, fee programs and restrictions on who exactly can handle the freight,' if the Los Angeles-Long Beach plan was implemented, said Peter Gatti, NIT League executive director.
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| Gatti |
Gatti and others compare the possible scenario to the days before deregulation when truckers faced licensing regulations in each individual state, often leading to trucks bearing dozens of different license plates.
'Except in this situation, instead of 50 different states, you are talking about dozens and dozens of individual cities, each with their own regulations,' Gatti said.
In addition, the plan would lead to a certain number of lost jobs among the trucks and trucking firms.
Economic experts have said it is fair to assume that each truck represents one job for a truck driver. This means that on Jan. 1, 2010 the plan would have eliminated more than 6,100 driver positions.
This scenario assumes that the ports maintain their banning schedule and are able to fund and obtain all replacement vehicles set out in the plan.
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| Connaughton |
In addition, based on expert estimations that for every four trucks on the road, one person works in a support role, the ports' truck plan would result in the loss of more than 1,500 support jobs in the first 24 months of implementation. These positions would include dispatchers, clerical support, payroll, customer service, scheduling, safety compliance, accounting, security, human resources and recruiting.
An economic impact study of the truck plan, commissioned by the ports and available on their Web sites, found that 376 trucking companies would vanish, along with just over 2,250 back office and support jobs.
The analysis detailed that half of truck companies with fewer than 10 trucks, or 123 firms, would be put out of business. More than 180 firms with 11 to 25 trucks would be displaced, nearly 65 firms with 25 to 75 trucks would be lost, and eight firms with more than 75 trucks would disappear due to the truck plan.
The study did not detail exactly how many truck driver positions would be lost as a result of forcing out the 376 firms. However, a rough calculation using numbers in the analysis suggests that at least 4,400 driver positions would be eliminated by the plan. ' Keith Higginbotham