(Editor’s note: a comment from the California Trucking Association has been added).
The California Trucking Association is ending its legal battle against California’s AB5 independent contractor law, but its co-plaintiff, the Owner-Operator Independent Drivers Association, will continue the fight.
Robert Roginson, a partner with the law firm of Ogletree Deakins Nash Smoak & Stewart, which has represented the CTA in its long legal fight, confirmed that the association will withdraw its appeal before the 9th U.S. Circuit Court of Appeals. He declined further comment, and a formal withdrawal brief has not yet been filed with the court.
Separately, a spokeswoman for OOIDA said the group will continue the appeal.
The decision by CTA brings to an end for the association a saga that began with the filing of its initial lawsuit in late 2019 challenging the legality of AB5’s implementation in trucking. CTA argued that the Federal Aviation Administration Authorization Act (F4A), enacted in 1994, should be interpreted as stopping a state from implementing a law like AB5 because it may impact a “price, route, or service,” which F4A specifically bars.
The high-water mark of CTA’s fight came on New Year’s Eve 2019 when Judge Roger Benitez of the U.S. District Court for the Southern District of California handed down an injunction blocking AB5’s enforcement against trucking in the state.
But from that point, the CTA suffered a series of losses. An appellate court in a 2-1 decision overturned the injunction in April 2021. The CTA took the appeal to the Supreme Court, which denied review in June 2022 and kicked the case back to the District Court.
Before oral arguments in November 2023, OOIDA joined as a co-plaintiff.
But the setbacks continued. Benitez in March ruled against all the various arguments made by OOIDA and CTA, denying a motion for a new injunction. CTA and OOIDA filed their intention to appeal to the 9th Circuit – and OOIDA has – though there was skepticism among trucking attorneys that there was effectively any new legal argument that might succeed.
CTA and its attorneys now appear to have agreed with those attorneys in making the decision to end its efforts.
“The California Trucking Association has litigated AB 5 for four and a half years and have decided not to pursue further appeal of the District Court’s latest decision,” CTA president Eric Sauer said in a statement provided to FreightWaves. “While we strongly believe that the Court’s initial finding of preemption was correct, California and the legislation’s union sponsors had to take the position that the State’s 70,000 owner-operators had a right to conduct business in the State in order to overcome our arguments. This is a win for the working class entrepreneurs that make up the backbone of the State’s supply chain.”
There were three legal arguments that OOIDA and CTA were prepared to make and have made throughout the process.
One is the basis for OOIDA’s appeal, and it has already filed a brief laying out its arguments: that the Dormant Commerce Clause of the Constitution is violated by certain provisions in AB5. That argument will continue to be heard as long as OOIDA does not drop its case.
The second is the F4A argument. But in his March decision, Benitez, who accepted that CTA argument in 2019, said the appellate court in its April 2021 decision had settled the issue.
The third is the equal protection of the law argument. The gist of it was that the way AB5 was written and enforced, with its long list of exceptions for other industries, was singling out the trucking industry. But that argument took a hit in June in the case known as Olson, after the lead plaintiff, or Uber/Postmates, the two companies that also filed suit in 2019, when an 11-judge panel of the 9th Circuit shot down the equal protection argument.
The only place where AB5 opponents have won is at the ballot box, with Proposition 22 that kept the state from enforcing AB5 against gig drivers, such as those at Uber. Legal challenges to that vote from Election Day 2020 were partially successful at first but have failed more recently.
AB5 was approved by the California State Legislature and signed by Gov. Gavin Newsom in 2019. It codified into law the ABC test that had been laid out in the Dynamex case, considered a key legal precedent used to determine whether a worker is truly an independent contractor or is effectively an employee.
The B prong of the ABC test has long been of key concern to the trucking industry. It holds that a worker can be considered independent if “The worker performs work that is outside the usual course of the hiring entity’s business.” A trucking company hiring an independent owner-operator to move freight could risk being found in violation of the B prong.
Several attorneys have noted that for all the sound and fury of the past five years, the state has not undertaken any known AB5 enforcement actions against California trucking, and the provisions of AB5 are not known to be part of any lawsuits or Private Attorney General Act litigation.
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