{"id":8777,"date":"2021-04-29T12:16:53","date_gmt":"2021-04-29T19:16:53","guid":{"rendered":"https:\/\/higgslaw.local\/?p=8777"},"modified":"2021-06-22T11:14:44","modified_gmt":"2021-06-22T18:14:44","slug":"ninth-circuits-decision-in-california-trucking-association-v-rob-bonta","status":"publish","type":"post","link":"https:\/\/higgslaw.com\/ninth-circuits-decision-in-california-trucking-association-v-rob-bonta\/","title":{"rendered":"Ninth Circuit’s Decision in California Trucking Association v. Rob Bonta"},"content":{"rendered":"

On April 28, 2021, the U.S. Court of Appeals for the Ninth Circuit issued a groundbreaking ruling affecting the trucking industry in California Trucking Association v. Rob Bonta <\/em>(\u201cCTA v. Bonta<\/em>\u201d).[1]<\/a>\u00a0 In its decision, the Ninth Circuit reversed the district court\u2019s preliminary injunction and held that the application of AB 5\u2019s ABC test to motor carriers is not preempted by the Federal Aviation Administration Authorization Act of 1994 (\u201cFAAAA\u201d).\u00a0\u00a0 Accordingly, motor carriers across the State of California will now need to prepare for the injunction to likely be lifted in May and dramatically adjust their operations based on the limited options available. \u00a0While this decision has major implications for motor carriers and independent owner-operators throughout California, as further discussed below, it is likely not the last legal hurdle for the embattled AB 5 as a petition for a rehearing en banc<\/em> (i.e<\/em>., before the entire bench) might be forthcoming.<\/p>\n

Ultimately, the Ninth Circuit decided in CTA v. Bonta<\/em> that AB 5 is not preempted by the FAAAA because it is a \u201cgenerally applicable labor law that affects a motor carrier\u2019s relationship with its workforce and does not bind, compel, or otherwise freeze into place the prices, routes, or services of motor carriers.\u201d\u00a0 In reaching its decision, the Ninth Circuit found that the California Trucking Association had the requisite standing required on behalf of its members.\u00a0 However, the Ninth Circuit held that the district court erred on the basis that the California Trucking Association is \u201cunlikely to succeed on the merits\u201d because of the well-established precedent that generally applicable labor laws (e.g<\/em>., \u201cBorello<\/em> test\u201d) are not preempted by federal law.\u00a0 The Ninth Circuit discussed such precedent at length including its prior holding that the Borello<\/em> test would \u201cat most impose modest increases in business costs\u2026\u201d and that it would \u201cnot have an impermissible effect, such as binding motor carriers to specific services\u2026.\u201d\u00a0\u00a0 In the end, the Ninth Circuit determined the same analysis regarding Borello<\/em> applied to the ABC test from AB 5.<\/p>\n

Prior to reaching the Ninth Circuit, the California Trucking Association and two individuals sued in the United States District Court for the Southern District of California to enjoin the State from enforcing AB 5.\u00a0 The California Trucking Association argued that AB 5 should be expressly preempted by the FAAAA because that federal law contains express language prohibiting any state from passing laws that relate to \u201ca price, route, or service of any motor carrier.\u201d\u00a0 AB 5 codified the ABC test into Labor Code section 2775 and it states that any person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates the following criteria:<\/p>\n

    \n
  1. the person is free from the control and direction of the hiring entity in connection with the performance of the work\u2014in contract and in fact;<\/li>\n
  2. the person performs work that is outside the usual course of the hiring entity\u2019s business; and<\/li>\n
  3. the person is customarily engaged in an independently established trade, occupation, or business.<\/li>\n<\/ol>\n

    On January 16, 2020, the district court agreed with the California Trucking Association and granted the preliminary injunction, thereby prohibiting the State from enforcing AB 5 against carriers.\u00a0 The State appealed and argued in its Opening Brief that: (i) the district court erred in concluding that the California Trucking Association was likely to succeed on the merits because the FAAA does not preempt generally applicable labor regulations; (ii) the California Trucking Association\u2019s 19-month delay in seeking preliminary relief undermines their claims of irreparable harm; and (iii) the balance of equities and public interest on behalf of employees weigh in favor against enjoining AB 5.<\/p>\n

    As fully discussed above, the Ninth Circuit ultimately sided with State.\u00a0 While the decision complicates the motor carrier industry, Higgs Fletcher & Mack has a team of experienced employment and transportation attorneys ready to assist trucking organizations and businesses in navigating the difficult legal landscape.<\/p>\n

    ________________________<\/p>\n

    [1]<\/a> The case was previously titled California Trucking Association v. Xavier Becerra<\/em> but that was prior to Mr. Becerra\u2019s nomination and approval as the next United States Secretary of Health and Human Services.<\/p>\n","protected":false},"excerpt":{"rendered":"

    On April 28, 2021, the U.S. Court of Appeals for the Ninth Circuit issued a groundbreaking ruling affecting the trucking industry in California Trucking Association v. Rob Bonta (\u201cCTA v. Bonta\u201d).[1]\u00a0 In…<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9],"tags":[],"coauthors":[],"class_list":["post-8777","post","type-post","status-publish","format-standard","hentry","category-attorney-articles","attorney-francisco-loayza","practice-employment-law","practice-transportation-law"],"acf":[],"yoast_head":"\nNinth Circuit's Decision in California Trucking Association v. 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