California truckers petition U.S. Supreme Court to invalidate AB5

(The Center Square) – The California Truckers Association (CTA) has petitioned the U.S. Supreme Court to invalidate Assembly Bill 5 (AB5), which some argue has nearly eliminated the gig worker economy in the state.

In January, U.S. District Judge Roger T. Benitez issued a temporary restraining order protecting 70,000 independent trucker owner operators from AB5, which requires companies operating in or doing business in California to classify their workers as full-time employees instead of independent contractors.

The association argues that AB5, which went into effect Jan. 1, 2020, threatens the livelihood of more than 70,000 truckers and “wrongfully restricts their ability to provide services as owner-operators and, therefore, runs afoul of federal law.”

“For decades, motor carriers across the United States have provided freight-transportation services through owner-operators — individuals who drive their own trucks and operate as independent contractors,” CTA’s petition states. “Owner-operators play a critical role in interstate commerce — one that Congress has recognized and protected.”

Benitez agreed, arguing that the law improperly treated truck owner-operators as employees instead of “as the independent contractors that they are.”

“Plaintiffs have established that imminent, irreparable harm is likely because without significantly transforming their operations to treat independent contracting drivers as employees for all specified purposes under California laws and regulations, they face the risk of governmental enforcement actions, as well as criminal and civil penalties,” Benitez wrote in his opinion.

The state appealed Benitez’s ruling to the 9th Circuit Court of Appeals, which overruled it in April. The appeals court denied a request for a rehearing in June, and later granted a stay requested by CTA to allow Benitez’s injunction to remain in place throughout the appeals process.

In its petition with the Supreme Court, the association argues that the 9th Circuit wrongly rejected its challenge to AB5 and its ruling created a conflict in the circuit courts that only the Supreme Court can resolve.

The 9th Circuit’s ruling, it argues, “creates a conflict in the circuits. It rests on a construction of the Federal Aviation Administration Authorization Act of 1994 that departs both from the statutory language and from this court’s approach. It will cause dis-uniformity in national commerce while disrupting the operations both of motor carriers and of owner-operators. And it interferes with the routes, services and prices of motor carriers — just what Congress meant the FAAAA to prevent.”

The 1994 FAAAA was enacted “to ensure that the States would not undo federal deregulation with regulation of their own” and avoid “a patchwork of state service-determining laws, rules, and regulations,” the petition states, citing a 2008 Supreme Court ruling in Rowe v. New Hampshire Motor Transportation Association. The FAAAA preempts state laws “related to a price, route, or service, of any motor carrier,” the petition argues.

In 1994, Congress found that “the sheer diversity” of state regulatory schemes presented “a huge problem for national and regional carriers attempting to conduct a standard way of doing business,” and that state regulation of the trucking industry “imposed an unreasonable burden on interstate commerce” that “impeded the free flow of trade, traffic, and transportation of interstate commerce.”

A spokesperson from the California attorney general’s office said they were “reviewing the petition,” adding that the California Department of Justice would “continue to defend laws that are designed to protect workers and ensure fair labor and business practices.”

If the Supreme Court decides to hear the case, the injunction would remain in place until the case is decided. If the justices decide not to hear the case, the injunction would be lifted.

The court is expected to announce whether or not it will hear the case within six weeks.

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