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AMERICAN TRUCKING ASSOCIATIONS v. CITY OF LOS ANGELES
AMERICAN TRUCKING ASSOCIATIONS, INC., Plaintiff-Appellant,
v.
THE CITY OF LOS ANGELES; THE HARBOR DEPARTMENT OF THE CITY OF LOS ANGELES; THE BOARD OF HARBOR COMMISSIONERS OF THE CITY OF ANGELES, Defendants-Appellees,
NATURAL RESOURCES DEFENSE COUNCIL; SIERRA CLUB; COALITION FOR CLEAN AIR, INC., Defendants-intervenors-Appellees.
No. 10-56465.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted June 10, 2011—Pasadena, California.
Filed September 26, 2011.
Robert Digges, Jr. (argued), Chief Counsel, American Trucking Associations, Inc. Arlington, Virginia; Stephen S. Anderson, Jr., William Stephen Cannon, Seth David Greenstein, Richard Levine, and Evan P. Schultz, Constantine, Cannon LLP, Washington, D.C.; Christopher Chad McNatt, Jr., Scopelitis, Garvin, Light, Hanson & Feary, LLP, Pasadena, California, for the petitioner-appellant.
Steven S. Rosenthal (argued), Susanna Chu, David Cousineau, and Alan Palmer, Kaye Scholer LLP, Washington, D.C.; Joy Murakami Crose and Simon Michael Kann, LA City Attorney's Office, San Pedro, California; Thomas A. Russell and Carmen A. Trutanich, City of Los Angeles, San Pedro, California, for defendants-appellants the City of Los Angeles and the Board of Harbor Commissioners.
Melissa Lin Perrella (argued) and David Richard Pettit, Natural Resources Defense Council, Inc., Santa Monica, California, for defendants-intervenors-appellees The National Resources Defense Council, Sierra Club, and Coalition for Clean Air, Inc.
Anthony T. Caso, Law Office of Anthony T. Caso, Orange, California; John C. Eastman, The Claremont Institute Center for Constitutional Jurisprudence, Orange, California, for amicus-curiae The Center for Constitutional Jurisprudence and Harbor Trucking Association.
Kamala Harris and Susan Lea Durbin, Office of the California Attorney General, Sacramento, California, for amicus curiae the State of California.
John R. Bagileo, Law Office of John R. Bagileo, Glenwood, Maryland; Mark Irving Labaton, Motley Rice LLP, Los Angeles, California, for amicus curiae the Intermodal Association of North America, Inc.
William L. Messenger, National Right to Work Legal Defense Foundation, Springfield, Virginia, for amicus curiae Raymond Porras, Pilar Orellana, and the National Right to Work Legal Defense Foundation.
Paul D. Cullen, Jr., The Cullen Law Firm, PLLC, Washington, D.C., for amicus curiae The Owner-Operator Independent Drivers Association, Inc.
Before: Betty B. Fletcher and N. Randy Smith, Circuit Judges, and Rudi M. Brewster, District Court Judge.* Opinion by Judge B. Fletcher; Dissent by Judge N. R. Smith
OPINIONB. FLETCHER, Circuit Judge. Beginning in 2008, the Port of Los Angeles (POLA, or the Port) prohibited motor carriers from operating drayage trucks1 on Port property unless the motor carriers entered into "concession agreements" with the Port. The concession agreements set forth fourteen specific requirements covering, among other things, truck driver employment, truck maintenance, parking, and Port security. The agreements were adopted as part of the Port's "Clean Truck Program" (CTP), which includes a progressive ban on older (and higher-polluting) trucks on Port property, a multi-faceted incentive program to support acquisition of clean trucks, and a system of penalties on transport of cargo by older trucks. The Port adopted the CTP in response to community opposition, including litigation, that had successfully stymied Port growth from the mid-1990s through 2007. American Trucking Associations, Inc. (ATA, a national association of motor carriers),2 challenges the concession agreements, arguing that they are preempted by the Federal Aviation Administration Authorization Act (FAAA Act), 49 U.S.C. § 14501 et seq. After obtaining a preliminary injunction against several provisions of the concession agreements, ATA challenged five specific provisions at trial. The district court held that none of the challenged provisions fell within the scope of FAAA Act preemption, first because some did not relate to motor carriers' rates, routes, and services, and second because the State adopted the entire agreement (and the challenged provisions in particular) in its capacity as a market participant, rather than a market regulator. See 49 U.S.C. § 14501(c)(1). The district court further held that the FAAA Act's exemption for regulation "genuinely responsive to motor vehicle safety" saved from preemption the provision requiring motor carriers to create and administer regular maintenance plans. See 49 U.S.C. § 14501(c)(2)(A). ATA appeals. We have jurisdiction under 28 U.S.C. § 1291. We affirm the district court in large part, but reverse its decision that the employee-driver provision of the concession agreement falls within the market participant doctrine and is not preempted. I.A.
* The Honorable Rudi M. Brewster, Senior District Court Judge for the U.S. District Court for Southern California, San Diego, sitting by designation.
1. Drayage trucks move cargo from marine terminals at the Port (where shipping companies unload containers) to customers, railroads, or other trucks for long-distance transport.
2. Approximately thirty of the six hundred motor carriers currently operating at the Port are members of ATA.
3. Stevedores manage the loading and unloading of ships. Black's Law Dictionary 1539 (9th ed. 2009).
4. The Port is located in California's South Coast Air Basin, an EPA non-attainment area for several air quality standards. In 2008, the Basin had the worst air quality in the nation for a number of pollutants. The Port is responsible for a significant portion of these pollutants. In 2008, the population residing in the area around the Port suffered an average cancer risk from air pollution more than 60% higher than the average in the South Coast Air Basin.
5. The Ports of Los Angeles and Long Beach are contiguous and form a single physical Port, although they are managed independently. Though the Port of Long Beach was originally a party to this lawsuit, the Port of Long Beach and Appellees settled in October 2009, and the district court dismissed the Long Beach defendants with prejudice. The Long Beach claims are not at issue in this case.
6. The Transportation Worker Identification Credential (TWIC) is a "security measure that will ensure individuals who pose a threat do not gain unescorted access to secure areas of the nation's maritime transportation system" See Transportation Security Administration, TWIC Program Information, available at http://www.tsa.gov/what_we_do/layers/twic/program_info.shtm.
7. See Am. Trucking Ass'ns, Inc. v. City of L.A., 577 F.Supp.2d 1110 (C.D. Cal 2008) (ATA-I)(denying preliminary injunction on the grounds that the safety exception applies); Am. Trucking Ass'ns, Inc. v. City of L.A., 559 F.3d 1046 (9th Cir 2009) (ATA-II) (reversing the safety exception decision and remanding); Am. Trucking Ass'ns, Inc. v. City L.A., No. CV 08-4920, 2009 WL 1160212 (C.D. Cal. 2009 Apr. 28, 2009) (ATA-III); Am. Trucking Ass'ns, Inc. v. City of L.A., 596 F.3d 602 (9th Cir. 2010) (ATA-IV).
8. The Airline Deregulation Act preempts any provision that relates to "rates, routes and services." 49 U.S.C. app. § 1305(a)(1) (emphasis added). The FAAA Act preempts any provision that relates to "prices, routes, and services." 49 U.S.C. § 14501(c)(1). We use the terms "prices" and "rates" interchangeably. See Rowe, 552 U.S. at 375 (discussing whether a state provision relates to rates and is preempted under the FAAA Act).
9. ATA argues that the concession agreements differ from the ordinance at issue in Air Transport because the latter did "not give the city discretion to decide which airlines could not serve the airport." ATA misreads Air Transport. The ordinance there said "[n]o contracting agency of the City. . . shall execute or amend any contract . . . with any contractor that discriminates in the provision of [benefits] . . . between employees with domestic partners and employees with spouses . . . ." 266 F.3d at 1069. The ordinance required the airport to establish that the airlines did not discriminate, and prohibited the airport from contracting with airlines that did, or executing pre-existing contracts. There is no meaningful distinction between the ordinance in Air Transport and the concession agreements, which also require the Port to ensure that concessionaires comply with certain requirements before entering Port property.
10. Contrary to ATA's assertion, neither the district court's decision at the preliminary injunction phase nor this court's affirmance of that decision are binding as law of the case. The district court concluded that "[a]lthough case law provides some conflicting indications, the Court finds that, on balance, plaintiff has a significant likelihood of showing that defendants are not participants in the relevant market." ATA-I, 577 F. Supp. 2d at 1120. We commended the district court's "cogent explanation" but offered no further analysis. ATA-II, 559 F.3d at 1053.
As a "general rule, our decisions at the preliminary injunction phase do not constitute the law of the case." Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v. USDA, 499 F.3d 1108, 1114 (9th Cir. 2007) (internal quotation marks and citation omitted). "Any of our conclusions on pure issues of law, however, are binding." Id. Neither ATA-I nor ATA-II decided a "pure issue of law" with respect to the market participant doctrine, and their equivocal holdings on the likelihood that plaintiffs would prevail are not binding on this panel.
11. See, e.g., Engine Mfrs. Ass'n v. S. Coast Air Quality Maint. Dist., 498 F.3d 1031, 1040 (9th Cir. 2007) (the State was acting as a market participant when it required transportation vehicles purchased with State funds to meet environmental standards); Tocher, 219 F. 3d at 1049-50.
12. ATA argues that, in S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 97-98 (1984) (plurality), the Supreme Court limited the market participant doctrine to State actions taken in a "narrow" market defined by contractual privity. Wunnicke is not controlling precedent on this question. Its discussion of the market participant doctrine did not garner a majority of justices. See id. at 93-98 (majority op.); id. at 101 (Powell, J., in a concurrence in part and concurrence in the judgment joined by Burger, C.J.) (stating that they would remand to allow the Court of Appeals to apply the market participant doctrine in the first instance); id. at 101-103 (Rehnquist, J., in a dissent joined by O'Connor, J.) (arguing that the market participant doctrine applied). Indeed, Wunnicke is a perfect example of the Supreme Court's fractured views on the market participant doctrine. See Shell Oil Co. v. City of Santa Monica, 830 F.2d 1052, 1056 (9th Cir. 1987).
Subsequent cases either distinguish Wunnicke as an outlier involving special considerations of natural resources, foreign commerce, and restrictions on resale, or cite Wunnicke for general positions of law not unique to its analysis. See, e.g., Dep't of Revenue of Ky. v. Davis, 553 U.S. 328, 348 n.17 (2008) (responding to the dissent and distinguishing Wunnicke as a case involving three unique circumstances); United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 340 n.4 (2007) (citing Wunnicke as an example of local-processing requirements invalidated by the Court); Shell Oil, 830 F.2d at 1057-58 (citing Wunnicke for the proposition that "contractual privity does not insulate a state or local body from commerce clause scrutiny").
13. Both parties discuss as persuasive authority cases from other circuits and district courts addressing the market participant doctrine in the general context of State facilities. See Sprint Spectrum L.P., 283 F.3d at 420-21 (upholding under the market participant doctrine a school district's restrictions on cellular phone towers placed on school property); Four T's, Inc. v. Little Rock Mun. Airport Comm'n, 108 F.3d 909, 912-13 (8th Cir. 1997) (holding that State restrictions on rental car operators that leased airport terminal counter space fell within the market participant doctrine); Smith v. Dep't of Agric., 630 F.2d 1081, 1083 (5th Cir. 1980) (holding that preferential placement for local farmers at a State-run farmers market did not fall within the market participant doctrine); Aeroground, Inc. v. City & Cnty. of San Francisco, 170 F.Supp.2d 950, 958-59 (N.D. Cal. 2001) (holding for the purposes of a preliminary injunction that an airport was not acting as a market participant when it adopted a rule requiring employers operating at the airport to permit certain union actions); Transp. Limousine of Long Island, Inc. v. Port Auth. of N.Y. & N.J., 571 F.Supp. 576, 581 (E.D.N.Y. 1983).
Factually, those cases are distinguishable, so any analogy to the holdings would be strained. Cf. Tri-M, 638 F.3d at 422 (the court must consider the government's actions in the specific context presented). These cases are useful only to illustrate that other courts examine whether a particular provision is actually related to the State's proprietary interest in managing its facilities, or whether it reflects the State's regulatory interest in unrelated industries.
14. We express no opinion on this point.
15. Though we do not rest our holding on this ground, we agree with the district court that the maintenance provision has only a tenuous and remote connection to rates, routes, and services. Requiring regular maintenance of trucks does not directly affect drayage pickups or deliveries, nor does it bind motor carriers to particular routes or types of services. Though one would suspect that maintenance could have a connection to costs and thus rates, the evidence introduced at trial established that the maintenance provision has not given rise to any significant additional costs and that concessionaires have not increased their rates as a result of complying with the provisions. ATA does not challenge as clearly erroneous the district court's factual finding that the maintenance provision has not changed the rates charged by motor carriers, further supporting our view that the maintenance provision is not related to rates and not preempted by the FAAA Act.
16. In assessing the Port's motivations, we focus exclusively on the orders and published documents issued by the Port, and on statements made at trial by high-ranking Port officials. Both ATA and its amicus imply that statements of consultants hired by the Port reflect the Port's motivations. This argument is without merit, even though both reports were commissioned by the Port, and the Port ultimately adopted the course recommended by both reports. The consultants are not agents of the Port, and it is too much to conclude that every statement in each report was adopted by the Port or accurately reflects the Port's motivations.
17. As discussed in section IV.C supra, application of the FAAA's safety exception is not precluded by Castle v. Hayes, 348 U.S. 61 (1954). The placard provision is a reasonable measure aimed at promoting Port safety, which applies only while trucks are operating on the Port's private property. It is not comparable to Illinois' attempt to bar certain federally licensed motor carriers from its state highways, which was at issue in Castle.
1. Also not controlling but persuasive is the case of Fla. Transp. Serv., Inc. v. Miami-Dade Cnty., 757 F.Supp.2d 1260 (S.D. Fla. 2010). In Florida Transportation the plaintiffs challenged the Port of Miami's limitation on the number of stevedores. Id. Regarding the market participant doctrine, the court found the county operating the Port of Miami not to be in the market of stevedoring just because it participates in the market for port services. Id. at 1282 ("[T]he county simply provides a suitable market place that it owns—the Port—for stevedores to offer their services.").
2. Although Wunnicke, 467 U.S. 82 (1984), is a plurality opinion, we cited its holding with approval in Big Country Foods, 952 F.2d at 1178.
3. In virtually every Ninth Circuit case finding that a government entity acted as a market proprietor, the government was actually participating in the marketplace by purchasing goods or services. See, e.g., Engine Mfrs. Ass'n v. S. Coast Air Quality, 498 F.2d 1031 (9th Cir. 2007) (holding that a state subdivision acted as a market participant in establishing air quality rules governing state and local governments' procurement of new fleet vehicles); Tocher v. City of Santa Ana, 219 F.3d 1040, 1049 (9th Cir. 2000) (holding the City of Santa Ana acted as a market participant in "establishing rules and regulations to guide the formation of contracts for towing services provided exclusively to the City" (emphasis added)).
4. California recognized this enduring limit on its authority to regulate interstate motor carriers when it enacted the Motor Carrier Safety Improvement Act of 1996. The Act provides, in part, that if the California Highway Patrol determines a commercial carrier has engaged in "consistent failure" to comply with safety requirements "so as to justify a suspension or revocation of the motor carrier's motor carrier permit . . . for interstate operators, the [Highway Patrol] shall recommend to the Federal Motor Carrier Safety Administration that appropriate administrative actions be taken against the carrier . . . ." Cal. Veh. Code § 34505.6(a) (emphasis added). This enforcement scheme is consistent with Castle in that California relies on federal authorities to revoke an interstate offender's permit where the state would otherwise revoke an intrastate offender's transportation permit for the same conduct.
5. The district court concluded, without analysis, that Castle does not apply, because the FAAA Act was enacted 40 years after Castle. However, the FAAA Act did not expand states' authority to regulate interstate motor vehicles, even on safety grounds. In addressing this very question, Congress explained that "nothing in these new subsections contains a new grant of Federal authority to a State to regulate commerce and nothing in these sections amends other Federal statutes that govern the ability of States to impose safety requirements . . . ." H.R. Rep. No. 103-677 at 84 (1994), reprinted in 1994 U.S.C.C.A.N. 1715, 1757.
6. The United States, writing as amicus curiae in this case, also argued that Castle and its progeny are still in full effect, explaining "the Supreme Court has recognized that `comprehensive federal regulation precludes state or local entities from `exercising any veto power over' interstate commerce service providers.'" See Motion Granting in Part and Denying in Part Plaintiff's Motion on Remand for Entry of Preliminary Injunction, Case No. 2:08-cv-04920-CAS-CT, Dkt. No. 155, at 6 (citing Castle, 348 U.S. at 64).
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