Trucking companies in the Port of Los Angeles won a court victory recently against the state of California, and Attorney General Jerry Brown, to force them to stop using independent contractor drivers to dray containers in California’s ports and to use employee drivers instead.
In a civil action filed in Superior Court by the attorney general against Pac Anchor Transportation Inc and truck owner Alfredo Barajas, Case #BC 397600, Los Angeles Superior Court Judge Elizabeth Allen White held that a federal law, which protects motor carriers from state regulation, pre-empts claims against motor carriers brought under California’s Unfair Competition Law (UCL).
The federal law, part of the Federal Aviation Administration Authorization Act (FAAAA), prohibits states from enacting and enforcing laws “related to” motor carrier prices, routes, or services in order to maximize competitive forces in the trucking industry. White agreed with the “very strong” argument advanced by attorneys Neil S Lerner, Arun Dayalan, and Arthur A Severance of the Sands Lerner law firm that claims against motor carriers under the UCL are pre-empted per se under the FAAAA.
White held that the attorney general’s case, which was based on the allegation that the defendants had improperly classified drivers as independent contractors rather than employees, would have a significant effect on motor carrier prices, routes, and services and was therefore pre-empted under the FAAAA. White found that the attorney general’s actions threatened to erect entry controls that would discourage independent contractor drivers from participating in the trucking market, thereby frustrating Congress’ intent to maximize competitive forces in the trucking industry.