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Thursday, June 13, 2013

U.S. Supreme Court turned down operational mandates set by the Port of Los Angeles in an attempt to impose regulation on interstate commerce

In an opinion authored by Justice Kagan, a unanimous Supreme Court rejected the Port’s contention. 

The legal arguments were regarding "concession agreements" that the Port made mandatory for drayage trucks performing short haul movement of cargo in and out of the port - under the auspices of the "Clean Truck Program" which was implemented in 2007.  The agreement required that the trucking company meet additional regulations for financial capacity, maintenance, and additional regulations for it's employment of drivers.  The agreements also require specific placards be placed on the vehicles with a phone number for reporting issues or concerns, and a plan for off-street parking.  An amended tariff made it a misdemeanor for terminal operators to grant access to any unregistered drayage truck.

Agreeing with ATA on these rules, the Court concluded that, whatever the Port’s asserted motivation, the concession agreements amounted to “classic regulatory authority” and thus fell within the scope of the FAAAA’s preemption provision. It observed that the concession agreements, while technically contracts between the Port and trucking companies, were not the “result merely of the parties’ voluntary commitments.”  Rather, the Port compelled trucking companies to enter into the contracts as a condition of access to the Port, by “wielding coercive power over private parties, backed by the threat of criminal punishment.”  By imposing the concession agreements through coercion rather than “ordinary bargaining,” Los Angeles was “performing its prototypical regulatory role.”.