Post by concernedportworker on Nov 6, 2008 9:16:31 GMT -5
The JOURNAL of COMMERCE
Two-Front War
Southern California Clean-Trucks Case is Before Courts, FMC
November 6, 2008 8:48:40 AM
Bill Mongelluzzo
Battle lines are drawn in the Los Angeles-Long Beach clean-trucks case. Now it's up to the courts and the Federal Maritime Commission to determine whether the ports can enforce their requirements that harbor drayage companies obtain port-issued licenses to operate.
The last three weeks have produced a flurry of legal briefs and letters by attorneys representing the ports, the Justice Department, the American Trucking Associations, the National Association of Waterfront Employers, the Natural Resources Defense Council and the National Industrial Transportation League.
It's no mystery why the case has attracted such attention: The stakes are huge. What the courts and the FMC decide could set a precedent for other ports seeking to achieve cleaner air by regulating trucking operations. "The FMC has to deal with this law so other port authorities know what is and isn't legal," said Charles T. Carroll, executive director of the National Association of Waterfront Employers.
No one is challenging the anti-pollution measures, which are part of a clean-air program that the ports need in order to clear a backlog of stalled environmental permits for more than a dozen construction projects. No one objected to the ports' Oct. 1 ban of trucks built before 1989. Motor carriers already have added dozens of new, clean-burning trucks to their fleets. Within five years, all trucks serving the harbor will be 2007-model or newer.
There's sharp disagreement, however, over the ports' requirements that truckers obtain operating licenses, or concessions. The ports' clean-truck plans require motor carriers to sign a concession agreement, pay fees and abide by port regulations covering hiring practices, proof of financial capability, off-street parking requirements, and truck safety and security.
Separate battles are under way in two venues: Federal courts are addressing whether the ports' concession requirements are an illegal effort to regulate interstate commerce. The FMC, meanwhile, is considering the concessions' impact on truck capacity and freight rates, and whether the concessions discriminate against motor carriers and constitute a refusal by the ports to deal with certain types of trucking companies.
While the filings are voluminous and involve multiple issues, the controversy is crystallized in two main arguments:
-- The American Trucking Associations charges that the Federal Aviation Administration Authorization Act prevents state or local regulation of motor carriers engaged in regulating interstate commerce. The ports insist they are exempt from that act because they operate on state-granted sovereign tidelands and because they are market participants attempting to protect their investments.
-- The FMC has expressed concern that the concession requirements could improperly reduce competition and capacity, increase rates, and discriminate against some motor carriers. The National Association of Waterfront Employers has asked the 9th U.S. Circuit Court of Appeals to order the court case sent to the FMC for action under the Shipping Act. The FMC could seek a court injunction against the concession requirements.
Round One of the court battle has already taken place. The ATA last summer asked a federal district court in Los Angeles to block the ports from implementing the concession requirements on Oct. 1. The court denied the trucking organization's request for emergency action.
The district court acknowledged that the ATA's argument on federal pre-emption is sound. But in refusing to grant the emergency injunction, the court said the truck safety and port security could be compromised if the concessions didn't take effect, and that the ATA hadn't shown that allowing the concessions to take effect on schedule would cause irreparable harm to its members.
Although the 9th Circuit refused to overturn the district court's decision, the ATA is still seeking a preliminary injunction from the appellate court to block the courts from enforcing the concession agreements that took effect on Oct. 1. The ATA also has challenged the concession plans' legality in a U.S. District Court lawsuit that is expected to be heard next year.
The Justice Department, representing itself, the Transportation Department, the Federal Motor Carrier Safety Administration and the attorney general, added the government's weight to the ATA's case before the 9th Circuit. In a friend-of-the-court brief, the Justice Department argued that Congress delegated to the Transportation Department the authority to implement the Federal Aviation Administration Authorization Act, and application of the statute is "of critical concern" to the government.
The government's brief insisted that the law explicitly prohibits state and local authorities from regulating prices, routes and services of motor carriers. The brief acknowledged that a state or local entity could be exempted from federal pre-emption if it is acting to regulate safety. However, the Justice Department argued that the lower court stretched that exemption too far by extending it to include port security.
The government also took issue with the Port of Los Angeles's requirement that motor carriers switch from owner-operators to all-employee driver work forces by 2013. "Whether a properly licensed and insured driver is an independent contractor or an employee has no relevance to motor carrier safety," the Justice Department said in its brief.
Employee drivers are a goal of the Teamsters union, which contends that owner-operators won't be able to buy and maintain low-polluting vehicles over the long run. Employers say the Teamsters' real motivation is that the employee requirement would make it easier -- and legal -- to organize the drivers, most of whom are now independent contractors.
The Justice Department also said that although the ports operate on state-granted tidelands, their operations "are no less subject to congressional authority than other economic activities." The brief also said the ports' claim that they are exempt from federal pre-emption because they are freight market participants is "equally meritless."
"The ports do not participate in any relevant market," and do not directly procure motor carrier drayage services, the government said.
The NIT League, whose 700 members include importers, exporters and other companies involved in transportation, also emphasized the federal pre-emption argument in the brief it filed in support of the ATA's position. The league said the ports' concession requirements for harbor truckers are artificial barriers to entry that could reduce competition.
The NIT League says the federal government has regulated maritime commerce at least since 1916 and notes that harbor trucking service is an integral part of intermodal through transportation services that move containers from a vessel to a distribution warehouse or rail transfer yard under a single contract. As for the ports' claim to a safety exemption from the aviation act, the NIT League said safety is an incidental benefit of the clean-trucks plan, but not the main objective.
In order to set up the clean-trucks plan and work with marine terminal operators to collect fees associated with the program, the ports had to apply to the FMC for exemption from U.S. antitrust laws.
Acting in its capacity as enforcer of the Shipping Act, the FMC has sought a steady stream of information from the ports on their concession agreements. The ports have provided this information, begrudgingly at times. In a recent latter to the FMC, the ports questioned the commission's authority in this matter.
In a letter signed by their executive directors, the ports said the FMC shouldn't interfere with the clean-trucks plans before conducting an environmental analysis as required by federal law. The executive directors added, "Serious questions remain about the FMC's subject matter jurisdiction and technical expertise to even do so."
The Natural Resources Defense Council and other environmental groups have weighed in on behalf of the ports. The environmentalists cite several laws, including the National Environmental Policy Act, that they say require the FMC to analyze the environmental consequences of any commission action. The NRDC also said that any FMC action without proper environmental analysis would violate the Clean Air Act, Energy Policy and Conservation Act and Administrative Procedures Act.
The National Association of Waterfront Employers made a different argument. It argued in its brief that the FMC should have primary jurisdiction in the clean-trucks case. The association said Congress intended that federal agencies with expertise in certain areas have primary jurisdiction in those areas, and that the FMC has expertise in U.S. maritime commerce.
The NAWE wants the FMC to use its authority under the Shipping Act to seek an injunction in the U.S. District Court for the District of Columbia against any port requirements that reduce trucking competition or unreasonably increase transportation costs. The association also wants the FMC to use its authority under the Shipping Act's Section 10 to act against port actions that result in discrimination against or refusal to deal with parties such as owner-operators.
Bill Mongelluzzo can be contacted at bmongelluzzo@joc.com.
Two-Front War
Southern California Clean-Trucks Case is Before Courts, FMC
November 6, 2008 8:48:40 AM
Bill Mongelluzzo
Battle lines are drawn in the Los Angeles-Long Beach clean-trucks case. Now it's up to the courts and the Federal Maritime Commission to determine whether the ports can enforce their requirements that harbor drayage companies obtain port-issued licenses to operate.
The last three weeks have produced a flurry of legal briefs and letters by attorneys representing the ports, the Justice Department, the American Trucking Associations, the National Association of Waterfront Employers, the Natural Resources Defense Council and the National Industrial Transportation League.
It's no mystery why the case has attracted such attention: The stakes are huge. What the courts and the FMC decide could set a precedent for other ports seeking to achieve cleaner air by regulating trucking operations. "The FMC has to deal with this law so other port authorities know what is and isn't legal," said Charles T. Carroll, executive director of the National Association of Waterfront Employers.
No one is challenging the anti-pollution measures, which are part of a clean-air program that the ports need in order to clear a backlog of stalled environmental permits for more than a dozen construction projects. No one objected to the ports' Oct. 1 ban of trucks built before 1989. Motor carriers already have added dozens of new, clean-burning trucks to their fleets. Within five years, all trucks serving the harbor will be 2007-model or newer.
There's sharp disagreement, however, over the ports' requirements that truckers obtain operating licenses, or concessions. The ports' clean-truck plans require motor carriers to sign a concession agreement, pay fees and abide by port regulations covering hiring practices, proof of financial capability, off-street parking requirements, and truck safety and security.
Separate battles are under way in two venues: Federal courts are addressing whether the ports' concession requirements are an illegal effort to regulate interstate commerce. The FMC, meanwhile, is considering the concessions' impact on truck capacity and freight rates, and whether the concessions discriminate against motor carriers and constitute a refusal by the ports to deal with certain types of trucking companies.
While the filings are voluminous and involve multiple issues, the controversy is crystallized in two main arguments:
-- The American Trucking Associations charges that the Federal Aviation Administration Authorization Act prevents state or local regulation of motor carriers engaged in regulating interstate commerce. The ports insist they are exempt from that act because they operate on state-granted sovereign tidelands and because they are market participants attempting to protect their investments.
-- The FMC has expressed concern that the concession requirements could improperly reduce competition and capacity, increase rates, and discriminate against some motor carriers. The National Association of Waterfront Employers has asked the 9th U.S. Circuit Court of Appeals to order the court case sent to the FMC for action under the Shipping Act. The FMC could seek a court injunction against the concession requirements.
Round One of the court battle has already taken place. The ATA last summer asked a federal district court in Los Angeles to block the ports from implementing the concession requirements on Oct. 1. The court denied the trucking organization's request for emergency action.
The district court acknowledged that the ATA's argument on federal pre-emption is sound. But in refusing to grant the emergency injunction, the court said the truck safety and port security could be compromised if the concessions didn't take effect, and that the ATA hadn't shown that allowing the concessions to take effect on schedule would cause irreparable harm to its members.
Although the 9th Circuit refused to overturn the district court's decision, the ATA is still seeking a preliminary injunction from the appellate court to block the courts from enforcing the concession agreements that took effect on Oct. 1. The ATA also has challenged the concession plans' legality in a U.S. District Court lawsuit that is expected to be heard next year.
The Justice Department, representing itself, the Transportation Department, the Federal Motor Carrier Safety Administration and the attorney general, added the government's weight to the ATA's case before the 9th Circuit. In a friend-of-the-court brief, the Justice Department argued that Congress delegated to the Transportation Department the authority to implement the Federal Aviation Administration Authorization Act, and application of the statute is "of critical concern" to the government.
The government's brief insisted that the law explicitly prohibits state and local authorities from regulating prices, routes and services of motor carriers. The brief acknowledged that a state or local entity could be exempted from federal pre-emption if it is acting to regulate safety. However, the Justice Department argued that the lower court stretched that exemption too far by extending it to include port security.
The government also took issue with the Port of Los Angeles's requirement that motor carriers switch from owner-operators to all-employee driver work forces by 2013. "Whether a properly licensed and insured driver is an independent contractor or an employee has no relevance to motor carrier safety," the Justice Department said in its brief.
Employee drivers are a goal of the Teamsters union, which contends that owner-operators won't be able to buy and maintain low-polluting vehicles over the long run. Employers say the Teamsters' real motivation is that the employee requirement would make it easier -- and legal -- to organize the drivers, most of whom are now independent contractors.
The Justice Department also said that although the ports operate on state-granted tidelands, their operations "are no less subject to congressional authority than other economic activities." The brief also said the ports' claim that they are exempt from federal pre-emption because they are freight market participants is "equally meritless."
"The ports do not participate in any relevant market," and do not directly procure motor carrier drayage services, the government said.
The NIT League, whose 700 members include importers, exporters and other companies involved in transportation, also emphasized the federal pre-emption argument in the brief it filed in support of the ATA's position. The league said the ports' concession requirements for harbor truckers are artificial barriers to entry that could reduce competition.
The NIT League says the federal government has regulated maritime commerce at least since 1916 and notes that harbor trucking service is an integral part of intermodal through transportation services that move containers from a vessel to a distribution warehouse or rail transfer yard under a single contract. As for the ports' claim to a safety exemption from the aviation act, the NIT League said safety is an incidental benefit of the clean-trucks plan, but not the main objective.
In order to set up the clean-trucks plan and work with marine terminal operators to collect fees associated with the program, the ports had to apply to the FMC for exemption from U.S. antitrust laws.
Acting in its capacity as enforcer of the Shipping Act, the FMC has sought a steady stream of information from the ports on their concession agreements. The ports have provided this information, begrudgingly at times. In a recent latter to the FMC, the ports questioned the commission's authority in this matter.
In a letter signed by their executive directors, the ports said the FMC shouldn't interfere with the clean-trucks plans before conducting an environmental analysis as required by federal law. The executive directors added, "Serious questions remain about the FMC's subject matter jurisdiction and technical expertise to even do so."
The Natural Resources Defense Council and other environmental groups have weighed in on behalf of the ports. The environmentalists cite several laws, including the National Environmental Policy Act, that they say require the FMC to analyze the environmental consequences of any commission action. The NRDC also said that any FMC action without proper environmental analysis would violate the Clean Air Act, Energy Policy and Conservation Act and Administrative Procedures Act.
The National Association of Waterfront Employers made a different argument. It argued in its brief that the FMC should have primary jurisdiction in the clean-trucks case. The association said Congress intended that federal agencies with expertise in certain areas have primary jurisdiction in those areas, and that the FMC has expertise in U.S. maritime commerce.
The NAWE wants the FMC to use its authority under the Shipping Act to seek an injunction in the U.S. District Court for the District of Columbia against any port requirements that reduce trucking competition or unreasonably increase transportation costs. The association also wants the FMC to use its authority under the Shipping Act's Section 10 to act against port actions that result in discrimination against or refusal to deal with parties such as owner-operators.
Bill Mongelluzzo can be contacted at bmongelluzzo@joc.com.