A law in California that aims to limit the number of independent contractors now threatens to throw the trucking industry into turmoil as America’s supply chains already struggle to get goods to shelves.
The Biden administration’s solicitor general doesn’t want the Supreme Court to touch it.
“The petition for a writ of certiorari should be denied,” Solicitor General Elizabeth Prelogar wrote in an analysis to the high court, asking it to pass on this case. “The court of appeals correctly determined that petitioners were unlikely to succeed on their claim that the [Federal Aviation Administration Authorization Act of 1994] preempts applying the ABC test as codified under California law to owner-operators.”
Prelogar granted that “the circuits have reached differing outcomes” but argued, pun likely unintentional, that the case is “a poor vehicle in which to address the question presented.”
The case is titled California Trucking Association, Inc. v. Bonta, with “Bonta” being California Attorney General Robert Bonta. As of June 2, the court had not made up its mind one way or another to hear the case, according to SCOTUSblog.
If the court doesn’t hear it, the stay holding a lower court decision back will be lifted, which R Street Institute Western Region Director Steven Greenhut believes would have many negative ramifications.
“A failure to review the California Trucking Association case would have disastrous results in the state,” he told the Washington Examiner. “If Assembly Bill 5 becomes law, it will destroy the owner-operator model for trucking.”
That would be contrary to the wishes of many owner-operators who “prefer to work as independent businesspeople rather than as employees committed to a single firm,” he argued.
Greenhut added that the law “would force trucks coming into California from elsewhere to stop at the state border — thus driving up the costs of deliveries and imperiling trucking jobs in the state. California has suffered through a long backlog at the ports of Los Angeles and Long Beach, which is caused in part by a shortage of drivers. The courts need to overturn this law, which is not only counterproductive but an assault on workers’ ability to choose their own work arrangement.”
Trade publication FreightWaves reported that within the industry, the law is “viewed as having the potential to upend or even obliterate the trucking owner-operator model in the state.”
The so-called ABC Test is part of Assembly Bill 5, which California enacted in 2019. It has proven so hard to make work that the legislature has carved out exceptions for about 100 industries — but not trucking.
“Courts using this test look at whether a worker meets three separate criteria to be considered an independent contractor,” the Legal Information Institute said.
Those criteria are that the worker is “free from the employer’s control or direction in performing the work,” that the work “takes place outside the usual course of the business of the company and off the site of the business,” and that the worker “is engaged in an independent trade, occupation, profession, or business.”
On the face of it, it’s hard to argue that what independent owner-operator truckers do is “outside the usual course of the business” of hauling companies.
The California Trucking Association had used the Federal Aviation Administration Authorization Act of 1994, with its federal preemption of some state regulations of the transportation of goods under federal law, to win an initial judgment against applying such a test to trucking. Then the 9th U.S. Circuit Court of Appeals weighed in against that interpretation. Then that decision was stayed, pending Supreme Court review.
There is much speculation as to whether the court will take the case up at this time.
On the one hand, several states have some version of the ABC Test. Different circuit courts have interpreted the application of federal law in ways that clash. The Supreme Court often weighs into these “circuit splits” to harmonize the application of federal law.
On the other hand, Scopelitis law firm partner Prasad Sharma told FreightWaves that “anytime the solicitor general recommends denial, it hurts the chances the court will take the case.”
