California’s I/C Wipeout Law Could Be Enforced Next Week After New Court Decision
San Francisco, CA – The U.S. Court of Appeals for the 9th Circuit has once again delivered a significant defeat to trucking stakeholders.
In a 2-1 decision issued on Monday, the three judge panel denied a petition filed last month by the California Trucking Association (CTA) for an en banc rehearing of the court’s previous decision which paved the way for enforcement of California’s controversial Assembly Bill 5 law, known as AB-5, on motor carriers.
In April, the U.S. Court of Appeals for the 9th Circuit overturned an injunction issued by a lower court which specifically prevented the state from enforcing AB-5.
The decision sent shockwaves throughout the California trucking community.
CTA responded by filing for an en banc rehearing, but it too has now been denied.
The controversial law is opposed by major trucking groups such as the American Trucking Associations, Owner Operator Independent Driver’s Association, and Western States Trucking Association and could begin being enforced as soon as seven days from the denial of the en banc petition.
At the heart of CTA’s argument is that the 1994 Federal Aviation Administration Authorization Act (F4A) blocks states from enacting a “patchwork of labor laws” in which the impact would effectively be “so significant that it indirectly determines price, routes, or services” interstate trucking companies can provide its customers.
Additionally, the CTA argued if AB-5’s controversial “ABC Test” to determine if a worker is an independent contractor was enforced — specifically, the B-prong which classifies a worker as an “employee” of the company unless that worker “performs work that is outside the usual course of the hiring entity’s business” — it would harm as many as 70,000 independent contractors within the state and all but eliminate trucking’s long-established owner-operator model in California.
CTA Will File an Appeal to the U.S. Supreme Court
In a statement, Shawn Yadon, CEO of the CTA, called the court’s latest decision “disappointing.”
“We are committed to continuing our efforts to protect California’s 70,000 independent truckers,” Yadon said. “Enforcing AB-5 would throw the nation’s supply chain into further chaos and destroy the livelihoods of thousands of blue collar entrepreneurs.”
CTA has 150 days to petition the United States Supreme Court for a writ of certiorari.
“We will look to every option to prevent greater harm including filing a motion to delay the removal of the preliminary injunction, while we also petition the U.S. Supreme Court to consider our case,” Yadon commented.
While CTA is entitled to appeal to the U.S. Supreme Court and ask for an injunction until the case is decided upon, there is no guarantee the highest court in the land will hear the case.
TransportationNation.com will continue to follow new developments.