The California law enacted last year that mostly blocks fleets from contracting with owner-operators will face its next court test in September. That’s when a panel of judges on the Ninth Circuit Court of Appeals will decide whether the law will remain out of force for trucking while it’s further adjudicated.
California’s A.B. 5, among other provisions, blocks employers from using independent contractors that perform the same work as the business itself. As has been well reported on Overdrive, that stipulation forbids fleets from working with leased owner-operators — those who own their own truck and business but run under the authority of another carrier. The law spooked carriers like Landstar, Prime and others with a large owner-operator presence, leading them to cut ties with their California-based contractors.
The law took effect Jan. 1, but a federal judge at the District Court level issued a last-minute, temporary injunction against A.B. 5’s enforcement within the trucking industry. Thus, carriers and owner-operators have been able to carry on with business as usual, if they wish, while a lawsuit brought by the California Trucking Association makes its way through the courts.
The Ninth Circuit Court of Appeals will hear oral arguments Sept. 1 to determine whether that injunction will stay in effect — a decision that could ripple throughout the lawsuit’s remaining steps.
“We’re confident that the preliminary injunction was rightly entered, because A.B. 5 is pre-empted” by federal law, said Bob Roginson, a partner at Ogletree, Deakins, Nash, Smoak and Stuart, and the attorney representing CTA and two independent owner-operators in their case against the state. “If the Ninth Circuit comes down with what we believe to be a recognition of that fact, that would make it really clear” that their arguments to ultimately win the case are strong.
The court’s decision could boost CTA’s efforts to have motor carriers permanently excluded from the law. If the Ninth Circuit rules in CTA’s favor in the preliminary injunction, Roginson said the court effectively could “lay the pathwork” for the Southern California U.S. District Court’s decision in CTA’s case against A.B. 5.
Whatever the court decides – to uphold the preliminary injunction or not – the case will go back to U.S. District Court in Southern California to be heard in full. After that, it’s likely to be appealed to the Ninth Circuit, then potentially on to the U.S. Supreme Court.
Roginson expects a decision this year from the Ninth Circuit as to whether A.B. 5 will apply while litigation against the law proceeds.