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Ninth Circuit Declines to Rehear Truckers’ Challenge to California Contractor Law

The California Trucking Association won’t get a new Ninth Circuit hearing on its challenge to California’s landmark employment law --- paving the way for a trip to the Supreme Court.

(CN) --- Motor carriers that hire independent truckers who own their rigs lost their bid for a new hearing at the Ninth Circuit on Monday, leaving in place a panel's ruling they must comply with California’s landmark contractor labor law Assembly Bill 5.

The California Trucking Association, a trade organization representing motor carriers that hire independent contractors who own their own rigs, known as “independent owner-operators,” saw its request for an en banc rehearing rejected after its petition “was circulated to the judges of the court, and no judge requested a vote for en banc consideration,” according to a 2-page order filed Monday.

The denial for a new hearing paves the way for CTA to take the case to the U.S. Supreme Court.

CTA CEO Shawn Yadon confirmed in a written statement to Courthouse News the organization plans to do so.

“While the decision by the Ninth Circuit to deny an en banc rehearing is 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. We will look to every option to prevent greater harm as we petition the U.S. Supreme Court to consider our case.”

The California Attorney General's Office praised the decision in a statement Monday.

“We're pleased with today's decision once again affirming AB 5's general applicability. At the California Department of Justice, we'll continue to defend laws that are designed to protect workers and ensure fair labor and business practices," state Attorney General Rob Bonta's office said.

The Ninth Circuit’s order Monday may also pave the way for the state to enforce AB 5 against the trucking industry for the first time since the law went into effect in 2020.

A preliminary injunction by U.S. District Judge Roger Benitez, a George W. Bush appointee, had remained in place while the case was appealed. Now the Ninth Circuit has refused to rehear the case, the state will likely begin enforcement of AB 5 against the trucking industry.

In April, the Ninth Circuit upheld California’s historic labor law finding it is be preempted by federal laws governing the trucking industry.

The 1994 Federal Aviation Administration Authorization Act, also called F4A, preempts state law “related to a price, route or service of any motor carrier … with respect to the transportation of property.”

 The Ninth Circuit panel --- led by George W. Bush appointee Judge Sandra S. Ikuta --- found AB 5 did none of those things and was a “generally applicable labor law that affects a motor carrier’s relationship with its workforce.”

But CTA’s attorney Andrew Tauber with Mayer Brown had argued before the Ninth Circuit AB 5 couldn’t be considered a generally applicable labor law due to the numerous exemptions and carveouts for certain industries.

AB 5 codified a three-prong “ABC” test for determining if a worker is an employee --- entitled to employment protections and benefits --- or an independent contractor. It has been fought by industries across the state including ride-hail companies, news companies and freelance journalists.

In response, California lawmakers passed Assembly Bill 2257 this past September which added exemptions for several industries who argued they’d be harmed by AB 5.

CTA and others in the trucking industry have argued AB 5 upends its business model where motor carriers typically contract with independent owner-operators who own their own rigs and perform trucking services for various companies engaged in interstate commerce.

Follow Bianca Bruno on Twitter

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