On June 13, 2013, the Supreme Court of the United States decided American Trucking Associations, Inc. v. City of Los Angeles, No. 11-798, holding that section 14501(c)(1) of the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempts two provisions of an agreement that trucking companies must sign before they can transport cargo at the Port of Los Angeles.
To address community concerns about traffic congestion and air pollution related to proposed expansions at the Port of Los Angeles, the city's Board of Harbor Commissioners implemented a "Clean Truck Program" in 2007. Among other actions, the board created a concession agreement whereby trucking companies seeking to operate on the port's premises were required to (1) affix a placard on each truck with a phone number for reporting environmental or safety concerns, and (2) submit a plan listing off-street parking locations for each truck when not in service. To ensure compliance, the board amended the city's tariff (a local ordinance) to provide that criminal penalties of up to $500 and six months in jail could be imposed on terminal operators who permitted access to trucking companies not registered under the concession agreement.
American Trucking Associations, Inc. (ATA), a national trade association representing the trucking industry, filed suit against the Port and City of Los Angeles, seeking an injunction against these and other provisions of the concession agreement. ATA contended that the FAAAA—which provides that states and local governments "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier"—expressly preempts the concession agreement requirements. The parties agreed that the local regulation related to price, route, or service, so the only dispute was whether the local regulation had the force and effect of law. After a bench trial, the District Court found that neither the FAAAA nor Supreme Court precedent prevented the port from proceeding with any part of the Clean Truck Program. The United States Court of Appeals for the Ninth Circuit affirmed.
The Supreme Court reversed, holding that the placard and parking requirements were "provision[s] having the force and effect of law" within the meaning of FAAAA section 14501(c)(1). The FAAAA has a market-participant type exception, but the court ruled that the two provisions of the concession agreement did not fall within that exception, and rather were exercises of "classic regulatory authority" having the force and effect of law. This conclusion flowed from the agreement's use of criminal penalties to ensure compliance; such "coercive power over private parties," the Court explained, amounted to action "‘having the force and effect of law' if anything does." The Court declined to decide whether two other provisions of the Concession Agreement were preempted under prior precedent because they had not yet been enforced.
Justice Kagan delivered the opinion for a unanimous Court. Justice Thomas filed a concurring opinion.