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California Truckers’ Classification Fight Going to 9th Cir. (1)

Jan. 30, 2020, 3:07 PMUpdated: Jan. 30, 2020, 5:46 PM

California Attorney General Xavier Becerra (D) and the Teamsters asked the Ninth Circuit to review an injunction against enforcement of California’s new worker classification law against truckers who operate as contractors.

Whether AB 5 is preempted by the Federal Aviation Administration Authorization Act, which regulates motor carriers, will be an issue of first impression in the U.S. Court of Appeals for the Ninth Circuit and could potentially end up before the U.S. Supreme Court.

The request for interlocutory appeal is “an expected next step” in this case, Greg Feary, president and managing partner of Scopelitis, Garvin, Light, Hanson & Feary PC, said Thursday.

No matter who ultimately ends up losing, an appeal to the Supreme Court is likely, he said. “While impossible to predict with certainty, of course, the earmarks, such as a split of decisions within the circuit courts of appeals, seem to be present to expect the Court’s grant of such appeal,” Feary said.

The First Circuit held that the FAAAA preempted Massachusetts’ Independent Contractor statute, but the Third and Seventh Circuits found that the FAAAA didn’t preempt similar laws in New Jersey and Illinois.

California’s AB 5 went into effect Jan. 1 and has faced significant opposition from the trucking industry, as well as the gig economy and freelancers. The law codified and expanded a 2018 California Supreme Court ruling that adopted a new legal standard, known as the “ABC” test, for determining when a worker is an independent contractor rather than an employee.

The California Trucking Association and two independent motor-carriers won a preliminary injunction Jan. 16, after Judge Roger Benitez found that they’d established a likelihood of success on the merits of their arguments. The truckers argued that the FAAAA expressly preempts the ABC test because it requires them to classify all drivers as employees, causing significant interference with their prices, routes, and services.

But Becerra has argued that the ABC test doesn’t discriminate against or substantially burden interstate commerce because it applies equally to in-state, multi-state, and out-of-state employers and doesn’t impose any requirements on trucking routes or how they are staffed.

The Teamsters, who intervened in the case, also agree that the law should be upheld.

The two notices of appeal were filed Wednesday in the U.S. District Court for the Southern District of California.

The California Department of Justice represents the state. Altshuler Berzon LLP represents the Teamsters. Ogletree, Deakins, Nash, Smoak & Stewart PC represents the California Trucking Association.

The case is California Trucking Association v. Becerra, S.D. Cal., No. 18-cv-02458, 1/29/20.

(Updates Jan. 30 story with additional reporting throughout.)

To contact the reporter on this story: Kathleen Dailey at kdailey@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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