ATA court victory: What happens next? An interview with Curtis Whelan
On March 20th, 2009, the U.S. Court of Appeals ruled in favor of the ATA in its lawsuit against the ports of Los Angeles and Long Beach concerning certain controversial portions of their Clean Truck Programs. Namely, the Port of Los Angeles’ requirement that would ban owner-operators and force all drivers to be employees, as well as the concession agreements with the ports that would have regulated many aspects of trucking companies operations, such as parking restrictions, financial disclosures, etc. The Court of Appeals sent the case back down to the District Court with instructions for the District Court to “proceed as quickly as possible so that the ATA will not suffer unnecessary harm from any unconstitutional provisions”.
The following Monday, on March 23rd, we caught up with Curtis Whelan, the Executive Director of the ATA’s Intermodal Motor Carriers Conference (IMCC) to get his thoughts on the Court of Appeals decision and to learn what happens next.
3PLwire: So, in regards to the ruling, my understanding of the ruling is that the circuit court is sending the case back down to the U.S. District Court with orders that the judge grant an injunction against all or part of the concession plans so …
ATA: That’s correct
3PLwire: …so what happens now? What does this mean for the ATA and the ports?
ATA: 
Well, we have…the normal process for these things are you call the lower courts clerk and ask them what schedule they plan on following, what would they like to do, I mean, the ranges of scheduling oral arguments, having some sort of a status phone call, conference call with the parties, so there’s a variety of things that the judge could schedule. Our concern number one is to make sure she schedules it very quickly and I think the court of appeals underscored that there is harm being done, that this is an issue that needs to be addressed very quickly, it’s one of the reasons they denied rehearing or any kind of filing of appeal at the court of appeals level. So I think they have underscored through Judge Snyder that this needs to be done quickly and here’s at a minimum what you need to do, which is what you described earlier, they have to grant a preliminary injunction. Certainly on the employee requirements, certainly on the parking issues and then in the body of the opinion they went through several other issues the financial disclosure requirements and some of the other things which they find to be wanting in terms of her analysis. They also told her that they applauded her in many ways for her thought process that led her to conclude that we would on the merit’s win, the market participation issue which the ports had raised in which one of their key issues that the teamsters certainly were espousing and that we would also win on the issue of the sovereignty of the tidelands which is where the ports are situated. Somehow acting under the Tidelands Act they had protection from Federal preemption. Judge Snyder in her ruling, back in September, said that she didn’t think it was going to carry the day for the ports. And the Court of Appeals confirmed that, indeed, this will not. Which leaves us then is the issue that she was reversed on which is finding some sort of protection from Federal preemption because of the safety, security related issues, that she found that the Ports program addressed. And they said, “No, it does not.” These are not safety security issues. These look like economic regulation and to the extent that there’s something that’s safety security related, those can be found in the transportation worker identity card issue and all the other ones that are out there.
3PLwire: Ok.
ATA: It was a very comprehensive ruling. It very much reflected the oral argument for those of us that sat through that on March the 4th now, of all three Justices were very much engaged in asking the Ports to clarify various things. They seemed skeptical almost 100% of the time on the Ports’ answer. So we came away from the oral argument in early March being pretty positive. But you always have to wait until they actually write an opinion. In this case the opinion seemed to square very much with what they had been asking and what they had expressed their sort of dubious interpretations of these vis-à-vis the Ports.
3PLwire: You mentioned the Court of Appeals stated they would not try to entertain any petition for rehearing. Do you think the Ports will now appeal to the Supreme Court and if so, do you have any kind of timeline that would be?
ATA: Well, my guess, I mean I think they can, I haven’t researched that. It’s always been sort of presumed, but again, the Supreme Court is the one that on February 20th of last year gave a 9-0 opinion on a state activity that was dealing with routes, rates and services. And the main activity which was involved as far left government control than what the Ports have done, there was no great quotes in Maine about how their entity was trying to control trucking, reshape it, increase, decrease the number of motor carriers participating, all of that dialog, is even much better than what was going on in the Maine case. And that was 9-0. So if they want to go there, fine.
3PLwire: Ok, I also want to touch base really quick on the FMC investigation into the Ports’ Clean Truck plans and I know that’s separate from what you guys are doing but it’s still related to that. I’ll admit to not knowing enough about it, so what happens now with the FMC investigation. I assume that’s still on going. Correct?
ATA: 
Yeah, there’s really two processes going on at the FMC. And we are interveners in one. There’s a main case that was filed, I mean, the central case, not Maine case, we already mentioned Maine. There’s a central case that was filed back in the fall, that basically under section ten of the Shipping Act which deals with a variety of fairness and nondiscrimination provisions. The FMC voted and has initiated an investigation of the, basically the entire Ports’ program, Clean Truck program and they identified I think twelve or thirteen specific areas in total. They’re basically describing the whole program. And under that procedure an Administrative Law judge has been appointed and he’s beginning to put together fact finding efforts, setting times for depositions and things, and just sort of setting up for a huge investigation. He has until the September of this year to complete that work. And then, by I believe it’s January of 2010, the Commissioners have to vote, accept the findings, accept the recommendations, or pick and choose whatever it is that they want. So that’s the investigation that is not in certainly the short term, although it’s amazing now that we’re in ’09 that doesn’t seem very long but when it started last Fall it seemed like a long time away. But they have an underlying process that will yield recommendations and findings and such as to whether or not the Ports’ activity on a whole bunch of specific Clean Truck issues is legal, is not, is discriminatory, is not, those kinds of things. Secondly, they have a filed, it’s the only time they’ve used relatively new law that was passed back in the late 90’s, they filed in the U.S. District Court a request for preliminary injunction over the Ports’ implementation of various elements of the Clean Truck program. They had an oral argument before the U.S. District Court on December the 5th, I believe. And they are now awaiting the judge’s determination on whether or not they, the FMC, will get a preliminary injunction now. The preliminary injunction that the FMC is seeking is more extensive than the one we were seeking. They, indeed, are challenging the fees. So if they were to prevail on what they requested, the Port would be stopped from even collecting the fees.
3PLwire: Interesting.
ATA: 
We are specifically not trying to challenge the fees, because that to us is a…if you’re going to retire trucks under mandate, you have some funding source to be able to replace them and that’s what the Container Fee did. We have always argued that our lawsuit, and I think the judge has also looked at that, doesn’t really stop the Ports from the Clean Air portions of their proposal. We’re not challenging the truck retirement, although we do note publicly and I’ll be making some speeches soon, I mean, some of these things is the next round of truck retirements is at the end of this year and the number is anywhere between eight, ten thousand trucks will fall under the next axe. Now, in this economy, it’s hard to believe even with subsidies that you’re going to find a lot of people going out there to buy 2010 or 2007 trucks. But again that’s something the Ports have to decide, but we are not challenging that, we are not challenging the fees, we are not challenging the maintenance of the underlying data system, the truck driver registry, and that’s how they evaluate and read what truck’s going in and out of the gate, what year is it, those kinds of things. We’re not trying to mess up the Clean Truck portion of this, the environmental savings and such. But we are challenging the concession agreement, which to us is a contract which blocks entry into a deregulated market.
3PLwire: Sure.
ATA: But again, the FMC is going farther, because what they see is the fee system discriminates, obviously they’ve got a system where if you already can afford your own 2007 trucks, you don’t have to pay the fee, therefore you can go out and undercut somebody who still has a decent truck, but you can undercut their rate and move into their customer market because there is a fee set up. Is that discriminatory, yes or no? Should it be allowed, yes or no? That’s what the FMC is looking at.
3PLwire: Ok.
ATA: So theirs is broader, more complicated, but it’s a different process.
3PLwire: I’m glad you mentioned the ATA stance, that you haven’t been challenging any of the environmental issues with the Clean Truck plan. I’m sure you already know this but the Natural Resources Defense Council issued a press release on Friday stating that, “This decision today places in jeopardy the Clean Air goals of the Ports as well as every Port infrastructure expansion project that relies on clean trucks. I’m curious to know…
ATA: 
Well, that’s nonsense. It’s typical of David Petit. I was on a panel with him in the early part of the month in California. I mean, again, that’s, unfortunately some groups always come out with the negatives and the scare tactics. What has screwed up their environmental “cleaning” of this whole thing is the Ports pretty much abandoned one huge element of their program. Originally designed, if you wanted to get a Port loan, a grant or whatever, to get a new truck, you had to turn in for scrappage your old truck. And that makes sense, because, particularly with the pre-‘89 trucks that were banned as of October the 1st of last year, according to the Ports’ statistics, that one trigger, that getting rid of those older trucks, would give them fifty percent of the eighty percent savings that they attribute to the Clean Truck program. As far as we can tell, basically none of those trucks were scrapped. They shoved them out the gate, they won’t let them work there, but they did not…none of those people got new loans as far as we can tell. There’s only been thirty-two loans and keys passed to new applicants to get new trucks. And even if you assume all of those were the pre-‘89’s, that still leaves 2700 dirty trucks that could potentially be moving outside the gate, moving other things other than Port containers. I just read today that the Port of Long Beach just passed something, which, again, tries to make in one sense a little bit fairer if you have an ‘07 truck, you don’t have to pay the Container Fee. Under their old program, though, the ‘07 truck either had to be in business October the 1st or under a purchase order that was dated by December 31st of 2008. They’ve now said any truck that you finance will not have to pay the fee, but they also waive the requirement that you turn in a dirty truck. They have basically shoved the problem out of the gate. Those trucks again, the markets down, those trucks can certainly still run within the basin of L.A. and they don’t have any walls up, so whatever spewed out can be spewed out and go right back into the Port. But they abandon the one catch that would make sure that those trucks were scrapped. I think David Petit, particularly, in all of his [report] is totally inaccurate in what he describes. It has nothing to do with ATA and our lawsuit. It has everything to do with how the Ports are implementing a program. And we will continue to start beating on that; because, most people haven’t thought about it. They get this idea that those old trucks are off the road and they are not.
3PLwire: Interesting.
ATA: We were not challenging the retirement of those trucks or any other. So we’re disappointed that they have not…some of their original big plan which came out in that big book, San Pedro plan, had balance to it. I didn’t like all of it obviously, but that was one portion that made sense. If you basically want to cut somebody out of the business, where those trucks are otherwise legal in California and the rest of the country, you got to have an enticement to do that. So the enticement was a loan, and the key to the loan was, you’ve got to give me that truck and we’ll scrap it. You can’t use it somewhere else. You can’t ship it to Mexico. You can’t do all of these very normal things that people have done over the years with older trucks. That made, to me, sense as to why and how you’d set something up. But they’ve totally abandoned that. When you read all these things about, “Wow! We’re well on our way. We’ve gotten fifty percent of the clean up now…” The only clean up that you’re getting in that Port is because the economy went to hell.
3PLwire: [laughs]
ATA: Seriously, they’re down forty-some percent in Long Beach and thirty-some percent in L.A. There should be a corresponding savings in emissions. They say it’s the program and I’ll tell them it’s the economy and your program, you abandoned the best parts of it.
3PLwire: And the next thing you’ll see is they’ll start saying, “Well, the business isn’t there so why do we need to expand infrastructure.” That’ll be the next thing they’ll say.
ATA: And again, David’s point on that is the environmentalists have set a very high bar for expansion and in order to get in the new terminals and the new facilities, you have to reduce emissions by “blank,” and that blank was made up by them. There’s no magic about it but accept whatever the number is. And quite frankly, they don’t want any expansion in the Port, and they know it, I know it, and everybody else knows it. But it looks good on paper to say, “We’ll let expansion go on if you do X, Y and Z, in terms of emission reduction.” The bottom line is, they’re always turning on that and finding another reason to challenge the expansion. It takes years and years now in L.A. and Long Beach, and that’s why they’re getting traffic diverted to other ports who are likewise concerned about emissions, but are not trying to shut down the businesses that are there and bring prosperity to the area.
3PLwire: Right. Mr. Whelan, thank you very much for your time.
ATA: Sure, anytime.
3PLwire: I appreciate it.
For those of you who would like to learn more about the background of the Clean Truck Programs and the controversial issues surrounding some of the elements of the programs, please refer to our original post on the court ruling here and scroll down to see a list of handy links.
pamelaw@pactrans.com on Thu, 9th Apr 2009 2:24 pm
I think the clean truck charge is too high.