SOURCE: Sands Lerner

Sands Lerner

September 24, 2009 13:51 ET

Port Trucker in Los Angeles Wins Hotly Contested Court Battle Against California Attorney General Jerry Brown Over Misclassification of Drivers

LOS ANGELES, CA--(Marketwire - September 24, 2009) - Trucking companies in the Port of Los Angeles won a resounding court victory this week against the ongoing efforts of the State of California, and Attorney General Jerry Brown, to force them to stop using independent contractor drivers to dray containers in California's ports and to use employee drivers instead.

In a civil action filed in Superior Court by the attorney general against Pac Anchor Transportation, Inc. and truck owner Alfredo Barajas, Case No. BC 397600, Los Angeles Superior Court Judge Elizabeth Allen White held that a federal law, which protects motor carriers from state regulation, preempts claims against motor carriers brought under California's Unfair Competition Law ("UCL").

The federal law, part of the Federal Aviation Administration Authorization Act ("FAAAA"), prohibits states from enacting and enforcing laws that are "related to" motor carrier prices, routes, or services in order to maximize competitive forces in the trucking industry. Judge White agreed with the "very strong" argument advanced by attorneys Neil S. Lerner, Arun Dayalan, and Arthur A. Severance of the Sands Lerner law firm that claims against motor carriers under the UCL are preempted per se under the FAAAA.

Judge White held that the attorney general's case, which was based on the allegation that the defendants had improperly classified drivers as independent contractors rather than employees, would have a significant effect on motor carrier prices, routes, and services and was therefore preempted under the FAAAA. Judge White found that the attorney general's actions threatened to erect entry controls that would discourage independent contractor drivers from participating in the trucking market, thereby frustrating Congress' intent to maximize competitive forces in the trucking industry.

This ruling is the second blow this year to the continuous efforts of the State of California, and its political subdivisions, and to the ongoing efforts of the Teamsters, to force California's port trucking companies to switch from an independent contractor driver business model to an employee driver business model. The message from the courts is now very clear: the state should stop meddling in the port trucking industry.

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