Last week marked another significant development in the ongoing challenge to California’s AB 5 contractor law by various trucking groups. The law, signed in 2019, effectively restricts traditional owner-operator/carrier leasing models in the state, prompting the California Trucking Association (CTA) and Owner-Operator Independent Drivers Association (OOIDA) to challenge its validity in court.
After several delays, the U.S. District Court for the Southern District of California finally heard arguments on November 13. CTA and OOIDA are seeking either an injunction to prevent the law from applying to trucking or an exemption specifically for interstate trucking.
AB 5 introduced the “ABC test” for determining contractor classification in California. For the trucking industry, the “B” portion of the test poses challenges, requiring a worker to perform duties outside the usual course of the hiring company’s business to be classified as a contractor. This criterion often conflicts with the typical relationship between owner-operators and trucking companies.
Judge Roger Benitez, who previously granted a preliminary injunction in 2020 when AB 5 first took effect, oversaw the recent arguments. The initial injunction remained in place until June 2022, when the U.S. Supreme Court declined to hear the case, sending it back to the lower court.
The outcome of Benitez’s ruling remains uncertain, but probing questions during the recent arguments suggest potential directions for the case. Observers noted Benitez’s inquiries into alleged violations of federal law and impacts on interstate commerce, indicating the complexity of the challenge.
Paul Torlina, government affairs counsel for OOIDA, shared insights from the courtroom, highlighting Benitez’s questioning about any leeway or flexibility offered to provide relief for the trucking industry within the law. The California attorney reportedly admitted to no such adjustments being made, raising questions about the law’s inflexibility compared to carve-outs for other worker groups.
A notable line of questioning from Benitez raised concerns about California enacting a law that affects all states, characterizing it as potentially “arrogant” behavior. This inquiry hinted at the judge’s skepticism regarding the state’s motivations.
CTA’s arguments focused on the Federal Aviation Administration Authorization Act (FAAAA or F4A) preempting state law, while OOIDA’s attorneys highlighted how AB 5 violates the Commerce Clause and Equal Protection Clause of the U.S. Constitution.
Torlina emphasized the discriminatory effect of the law on interstate drivers, noting that AB 5 creates issues for non-California drivers engaged in interstate trucking.
Regarding the timeline for a decision, Torlina expressed optimism that Benitez’s familiarity with the case could expedite the process to a few months, although the usual expectation is six to eight months. Anticipating an appeal regardless of the ruling, Torlina suggested that the case might extend for another 18-24 months, as the Ninth Circuit Court of Appeals is likely to be involved.
The Ninth Circuit had previously ruled on AB 5’s applicability to trucking, reversing Benitez’s first injunction in April 2021, adding another layer of complexity to the ongoing legal battle.