The US Supreme Court [official website] ruled [opinion, PDF] unanimously Thursday in American Trucking Associations, Inc. v. Los Angeles [SCOTUSblog backgrounder] that federal law preempts certain provisions of an agreement that trucking companies must sign before they can transport cargo at the Port of Los Angeles. In an opinion by Justice Elena Kagan, the court held, "that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) [text] expressly preempts two of the contract's provisions, which require such a company to develop an off-street parking plan and display designated placards on its vehicles." The court declined to decide whether, under Castle v. Hayes Freight Lines, Inc. (1954) [opinion], federal law governing licenses for interstate motor carriers prevents the Port from using the agreement's penalty clause to punish violations of other, non-preempted provisions. The court partially reversed the decision [text] of the US Court of Appeals for the Ninth Circuit and remanded the case. Justice Clarence Thomas filed a concurring opinion.
The court heard oral arguments [JURIST report] in the case in April. An attorney for the American Trucking Associations [association website] argued that "[t]he Port is imposing binding standards of conduct on motor carriers as a condition of accessing a channel of interstate commerce," impermissibly, through criminal penalties. An attorney for the city of Los Angeles argued that they were simply acting under the same standards as private entities. "They set forth conditions under which drayage trucks can enter the nonpublic portions of the Port, and they are indistinguishable, indistinguishable from contract provisions that private parties routinely impose on those who seek to enter their property. In our view, [49 USC § 1450 (c)(1)] does not deal with contracts, and it doesn't deal with the right of landowners to condition those seeking entry into their Port."