Facts

The Port of Los Angeles operated a Clean Trucks Program, which mandated use of a concession agreement requiring big rigs entering to the port to comply with strict diesel emissions standards, as well as other requirements, including the phase-out of owner-operator drivers and mandated off-street parking. The American Trucking Association (ATA) filed suit against the Port.

PLAINTIFF'S CONTENTIONS:
The ATA did not challenge the environmental aspects of the port regulations, but contended that the Port could not require companies to hire drivers as direct employees because the restriction would impact motor carrier rates, routes, and services. The ATA contended that the employee restriction, as well as other provisions of the concession agreement, violated federal law under the Federal Aviation Administration Authorization Act of 1994.

DEFENDANT'S CONTENTIONS:
The Port contended that federal law allowed it to protect its business interests by controlling truck environmental impacts, safety and security at the Port.

Result

Although the court found that the employee mandate affected carrier rates, routes, and services, the court upheld the Clean Truck Program, finding that it was not regulatory but proprietary action under the market participant exception to federal preemption and, therefore, a proper exercise of the Port's authority to run its business. The court held that the Port, in its capacity as a landlord, could restrict access to its facility to those companies which complied with its terms.