California AG files brief to overturn AB5 injunction

UPDATE: March 16, 2020: California Attorney General Xavier Becerra asked the U.S. Ninth Circuit Court of Appeals to reverse an injunction granted by a U.S. District Court that exempts the California trucking industry from Assembly Bill 5 (AB5). Becerra filed an opening brief Wednesday.

The California Trucking Association (CTA) sought the injunction last year, saying the state law is preempted by a federal regulation known as the Federal Aviation Administration Authorization Act (FAAAA). Becerra argues FAAAA just preempts legislation that affects the price, routes and service of carriers, and said the court "made no findings on whether AB 5 has any effect on" these aspects of the industry "let alone whether any such effect had the requisite significance."

Dive Brief:

U.S. District Judge Roger Benitez granted the California Trucking Association (CTA) a preliminary injunction, which will exempt the California trucking industry from Assembly Bill 5 (AB5), according to court documents filed Thursday.
"There is little question that the State of California has encroached on Congress’ territory by eliminating motor carriers’ choice to use independent contractor drivers, a choice at the very heart of interstate trucking," Benitez wrote in his order.
The injunction will remain in place as the court considers CTA's case, which argues federal law preempts AB5. Benitz issued the injunction based on the strength of CTA's argument and said, "with AB-5, California runs off the road and into the preemption ditch of the [Federal Aviation Administration Authorization Act]."

Dive Insight:

Benitez's decision bars California Attorney General Xavier Becerra, one of the defendants in the case, from enforcing AB5 for motor carriers until the court reached a final verdict in the case.

It's not immediately clear what the timeline is for the hearing. Derek Myers, an attorney with Chauvel & Glatt, told Supply Chain Dive prior to the decision that regardless of how the case settles, the other party will most likely appeal.

The CTA argues AB5 would impact capacity and rates if it were put into place, and owner-operators have protested the legislation that sought to protect workers from misclassification.

This is a developing story. Here's a look at how it's played out so far.