In the first district court action in months in the California Trucking Association’s (CTA’s) legal challenge to AB5, the federal district court in San Diego held a hearing to map out the next steps in the litigation. AB5 is the California law that radically changed the test for determining whether a worker is an employee or independent contractor. AB5 applies to all industries but is considered particularly damaging to the independent owner-operator model used by the trucking industry.
District court action had been on hold while California and the Teamsters successfully appealed, and got overturned, the district court’s preliminary injunction that had stopped the state from enforcing AB5 since New Year’s Eve 2019. At this week’s hearing, federal district court Judge Robert Benitez recognized the Court of Appeals’ decision and dissolved the preliminary injunction. This means that California is now free to enforce AB5 against motor carriers and drivers. The state has not, however, announced if and when it would begin such enforcement.
The court then set a 20-day deadline for the State and the Teamsters to respond to the Owner-Operator Independent Drivers Association’s (OOIDA’s) motion to intervene in the case as a plaintiff. The Cullen Law Firm, PLLC, represents OOIDA in this effort. OOIDA filed this motion 17 months ago, but it was put on hold during the appeal. OOIDA argues in its motion that it must be allowed to join the case because none of the other parties in the case represent independent owner-operators or motor carriers from outside of California who occasionally haul loads into California. Interestingly, in court, the judge asked the state attorneys why they would object to OOIDA intervening when they had no objection to the Teamsters’ intervening? The state mentioned the issue of delay as a ground for opposing, but it will have a chance to give its complete position in its brief to be filed by September 19, 2022.
The CTA then informed the court of its intention to ask for another preliminary injunction – again, to stop the state from enforcing AB5 against the trucking industry during the litigation. The court adopted a briefing schedule for that motion, starting on October 11 and ending December 2, 2022. There is no deadline for the court to decide that motion, but this schedule means that California is free to enforce AB5 against the motor carrier industry at least through early December.
Finally, the court vacated its prior dismissal of the CTA’s dormant Commerce Clause claim, restoring the claim it previously dismissed based on the preemption decision that was reversed by the Ninth Circuit. The court gave no indication of when any other proceedings in the case would occur, though it left open the door to further briefing on motions to dismiss.
For more information on AB5 and the current litigation against its application to the trucking industry, please contact