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SUPREME COURT OF THE UNITED STATES
_________________
No. 11–798
_________________
AMERICAN TRUCKING ASSOCIATIONS, INC.,
PETITIONER
v. CITY OF LOS ANGELES, CALIFORNIA,
et al.
on writ of certiorari to the united states
court of appeals for the ninth circuit
[June 13, 2013]
Justice Kagan delivered the opinion of the
Court.
In this case, we consider whether federal law
preempts certain provisions of an agreement that trucking companies
must sign before they can transport cargo at the Port of Los
Angeles. We hold that the Federal Aviation Administration
Authorization Act of 1994 (FAAAA) 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. We decline to decide in the case’s present,
pre-enforcement posture whether, under
Castle v.
Hayes
Freight Lines, Inc.,
348 U.S.
61 (1954), 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.
I
A
The Port of Los Angeles, a division of the
City of Los Angeles, is the largest port in the country. The Port
owns marine terminal facilities, which it leases to “terminal
operators” (such as shipping lines and stevedoring companies) that
load cargo onto and unload it from docking ships. Short-haul
trucks, called “drayage trucks,” move the cargo into and out of the
Port. The trucking companies providing those drayage services are
all federally licensed motor carriers. Before the events giving
rise to this case, they contracted with terminal operators to
transport cargo, but did not enter into agreements with the Port
itself.
The City’s Board of Harbor Commissioners runs
the Port pursuant to a municipal ordinance known as a tariff, which
sets out various regulations and charges. In the late 1990’s, the
Board decided to enlarge the Port’s facilities to accommodate more
ships. Neighborhood and environmental groups objected to the
proposed expansion, arguing that it would increase congestion and
air pollution and decrease safety in the surrounding area. A
lawsuit they brought, and another they threatened, stymied the
Board’s development project for almost 10 years.
To address the community’s concerns, the Board
implemented a Clean Truck Program beginning in 2007. Among other
actions, the Board devised a standard-form “concession agreement”
to govern the relationship between the Port and any trucking
company seeking to operate on the premises. Under that contract, a
company may transport cargo at the Port in exchange for complying
with various requirements. The two directly at issue here compel
the company to (1) affix a placard on each truck with a phone
number for reporting environmental or safety concerns (You’ve seen
the type: “How am I driving? 213–867–5309”) and (2) submit a plan
listing off-street parking locations for each truck when not in
service. Three other provisions in the agreement, formerly dis-
puted in this litigation, relate to the company’s financial
capacity, its maintenance of trucks, and its employment of
drivers.
The Board then amended the Port’s tariff to
ensure that every company providing drayage services at the
facility would enter into the concession agreement. The mechanism
the Board employed is a criminal prohibition on terminal operators.
The amended tariff provides that “no Terminal Operator shall permit
access into any Terminal in the Port of Los Angeles to any Drayage
Truck unless such Drayage Truck is registered under a Concession
[Agreement].” App. 105. A violation of that provision—which occurs
“each and every day” a terminal operator provides access to an
unregistered truck—is a misdemeanor.
Id., at 86. It is
punishable by a fine of up to $500 or a prison sentence of up to
six months.
Id., at 85–86.
The concession agreement itself spells out
penalties for any signatory trucking company that violates its
requirements. When a company commits a “Minor Default,” the Port
may issue a warning letter or order the company to undertake
“corrective action,” complete a “course of . . .
training,” or pay the costs of the Port’s investigation.
Id., at 81–82. When a company commits a “Major Default,” the
Port may also suspend or revoke the company’s right to provide
drayage services at the Port.
Id., at 82. The agreement,
however, does not specify which breaches of the contract qualify as
“Major,” rather than “Minor.” And the parties agree that the Port
has never suspended or revoked a trucking company’s license to
operate at the Port for a prior violation of one of the contract
provisions involved in this case. See Tr. of Oral Arg. 42–43,
49–51.
B
Petitioner American Trucking Associations,
Inc. (ATA), is a national trade association representing the
trucking industry, including drayage companies that operate at the
Port. ATA filed suit against the Port and City, seeking an
injunction against the five provisions of the concession agreement
discussed above. The complaint principally contended that
§14501(c)(1) of the FAAAA expressly preempts those requirements.
That statutory section states:
“[A] State [or local government] may not
enact or enforce a law, regulation, or other provision having the
force and effect of law related to a price, route, or service of
any motor carrier . . . with respect to the
transportation of property.” 49 U. S. C.
§14501(c)(1).[
1]
ATA also offered a back-up argument: Even if the
requirements are valid, ATA claimed, the Port may not enforce them
by withdrawing a defaulting company’s right to operate at the Port.
That argument rested on
Castle v.
Hayes Freight Lines,
Inc.,
348 U.S.
61 (1954), which held that Illinois could not bar a federally
licensed motor car- rier from its highways for prior violations of
state safety regulations. We reasoned in
Castle that the
State’s action conflicted with federal law providing for
certification of motor carriers; and ATA argued here that a similar
conflict would inhere in applying the concession agreement to
suspend or revoke a trucking company’s privileges. Following a
bench trial, the District Court held that neither §14501(c)(1) nor
Castle prevents the Port from proceeding with any part of
its Clean Truck Program.
The Court of Appeals for the Ninth Circuit
mainly affirmed. Most important for our purposes, the court held
that §14501(c)(1) does not preempt the agreement’s placard and
parking requirements because they do not “ ‘ ha[ve] the
force and effect of law.’ ” 660 F.3d 384, 395 (2011) (quoting
§14501(c)(1)). The court reasoned that those requirements, rather
than regulating the drayage market, advance the Port’s own
“business interest” in “managing its facilities.”
Id., at
401. Both provisions were “designed to address [a] specific
proprietary problem[ ]”—the need to “increase the community
good-will necessary to facilitate Port expansion.”
Id., at
406–407; see
id., at 409. The Ninth Circuit also held the
agreement’s financial-capacity and truck-maintenance provisions not
preempted, for reasons not relevant here.[
2] Section 14501(c)(1), the court decided, preempts
only the contract’s employment provision. Finally, the Ninth
Circuit rejected ATA’s claim that
Castle bars the Port from
applying the agreement’s penalty clause to withdraw a trucking
company’s right to operate at the facility. The court thought
Castle inapplicable because of the narrower exclusion in
this case: “Unlike a ban on using
all of a State’s
freeways,” the court reasoned, “a limitation on access to a single
Port does not prohibit motor carriers” from generally participating
in interstate commerce. 660 F. 3d, at 403.
We granted certiorari to resolve two questions:
first, whether §14501(c)(1) of the FAAAA preempts the concession
agreement’s placard and parking provisions; and second, whether
Castle precludes reliance on the agreement’s penalty clause
to suspend or revoke a trucking company’s privileges. See 568
U. S. ___ (2013). Contrary to the Ninth Circuit, we hold that
the placard and parking requirements are preempted as “provision[s]
having the force and effect of law.” That determination does not
obviate the enforcement issue arising from
Castle because
the Ninth Circuit’s rulings upholding the agreement’s
financial-capacity and truck-maintenance provisions have now become
final;[
3] accordingly, the Port
could try to apply its penalty provision to trucking companies that
have violated those surviving requirements. But we nonetheless
decline to address the
Castle question because the case’s
pre-enforcement posture obscures the nature of the agreement’s
remedial scheme, rendering any decision at this point a shot in the
dark.
II
Section 14501(c)(1), once again, preempts a
state “law, regulation, or other provision having the force and
effect of law related to a price, route, or service of any motor
car- rier . . . with respect to the transportation of
property.” All parties agree that the Port’s placard and parking
requirements relate to a motor carrier’s price, route, or service
with respect to transporting property. The only disputed question
is whether those requirements “hav[e] the force and effect of law.”
The Port claims that they do not, because the “concession contract
is just [like] a private agreement,” made to advance the Port’s
commercial and “proprietary interests.” Brief for Respondent City
of Los Angeles et al. 19 (Brief for City of Los Angeles)
(internal quotation marks omitted).[
4]
We can agree with the Port on this premise:
Section 14501(c)(1) draws a rough line between a government’s
exercise of regulatory authority and its own contract-based
participation in a market. We recognized that distinction in
American Airlines, Inc. v.
Wolens,
513 U.S.
219 (1995), when we construed another statute’s near-identical
“force and effect of law” language. That phrase, we stated,
“connotes official, government-imposed policies” prescribing
“binding standards of conduct.”
Id., at 229, n. 5
(internal quotation marks omitted). And we contrasted that
quintessential regulatory action to “contractual commitment[s]
voluntarily undertaken.”
Id., at 229 (internal quotation
marks omitted). In
Wolens, we addressed a State’s
enforcement of an agreement between two private parties. But the
same reasoning holds if the government enters into a contract just
as a private party would—for example, if a State (or City or Port)
signs an agreement with a trucking company to transport goods at a
specified price. See,
e.g., Building & Constr. Trades
Council v.
Associated Builders & Contractors of Mass./R.
I., Inc.,
507 U.S.
218, 233 (1993) (When a State acts as a purchaser of services,
“it does not ‘regulate’ the workings of the market . . .
; it exemplifies them” (some internal quotation marks omitted)).
The “force and effect of law” language in §14501(c)(1) excludes
such everyday contractual arrangements from the clause’s scope.
That phrasing targets the State acting as a State, not as any
market actor—or other- wise said, the State acting in a regulatory
rather than proprietary mode.
But that statutory reading gets the Port
nothing, because it exercised classic regulatory authority—complete
with the use of criminal penalties—in imposing the placard and
parking requirements at issue here. Consider again how those
requirements work. They are, to be sure, contained in contracts
between the Port and trucking companies. But those contracts do not
stand alone, as the result merely of the parties’ voluntary
commitments. The Board of Harbor Commissioners aimed to “require
parties who access Port land and terminals for purposes of pro-
viding drayage services” to enter into concession agreements with
the Port. App. 108 (Board’s “Findings”). And it accomplished that
objective by amending the Port’s tariff—a form of municipal
ordinance—to provide that “no Terminal Operator shall permit” a
drayage truck to gain “access into any Terminal in the Port” unless
the truck is “registered under” such a concession agreement.
Id., at 105. A violation of that tariff provision is a
violation of criminal law. And it is punishable by a fine or a
prison sentence of up to six months.
Id., at 85–86. So the
contract here functions as part and parcel of a governmental
program wielding coercive power over private parties, backed by the
threat of criminal punishment.
That counts as action “having the force and
effect of law” if anything does. The Port here has not acted as a
private party, contracting in a way that the owner of an ordinary
commercial enterprise could mimic. Rather, it has forced terminal
operators—and through them, trucking companies—to alter their
conduct by implementing a criminal prohibition punishable by time
in prison. In some cases, the question whether governmental action
has the force of law may pose difficulties; the line between
regulatory and proprietary conduct has soft edges. But this case
takes us nowhere near those uncertain boundaries. Contractual
commitments resulting not from ordinary bargaining (as in
Wolens), but instead from the threat of criminal sanctions
manifest the government
qua government, performing its
prototypical regulatory role.
The Port’s primary argument to the contrary,
like the Ninth Circuit’s, focuses on motive rather than means. The
Court of Appeals related how community opposition had frustrated
the Port’s expansion, and concluded that the Clean Truck Program
“respon[ded] to perceived business necessity.” 660 F. 3d, at
407. The Port tells the identical story, emphasizing that private
companies have similar business incentives to “adopt[ ] ‘green
growth’ plans like the Port’s.” Brief for City of Los Angeles 30.
We have no reason to doubt that account of events; we can assume
the Port acted to enhance goodwill and improve the odds of
achieving its business plan—just as a private company might. But
the Port’s intentions are not what matters. That is because, as we
just described, the Port chose a tool to fulfill those goals which
only a government can wield: the hammer of the criminal law. See
United Haulers Assn., Inc. v.
Oneida-Herkimer Solid Waste
Mgmt. Auth.,
438 F.3d 150, 157 (CA2 2006), aff’d,
550
U.S. 330 (2007). And when the government employs such a
coercive mechanism, available to no private party, it acts with the
force and effect of law, whether or not it does so to turn a
profit. Only if it forgoes the (distinctively governmental)
exercise of legal authority may it escape §14501(c)(1)’s preemptive
scope.
The Port also tries another tack, reminding us
that the criminal sanctions here fall on terminal operators alone,
not on the trucking companies subject to the agreement’s
requirements; hence, the Port maintains, the matter of “criminal
penalties is a red herring.” Tr. of Oral Arg. 31; see Brief for
City of Los Angeles 39–40. But we fail to see why the target of the
sanctions makes any difference. The Port selected an indirect but
wholly effective means of “requir[ing] parties . . .
providing drayage services” to display placards and submit parking
plans: To wit, the Port required terminal operators, on pain of
criminal penalties, to insist that the truckers make those
commitments. App. 108; see
supra, at 3, 8. We have often
rejected efforts by States to avoid preemption by shifting their
regulatory focus from one company to another in the same supply
chain. See,
e.g.,
Rowe v.
New Hampshire Motor
Transp. Assn.,
552 U.S.
364, 371–373 (2008) (finding preemption under the FAAAA
although the State’s requirements directly targeted retailers
rather than motor carriers);
Engine Mfrs. Assn. v.
South
Coast Air Quality Management Dist.,
541
U.S. 246, 255 (2004) (finding preemption under the Clean Air
Act although the requirements directly targeted car buyers rather
than sellers). The same goes here. The Port made its regulation of
drayage trucks mandatory by imposing criminal penalties on the
entities hiring all such trucks at the facility. Slice it or dice
it any which way, the Port thus acted with the “force of law.”
III
Our rejection of the concession agreement’s
placard and parking requirements does not conclude this case. Two
other provisions of the agreement are now in effect: As noted
earlier, the Ninth Circuit upheld the financial-capacity and
truck-maintenance requirements, and that part of its decision has
become final. See
supra, at 5, and n. 2. ATA argues
that our holding in
Castle limits the way the Port can
enforce those remaining requirements. According to ATA, the Port
may not rely on the agreement’s penalty provision to suspend or
revoke the right of non-complying trucking companies to operate on
the premises. As we have described,
Castle rebuffed a
State’s attempt to bar a federally licensed motor carrier from its
highways for past infringements of state safety regulations. A
federal statute, we explained, gave a federal agency the authority
to license interstate motor carriers, as well as a carefully
circumscribed power to suspend or terminate those licenses for
violations of law. That statute, we held, implicitly prohibited a
State from “tak[ing] action”—like a ban on the use of its
highways—“amounting to a suspension or revocation of an interstate
carrier’s [federally] granted right to operate.” 348 U. S., at
63–64.
The parties here dispute whether
Castle
restricts the Port’s remedial authority. The Port echoes the Ninth
Circuit’s view that banning a truck from “
all of a State’s
freeways” is meaningfully different from denying it “access to a
single Port.” 660 F. 3d, at 403; see Brief for City of Los
Angeles 49. ATA responds that because the Port is a “crucial
channel of interstate commerce,”
Castle applies to it just
as much as to roads. Brief for Petitioner 18.
But we see another question here: Does the
Port’s enforcement scheme involve curtailing drayage trucks’
operations in the way
Castle prohibits, even assuming that
decision applies to facilities like this one? As just indicated,
Castle puts limits on how a State or locality can punish an
interstate motor carrier for prior violations of truck- ing
regulations (like the concession agreement’s requirements). Nothing
we said there, however, prevents a State from taking off the road a
vehicle that is contemporaneously out of compliance with such
regulations. Indeed, ATA filed an
amicus brief in
Castle explaining that a vehicle “that fails to comply with
the state’s regulations may be barred from the state’s highways.”
Brief for ATA, O. T 1954, No. 44, p. 12; see Brief for
Respondent,
id., p. 23 (A State may “stop and prevent
from continuing on the highway any motor vehicle which it finds not
to be in compliance”). And ATA reiterates that view here, as does
the United States as
amicus curiae. See Reply Brief 22;
Brief for United States 29–30. So the Port would not violate
Castle if it barred a truck from operating at its facilities
to prevent an ongoing violation of the agreement’s
requirements.
And at this juncture, we have no basis for
finding that the Port will ever use the agreement’s penalty
provision for anything more than that. That provision, to be sure,
might be read to give the Port broader authority: As noted earlier,
the relevant text enables the Port to suspend or revoke a trucking
company’s right to provide dray- age services at the facility as a
“[r]emedy” for a “Major Default.” App. 82; see
supra, at 3.
But the agreement nowhere states what counts as a “Major
Default”—and specifically, whether a company’s breach of the
financial-capacity or truck-maintenance requirements would
qual-ify. And the Port has in fact never used its suspension or
revocation power to penalize a past violation of those
requirements. See Tr. of Oral Arg. 43, 50–51. Indeed, the Port’s
brief states that “it does not claim[ ] the authority to
punish past, cured violations of the requirements challenged here
through suspension or revocation.” Brief for City of Los Angeles 62
(internal quotation marks omitted). So the kind of enforcement ATA
fears, and believes inconsistent with
Castle, might never
come to pass at all.
In these circumstances, we decide not to decide
ATA’s
Castle-based challenge. That claim, by its nature,
attacks the Port’s enforcement scheme. But given the
pre-enforcement posture of this case, we cannot tell what that
scheme entails. It might look like the one forbidden in
Castle (as ATA anticipates), or else it might not (as the
Port assures us). We see no reason to take a guess now about what
the Port will do later. There will be time enough to address the
Castle question when, if ever, the Port enforces its
agreement in a way arguably violating that decision.
IV
Section 14501(c)(1) of the FAAAA preempts the
placard and parking provisions of the Port’s concession agreement.
We decline to decide on the present record ATA’s separate
challenge, based on
Castle, to that agreement’s penalty
provision. Accordingly, the judgment of the Ninth Circuit is
reversed in part, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.
