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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.
