The Supreme Court has announced in an end-of-term orders list that it will not be reviewing CTA v. Becerra, making the Ninth Circuit Court of Appeals verdict the official law of California.
Judge Roger Benitez issued an injunction against the AB-5 law roughly two years ago, saying that the AB-5 law, when placed on the trucking industry, violated the Federal Aviation Administration Authorization Act (F4A).
The Ninth Circuit Court of Appeals disagreed, but was willing to let the injunction stay in place while the CTA petitioned the Supreme Court. Now with the Supreme Court declining to hear the case, the stay’s removal is imminent.
The California Trucking Association was quick to voice its disdain for the result.
“Gasoline has been poured on the fire that is our ongoing supply chain crisis. In addition to the direct impact on California’s 70,000 owner-operators, who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation We are disappointed the Court does not recognize the irrevocable damage eliminating independent truckers will have on interstate commerce and communities across the state. The legislature and Newsom administration must immediately take action to avoid worsening the supply chain crisis and inflation,” the CTA said in a statement.
What Happens Next
The owner-operator business model of driving under another’s Authority is going to disappear. When that happens, small business owners are likely to relocate to other states in order to keep their independence.
The question that remains is whether or not other states, or even the federal government, will follow in the footsteps of California, and work to abolish the independent contractor model that has been popular amongst truckers up until now.
The other question that remains is the effect on the supply chain. If it has enough of a catastrophic effect on the economy as the CTA says it will, will the courts be willing to reconsider their position on AB-5?
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