The court of appeals affirmed a district court judgment in part, reversed in part, and remanded the action for further proceedings. The court held that when an independent state entity manages access to its facilities, and imposes conditions similar to those that would be imposed by a private landlord in the state’s position, the state may claim the market participant doctrine for purposes of Federal Aviation Administration Authorization Act preemption. The court held further that certain requirements in concession agreements imposed by the Port of Los Angeles on drayage truck motor carriers, namely the financial capability, maintenance, off-street parking, and placard provisions, were not preempted by the Act. The court held, however, that the employee-driver provision of the concession agreements was not saved from preemption by the market participant doctrine.
Beginning in 2008, the Port of Los Angeles prohibited motor carriers from operating drayage trucks on Port property unless the motor carriers entered into “concession agreements” with the Port. The concession agreements set out fourteen specific requirements covering, among other things, truck driver employment, truck maintenance, parking, and Port security. The agreements were adopted as part of the Port’s “Clean Truck Program” (CTP), which included a progressive ban on older (and higher-polluting) trucks on Port property, a multi-faceted incentive program to support acquisition of clean trucks, and a system of penalties on transport of cargo by older trucks. The Port adopted the CTP in response to community opposition, including litigation, that had successfully stymied Port growth from the mid-1990s through 2007.
