AB 5 Litigation Update: New Rulings from the U.S. Southern District Court

Last week, Judge Robert T. Benitez issued rulings on two pending motions in CTA’s lawsuit against AB 5.

First, as expected, the Court denied the Teamsters' request for a stay of the preliminary injunction, which means the State is still prohibited from enforcing AB 5 as it relates to motor carriers. In rejecting the Teamsters’ arguments, the Court relied largely on earlier findings in Judge Robert T. Benitez’s order granting CTA’s motion for a preliminary injunction. The Court also questioned whether the Teamsters even had standing to challenge the preliminary injunction order on the State’s behalf.

Second, the Court issued its order on the State’s motion to dismiss. In short, the Court found that CTA has standing and may pursue the FAAAA preemption claim; however, the Court did dismiss our Dormant Commerce Clause claim. In its decision to reject the State’s challenges to CTA’s legal standing and to our FAAAA claim, the Court similarly relied largely on its findings in its preliminary injunction order. As for the Dormant Commerce Clause claim, the Court held that judicial review under the commerce clause is limited to circumstances where, “Congress has not acted or purported to act” and that in this circumstance, Congress acted by adopting the FAAAA.

In summary, the Court’s stay of enforcement of AB 5 as it pertains to motor carriers remains in place and our strongest claim, that AB 5 is preempted by the FAAAA, will move forward.

CTA will continue to update membership on the status of this case.