# Record and brief — American Trucking Assns., Inc. v. Los Angeles > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385051_0764%3A0 ## Record - **Collection:** Supreme Court brief - **Document type:** Record and brief - **Published:** January 1, 2013 - **Citation:** 569 U.S. 641 ## Text ¥. SUPREME COURT me OF THE UNITED STATES No. 11-798 Title: American Trucking Associations, !nc . Petitioner V City of Los Angeles, California. et al Docketed December 23, 2011 Lower Ct United States Court of Appeals for the Ninth Circuit Case Nos.: (10-56465) Decision Date: October 31, 2011 Questions Presented — lie —-- Proceedings and Orders~~~~~~~~~~~~~~~~~~~~~ Dec 22 2011 Petition for a writ of certioran filed. (Response due January 23, 2012) Jan 42012 Order extending time to file response to petition to and including February 21 2012. for all respondents Jan 23 2012 Brief amici curiae of Center for Constitutional Jurisprudence. et al. filed Jan 23 2012 Brief amici curiae of Chamber of Commerce of the United States of America. et al filed Jan 23 2012 Brief amicus curiae of Owner-Operator Independent Drivers Association, inc filed Jan 23 2012 Brief amicus curiae of Airlines for America filed Feb 21 2012 Brief of respondents National Resources Defense Council, et al. in opposition filed Feb 21 2012 Brief of respondents City of Los Angeles. California, et al. in opposition filed Mar 22012 Reply of petitioner American Trucking Associations. Inc filed Mar 72012 DISTRIBUTED for Conference of March 23, 2012 Mar 26 2012 The Solicitor General is invited to file a brief in this case expressing the views of the United States Nov 30 2012 Brief amicus curiae of United States filed Dec 10 2012 Supplemental brief of petitioner American Trucking Associations. Inc. filed Dec 12 2012 DISTRIBUTED for Conference of January 4, 2013 Jan 72013 DISTRIBUTED for Conference of January 11, 2013 Jan 11 2013 Petition GRANTED limited to Questions 1 and 3 presented by the petition Feb 11 2013 SET FOR ARGUMENT ON Tuesday, April 16, 2013 Feb 15 2013 Brief of petitioner American Trucking Associations, !nc filed Feb 15 2013 Joint appendix filed. (Statement 0’ costs filed } Feb 22 2013 Brief amicus curiae of the United States supporting reversal filed Feb 22 2013 Brief amici curiae of Owner-Operator Independent Drivers Association inc filed Feb 22 2013 Brief amicus curiae of Airlines for America filed Feb 22 2013 Brief amicus curiae of California Construction Trucking Association filed Feb 22 2013 Brief amicus curiae of Center for Constitutional Jurisprudence and Harbor Trucking Association filed Feb 22 2013 Brief amici curiae of Chamber of Commerce of the United States of America. et al filed Feb 25 2013 Record from US CA. for 9th Circuit is electronic Feb 25 2013 Record from US DC. for Centra! Distnct of California is electronic Mar 12013 CIRCULATED Mar 18 2013 Brief of respondents City of Los Angeles, California, et a! filed (Distributed) Mar 18 2013 Brief of respondents National Resources Defense Council, et a!. (Distributed) filed Mar 25 2013 Motion of the Solicitor Genera! for leave to participate in oral argument as amicus Curiae and for divided argument filed Mar 25 2013 Brief amicus curiae of Los Angleles Chamber of Commerce filed (Distributed) Mar 25 2013 Brief amici curiae of National Organization of Counties, et al. filed Mar 25 2013 Brief amicus curiae of Airports Council Internationa! - North Amenca filed Mar 25 2013 Brief amici curiae of California and Washington filed (Distributed) Apr 12013 Motion of the Solicitor General for leave to participate in oral argument as amicus Curiae and for divided argument GRANTED. Apr 52013 Reply of petitioner American Trucking Associations. Inc. filed (Distributed) Apr 16 2013 Argued. For petitioner Daniel N Lerman, Washington D.C. and John F. Bash, Assistant to the Solicitor General, Department of Justice. Washington, D C (for United States. as amicus curiae ) PETITION FOR WRIT OF CERTIORARI -/ IN THE Supreme Court of the Anited States AMERICAN TRUCKING ASSOCIATIONS, INC., Petitioner, CITY OF LoS ANGELES, ET AL., Respondents. On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Ninth Circuit PETITION FOR A WRIT OF CERTIORARI - ROBERT DIGGES, JR. American Trucking Associations, Inc. 950 North Glebe Road Arlington, VA 22203 (703) 838-1889 Roy T. ENGLERT, JR. Counsel of Record ALAN UNTEREINER LEIF OVERVOLD Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP 1801 K Street, N.W. Washington, D.C. 20006 (202) 775-4500 renglert@robbinsrussell.com Counsel for Petitioner Library of Conaress Law l int city QUESTIONS PRESENTED Title 49 U.S.C. § 14501(c)(1), originally enacted as a provision of the Federal Aviation Administration Authorization Act of 1994, provides that “a State [or] political subdivision ... 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 transporta- tion of property.” It contains an exception providing that the express preemption clause “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” Jd. § 14501(c)(2)(A). The questions presented are: 1. Whether an unexpressed “market participant” exception exists in Section 14501(c)(1) and permits a municipal governmental entity to take action that conflicts with the express preemption clause, occurs in a market in which the municipal entity does not participate, and is unconnected with any interest in the efficient procurement of services. 2. Whether a required concession agreement setting out various conditions a motor carrier must meet to serve a particular port imposes any requirements that are “related to a price, route, or service of any motor carrier” for the purposes of preemption under Section 14501(c)(1). 3. Whether permitting a municipal governmental entity to bar federally licensed motor carriers from access to a port operates as a partial suspension of the motor carriers’ federal registration, in violation of Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954). RULE 14.1(b) STATEMENT Petitioner is the American Trucking Associations, Inc., plaintiff-appellant below. Respondents are the City of Los Angeles, the Harbor Department of the City of Los Angeles, and the Board of Harbor Commissioners of the City of Los Angeles, all defendants-appellees below, and Natural Resources Defense Council, Sierra Club, and Coalition for Clean Aijir, Inc., all defendants- intervenors-appellees below. RULE 29.6 STATEMENT Petitioner has no parent companies or non-whoily- owned subsidiaries. iv TABLE OF CONTENTS Page QUESTIONS PRESENTED ..................cecceeceeceeeeees i BUA 14.16) BEAT MEU cccccccccccccccoscccccccesesccers il BPD CD EPI dncsccscnscsentessnsstascccsesonsine iii CE GI GU OE ccescccssnnccosccsssnscssscsoncess vi ET vnicciiccnsininaviveinemedenisttiadaeaiiidiiita 1 TE ciicricrcoesaiaseniiinieanbiipiniadimaliiaueiiiainls 1 CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED .............c0cccssceseceseees 1 IEE scisictinisipiinnainasinnininimnninbineabannstniieadeiiehins 1 A. The Deregulatory Scheme of the SPIT cicnstinciusritaiidinipadenesatimnaenanaiindnieiiinnnieints 2 B. The Port’s Mandatory Concession i icniciicnitnisisnininancnnantiineiatnlabiatnititinis 3 C. Prior Proceedings in This Case.................... 5 D. The Court of Appeals’ Decision.................... 7 REASONS FOR GRANTING THE Pee ncdcdcnsicisteventindinniilininiabiintinianienianbeinnss 10 I. The Circuits Are Deeply Divided over the Scope of the “Market Participant” PIII cciicsicsiniisiececcuiusichndeiieisammabiuiaediadaddnididubminedmatiianede 12 A. This Case Squarely Presents Two Conflicts in the Context of the SETI icsvavciccticniasipietiinasieieitaihdiaiesbaalaettaebsiadanamseiani 12 B. The Questions Presented Are Significant and Recurring. .......................+ 19 Vv TABLE OF CONTENTS-continued Page Il. The Ninth Circuit Decision Also Expands and Entrenches a Circuit Split as to When a State Kegulation Is “Related to a Price, Route, or Service” ........... 20 A. This Case Creates a Conflict with Preemption Decisions Under Related aa cat aan at lata ale 20 B. This Case Entrenches a Conflict Regarding the Scope of the FAAAA’s EID GRIND cncrccnseutincncnseinnnnsnincnnssens 24 IlI.The Decision Below Conflicts with Controlling Precedent of This Court .............. 26 IV.The Decision Below Wrongly Answers Each of the Questions Presented.................... 29 SI iinciistiiieitereneaseciuinctebiciiniidiitaieananerieciaiaid 34 vi TABLE OF AUTHORITIES Page(s) CASES Air Transp. Ass’n of Am. v. City & Cnty. of San Francisco, 266 F.3d 1064 (Sth Cir. 2001).............. 25 Air Transp. Ass’n of Am. v. Cuomo, 520 F.3d I ll lee atl 25 American Airlines, Inc. v. Wolens, 513 U.S. 219 STITT cil sietinscirinieetshicachateiiiiacinaaiaiiiadhaibetailiatidabipiabinndaddeaememiitniabneuntait 23 Antilles Cement Corp. v. Acevedo Vila, 408 F.3d Be ey Si ircicniccicinitaiiiealiuniniintehiceaiaaiiinenmandidbaaenbiinits 14 Atl. Coast Demolition & Recycling, Inc. v. Bd. of Chosen Freeholders, 48 F.3d 701 (3d Cir. ES Tao ee Pen nme eee nee ens Sema eee 15 Bldg. & Construction Trades Council v. Assoc. Builders & Contractors, 507 U.S. 217 (1993)..17, 31 Bonner v. City of Prichard, 661 F.2d 1206 (11th ETT OLA TO LANE Tae TO 13 Branche v. Airtran Airways, Inc., 342 F.3d I ls 23, 25 Brooks v. Vassar, 462 F.3d 341 (4th Cir. 2006)........ 14 Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686 (5th Cir. 1999)............. 15, 16 Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 Ree cnr ee nant HINES REN passim Chamber of Commerce v. Brown, 554 U.S. 60 ITC cen nee os eae Sener S 18, 32 Chance Mgmt., Inc. v. South Dakota, 97 F.3d I, I oa cesieniiemaieiondinaiidaneis 15 vii TABLE OF AUTHORITIES-continued Page(s) City of Charleston v. A Fisherman’s Best, Inc., eee 32 City of Chicago v. Atchison, Topeka & Santa Fe Sans I TP iia ateiecacielenecia iablinainiennanens 28 City of Columbus v. Ours Garage & Wrecker Service, Inc., 536 U.S. 424 (2002).................... 16, 17 Council of City of New York v. Bloomberg, 6 4 fk | Eee nee T enna ee one 17 Dep't of Revenue of Kentucky v. Davis, 553 U.S. NEALE EN tonne me noe NN anne era O eee 14 DiFiore v. Am. Airlines, Inc., 646 F.3d 81 (1st Cir. 2011), cert. denied, No. 11-221 (Nov. 28, TET cca eeceenitiniecicinidinceenieandanaietaniaieiepingamienaienabiindnialibidiesinindtindei 25 Duncan v. Northwest Airlines, Inc., 208 F.3d NC, SITE ciscsinissiishetinnncbiniieclidibindiaiiunabuniinietinadidins 24 Endsley v. City of Chicago, 230 F.3d 276 (7th eas MEP snieiceth nsscieaiseniabecdeieseiscieailliaeldaiaibiahasiaindaaciidaegiiaian 14-15 Fla. Transp. Serv., Inc. v. Miami-Dade Cnty., 757 F. Supp. 2d 1260 (S.D. Fla. 2010)................... 13 Four T’s, Inc. v. Little Rock Municipal Airport Comm'n, 108 F.3d 909 (8th Cir. 1997) .................. 13 Ginsberg v. Northwest, Inc., 653 F.3d 1033 (9th Saas HITT wcisncetiansinientsntincpdninniinpnssandinndtaaniinnnaionts 25-26 Goodspeed Airport LLC v. E. Haddam Inland Wetlands & Watercourses Comm'n, 634 F.3d I ha alc 22 TABLE OF AUTHORITIES~continued Page(s) Greater Washington Bd. of Trade v. Dist. of Columbia, 948 F.2d 1317 (D.C. Cir. 1991), i He i He CI viccrercncncncccnssstcuductenceecersce 22 GSW, Inc. v. Long County, Ga., 999 F.2d 1508 I (el 15 Healthcare Ass'n of New York State, Inc. v. Pataki, 471 F.3d 87 (2d Cir. 2006)......................6. 17 Hodges v. Delta Airlines, Inc., 44 F.3d 334 (5th ETT AL TTT 25 Huish Detergents, Inc. v. Warren Cnty., Ky., re ee ee ee i Be icisceccccesesunnsinscnsscuteosecss 15 In re Dyke, 943 F.2d 1435 (5th Cir. 1991)................. 22 Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 EC ear ARR ae a eRe ORE ee 21 Ky. Ass'n of Health Plans, Inc. v. Nichols, 227 F.3d 352 (6th Cir. 2000), affd sub nom. Ky. Ass'n of Health Plans, Inc. v. Miller, 538 U.S. i TE ee TE Le a eee 22 Lodi Truck Serv., Inc. v. United States, 706 ff EE Lee ee 28 Mackey v. Lanier Collection Agency & Seruv., Oca: cel 21 Morales v. Trans World Airlines, Inc., 504 U.S. EASTER See SONNE eae Lee ee 3, 19 New England Legal Found. v. Mass. Port Auth., 883 F.2d 157 (1st Cir. 1989) ....................... 20 ix TABLE OF AUTHORITIES~continued Page(s) Northwest Airlines, Inc. v. Duncan, 531 U.S. TERT RIT AN SES LEE SSE IEE LO Bee Re 20, 24 Petrey v. City of Toledo, 246 F.3d 548 (6th Cir. SI cc cieethein alii aia aaa a cy 16 Prudential Ins. Co. of Am. v. Natl Park Med. Ctr., Inc., 154 F.3d 812 (8th Cir. 1998) ................. 22 R.R. Transfer Serv. Inc. v. City of Chicago, 386 Uy acs 28 Rowe v. N.H. Motor’ Transp. _ Ass'n, Se Ee Ce IED cb iiccintitendineenticnnniiniesnnennds passim Smith v. Comair, Inc., 134 F.3d 254 (4th Cir. REESE RELA Soe Ome ee a ae Se SRS NER a 25 Smith v. Department of Agricu'ture, 630 F.2d [REISE 9,12,13 South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82 (1984).............cccccceeeeees 10, 14 Stucky v. City of San Antonio, 260 F.3d 424 (5th Cir. 2001) Taj Mahal Travel, Inc. v. Delta Airlines, Inc., Be Be Be ee Gos Fi ccesccceccccccscccvcsscsccececeses 24 Tocher v. City of Santa Ana, 219 F.3d 1040 I iain i tee 16 Travel All Over The World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423 (7th Cir. 1996).......... 25 Tri-M Group, LLC v. Sharp, 638 F.3d 406 (3d EATEN RAT CREE SAR Ee be Oe Oe 17 x TABLE OF AUTHORITIES-continued Page(s) United Healthcare Ins. Co. v. Davis, 602 F.3d I ali eds adaleaimeioninns 14 United Wire, Metal & Mach. Health & Welfare Fund v. Morristown Mem Hosp., 995 F.2d I iin a idee cus aleanemncnsie 22 USA Recycling, Inc. v. Town of Babylon, 66 ee EE EE NG ITED dbiciniwiccnncecnncumsaviituesnensneesiseenn 15 Ventress v. Japan Airlines, 603 F.3d 676 (9th RN CI csiiacass peruhccheaianidine iikadabcatemap ed iesiueiiiies iaeliidisipiaiibeaeees 26 STATUTES AND LEGISLATIVE HISTORY Oe a NL 30 A i cccicesratesisivisvindiulosisicdushdainesinnek 21 cs scaicasceninccsesdepbaninbl 4 I i ind si sicessnhinccdesdads ettustiolsinincisieteetsiamuintioaiapsiies l Ee Doe 33 ee SE eiicinindeninesinsinninutiontnincgintss 2, 3, 31 GD UIA. © RGB ve scesscscccccncsicceccesccesssssss & BF 49 U.S.C. § 14501(c)(2)(C) .ccccccececesceceecececeeeseeceeeeeeeees 30 OE, © BI ni aden cscenscieccncicnsniesesnsvacensescninnse 31 gt aE ae oe 30 6d sia rinasnseensinvotsleseiaticnaiainiac 4 A i slaieideaehiialnail 4 ee i cnciineninitinianidasidannientgdpesameseatia 30 x) TABLE OF AUTHORITIES~continued Page(s) H.R. Conf. Rep. No. 103-677 (1994), reprinted he og Fd oS RD) een eee ree 3 ICC Termination Act of 1995, Pub. L. No. 104— a a Ss WI I, So oicc ccs dcscocadcenaseinbderececeses 27 Pub. L. No. 103-311, § 207 (1994), 108 Stat. a a a 27 MISCELLANEOUS Brief for the United States as Amicus Curiae Supporting Reversal, Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 559 F.3d 1046 (9th Cir. 2009) (No. 08-56503) ............. 18, 23, 28, 33 PETITION FOR A WRIT OF CERTIORARI OPINIONS BELOW The opinion of the court of appeals, as amended October 31, 2011 (App. 1la-58a), is reported at 660 F.3d 384. The opinion of the district court (App. 59a- 137a) is unreported. The earlier opinions of the court of appeals in connection with petitioner’s request for a preliminary injunction (App. 138a-148a, 208a-238a) are reported at 596 F.3d 602 and 559 F.3d 1046. The district court opinions issued in connection with the preliminary injunction (App. 149a-207a, 239a-272a) are unreported. JURISDICTION The court of appeals’ judgment was entered on September 26, 2011. This Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The relevant provisions of the Supremacy Clause of the Constitution and of the Federal Aviation Ad- ministration Authorization Act, 49 U.S.C. § 14501 et seq., are reproduced at App. 273a-279a. STATEMENT This case raises important and recurring ques- tions that have divided the circuits concerning three subjects. The first is the preemptive scope of the Federal Aviation Administration Authorization Act (“FAAAA”). The second is the scope and applicability of the “market-participant exception”—first recog- nized in the dormant Commerce Clause context—to an express preemption scheme such as that set out by the FAAAA. The third is the enduring vitality of this 2 Court’s decision in Castle v. Hayes Freight Lines., Inc., 348 U.S. 61 (1954), under the deregulatory scheme created by the FAAAA. As the dissent below observes, the majority's opinion creates conflicts with at least one other cir- cuit over whether the “market participant” defense can be invoked by a governmental entity to save its actions from preemption when (a) the governmental entity owns property on which the market operates but does not actually participate in the market in which it is imposing conditions, and (b) the conditions are unrelated to the efficient procurement of services. The decision below also entrenches and extends a longstanding conflict with the First, Second, Fourth, Fifth, Seventh, and Eleventh Circuits over the mean- ing of the preemption clause’s coverage of state and local requirements “related” to motor carriers’ “price[s], route[s], or service[s]” (49 U.S.C. § 14501(c)(1)). Finally, the decision below conflicts with Castle, a longstanding precedent of this Court precluding States from enforcing regulations through actions that (as here) amount to a partial suspension of a federally licensed motor carrier's grant of nation- wide operating authority. A. The Deregulatory Scheme of the FAAAA In 1994, Congress enacted the FAAAA, comple- menting the earlier-enacted Motor Carrier Act of 1980 (“MCA”). The MCA had broadly deregulated the trucking industry at the federal level. The FAAAA prevented state and municipal governments from counteracting that policy through their own regula- tion of motor carriers. Congress believed state eco- nomic regulation of motor carrier operations resulted in “significant inefficiencies, increased costs, reduc- tion of competition, inhibition of innovation and 3 technology and curtail[ment of] the expansion of markets.” H.R. Conf. Rep. No. 103-677, at 86 (1994), reprinted in 1994 U.S.C.C.A.N. 1715, 1758. Congress concluded that broad preemption was required to free interstate carriers from the inefficiencies created by a multitude of local regulatory schemes. The FAAAA therefore provides that a State or its political subdivision “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). The Act provides for limited exceptions, including a provision noting that it “snall not restrict the safety regulatory authority of a State with respect to motor vehicles.” Id. § 14501(c)(2)(A). Nevertheless, the general scope of the FAAAA’s express preemption clause— modeled after language in the Aijrline Deregulation Act (“ADA”)}—is expansive. Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 370 (2008). Broad preemption fosters a deregulatory policy aimed at ensuring that prices, routes, and services reflect “maximum reli- ance on competitive market forces,’ thereby stimulat- ing ‘efficiency, innovation, and low prices.” Jd. at 371 (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992)). B. The Port’s Mandatory Concession Agree- ments This litigation arises out of restrictions imposed by the Port of Los Angeles on motor carriers seeking to contract with shipping lines that lease terminal space at the Port. The Port is an independent division of the City of Los Angeles, occupying land granted to the City by the State of California. App. 5a. The Port acts much lke a “landlord,” developing terminal 4 facilities that it leases to shipping lines and stevedoring companies in exchange for property leases and fees. App. 5a-6a, 71a. The Port is a major avenue of interstate and foreign commerce, handling more containerized cargo than any other port in the country. App. 6a. The Port has no non-regulatory interaction with the drayage trucks that transport cargo from the Port to customers or to other trucking or railroad facilities. Cargo from the ships docked at the Port is unloaded by terminal operators into marine terminals. Cargo owners, ocean carriers, railroads, and other providers of freight transportation then arrange for drayage services through federally licensed motor carriers (LMCs).' Before 2008, these LMCs frequently provided drayage services with and through inde- pendent contractors who owned and operated the drayage trucks. The Port does not itself contract with any drayage providers. App. 6a. In 2008, the Port began prohibiting its tenant terminal operators from allowing drayage trucks to enter their terminal facilities unless the drayage trucks were operated by motor carriers that had first agreed to enter into “concession agreements” with the Port imposing multiple requirements on the carriers and their operations. App. 3a-4a, 12a. This measure was enacted as part of a larger “Clean Truck Program,” designed in response to environmentally grounded legal and political opposition to the Port’s expansion. App. 4a. ‘ A motor carmer engaged in interstate commerce receives operating authority from the Department of Transportation, under the registration provisions of the MCA, 49 U.S.C. § 13902, and must comply with safety regulations and inspection requirements promulgated under the Federal Motor Carrier Safety Act, id. §§ 31136, 31142. 5 Of the 14 requirements imposed under the conces- sion agreements on motor carriers, five remain at issue. These require a motor carrier seeking to serve the Port to (1) transition over five years to the use of only employee-drivers rather than independent owner-operators (the “employee-driver provision”); (2) submit an “off-street parking plan,” including parking locations for all “Permitted Trucks,” and ensure that Permitted Trucks comply with municipal parking restrictions (the “off-street-parking pro- vision”); (3) ensure that maintenance of all Permitted Trucks is conducted in accordance with the manu- facturers’ instructions, with the concessionaires re- sponsible for vehicle condition and safety (the “main- tenance provision”); (4) post placards on Permitted Trucks while the trucks are entering, leaving, or on Port property, providing a number for members of the public to call with concerns regarding truck emis- sions, safety, and compliance (the “placard provi- sion’); and (5) demonstrate to the satisfaction of the Port’s Executive Director that the concessionaire possesses the financial capability to perform its obligations under the agreement (the “financial- capability provision”). App. 12a-13a. C. Prior Proceedings in This Case Petitioner American Trucking Associations, Inc. (“ATA”), a national association of motor carriers, sued to challenge the mandatory imposition of these agreements, arguing that the Port’s requirements are preempted by the FAAAA. App. 4a. The district court originally denied a preliminary injunction entirely. The court acknowledged that the concession-agreement requirements fell within the FAAAA’s preemption clause and the Port’s action could not be justified as that of a market participant. 6 App. 247a-248a, 252a-261a. But, the court held, the fact that some of the provisions could be upheld under the vehicle-safety exception saved the agree- ments from preemption in their entirety. App. 266a. A unanimous panel of the Ninth Circuit agreed that the agreements likely fell within the FAAAA’s preemption clause, explaining: “[t]hat the Concession agreements relate to prices, routes or services of motor carriers can hardly be doubted.” App. 221la (emphasis added). The Ninth Circuit reversed the district court regarding its application of the safety exception, holding that the court must consider whether each individual provision of the concession agreements could be justified under the safety excep- tion. App. 229a-230a. On remand, the district court granted a preliminary injunction with respect to a number of the individual provisions of the concession agreements. App. 203a.* The district court conducted a bench trial con- cerning a permanent injunction. ATA argued (1) that the concession agreements were per se “related to a price, route, or service” for the purposes of FAAAA preemption, (2) that they could not be justified under the “market participant” exception, and (3) that the FAAAA’s vehicle-safety exception neither justified any specific provision in the concession agreements 2 The district court preliminarily enjoined the employee-driver, financial-capability, and off-street-parking provisions, but not the maintenance and placard provisions. App. 203a-204a. In a later appeal, the Ninth Circuit reversed the district court again with regard to the placard provision. App. 144a. Consistent with the Ninth Circuit's prior determination that it could “hardly be doubted” that the concession agreements imposed requirements that “relate to prices, routes or services of motor carriers,” App. 221la, petitioner and the City “agree[d]” on that point in this second appeal. App. 143a. 7 nor allowed the Port to refuse access to LMCs as a general matter. The district court held that none of the disputed provisions of the concession agreement was preempted. The court concluded that the Port was acting as a “market participant” in requiring the agreements and that specific provisions were further justified either as not “related to the price, route, or service of a motor carrier” or as falling within the exception to preemption for motor vehicle safety. App. 136a-137a. D. The Court of Appeals’ Decision A divided panel of the Ninth Circuit affirmed in part and reversed in part. App. 47a. 1. The majority began by addressing whether the concession agreements and their individual provi- sions were “related to a price, route, or service of any motor carrier” such that they were preempted by the FAAAA’s express preemption clause. The court of appeals noted that under Ninth Circuit precedent the phrase “price, route, or service” is understood only “in the public utility sense,” referring to things such as the “frequency and scheduling of transportation” or the “courses of travel.” App. 17a-18a (internal quotation marks omitted). The majority held “that a State may condition access to State property so long as the conditions do not impose costs that compel the carrier to change rates, routes, or services.” App. 21a. The majority concluded that the financial-capability provision was insufficiently related to rates, routes, or services to be preempted. App. 33a-34a. The panel also held that some provisions of the concession agreements escaped preemption under a market-participant exception nowhere expressed in the text of the FAAAA. According to the majority, agreements can escape preemption even if (a) they 8 were not directed at the “efficient procurement” of goods or services, and (b) the Port did not purchase the drayage services on which it imposed the disputed conditions. App. 23a-29a. In a statement that made no pretense of having anything to do with statutory text, the majority concluded that “[a] pri- vate port owner could (and probably would) enter into concession-type agreements with licensed motor carriers in order to further its goals.” App. 29a. Analyzing individual provisions of the agreements to determine whether each served the government’s “interests as a facilities manager,” App. 30a, the panel concluded that the off-street-parking and placard provisions were not preempted. In doing so, it held that “[e]nhancing good-will in the community surrounding the Port,” App. 40a, and “receiving complaints about drayage trucks entering, leaving, and operating on its property,” App. 46a, qualified as proprietary interests justifying imposition of the restrictions. None of those statements had anything to do with the text of the statute. The court also rejected petitioner's contention that—under Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954)—States cannot limit a _ federally registered motor carrier's access to a particular port (even to enforce vehicle-safety laws). App. 30a-32a. Without expressly deciding whether the FAAAA’s enactment modified Castle’s holding, the majority concluded that the ban on a motor carrier's access to the Port did not so limit its participation in the 3 The Ninth Circuit did, however, reverse the district court with respect to the employee-driver provision. The court concluded that, “[w]hile the Port may impose conditions on licensed motor carners seeking to operate on Port property, it cannot extend those conditions to the contractual relationships between motor carriers and third parties.” App. 43a. 9 transport of interstate goods as to run afoul of Castle. App. 32a. Finally, the panel considered the district court’s application of the FAAAA’s vehicle-safety exception to the maintenance provision. Acknowledging that the restriction was imposed in part as a result of environmental concerns, it held that such mixed mo- tives did not preclude application of the safety excep- tion and that the provision did respond to safety con- cerns. App. 36a-37a. Moreover, although the provi- sion largely duplicated federal safety requirements, the court held that “the Port need not demonstrate that the requirement to comply with manufacturer's instructions creates safety benefits over and above those [already] created by federal law.” App. 38a. 2. Judge N. Randy Smith dissented in part. App. 47a. He agreed that the FAAAA preempts the employee-driver provision but not the financial- capability provision.‘ He also agreed that the main- tenance provision is not preempted. Judge Smith dis- agreed, however, with the panel’s conclusions regard- ing both the market-participant exception and the effect of Castle. With respect to the market-participant exception, Judge Smith noted that the majority opinion conflicts with Smith v. Department of Agriculture, 630 F.2d 1081 (5th Cir. 1980). Smith held that simply owning a facility does not make a government entity a par- —— ———— ——— ——————— * Although the dissent states that Judge Smith “concur|red] that the .. . financial capability provision|] [is] preempted by federal law,” App. 58a, it appears he in fact agreed that this provision was not preempted, as the dissent provides no other indication of disagreement with the relevant portions of the majority opinion. 10 ticipant in a market operating within that facility. App. 49a. Moreover, Judge Smith concluded that the majori- ty permitted the Port to “reach[] beyond the immedi- ate parties with whom it transacts.” App. 50a. Such a holding, he noted, is in conflict with Ninth Circuit precedent and with the plurality opinion in South- Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82 (1984). App. 50a. Judge Smith noted further that, even if the Port had been a participant in the relevant sense, in im- posing the off-street-parking provision the Port was “attempt[ing] to address political concerns the Port alleges local community members have raised.” It was not—as the market-participant doctrine re- quires—-addressing the “efficient procurement” of goods or services. App. 56a. Finally, Judge Smith dissented from the conclu- sion that the Port could completely deny access to federally licensed motor carriers. As he recognized, “revoking access, under Castle, is an enforcement mechanism beyond the reach of California and its political sub-parts, including the Port.” App. 55a. As in Castle, barring motor carriers from accessing the largest port in the United States both “would no doubt ‘seriously disrupt’ drayage carriers’ ability to transport goods from ships to other destinations in and outside California” and represents an impermis- sible “partial suspension’ of drayage carriers’ federal permits to transport goods in the stream of interstate commerce.” App. 55a-56a. REASONS FOR GRANTING THE PETITION The decision below creates and exacerbates mul- tiple conflicts concerning important and recurring issues of federal law. It represents the first time the 11 market-participant exception has been recognized under the FAAAA outside the highly specific context of municipal actions taken to arrange for the pro- vision of involuntary towing services. No such excep- tion is even hinted at in the statute. In addition, the decision below construes this atextual exception ex- pansively to allow a governmental entity to escape preemption in regulating a market in which it does not itself participate. And the Ninth Circuit, in con- flict with previous decisions recognizing only a limit- ed exception to FAAAA preemption, applied an excep- tion untethered to any governmental interest in the efficient procurement of goods and services. The conflicts created by the decision below threaten to create the very patchwork of regulation that the FAAAA was enacted to prevent. Further review would also allow the Court to re- solve a circuit conflict over the scope of “related to” language in the FAAAA preemption clause. That con- flict persists even after Rowe. The decision below reflects continuation of the Ninth Circuit’s uniquely crabbed view of the meaning of the crucial phrase “rates, routes, or services.” Finally, review would allow the Court to reaffirm the continued vitality of its decision in Castle. Since Castle, federal regulatory policy related to the trucking industry has shifted from one of compre- hensive regulation to one of expansive deregulation. But allowing municipal entities such as the Port here to exercise a veto power over federally licensed motor carriers remains entirely inconsistent with the uni- form scheme established by Congress, and there is no indication that in enacting the FAAAA Congress in- tended to overturn Castle. 12 I. The Circuits Are Deeply Divided over the Scope of the “Market Participant” Exception A. This Case Squarely Presents Two Con- flicts in the Context of the FAAAA. The Ninth Circuit assumed that certain chal- lenged provisions of the concession agreement would be preempted but for an atextual market-participant exception to FAAAA preemption. No such exception exists at all, but we can assume for present purposes that the exception does exist. Even on that assump- tion, the decision below conflicts with two lines of case law. First, it permits a municipal entity, as a supposed market participant, to set conditions on a market in which it does not participate, in conflict with Smith v. Department of Agriculture, 630 F.2d 1081 (5th Cir. 1980). Second, it allows the Port to impose restrictions wholly divorced from any govern- mental interest in the “efficient procurement” of goods or services, in conflict with FAAAA decisions from other circuits. 1. The Ninth Circuit held that a State could es- cape FAAAA preemption by using its ownership of a facility to claim that it participated in markets oper- ating within that facility. The Fifth Circuit has reject- ed that argument. App. 43a-49a. Smith involved a dormant Commerce Clause challenge to rules adopted by Georgia’s Department of Agriculture, which gave non-residents inferior sales locations in a farmers’ market owned and operated by the State. 630 F.2d at 1082. The Fifth Circuit rejected the State’s argument that it was acting as a market participant. The court noted that neither the State nor its Department of Agriculture “produce[d] the goods to be sold at the market” or “engage[d] in the actual buying or selling of those 13 goods.” Jd. at 1083. Instead, the State “has simply provided a suitable marketplace for the buying and selling of privately owned goods.” /bid. As a result, within that marketplace, the State’s “essential role is that of market regulator” rather than a participant. Ibid. Smith is binding precedent in the Eleventh Cir- cuit under Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc). Unsurprisingly, Smith’s approach has been applied by a district court in the Eleventh Circuit to a situation analogous to that presented here. In Fla. Transp. Serv., Inc. v. Miami-Dade Cnty., 757 F. Supp. 2d 1260, 1281-1282 (S.D. Fla. 2010), the district court concluded that Smith precluded the Port of Miami from claiming it was a market participant, when the Port sought to impose conditions on the purchase and sale of steve- doring services while not itself purchasing or provid- ing such services. The court held that “[t]he market participant doctrine does not help the County because the market for port services is distinct from the market for stevedore services. .. . Ownership of the Port does not make the County a participant in the stevedore market any more than ownership of the farmers’ market made Georgia a participant in the produce market.” Jd. at 1282. The Eighth Circuit, by contrast, has indicated its disagreement with Smith. According to the Eighth Circuit, when a municipal airport commission pro- vides facilities for a car rental company, it is acting as a market participant. See Four T’s, Inc. v. Little Rock Municipal Airport Comm'n, 108 F.3d 909, 912-913 (8th Cir. *997). Thus, the Ninth Circuit’s decision rejecting Smith exacerbates a preexisting conflict. 14 The Ninth Circuit’s decision here additionally con- flicts (as Judge Smith recognized in dissent) with the plurality opinion in South-Central Timber Develop- ment, Inc. v. Wunnicke, 467 U.S. 82 (1984). The ma- jority did not attempt to claim its position is consis- tent with Wunnicke, stating simply that Wunnicke is “not controlling” and is “a perfect example of the Supreme Court’s fractured views on the market participant doctrine.” App. 26a a.12. In Wunnicke, this Court addressed the permissi- bility under the dormant Commerce Clause of a re- quirement imposed by Alaska conditioning the sale of timber on a contractual agreement that the timber be processed within the State before export. See 467 U.S. at 84. A four-Justice plurality of an eight-Justice Court rejected Alaska’s claim that it was acting as a market participant. Reasoning that “the doctrine is not carte blanche to impose any conditions that the State has the economic power to dictate,” id. at 97, the plurality concluded that “[t]he limit of the market-participant doctrine must be that it allows a State to impose burdens on commerce within the market in which it is a participant, but allows it to go no further,” ibid. Justice Powell, joined by Chief Justice Burger, concurred in the judgment and sug- gested that this Court should have remanded rather than decided the market-participant issue. Jd. at 101. This Court and federal courts of appeals have followed the plurality opinion in Wunnicke.® Yet the 5 See, e.g., Dep’t of Revenue of Kentucky v. Davis, 553 U.S. 328, 348 n.17 (2008) (plurality opinion) (“[T]he type of ‘downstream regulation’ that South—Central found objectionable is simply not present here.”); United Healthcare Ins. Co. v. Davis, 602 F.3d 618, 625 (5th Cir. 2010); Brooks v. Vassar, 462 F.3d 341, 356- 357 (4th Cir. 2006); Antilles Cement Corp. v. Acevedo Vila, 408 F.3d 41, 46-47 (1st Cir. 2005); Endsiey v. City of Chicago, 230 15 Ninth Circuit felt free to contradict it. This Court should resolve the conflict. 2. Even if a State may properly claim that it acts as a market participant when imposing conditions on markets in which it does not participate, the Ninth Circuit’s holding creates a circuit conflict. According to the decision below, a State acts as a market par- ticipant and escapes preemption when it pursues con- siderations entirely divorced from the efficient pro- curement of services. Other circuits disagree, even in the very FAAAA context in which this case arises. The limited case law of this Court recognizing such an exception to preemption under a different statute is also wholly at odds with the Ninth Circuit’s approach. Only a few circuits have recognized any market- participant exception to the FAAAA. All have done so in one highly specific factual circumstance. In Car- dinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686 (5th Cir. 1999), a municipality decided that the non-consensual towing of vehicles from the public streets would be handled by contracting with a single company in lieu of the previous rotation sys- tem. A losing bidder asserted that the contracting or- dinance was preempted by the FAAAA. 7d. at 689. Disagreeing, the Fifth Circuit concluded that a city’s contracting decision is shielded from preemption if it “applied to a single discre[te] contract” and was F.3d 276, 285 (7th Cir. 2000); Huish Detergents, Inc. v. Warren Cnty., Ky., 214 F.3d 707, 716 (6th Cir. 2000); Chance Mgmt., Inc. v. South Dakota, 97 F.3d 1107, 1112 (8th Cir. 1996); USA Recycling, Inc. v. Town of Babylon, 66 F.3d 1272, 1282-1283 (2d Cir. 1995); Atl. Coast Demolition & Recycling, Inc. v. Bd. of Chosen Freeholders, 48 F.3d 701, 716 & n.19 (3d Cir. 1995); GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1515-1516 (Lith Cir. 1993). 16 “designed to insure efficient performance rather than advance abstract policy goals.” Jd. at 693. The court set out its test as follows (ibid.): First, does the challenged action essentially re- flect the entity’s own interest in its efficient procurement of needed goods and services, as measured by comparison with the typical be- havior of private parties in similar circum- stances? Second, does the narrow scope of the challenged action defeat an inference that its primary goal was to encourage a general policy rather than address a specific proprietary pro- gram? In contrast to the panel decision here, the Fifth Circuit indicated that preemption would apply to a similar scheme that had been primarily motivated by “economics, community development, and social poli- cies.” According to the Fifth Circuit, “[w]hile private parties might choose to take into account such fac- tors, the ever present temptation to leverage the spending power and thus intrude on congressional design is such that the proprietary exception should be reserved for more archetypical market behavior.” Id. at 693 n.2 (emphasis added). The Fifth Circuit’s precise, narrow conclusion— that municipal contracting with the providers of non- consensual towing service was not preempted—was adopted by the Sixth and Ninth Circuits. Petrey v. City of Toledo, 246 F.3d 548, 559 (6th Cir. 2001) (noting challenged provisions serve City’s “narrow proprietary interest” with respect to towing), abrogated in part on other grounds by City of Columbus v. Ours Garage & Wrecker Service, Inc., 536 U.S. 424 (2002); Tocher v. City of Santa Ana, 219 F.3d 1040, 1049-1050 (9th Cir. 2000), abrogated in 17 part on other grounds by City of Columbus, 536 U.S. 424. However, when a municipality attempted to extend the holding to consensual towing services (for which the municipality is not a party to the relevant transaction), the Fifth Circuit rejected the effort. In this context, the challenged provisions “frustrate the normal working of private decisionmaking in a market,” and “the City’s market power cannot be said to be typical of similar private actors.” Stucky v. City of San Antonio, 260 F.3d 424, 436 (5th Cir. 2001), abrogated in part on other grounds by City of Columbus, 536 U.S. 424.6 Only once has this Court applied a market- participant exception to conclude that a state action was not preempted—and it did so in a case involving judicially created doctrines of implied preemption under the National Labor Relations Act (NLRA). Bldg. & Construction Trades Council v. Assoc. Build- ers & Contractors 507 U.S. 217, 232 (1993) (“Boston Harbor”). In doing so, the Court emphasized that the challenged governmental action (1) “was attempting to ensure an efficient project that would be completed as quickly and effectively as possible at the lowest cost” and (2) “was specifically tailored to one par- ticular job.” Ibid. Here, the Ninth Circuit applied no 6 By applying a market-participant exception when the legisla- tive purpose is not efficient procurement, the Ninth Circuit has also created conflicts with decisions outside of the FAAAA con- text. See Tri-M Group, LLC v. Sharp, 638 F.3d 406, 421-422 (3d Cir. 2011); Healthcare Ass’n of New York State, Inc. v. Pataki, 471 F.3d 87, 109 (2d Cir. 2006) (quoting approvingly Fifth Cir- cuit’s test in Cardinal Towing); Council of City of New York v. Bloomberg, 6 N.Y.3d 380, 395 (2006) (“In enacting the Equal Benefits Law the Council was obviously ‘setting policy.’. . . [I]t was not acting just as a manager or owner of property concerned with assuring the cheap and efficient performance of contracts.”). 18 such limitations on the market-participant exception to express FAAAA preemption. The Court reinforced the limited scope of the NLRA’s market-participant doctrine in Chamber of Commerce v. Brown, 554 U.S. 60 (2008). Holding a California law preempted by a 7-2 vote, the Court rejected a market-participant defense. The defense was unavailable because the legislative purpose was “not the efficient procurement of goods and services, but the furtherance of a labor policy,” id. at 70. So too here. Indeed, the United States, which submitted a brief in this case at the preliminary-injunction stage, termed the Port’s market-participant argument “meritless.” Brief for the United States as Amicus Curiae Supporting Reversal at 24, Am. Trucking Ass'ns, Inc. v. City of Los Angeles, 559 F.3d 1046 (9th Cir. 2009) (No. 08-56503) (“U.S. Amicus Br.”). As the United States recognized, “[t]he Ports do not participate in any relevant market.” Id. at 25. Instead, because the Port’s “control over the channels of interstate commerce permits the State to erect substantial impediments to the free flow of commerce,” the United States urged the court to reject the Port’s market-participant argument. Id. at 25-26 (internal quotation marks omitted). In this case, the majority acknowledged that the governmental requirement challenged is not a “nar- row spending decision{],” App. 23a, nor does it reflect the Port’s interest in “efficient procurement” of goods and services, tbid. Nevertheless, the panel concluded that the Port may, without preemption, impose condi- tions on a market in which it does not participate to ensure that services it does not purchase “are pro- vided in a manner that is safe, reliable, and consis- 19 tent with the Port’s overall goals for facilities man- agement.” App. 29a. No other court of appeals would have accepted that argument in the FAAAA context. The analogous argument has been consistently rejected—by this Court and others—outside the FAAAA context. Further review is appropriate. B. The Questions Presented Are Significant and Recurring As the many cases cited above demonstrate, the market-participant exception is frequently invoked in cases involving multiple statutes and the dormant Commerce Clause. It arises under the FAAAA and other statutes sharing similar express preemption language, and in cases involving implied field preemption (such as NLRA preemption). Thus, reviewing this case would bring clarity to a doctrine with potential application far beyond the particular context of this statute. At the same time, because this Court has never squarely addressed even the existence of a market-participant exception under an express preemption scheme, the context of this case represents an opportunity to define the particular limits applicable here. Furthermore, the importance of uniformity to the deregulatory scheme set out by the FAAAA has re- peatedly been recognized. As this Court noted in Rowe, the FAAAA’s preemption clause was modeled on language in the ADA and reflected a congressional goal of “helping assure transportation rates, routes, and services that reflect ‘maximum reliance on competitive market forces, thereby stimulating ‘efficiency, innovation, and low prices,’ as well as ‘variety and ‘quality.” 552 U.S. at 371 (quoting Morales, 504 U.S. at 378). As with the ADA, “[ijn re- ducing federal economic regulation of the field to al- 20 low the forces of free competition to rule the market- place, Congress obviously did not intend to leave a vacuum to be filled by the Balkanizing forces of state and local regulation.” New England Legal Found. v. Mass. Port Auth., 883 F.2d 157, 173 (1st Cir. 1989). Yet allowing the intercircuit differences discussed above to persist would lead to just that “patchwork of state service-determining laws, rules, and regula- tions” that this Court sought to avoid in Rowe. 552 U.S. at 373. Il. The Ninth Circuit Decision Also Expands and Entrenches a Circuit Split as to When a State Regulation Is “Related to a Price, Route, or Service” The decision below reinforces the Ninth Circuit’s cramped reading of “rates, routes, or services” under both the ADA and FAAAA. That reading has long conflicted with other circuits’ position, as three Members of this Court recognized in Northwest Airlines, Inc. v. Duncan, 531 U.S. 1058 (2000) (dissent from denial of certiorari). In addition, the challenged governmental restrictions here directly targeted motor carriers. The panel’s conclusion that such targeted restrictions are not preempted because they are insufficiently related to the “prices, routes, or services” of motor carriers flies in the face of the teaching of this Court and other circuits in related preemption settings. A. This Case Creates a Conflict with Preemp- tion Decisions Under Related Statutes Relying on a Ninth Circuit precedent permitting a municipality to condition airline leases of airport facilities on compliance with a generally applicable city ordinance, the decision below created a conflict as 21 to when a state regulation has a “reference to carrier rates, routes, and services.” The majority created that conflict by ignoring the specifically targeted nature of the restrictions at issue in this case. That omission contravenes the binding precedent of this Court in the analogous context of preemption under the Employee Retirement Income Security Act (ERISA) and the decisions of several circuits that have faith- fully followed that mandate. In the ERISA context, this Court has recognized the salience of the fact that a state law specifically targets the subject matter regulated by the preemptive federal statute. In Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825 (1988), the Court concluded that a state garnishment statute was preempted by ERISA, which displaces “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by ERISA. 29 U.S.C. § 1144(a) (emphasis added). The state statute at issue, the Court noted, “expressly refers to—indeed, solely applies to—ERISA employee benefit plans.” Mackey, 486 U.S. at 829. The Court had “virtually taken it for granted that state laws which are ‘specifically designed to affect employee benefit plans’ are pre-empted.” /bid. Later cases have only reinforced the importance of that distinction. E.g., Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139-140 (1990) (“We are not dealing here with a generally applicable statute that makes no reference to, or indeed functions irrespective of, the existence of an ERISA plan... . Here, the existence of a pension plan is a critical factor in establishing liability under the State’s wrongful discharge law. As a result, this cause of action relates not merely to pension benefits, but to the essence of the pension plan itself.”). 22 Numerous courts of appeals have analyzed in the ERISA context whether the challenged regulation is generally applicable or instead singles out the subject of the federal scheme for special treatment. See, e.g., Ky. Ass'n of Health Plans, Inc. v. Nichols, 227 F.3d 352, 360 (6th Cir. 2000) (“While a mere reference to an ERISA plan, without more, may not be enough to cause preemption, .. . if such a reference is combined with some effect on those plans, such as singling them out for different treatment, preemption will result.”), affd sub nom. Ky. Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003); Greater Washington Bd. of Trade v. Dist. of Columbia, 948 F.2d 1317, 1322 (D.C. Cir. 1991) (“[T]he ‘Shaw “exception”—that ERISA does not preempt state laws which affect benefit plans in a tenuous or peripheral manner—applies only to laws of general application; it does not protect state laws which specifically refer to ERISA benefit plans.”) (quoting In re Dyke, 943 F.2d 1435, 1448 (5th Cir. 1991)), affd, 506 U.S. 125 (1992). See also Prudential Ins. Co. of Am. v. Nat'l Park Med. Ctr., Inc., 154 F.3d 812, 822 (8th Cir. 1998); United Wire, Metal & Mach. Health & Welfare Fund v. Morristown Mem’ Hosp., 995 F.2d 1179, 1192 (3d Cir. 1993). Courts of appeals have also recognized the salience of a law’s general applicability outside the context of ERISA preemption. Applying the preemp- tion provision of the ADA and conducting a field preemption analysis under the Federal Aviation Act of 1958, the Second Circuit in Goodspeed Airport LLC v. E. Haddam Inland Wetlands & Watercourses Comm'n, 634 F.3d 206, 212 (2d Cir. 2011), noted that “the generally applicable state laws and regulations imposing permit requirements on land use challenged here do not, on the facts before us, invade thle] 23 preempted field [of aviation safety].” Applying the ADA in Branche v. Airtran Airways, Inc., 342 F.3d 1248, 1258-1259 (llth Cir. 2003), the Eleventh Circuit held that “the phrase ‘related to the .. . ser- vices of an air carrier’ means having a connection with or reference to the elements of air travel that are bargained for by passengers with air carriers... . This connection can be established by showing that the state law in question either directly regulates such services or... . has a significant economic impact on them.” The decision below conflicts with this long line of authority and with the common understanding that state laws targeting the very subject of a preemptive federal act—whether it be ERISA plans, the airline industry, or the trucking industry—are preempted. As this Court noted in American Airlines, Inc. v. Wolens, 513 U.S. 219, 229 n.5 (1995), the expansive language of the ADA’s preemption clause should be read in light of the statute’s deregulatory purpose to indicate that “States may not seek to impose their own public policies or theories of competition or regulation on the operations of an air carrier” (internal quotation marks omitted). The challenged provisions in this case do exactly that. Indeed, the United States, in its earlier amicus brief, recognized that the concession agreements fall “squarely within the FAAAA’s preemptive scope.” U.S. Amicus Br. 7. As the United States noted (id. at 8-9): The concession agreements at issue here affect motor carriers’ “price, route, or service” far more directly than the regulations on tobacco shippers at issue in Rowe. The concessions are essentially licenses to provide motor carrier 24 services within the Ports. To enter the Ports— and thus to access any routes or provide any services to customers within the Ports— carriers must agree to comply fully with the multifarious requirements of the concession agreements. Here, however, although petitioner raised the con- cession agreements’ specific targeting of drayage service providers in its Ninth Circuit brief, the panel ignored the significance of targeting in concluding that “a State may condition access to State property so long as the conditions do not impose costs that compel the carrier to change rates, routes, or services.” App. 2la (emphasis added). Applying that novel rule even to conditions targeting motor carriers conflicts with governing precedent of this Court. B. This Case Entrenches a Conflict Regard- ing the Scope of the FAAAA’s Preemption Clause As far back as 2000, three Justices recognized a conflict among the courts of appeals regarding when a given restriction “relates to carrier rates, routes, or services.” As Justice O’Connor recognized in dissent- ing from the denial of certiorari, the Ninth and Third Circuits define “services” narrowly for the purposes of preemption to include only “the prices, schedules, origins and destinations of the point-to-point trans- portation of passengers, cargo, or mail.” Northwest Airlines, 531 U.S. at 1058 (quoting Duncan v. Northwest Airlines, Inc., 208 F.3d 1112, 1114 (9th Cir. 2000), and citing Taj Mahal Travel, Inc. v. Delta Airlines, Inc., 164 F.3d 186 (3d Cir. 1998)). In sharp contrast, the Fourth, Fifth, and Seventh Circuits have all adopted a broader definition of “services,” covering the “[contractual] features of air trans- 25 portation.” Jbid. (alteration in original) (quoting Hodges v. Delta Airlines, Inc., 44 F.3d 334, 336 (5th Cir. 1995) (en banc), and citing Smith v. Comair, Inc., 134 F.3d 254, 259 (4th Cir. 1998), and Travel All Over The World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1433 (7th Cir. 1996)). The Eleventh Circuit later adopted this broader understanding as well. See Branche, 342 F.3d at 1257. Since the conflict was first recognized, this Court decided Rowe. There, it made clear that “services” under the FAAAA must extend at least to such things as a carrier's (a) use of a recipient-verification sys- tem, see 552 U.S. at 368, 371-372, and (b) examina- tion of a package to ensure that it is not being sent by a party listed as an unlicensed tobacco retailer, id. at 369, 372-373. Although the Court did not expressly resolve the circuit split, neither provision of the Maine law held preempted in Rowe fits comfortably within the Ninth Circuit’s “public utility” under- standing of the FAAAA’s preemption clause. See Air Transp. Ass’n of Am. v. City & Cnty. of San Fran- cisco, 266 F.3d 1064, 1071 (9th Cir. 2001). As a result, two circuits confronting this question after Rowe have adopted the broader approach first set out by the Fifth Circuit. DiFiore v. Am. Airlines, Inc., 646 F.3d 81, 87-88 (ist Cir. 2011), cert. denied, No. 11-221 (Nov. 28, 2011); Air Transp. Ass’n of Am. v. Cuomo, 520 F.3d 218, 223 (2d Cir. 2008). The First Circuit has correctly understood that the conflict “has been super[sjeded by controlling Supreme Court case law—namely, by Rowe’s expansive treatment of the term ‘service.” DiFiore, 646 F.3d at 88. As this case demonstrates, however, the Ninth Circuit still clings to its narrow construction of the ADA’s and FAAAA’s preemption clauses. See App. 16a-17a; see also Ginsberg v. Northwest, Inc., 653 26 F.3d 1033, 1041-1042 (9th Cir. 2011); Ventress v. Japan Airlines, 603 F.3d 676, 682-683 (9th Cir. 2010). The concession agreements imposed by the Port plainly regulate the contractual features of the provision of trucking services. Had the Ninth Circuit adopted other circuits’ interpretation of “services” under the ADA and FAAAA, it would have been clear that a requirement directly targeting the provision of motor carrier services is subject to preemption under the FAAAA. The decision below should be reviewed (if not summarily reversed). III. The Decision Below Conflicts with Control- ling Precedent of This Court Well before the passage of the FAAAA, this Court recognized limitations on the ability of States and municipalities to regulate federally licensed motor carriers. Even when regulating in an area of traditional state concern, a State is barred from enforcing its laws through even a partial suspension of the motor carrier’s ability to operate in interstate commerce. The decision below rejects that limit—left unaltered by the passage of the FAAAA—in concluding that the Port can enforce a provision of the concession agreements by denying LMCs access to the Port of Los Angeles, thereby effecting a partial suspension of their federally granted licenses. In Castle v. Hayes Freight Lines, Inc., the Court addressed the scope of a State’s “power . . . to bar interstate motor carriers from use of state roads as punishment for repeated violations of state highway regulations.” 348 U.S. at 62. This Court noted that the adoption of the Motor Carrier Act of 1935 had greatly reduced States’ former power over interstate motor carriers and that the Interstate Commerce Commission (“ICC”) itself operated under specific 27 provisions governing the issuance and revocation or suspension of certificates. “Under these circumstances, it would be odd if a state could take action amounting to a suspension or revocation of an interstate carrier's commission-granted right to operate.” Jd. at 64. Since “[i]t cannot be doubted that suspension of this common carrier’s right to use Iilinois highways is the equivalent of a partial suspension of its federally granted certificate,” the Court explained, a State may not enforce even an indisputably proper state regulation by resorting to such a penalty. Ibid. Although the federal scheme regulating interstate motor carriers has changed since Castle, those changes have not altered this underlying limit on a State’s regulatory authority. When Congress enacted the motor-vehicle-safety exception in the FAAAA’s preemption clause, it acted against the backdrop of this settled law. It did not expand the regulatory authority of the States. See 49 U.S.C. § 14501(c)(2)(A) (noting the relevant preemption provision of the FAAAA “shall not restrict the safety regulatory authority of a State with respect to motor vehicles”). lh. .2ed, just three days after the FAAAA’s enactment, Congress enacted the Trucking Industry Regulatory Reform Act of 1994, reinforcing the ICC’s authority to grant LMCs operating authority, while providing that the granted authority was now nationwide and not limited by a need to make a route-specific public interest finding. See Pub. L. No. 103-311, § 207 (1994), 108 Stat. 1683, 1686-1687. The 1995 ICC Termination Act, Pub. L. No. 104-88, provided for the retention of federal authority to license an interstate motor carrier’s operations. See ICC Termination Act of 1995, Pub. L. No. 104—88, § 13902, 109 Stat. 803. Not one of those statutory amendments indicates an 28 intent to reverse the longstanding statutory interpretation regarding the limits on States’ abilities to enforce vehicle-safety regulations. The limits set out in Castle, and reaffirmed in cases such as City of Chicago v. Atchison, Topeka & Santa Fe Ry., 357 U.S. 77 (1958), make clear that States and municipalities are prohibited from “exercising any veto power’ over interstate motor carriers, id. at 85; see also R.R. Transfer Serv. Inc. v. City of Chicago, 386 U.S. 351, 359 (1967). In its amicus brief in_ the preliminary-injunction proceedings in this case, the United States made clear that, “[ljike a federal system of comprehensive regulation, a federal system of broad deregulation is susceptible to disruption by state or local officials’ attempts to ‘exercise veto power by imposing a licensing requirement to provide services.” U.S. Amicus Br. 10. The panel majority below purported to distinguish Castle on the ground that, “[u)nlike a ban on using all of a State’s freeways, a limitation on access to a single Port does not prohibit motor carriers from participating in ‘transport [of] interstate goods to and from that State’ or eliminate ‘connecting links to points in other states.” App. 32a. The penalty, according to the panel, did not rise to the level of the “comprehensive ban” in Castle. Yet Castle does not apply solely to a “comprehensive ban” on an LMC’s operations but extends to a “partial suspension of its federally granted certificate.” 348 U.S. at 64. A motor carrier's federally granted interstate operating authority includes the transport of commodities between ocean ports and inland locations within the same state. See Lodi Truck Serv., Inc. v. United States, 706 F.2d 898, 899-900 (9th Cir. 1983). As a result, suspending these operators’ ability to 29 transport commodities to or from the Port of Los Angeles operates as a partial suspension of the carriers’ federal registrations. The decision below therefore conflicts with settled precedent of this Court in a respect critical to the efficient operation of the federal deregulatory scheme. IV. The Decision Below Wrongly Answers Each of the Questions Presented The decision below is deeply flawed at every turn. As an initial matter, the panel was wrong to reverse the Ninth Circuit’s earlier conclusion that it “can hardly be doubted” that “the Concession agreements relate to prices, routes or services of motor carriers.” App. 22la. The concession-agreement scheme imposed by the Port directly targets motor carriers. The panel was also wrong to suggest that the broad term “relate to” should be interpreted as covering only those state and local requirements that “compel changes to” prices, routes or services. Moreover, the authority claimed by the Port to prohibit motor carri- ers from entering its property and providing services represents “the very effect the federal law sought to avoid, i.e., a State’s direct substitution of its own gov- ernmental commands for ‘competitive market forces’ in determining (to a significant degree) the services that motor carriers will provide.” Rowe, 552 U.S. at 365. The Ninth Circuit similarly erred in concluding that any aspect of the challenged provision can be justified under a market-participant exception. The FAAAA nowhere expressly provides that Ports or any other governmental entities may enact otherwise- preempted regulations provided they do so while acting in a “proprietary capacity.” That absence is telling since, under the ADA’s materially identical 30 preemption scheme, Congress did provide exactly such an exception for municipally owned airports. See 49 U.S.C. § 41713(b)(3). Congress likewise has elected to include market- participant exceptions (in a variety of forms) in a number of express preemption schemes, but not in others. Compare, e.g., 15 U.S.C. § 2075(b) (allowing a federal, state, or local government to “establish[] or continu[e] in effect a safety requirement applicable to a consumer product for its own use which require- ment is designed to protect against a risk of injury associated with the product and which is not identical to the consumer product safety standard applicable to the product under this chapter if the . . . requirement provides a higher degree of protection from such risk of injury”); 49 U.S.C. § 30103(b)(1) (allowing federal, state, or local government to “prescribe a standard for a motor vehicle or motor vehicle equipment obtained for its own use that imposes a higher performance re- quirement than that required by the otherwise applicable standard”), with 49 U.S.C. § 14501(c)(2)(C) (providing, in the FAAAA’s only provision even arguably recognizing an exception for state and local governments’ proprietary interests, that the Act does not preempt laws “relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle”). There would be no need for Congress to include such provisions if the “market participant” exception could be read in by the courts. In addition, when Congress has elected to include such an ex- ception in a preemption scheme, it ordinarily has lim- ited it to the procurement activities of state or local governments (limits the Ninth Circuit in this case disregarded). 31 There is no textual basis for inferring, as the Ninth Circuit has, a market-participant exception to the broad terms of the FAAAA’s preemption provision. The provision at issue here—a municipal ordinance backed by the threat of criminal prosecu- tion requiring LMCs to enter into concession agreements to serve the Port—is a “law, regulation, or other provision having the force and effect of law.” 49 U.S.C. § 14501(c)(1). That should be the end of the inquiry. Boston Harbor is not to the contrary. That case did not deal with express preemption, but rather implied preemption. The same justification of adding a doctrine grounded in assumed congressional intent into the sphere of implied preemption under the NLRA is wholly !acking where, as in this case, Congress has expressly set out the scope of pre- emption. Moreover, in Boston Harbor this Court relied on the fact that exempting a government’s truly propri- etary actions would serve the goals of the NLRA, because that statute included an exception for the construction industry specifically authorizing the use of pre-hire agreements of the very kind required by the government as the purchaser of services. See 507 U.S. at 231. The FAAAA, by contrast, provides no exceptions for private or public parties to create restrictions of the sort instituted by the Port here. Indeed, the FAAAA categorically bars a State from “requir[ing}] a motor carrier... to display any form of identification on or in a commercial motor vehicle . . . other than forms of identification required by the Secretary of Transportation” (49 U.S.C. § 14506(a)). In light of that proscription, it is difficult to see why a State or municipality should be entitled (as the Ninth Circuit held) to impose exactly such a requirement 32 merely because it purports to act as a market participant. The Fourth Circuit has confronted a similar situa- tion in which a municipal port sought to bar access to federally licensed fishermen. Facing a preemption challenge under the Magnuson Act, the port invoked what it termed a “proprietary capacity exception.” The Fourth Circuit refused to read such an exception into the statute, concluding that there is “no explicit provision creating a proprietary exception[,] ... [nJor does the City point to any basis for concluding that such an exception is implied.” City of Charleston v. A Fisherman’s Best, Inc., 310 F.3d 155, 178-179 (4th Cir. 2002). Even if such an exception could properly be in- ferred by the courts, the breadth of the exception recognized here threatens to swallow the FAAAA’s general preemption rule. The restrictions imposed by the Port here are unconnected with any interest in specifying what service it is procuring or “ensur[ing] that [its] funds are spent in accordance with the pur- poses for which they are appropriated.” Chamber of Commerce, 554 U.S. at 70. Instead, the Port, as the panel acknowledged, neither provides nor procures any drayage services. App. 27a-28a. The Port’s “participation” in the market is as a regulator only. Nor is this all. The panel majority justified use of the market-participant exception on the sweeping ground that the Port’s actions were undertaken to “fe]nhancfe] good-will in the community surrounding the Port,” App. 40a, or to “receivi[e] complaints about drayage trucks entering, leaving, and operating on its property,” App. 46a. To allow a governmental actor to pursue actions simply because they “enhance good- will in the community” is to recognize a market-par- 33 ticipant exception that swallows the general rule of preemption. Finally, as noted above, the panel opinion is inconsistent with this Court’s decision in Castle. While Congress in enacting the FAAAA did preserve the “safety regulatory authority of a State with respect to motor vehicles,” 49 U.S.C. § 14501(a)(2), neither the FAAAA nor any later statute indicated that the authority preserved was unconstrained by long-recognized limits on remedial authority. Instead, as the United States argued in the preliminary- injunction proceedings, “[ljike a federal system of comprehensive regulation, a federal system of broad deregulation is susceptible to disruption by state or local officials’ attempts to ‘exercise veto power’ by im- posing a licensing requirement to provide services.” U.S. Amicus Br. 10. Moreover, as in Castle itself, there is no indication that the “conventional forms of punishment are inadequate” to enforce any safety regulations imposed by the Port. See Castle, 348 U.S. at 64. The panel in this case did not directly conclude that Castle has been modified or overturned by later developments. Instead, it purported to distinguish the decision on the ground that denial of access to a Port is not the equivalent of a “comprehensive ban.” App. 32a. But that rationale is untenable. The Port of Los Angeles “handles more shipping container and cargo volume than any other port in the country.” App. 6a. Preventing federally licensed motor carriers from accessing this Port undeniably precludes them from engaging in the interstate transport of goods entering the United States through the Port and destined to customers both within and outside the State of California. The Port’s actions thus plainly 34 serve as a partial suspension of these carriers’ operating authorities. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. ROBERT DIGGES, JR. Roy T. ENGLERT, JR. American Trucking Counsel of Record Associations, Inc. ALAN UNTEREINER 950 North Glebe Road LEIF OVERVOLD Arlington, VA 22203 Robbins, Russell, Englert, (703) 838-1889 Orseck, Untereiner & Sauber LLP 1801 K Street, N.W. Washington, D.C. 20006 (202) 775-4500 renglert@robbinsrussell.com December 22, 2011 APPENDIX la APPENDIX A United States Court of Appeals, Ninth Circuit. AMERICAN TRUCKING ASSOCIATIONS, INC., Plaintiff—Appellant, Vv. The CITY OF LOS ANGELES; the Harbor Department of the City of Los Angeles; the Board of Harbor Commissioners of the City of Los Angeles, Defendants—Appellees, Natural Resources Defense Council; Sierra Club; Coalition for Clean Air, Inc., Defendants— intervenors—Appellees. No. 10—56465. Argued and Submitted June 10, 2011. Filed Sept. 26, 2011. Amended Oct. 31, 2011. Counsel Robert Digges, Jr. (argued), Chief Counsel, American Trucking Associations, Inc., Arlington, VA; Stephen S. Anderson, Jr., William Stephen Cannon, Seth David Greenstein, Richard Levine, and Evan P. Schultz, Constantine, Cannon LLP, Washington, D.C.; Christopher Chad McNatt, Jr., Scopelitis, Garvin, Light, Hanson & Feary, LLP, Pasadena, CA, for the petitioner-appellant. Steven S. Rosenthal (argued), Susanna Chu, David Cousineau, and Alan Palmer, Kaye Scholer LLP, Washington, D.C.; Joy Murakami Crose and Simon 2a Michael Kann, LA City Attorney’s Office, San Pedro, CA; Thomas A. Russell and Carmen A. Trutanich, City of Los Angeles, San Pedro, CA, for defendants- appellants the City of Los Angeles and the Board of Harbor Commissioners. Melissa Lin Perrella (argued) and David Richard Pettit, Natural Resources Defense Council, Inc., Santa Monica, CA, for defendants-intervenors- appellees the National Resources Defense Council, Sierra Club, and Coalition for Clean Air, Inc. Anthony T. Caso, Law Office of Anthony T. Caso, Orange, CA; John C. Eastman, the Claremont Institute Center for Constitutional Jurisprudence, Orange, CA, for amicus-curiae the Center for Constitutional Jurisprudence and Harbor Trucking Association. Kamala Harris and Susan Lea Durbin, Office of the California Attorney General, Sacramento, CA, for amicus curiae the State of California. John R. Bagileo, Law Office of John R. Bagileo, Glenwood, MD; Mark Irving Labaton, Motley Rice LLP, Los Angeles, CA, for amicus curiae the Intermodal Association of North America, Inc. William L. Messenger, National Right to Work Legal Defense Foundation, Springfield, VA, for amicus curiae Raymond Porras, Pilar Orellana, and the National Right to Work Legal Defense Foundation. Paul D. Cullen, Jr., the Cullen Law Firm, PLLC, Washington, D.C., for amicus curiae the Owner- Operator Independent Drivers Association, Inc. 3a Appeal from the United States District Court for the Central District of California, Christina A. Snyder, District Judge, Presiding. D.C. No. 2:08—cv—04920— CAS—CT. Before: BETTY B. FLETCHER and N. RANDY SMITH, Circuit Judges, and RUDI M. BREWSTER, District Court Judge.** Opinion Opinion by Judge B. FLETCHER; Dissent by Judge N.R. SMITH. ORDER The majority opinion filed September 26, 2011, slip op. 18193, is hereby amended as follows: 1. Lines 20-25 at slip op. 18208 are deleted and the following are substituted in their stead: “The district court’s factual determinations are reviewed for clear error, and may be reversed only if they are “illogical, implausible, or without support in inferences that may be drawn from the facts in the record.” Hinkson, 585 F.3d at 1251.” OPINION B. FLETCHER, Circuit Judge: Beginning in 2008, the Port of Los Angeles (POLA, or the Port) prohibited motor carriers from operating * The Honorable Rudi M. Brewster, Senior District Court Judge for the U.S. District Court for Southern California, San Diego, sitting by designation. 4a drayage trucks! on Port property unless the motor carriers entered into “concession agreements” with the Port. The concession agreements set forth 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 includes 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. American Trucking Associations, Inc. (ATA, a national association of motor carriers),? challenges the concession agreements, arguing that they are preempted by the Federal Aviation Administration Authorization Act (FAAA Act), 49 U.S.C. § 14501 et seq. After obtaining a preliminary injunction against several provisions of the concession agreements, ATA challenged five specific provisions at trial. The district court held that none of the challenged provisions fell within the scope of FAAA Act preemption, first because some did not relate to motor carriers’ rates, routes, and services, and 1 Drayage trucks move cargo from marine terminals at the Port (where shipping companies unload containers) to customers, railroads, or other trucks for long-distance transport. 2 Approximately thirty of the six hundred motor carriers currently operating at the Port are members of ATA. 5a second because the State adopted the entire agreement (and the challenged provisions in particular) in its capacity as a market participant, rather than a market regulator. See 49 U.S.C. § 14501(c)(1). The district court further held that the FAAA Act’s exemption for regulation “genuinely responsive to motor vehicle safety” saved from preemption the provision requiring motor carriers to create and administer regular maintenance plans. See 49 U.S.C. § 14501(c)(2)(A). ATA appeals. We have jurisdiction under 28 U.S.C. § 1291. We affirm the district court in large part, but reverse its decision that the employee-driver provision of the concession agreement falls within the market participant doctrine and is _ not preempted. I. A. The Port of Los Angeles is an independent division of the City of Los Angeles, managed by the Board of Harbor Commissioners (BHC or the Board). It “occup[ies] land that was granted by the State of California ... via the California Tidelands Act, and the Port{ ] hold{s] the land in trust for the benefit of the people of California.” Am. Trucking Ass‘ns, Inc. u. City of L.A., 559 F.3d 1046, 1048—49 (9th Cir. 2009) (ATA-I}D. The Port is not, however, taxpayer- supported; it depends entirely on property leases and fees for its revenue, and manages its funds independent of the City. The Port develops terminal facilities and then leases those facilities to shipping 6a lines and stevedoring companies.’ It handles more shipping container and cargo volume than any other port in the country, and competes with other ports for business. Terminal operators unload cargo from ships docked at the Port into marine terminals. From the marine terminals, drayage trucks transport cargo to customers (or to off-Port long-distance trucks or railroads for further transport). “A supply of drayage trucks and drivers is integral to cargo movement at the Port.” Cargo owners, ocean carriers, railroads, and other transportation providers arrange for drayage services through Licensed Motor Carriers (LMCs or motor carriers). Prior to 2008, most LMCs serving the Port did not own or operate drayage trucks; rather LMCs contracted with independent owners and operators of trucks to actually provide the drayage services. The Port does not directly contract for any drayage services. Around 1997, the Port developed plans to expand its cargo terminal facilities in order to accommodate more (and larger) ships. See Natural Res. Def. Council, Inc. v. City of L.A., 103 Cal. App. 4th 268, 126 Cal. Rptr. 2d 615, 618 (2002). Those plans have been stymied by legal opposition from community and environmental groups, which claimed that the Port’s expansion would increase air pollution, that such pollution would adversely effect the health of people in the surrounding communities,* and that 3 Stevedores manage the loading and unloading of ships. Black's Law Dictionary 1539 (9th ed.2009). * The Port is located in California’s South Coast Air Basin, an EPA non-attainment area for several air quality standards. In Ja the Port did not comply with environmental laws in planning its expansion. /d. In 2002, a California appellate court enjoined construction of a new terminal facility for the China Shipping Line Company, concluding that the Port had failed to comply with the requirements of the California Environmental Quality Act. Id. at 628. The Port settled that suit in 2003 for more than $80 million. Similarly, in 2007, environmental and community groups threatened to seek an injunction of the Port’s plan to expand its TraPac Terminal. The Port entered into a settlement agreement in April 2008, requiring it to establish a five-year community mitigation plan to offset the environmental impact of the proposed expansion. In response to the opposition to Port expansion, the Boards of Harbor Commissioners for Los Angeles and Long Beach adopted a Clear Air Action Plan (CAAP) in November 2006.5 In the CAAP, the Port announced its intention to “grow green” and achieve a 45% reduction in total emissions by 2012. The Ports stated that they “recognize that their ability to 2008, the Basin had the worst air quality in the nation for a number of pollutants. The Port is responsible for a significant portion of these pollutants. In 2008, the population residing in the area around the Port suffered an average cancer risk from air pollution more than 60% higher than the average in the South Coast Air Basin. 5 The Ports of Los Angeles and Long Beach are contiguous and form a single physical Port, although they are managed independently. Though the Port of Long Beach was originally a party to this lawsuit, the Port of Long Beach and Appellees settled in October 2009, and the district court dismissed the Long Beach defendants with prejudice. The Long Beach claims are not at issue in this case. 8a accommodate the projected growth in trade will depend upon their ability to address adverse environmental impacts... that result from such trade.” Recognizing that trucks are a major source of air pollution at the Port, the CAAP introduced the Clean Truck Program, which was “designed to reduce emissions from the heavy duty trucks involved in port drayage to improve the health of people living in the communities surrounding the [Port].” The CAAP directed Port staff to “undertake a 5—year, focused effort to replace or retrofit the entire fleet of over 16,000 trucks that regularly serve our Port....” From November 2006 through February 2008, the Ports worked to develop the Clean Truck program. The Ports held a number of public meetings, consulted with stakeholders, and hired consultants to evaluate ideas for implementation. In October 2007, the Port adopted the first part of its Clean Truck Program: a progressive ban on older, higher-polluting trucks, with the goal that by 2012 all trucks visiting the Port frequently or semi- frequently will meet the United States Environmental Protection Agency’s 2007 emissions standards. The ban forbids terminal operators to allow non-compliant trucks to enter Port property. In December 2007, the Port also implemented a Clean Truck Fee, which functions as a penalty to incentivize rapid replacement of older trucks. The fee is charged to terminal operators, not to motor carriers, and applies to every container transported during the transition period by a drayage truck not in compliance with 2012 emissions goals. Neither the 9a progressive ban nor the Clean Truck Fee are directly at issue in this appeal. During its design of the Clean Truck Program, the Port identified several dilemmas it believed it needed to address. The Port believed that it would be very difficult for drayage service providers to comply with the progressive ban, particularly in light of research showing that drayage service providers had low capital and limited opportunities to obtain credit to invest in the acquisition of new trucks. Accordingly, the Port recognized that it would need to provide substantial financial grants to support the Clean Truck Program. The Port also wanted to “ensure that the Clean Trucks Program funding system yields more than temporary benefits.” The Port was especially concerned with ensuring that trucks purchased or retrofitted using State funding were maintained to ensure environmental compliance and safety. This concern stemmed from the Port’s belief that independent owner-operators had little capital to invest in maintaining cleaner trucks and that current mechanisms were inadequate to ensure maintenance on each individual truck. The Port was also concerned that the Clean Truck Program, in combination with the Transportation Worker Identification Credential (TWIC) program,® 6 The Transportation Worker Identification Credential (TWIC) is a “security measure that will ensure individuals who pose a threat do not gain unescorted access to secure areas of the nation’s maritime transportation system.” See Transportation Security Administration, TWIC Program Information, available at http://www.tsa.gov/what_we_do/layers/twic/program_info. shtm. 10a would result in significant losses of drayage truck drivers and disruption of Port services. After engaging in extensive study of Port drayage, the Port estimated that approximately 16,800 trucks would need to be replaced or retrofitted, and that an additional 6,000 to 13,000 trucks would be necessary to maintain drayage services when the Port expanded. The Port suspected that the Clean Truck Program would be prohibitively expensive for independent owner operators and could result in a significant disruption in drayage services. It also believed that 10 to 20% of extant drayage truck drivers would be unable to comply with TWIC requirements and thus unable to continue with port drayage. Left unaddressed, the Port concluded, these dilemmas could result in a crisis. To address its concerns, the Port decided to implement concession agreements as part of the Clean Truck Program. It hired consultants to examine whether proposed concession agreements would further the Port’s economic, operational, and safety goals. Some of the major issues the consultants considered were: (1) whether to provide incentives only to licensed motor carriers, or to all independent owner operators; (2) whether to require operational criteria to provide oversight of drayage truck operations; (3) and whether to require licensed motor carriers to convert to an “employee-only” model as opposed to using independent owner- operators. Ultimately, the consultants reached _ similar conclusions. Kach report recognized that stringent operational criteria and the adoption of an employee- lla only model for motor carriers would result in significant economic hardship for drayage truck providers, likely putting many of the more economically-marginalized companies out of business. Yet, each recommended that converting to such a model would have greater long-term benefits and provide the Port with the “best guarantee” of long-term sustainability in port drayage. In March 2008, the Port approved a multi-faceted incentive program and a concession agreement system. The incentive program was designed to “encourage Licensed Motor Carriers to cooperate” with the progressive ban. These programs included the Truck Funding Program, which offers grants covering 80% of the cost of obtaining a new, compliant truck or 100% of the costs of retrofitting older trucks, and a _ lease-to-own program with financial institutions selected by the Port and financial assistance towards the purchase of trucks at the end of the lease term; a Scrap Truck Buyback program, which provides a $5,000 bonus incentive for scrapping pre—1989 drayage trucks; a Procurement Assistance Program to help smaller motor carriers obtain better terms on new truck purchases; and a Concession Business Outreach Program. Though other incentives are available to any owner of qualifying trucks, the Truck Funding Program is available only to licensed motor carriers who are “concessionaires” in good standing with the Port, and funding priority is given to “concessionaires with a history of port drayage and financing.” The funding is not available to independent owner-operators. In addition, concessionaires receiving funding must “commit to a minimum Port drayage frequency for 12a each new truck of a minimum average of six trips per week for five years.” The incentive programs are not directly at issue in this appeal. Finally, the Board issued an order approving concession agreements and providing that, effective October 1, 2008, “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 or a Day Pass from the Port of Los Angeles.” The concession plans created a direct contractual agreement between the Port and motor carriers providing drayage services. Five provisions of the concession agreements are at issue in this appeal: 1. Provision III(d) requires concessionaires to transition over five years to using 100% employee drivers rather than using independent owner- operators. (The employee-driver provision). 2. Provision III(f) requires concessionaires to submit for approval “an off-street parking plan that includes off-street parking locations for all Permitted Trucks” and requires concessionaires to ensure that Permitted Trucks are “in compliance with parking restrictions by local municipalities.” (The off-street parking provision). 3. Provision III(g) makes _ concessionaires “responsible for vehicle condition and safety” and requires them to “ensure that the maintenance of all Permitted Trucks... is conducted in accordance with manufacturer’s instructions.” (The maintenance provision). 13a 4. Provision III) requires concessionaires to “post placards on all Permitted Trucks” when the trucks are “entering and leaving Port Property and while on Port Property.” The placards shall “refer| ] members of the public to a phone number to report concerns regarding truck emissions, safety, and compliance to the Concession Administrator and/or authorities.” (The placard provision). 5. Provision III(n) requires a concessionaire to “demonstrate[ ] to the _ satisfaction of the Executive Director that it possesses the financial capability to perform its obligations under th[e} Concession [agreement].” (The financial capability provision). Each concessionaire also agreed to pay a one-time concession fee of $2,500, and an annual fee of $100 for each permitted truck. As of April 2010, approximately 600 motor carriers had _ signed concession agreements with the Port. B. The procedural history of this case is extensive; we commend the reader to the orders and opinions discussing ATA’s quest for a preliminary injunction.’ 1 See Am. Trucking Ass’ns, Inc. v. City of L.A., 577 F. Supp. 2d 1110 (C.D. Cal. 2008) (ATA-J (denying preliminary injunction on the grounds that the safety exception applies); Am. Trucking Ass'ns, Inc. v. City of L.A., 559 F.3d 1046 (9th Cir. 2009) (ATA- IT) (reversing the safety exception decision and remanding); Am. Trucking Ass'ns, Inc. v. City L.A., No. CV 08-4920, 2009 WL 1160212 (C.D. Cal. Apr. 28, 2009) (ATA-IID); Am. Trucking l4a Suffice it to say that ATA was initially denied a preliminary injunction in full and this court reversed. See generally Am. Trucking Ass’ns, Inc. v. City of L.A., 577 F. Supp. 2d 1110 (C.D. Cal. 2008) (ATA-JT (holding that the market participant doctrine did not apply but denying preliminary injunction on the grounds that the safety exception applies); ATA-I/, 559 F.3d 1046 (reversing the safety exception decision and remanding). On remand, the district court granted a preliminary * ~nction against the employee driver provision, the parking provision, and the financial capability provision, but not the maintenance and placard provisions. See generally Am. Trucking Ass’ns, Inc. v. City of L.A., No. CV 08-4920, 2009 WL 1160212 (C.D. Cal. Apr. 28, 2009) (ATA-IJD. ATA again appealed. We reversed only with respect to the placard provision. Am. Trucking Ass’ns, Inc. v. City of L.A., 596 F.3d 602 (9th Cir. 2010) (ATA-IV). All told, the maintenance and placard provisions have been operative since April 2009, but the employee driver, parking, and financial capability provisions have not. After a bench trial on the merits, the district court made 105 specific findings of fact, and concluded that none of the challenged provisions were preempted. ATA appeals. Ass'ns, Inc. v. City of L.A., 596 F.3d 602 (Sth Cir. 2010) (ATA-— IV). 15a II. We review a district courts decision regarding federal preemption de novo. Tocher ». City of Santa Ana, 219 F.3d 1040, 1045 (9th Cir. 2000), abrogated on other grounds by City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 428 (2002), and Tillison v. City of San Diego, 406 F.3d 1126 (9th Cir. 2005); see also United States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir. 2009) (en banc) (If a “ ‘question requires us to consider legal concepts in the mix of fact and law and to exercise judgment about the values that animate legal principles, ... the question should be classified as one of law and reviewed de novo.’”) (quoting United States v. McConney, 728 F.2d 1195, 1202 (9th Cir. 1984)). The district court’s factual determinations are reviewed for clear error, and may be reversed only if they are “illogical, implausible, or without support in inferences that may be drawn from the facts in the record.” Hinkson, 585 F.3d at 1251. IIT. We first discuss the law relevant to this appeal, and address ATA’s contentions that the district court misinterpreted the applicable law. We do not, in this section, address ATA’s contentions that the district court misapplied the law to the facts. We will apply the law to the facts in section V of this opinion. Congress enacted the FAAA Act in 1994 to prevent States from undermining federal deregulation of interstate trucking. Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 368 (2008); Tocher, 219 F.3d at 16a 1048. The FAAA Act provides as a “general rule” that “a State[or] political subdivision of a State ... 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). In determining whether § 14501(c)(1) of the FAAA Act preempts State action, we ask three questions. First, we must consider whether the provision “relate [s] to a price, route, or service of a motor carrier.” Id.; see also Rowe, 552 U.S. at 368. If the answer is no, the provision does not fall within the preemptive scope of § 14501(c)(1). If the answer is yes, we must consider whether the provision “has the force and effect of law”—that is, whether the provision was enacted pursuant to the State’s regulation of the market, rather than the State’s participation in the market in a proprietary capacity. 49 U.S.C. § 14501(c)(1); see also Tocher, 219 F.3d at 1049—50. If the provision does not fall within the market participant doctrine and relates to rates, routes, or services, we turn to the third inquiry and consider whether any of the FAAA Act’s express exemptions save the regulation from preemption. As relevant here, the FAAA Act does not “restrict the safety regulatory authority of a State with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A); see also City of Columbus, 536 U.S. at 428. ATA argues that the district court misidentified and misapplied the law at every step. We first consider each of ATA’s general challenges to the district court’s analysis. We reject ATA’s arguments that (1) 17a the concession agreements per se affect rates, routes, and services; (2) the market participant doctrine does not apply because the Port does not “procure” drayage services; and (3) that the Supreme Court’s decision in Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954) precludes the application of the safety exception to this case. A. Related to Rates, Routes, or Services “(S]tate enforcement actions having a connection with, or reference to [motor] carrier rates, routes, and services are preempted.” Rowe, 552 U.S. at 370— 371 (internal quotation marks and emphasis omitted) (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384, 386-84, 390 (1992)) (interpreting the nearly identical preemption provision of the Airline Deregulation Act of 1978, 49 U.S.C. app. § 1305(a)(1)). The terms “rates, routes, and services” were “used by Congress in the public utility sense; that is, service refers to such things as the frequency and scheduling of transportation, and to the selection of markets to or from which transportation is provided.... Rates indicates price; routes refers to courses of travel.”® Air Transport Ass’n of Am. v. City & Cnty. of San Francisco, 266 F.3d 1064, 1071 (9th Cir. 2001) (internal quotation 8 The Airline Deregulation Act preempts any provision that relates to “rates, routes and services.” 49 U.S.C. app. § 1305(a)(1) (emphasis added). The FAAA Act preempts any provision that relates to “prices, routes, and services.” 49 U.S.C. § 14501(c)(1). We use the terms “prices” and “rates” interchangeably. See Rowe, 552 U.S. at 375, 128 S. Ct. 989 (discussing whether a state provision relates to rates and is preempted under the FAAA Act). 18a marks, citations, and alterations omitted); see also Rowe, 552 U.S. at 372-73 (describing a motor carriers services as its system for picking up, sorting, and carrying goods). In determining whether a provision has a connection to rates, routes, or services, we must examine the actual or likely effect of a State’s action. Cf. Cal. Div. of Labor Standards Enforcement v. Dillingham Constr. NA, Inc., 519 U.S. 316, 325 (1997); Californians for Safe & Competitive Dump Truck Transp. v. Mendonca, 152 F.3d 1184, 1189 (9th Cir. 1998). If the State, for example, mandates that motor carriers provide a particular service to customers, or forbids them to serve certain potential customers, the effect is clear, and the provision is preempted if it has the force and effect of law. See Rowe, 552 U.S. at 372-73; Morales, 504 U.S. at 388-89 (noting that advertising guidelines expressly referenced rates and had a forbidden significant effect on the fares charged). The waters are murkier, though, when a State does not directly regulate (or even specifically reference) rates, routes, or services. We recognize that FAAA Act “pre-emption may occur even if a [S]tate law’s effect on rates, routes, and services ‘is only indirect.” Rowe, 552 U.S. at 370 (quoting Morales, 504 U.S. at 386). At the same time, we require that the effect on rates, routes or services be more than “tenuous” or “remote.” Jd. at 371 (quoting Morales, 504 U.S. at 390). In such a “borderline” case, the proper inquiry is whether the provision, directly or indirectly, “binds the ... carrier to a particular price, route or service and thereby interferes with competitive market 19a forces within the... industry.” Air Transport, 266 F.3d at 1072; cf. Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 232-33 (1995) (holding that the Airline Deregulation Act’s preemption clause “stops States from imposing their own substantive standards with respect to rates, routes, or services” but does not prevent States from enforcing dispute resolution provisions in contracts signed by airlines); Mendonca, 152 F.3d at 1189 (holding that a State minimum wage statute did not affect rates, routes or services). ATA argues that the district court erred in examining the effect of each individual provision of the concession agreements, contending that “the requirement of a concession agreement per se affects routes and services” because it provides “POLA [the] ability to prohibit non-concessionaire LMCs from entering its property.” Our decision in Air Transport forecloses ATA’s argument. 266 F.3d at 1071-72. Air Transport considered whether a city ordinance requiring that registered domestic partners be afforded treatment equal to spouses had an effect on the routes of airlines.? Id. at 1069. The Airlines contended that ® ATA argues that the concession agreements differ from the ordinance at issue in Air Transport because the latter did “not give the city discretion to decide which airlines could not serve the airport.” ATA misreads Air Transport. The ordinance there said “[njo contracting agency of the City ... shall execute or amend any contract ... with any contractor that discriminates in the provision of [benefits] ... between employees with domestic partners and employees with spouses....” 266 F.3d at 1069. The ordinance required the airport to establish that the airlines did not discriminate, and prohibited the airport from contracting with airlines that did, or executing pre-existing contracts. There is no meaningful distinction between the ordinance in Air 20a the ordinance would require them to raise their rates or cease operating at San Francisco Airport due to increased costs. Id. at 1072, 1074. We held that because “[t]he Airlines [conceded] that they will use airport property in San Francisco regardless of the Ordinance ..., the Ordinance cannot be said to compel or bind the Airlines to a particular route or service and there is no preemption under the connection- with test.” Jd. at 1074. The Airlines claimed that the ordinance presented a “Hobson’s choice—either leave the Airport or do not discriminate.” /d. We noted that air carriers were allowed “to make their own decisions about where to fly and how many resources to devote to each route and service.” Jd. Though the Airlines’ decision to operate in San Francisco “may mean the Airlines will have to agree to abide by the Ordinance’s non-discrimination requirements as a ‘cost’ of maintaining their leases at [San Francisco Airport],” that did not, in itself, mean the Ordinance was preempted. Jd. “Hypothetically, there might be some contract term the City could demand whose costs would be so high that it would compel the Airlines to change their prices, routes, or services,” but the San Francisco Ordinance “d{id] not approach that level.” Jd. at 1075 (citing N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655 (1995) for the proposition that “there may be a point at which costs from a [S]tate law are so exorbitant that it could rise to the level of a substantive mandate.”). Transport and the concession agreements, which also require the Port to ensure that concessionaires comply with certain requirements before entering Port property. 2la Air Transport establishes that a State may condition access to State property so long as the conditions do not impose costs that compel the carrier to change rates, routes, or services (for example by forcing the carrier to cease doing business with the State). Accordingly, the concession agreements do not necessarily affect rates, routes, or services simply because they impose conditions on entering Port property. The correct question is whether each condition binds motor carriers, directly or indirectly, to a particular rate, route, or service. We apply this law to specific provisions of POLA’s concession agreements in part V of this opinion. B. The Market Participant Doctrine The FAAA Act “preempt[s] only [Sjtate regulation, and not actions a [S]tate takes as a market participant.” Johnson v. Rancho Santiago Cmty. Coll. Dist., 623 F.3d 1011, 1022 (9th Cir. 2010); Tocher, 219 F.3d at 1049. In applying the market participant doctrine, we undertake “a single inquiry: whether the challenged program constitute[s} direct [S]tate participation in the market.” Reeves, Inc. v. Stake, 447 U.S. 429, 435 n. 7 (1980) (internal quotation marks omitted); see also Bldg. & Constr. Trades Council of the Metro. Dist. v. Associated Builders & Contractors of Mass./R.J1., Inc. (hereinafter Boston Harbor), 507 U.S. 218, 227—32 (1993) (considering whether the State was pursuing “proprietary interests”). ATA contends that the Port does not participate in the market because the concession agreements do not fall neatly within the two-prong test adopted by our circuit as a guide for determining whether the 22a market participant doctrine applies. Johnson, 623 F.3d at 1023-24. The test was first developed in Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686, 693 (5th Cir. 1999), and asks: First, does the challenged action essentially reflect the entity’s own interest in its efficient procurement of needed goods and services, as measured by comparison with the _ typical behavior of private’ parties in _— similar circumstances? Second, does the narrow scope of the challenged action defeat an inference that its primary goal was to encourage a general policy rather than address a_e specific proprietary problem? Id.; see also Chamber of Commerce v. Lockyer, 463 F.3d 1076, 1084 (9th Cir. 2006) (en banc), rev'd on other grounds sub nom., Chamber of Commerce uv. Brown, 554 U.S. 60 (2008) and vacated by 543 F.3d 1117 (9th Cir. 2008). The first question “looks to the nature of the expenditure and _ protects comprehensive [S]tate policies with wide application from preemption, so long as the type of [S]tate action is essentially proprietary.” Johnson, 623 F.3d at 1024 (internal quotation marks omitted) (quoting Lockyer, 463 F.3d at 1084). “The second question looks to the scope of the expenditure and protects narrow spending decisions that do not necessarily reflect a [S]tate’s interest in the efficient procurement of goods or services, but that also lack the effect of broader social regulation.” Jd. (internal quotation marks omitted) (quoting Lockyer, 463 F.3d at 1084). If the answer to either question is yes, the market participant exception applies. Jd. 23a The second prong of the Cardinal Towing test is not at issue here. The concession agreements are not “narrow spending decisions” that “lack the effect of broader social regulation.” Johnson, 623 F.3d at 1024 (quoting Lockyer, 463 F.3d at 1084) (internal quotation marks omitted). “Narrow spending decisions” tend to be expressly limited in time and scope—for example, they apply to one city contract or to a number of contracts of a particular size and funded by a particular finite source. See id. at 1028— 29 (agreement limited to construction projects costing over $200,000, in a three-year period, and funded by specific initiative); Sprint Spectrum LP v. Mills, 283 F.3d 404, 421—21 (2d Cir. 2002) (contract applied only to one cellular phone tower located on particular property); Cardinal Towing, 180 F.3d at 694 (restrictions applied to single contract for police tows). Here, the concession agreements are not limited to contracts of a particular size or subsidized by State funds, and are not limited to drayage operations for a particular time. These factors indicate that the concession agreements do . ct fall within the narrow scope prong. Thus, we must consider whether the nature of the concession agreements is essentially proprietary. Johnson, 623 F.3d at 1024. ATA contends if the State’s actions do not qualify as “efficient procurement,” they cannot be _— considered proprietary.!° We disagree. ‘© Contrary to ATA’s assertion, neither the district court's decision at the preliminary injunction phase nor this court’s affirmance of that decision are binding as law of the case. The district court concluded that “[a]lthough case law provides some 24a The Supreme Court has applied the market participant doctrine to a case not involving “procurement” of goods. In Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 796—97 (1976), the Supreme Court upheld a Maryland policy penalizing in-state wreckers who kept abandoned vehicles on their property, and offering bounties to processors who scrapped vehicles formerly titled in Maryland. The Court held that Maryland’s “payment of [S]tate funds—in the form of bounties—to encourage the removal of automobile hulks” was proprietary and did not violate the dormant commerce clause. Id. at 809. It stated that vehicles “remain within Maryland in response to market forces, including that exerted by money from the State.” Jd. at 810. Under Alexandria Scrap, procurement for governmental use is not the only way a State can participate in the market. conflicting indications, the Court finds that, on balance, plaintiff has a significant likelihood of showing that defendants are not participants in the relevant market.” ATA-I, 577 F. Supp. 2d at 1120. We commended the district court’s “cogent explanation” but offered no further analysis. ATA-—I/, 559 F.3d at 1053. As a “general rule, our decisions at the preliminary injunction phase do not constitute the law of the case.” Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v. USDA, 499 F.3d 1108, 1114 (9th Cir. 2007) (internal quotation marks and citation omitted). “Any of our conclusions on pure issues of law, however, are binding.” Jd. Neither ATA-IJ nor ATA-II decided a “pure issue of law” with respect to the market participant doctrine, and their equivocal holdings on the likelihood that plaintiffs would prevail are not binding on this panel. 25a The first prong of Cardinal Towing is useful in cases where the government is buying goods or seeking services,'} but it is not the be-all-and-end-all of proprietary action. Cardinal Towing acknowledged as much, noting that its questions “seek to isolate” those cases to which the market participant doctrine applies and help courts to “distinguish[ ] between proprietary action that is immune from preemption and impermissible attempts to regulate through the spending power.” 180 F.3d at 693. If the State is not engaged in “efficient procurement” but nonetheless directly participates in the market in a proprietary manner, we see no reason why Cardinal Towing should preclude the application of the market participant doctrine. Cf. Tri-M Group, LLC v. Sharp, 638 F.3d 406, 422 (3d Cir. 2011) (identifying “several questions a court should ask when conducting the ‘single inquiry’ to determine ‘whether the challenged program constitute[s] direct state participation in the market’ ” and emphasizing that the questions must be considered in the “specific context” presented) (quoting White v. Mass. Council of Constr. Emp’rs Inc., 460 U.S. 204, 208 (1983)). Here, the Port directly participates in the market as a manager of Port facilities. In essence, the concession agreements are contracts under which the Port exchanges access to its property for a drayage carrier's compliance with certain conditions. ATA contends that the Port’s participation in the “port 1! See, e.g., Engine Mfrs. Ass'n v. S. Coast Air Quality Maint. Dist., 498 F.3d 1031, 1040 (9th Cir. 2007) (the State was acting as a market participant when it required transportation vehicles purchased with State funds to meet environmental standards); Tocher, 219 F.3d at 1049-50. 26a market” cannot extend to imposing restrictions on the “drayage market.”!2 To be sure, the State does not act as a market participant every time it manages any of its property. See Olympic Pipe Line Co. v. City of Seattle, 437 F.3d 872, 881-82 (9th Cir. 2006). In Olympic Pipe Line, for example, the City of Seattle was not acting as a market participant when it 12 ATA argues that, in S.—Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 97-98, 104 S. Ct. 2237, 81 L. Ed. 2d 71 (1984) (plurality), the Supreme Court limited the market participant doctrine to State actions taken in a “narrow” market defined by contractual privity. Wunnicke is not controlling precedent on this question. Its discussion of the market participant doctrine did not garner a majority of justices. See id. at 93-98, 104 S. Ct. 2237 (majority op.); id. at 101, 104 S. Ct. 2237 (Powell, J., in a concurrence in part and concurrence in the judgment joined by Burger, C.J.) (stating that they would remand to allow the Court of Appeals to apply the market participant doctrine in the first instance); id. at 101-103, 104 S. Ct. 2237 (Rehnquist, J., in a dissent joined by O’Connor, J.) (arguing that the market participant doctrine applied). Indeed, Wunnicke is a perfect example of the Supreme Court's fractured views on the market participant doctrine. See Shell Oil Co. v. City of Santa Monica, 830 F.2d 1052, 1056 (9th Cir. 1987). Subsequent cases either distinguish Wunnicke as an outlier involving special considerations of natural resources, foreign commerce, and restrictions on resale, or cite Wunnicke for general positions of law not unique to its analysis. See, e.g., Dep't of Revenue of Ky. v. Davis, 553 U.S. 328, 348 n. 17, 128 S. Ct. 1801, 170 L. Ed. 2d 685 (2008) (responding to the dissent and distinguishing Wunnicke as a case involving three unique circumstances); United Haulers Ass'n, Inc. v. Oneida—Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 340 n. 4, 127 S. Ct. 1786, 167 L. Ed. 2d 655 (2007) (citing Wunnicke as an example of local-processing requirements invalidated by the Court); Shell Oil, 830 F.2d at 1057-58 (citing Wunnicke for the proposition that “contractual privity does not insulate a state or local body from commerce clause scrutiny”). 27a refused to renew a franchise agreement giving a right of way under city streets to a natural gas pipeline because the pipeline did not conduct tests at the behest of the city. Jd. at 875-76, 882. We noted that, despite the city’s claim that it was acting as a landlord, the city’s “interest is not that of a private market participant that owns a pipeline or competes in the pipeline market or a related market.” Id. at 881 (emphasis added). Rather, we stated that “Seattle in its sovereign capacity owns the streets and land under which the Seattle Lateral [pipeline] runs, for the purpose of maintaining a transportation system” and the city sought to exercise its power to protect public health and safety. Id. at 882; see also Shell Oil Co. v. City of Santa Monica, 830 F.2d 1052, 1057—58 (9th Cir. 1987) (holding that a city “is not a market participant... in deciding whether, or on what terms to grant a franchise for the use of city streets”). In this case, we are not faced with a situaticn where the Port is managing property “in its sovereign capacity,” or imposing restrictions unrelated to its business interests as a property manager. As the district court recognized, the Port of Los Angeles is a business entity, operating wholly separately from the city government. It is entirely self-sustaining and does not depend on city funds. Furthermore, the Port has a business interest in the drayage market. The Port’s business is to provide a point of entry for ships to unload goods. The Port necessarily requires the interrelated service of drayage trucking in order to transport those goods to customers or points of forwarding. The district court found that (1) the “Port has a direct financial interest in the 28a unhindered and efficient flow of cargo through its terminals and in increasing container traffic through the Port”; (2) the Port “needs to continually improve the efficiency of cargo operations at the Port to maintain its competitive position with respect to other ports and capture additional business”; and (3) a supply of drayage trucks and drivers is integral to cargo movement at the Port. ATA does not challenge those factual findings as _ clearly’ erroneous. Accordingly, we must conclude that even though the Port does not purchase drayage services, such services are an integral part of Port business. The drayage and port markets are so closely related that the Port’s interest in managing its facilities can extend to imposing conditions on drayage carriers that operate on Port property.'* 13 Both parties discuss as persuasive authority cases from other circuits and district courts addressing the market participant doctrine in the general context of State facilities. See Sprint Spectrum L.P., 283 F.3d at 420-21 (upholding under the market participant doctrine a school district’s restrictions on cellular phone towers placed on school property); Four 7s, Inc. u. Little Rock Mun. Airport Comm'n, 108 F.3d 909, 912-13 (8th Cir. 1997) (holding that State restrictions on rental car operators that leased airport terminal counter space fell within the market participant doctrine); Smith v. Dep't of Agric., 630 F.2d 1081, 1083 (5th Cir. 1980) (holding that preferential placement for local farmers at a State-run farmers market did not fall within the market participant doctrine); Aeroground, Inc. v. City & Cnty. of San Francisco, 170 F. Supp. 2d 950, 958— 59 (N.D. Cal. 2001) (holding for the purposes of a preliminary injunction that an airport was not acting as a market participant when it adopted a rule requiring employers operating at the airport to permit certain union actions); Transp. Limousine of Long Island, Inc. v. Port Auth. of N.Y. & N.J., 571 F. Supp. 576, 581 (E.D.N-Y.1983). 29a We hold 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. Here, the Port leases its facilities to terminal operators, and permits drayage trucks to access its facilities, for the purpose of moving cargo through the Port and increasing Port revenues. The Port has a financial interest in ensuring that drayage services are provided in a manner that is safe, reliable, and consistent with the Port’s overall goals for facilities management. A private port owner could (and probably would) enter into concession-type agreements with licensed motor carriers in order to further its goals. See Boston Harbor, 507 U.S. at 231-32. We therefore conclude that the Port acted in its proprietary capacity as a market participant when it decided to enter into concession agreements. We stop short, though, of holding that every provision of the concession agreements is saved from preemption. The Supreme Court has placed limitations on what a State, acting as a market participant, may do. “[W]here the [S]tate seeks to affect private parties’ conduct unrelated to the performance of contract [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385051_0764%3A0. Public record. Not legal advice.