Cta v. Rob Bonta, 996 F.3d 644

Background

California Supreme Court in Dynamex adopted the "ABC" test for employee v. independent-contractor classification; California enacted AB‑5 to codify and expand that test.
AB‑5 presumes employee status unless the hiring entity proves three prongs (A–C); it includes multiple exemptions but generally broad application to employers.
California Trucking Association (CTA) — representing motor carriers that use owner‑operators — and two owner‑operators sued, claiming the Federal Aviation Administration Authorization Act (FAAAA or F4A) preempts AB‑5 as applied to motor carriers.
The district court granted a nationwide preliminary injunction preventing California from enforcing AB‑5 against motor carriers; the State and the Teamsters appealed.
Ninth Circuit (Ikuta, J.) held CTA had standing but reversed the injunction: AB‑5 is a generally applicable labor law affecting carriers’ workforce relationships and is not preempted by the F4A; Judge Bennett dissented arguing AB‑5 meaningfully affects carriers’ services and is preempted.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing (associational)	CTA and members have concrete plan to continue using owner‑operators and thus face realistic threat of enforcement	State: enforcement uncertainty and new exemptions undercut concrete injury	CTA has standing: policies conflict with AB‑5, state notified intent to enforce, prior enforcement against similarly situated parties
F4A preemption of AB‑5 (main)	AB‑5 forces carriers to use employees, raising costs and changing routes/services; thus AB‑5 "relates to" prices, routes, or services and is preempted	AB‑5 is a generally applicable labor law that regulates employer–worker relations and does not bind or freeze prices, routes, or services	AB‑5 is not preempted: it targets workforce relations and does not directly bind carriers’ prices/routes/services
General applicability/exemptions	Exemptions show AB‑5 targets certain industries and thus is not generally applicable	Even with exemptions, AB‑5 applies across hundreds of industries and functions as a generally applicable labor law	AB‑5 is generally applicable despite enumerated exemptions; general applicability favors non‑preemption
"All‑or‑nothing" / effect on services	ABC Prong B makes owner‑operators per se employees for hauling, effectively forcing carriers to change service models, buy fleets, consolidate routes, and reduce specialized/seasonal services	State and IBT: carriers could structure relationships under AB‑5 exemptions or hire owner‑operators as employees; alleged downstream effects are speculative	Court rejects speculative/indirect effects theory; precedent requires more direct "binding/freezing" effect on prices/routes/services for preemption

Key Cases Cited

Dynamex Operations W. v. Superior Ct., 4 Cal.5th 903 (Cal. 2018) (California Supreme Court adoption of the ABC test)
S.G. Borello & Sons, Inc. v. Dep’t of Indus. Rels., 48 Cal.3d 341 (Cal. 1989) (prior multi‑factor independent‑contractor test)
Morales v. Trans World Airlines, 504 U.S. 374 (1992) (broad "related to" preemption analysis under ADA)
Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364 (2008) (preemption where state law governs essential service details and thwarts deregulatory objective)
Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251 (2013) (limits on interpreting "related to" language)
Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) (California meal/rest‑break laws not F4A‑preempted; generally applicable labor laws aimed at workforce do not necessarily relate to prices/routes/services)
California Trucking Ass’n v. Su, 903 F.3d 953 (9th Cir. 2018) (Borello test not preempted; background labor regulation that affects workforce typically not preempted)
Californians for Safe & Competitive Dump Truck Transp. v. Mendonca, 152 F.3d 1184 (9th Cir. 1998) (prevailing wage law not preempted)
Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020) (common‑law negligence claims can be preempted where they attach at the point of providing services)
Am. Trucking Ass’ns v. City of Los Angeles, 559 F.3d 1046 (9th Cir. 2009) (concession agreements requiring transition to employees implicated prices/routes/services)
Schwann v. FedEx Ground Package Sys., Inc., 813 F.3d 429 (1st Cir. 2016) (Prong B of Massachusetts ABC test held related to services; persuasive on "all‑or‑nothing" effect)
Bedoya v. Am. Eagle Express Inc., 914 F.3d 812 (3d Cir. 2019) (discussed ABC test and preemption; distinguished factual variants)