Owner-Operator Independent Drivers Association, Inc. v. Bonta

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 16, 2025
• Docket: 24-2341
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 16 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

CALIFORNIA TRUCKING No. 24-2341 ASSOCIATION; et al., D.C. No. 3:18-cv-02458-BEN-DEB Plaintiffs,

OWNER-OPERATOR INDEPENDENT MEMORANDUM* DRIVERS ASSOCIATION, INC.,

Intervenor - Plaintiff - Appellant,

v.

ROB BONTA, in his official capacity as the Attorney General of the State of California; et al.,

Defendants - Appellees,

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

Intervenor - Defendant - Appellee.

Appeal from the United States District Court for the Southern District of California Roger T. Benitez, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Argued and Submitted April 9, 2025 Pasadena, California

Before: CALLAHAN, DESAI, and DE ALBA, Circuit Judges.

Appellant Owner-Operator Independent Drivers Association (“OOIDA”)

appeals the district court’s judgment in favor of the State of California. OOIDA

claims that California’s Assembly Bill 5 (“AB 5”) violates the dormant Commerce

Clause, U.S. Const. art. I, § 8, and that the business-to-business (“B2B”) exception

in AB 5 violates the dormant Commerce Clause and the Equal Protection Clause,

U.S. Const. amend. XIV, § 1. OOIDA argues that AB 5 violates the dormant

Commerce Clause because it imposes a substantial burden on interstate commerce,

which outweighs its putative benefits. OOIDA also contends that the B2B

exception violates the dormant Commerce Clause because it discriminates against

interstate commerce and violates the Equal Protection Clause because it treats

interstate and intrastate drivers differently. OOIDA maintains that there is no

rational basis to support this alleged disparate treatment.

When the district court consolidates its ruling on a preliminary injunction

with its decision on the merits under Federal Rule of Civil Procedure 65(a)(2), we

review the “district court’s factual findings for clear error and its conclusions of

law de novo.” Indep. Training & Apprenticeship Program v. Cal. Dep’t of Indus.

Rels., 730 F.3d 1024, 1031 (9th Cir. 2013). We have jurisdiction under 28 U.S.C.

§ 1291. We affirm.

2 24-2341 1. AB 5 does not violate the dormant Commerce Clause. “The dormant

Commerce Clause is not a roving license for federal courts to decide what

activities are appropriate for state and local government to undertake, and what

activities must be the province of private market competition.” United Haulers

Ass’n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 343

(2007). “[T]he Supreme Court has frequently admonished that courts should not

‘second-guess the empirical judgments of lawmakers concerning the utility of

legislation.’” Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris, 729

F.3d 937, 953 (9th Cir. 2013) (quoting Pac. Nw. Venison Producers v. Smitch, 20

F.3d 1008, 1017 (9th Cir. 1994)). “[S]tate laws offend the Commerce Clause when

they seek to ‘build up . . . domestic commerce’ through ‘burdens upon the industry

and business of other States,’ regardless of whether Congress has spoken.” Na’l.

Pork Producers Council v. Ross, 598 U.S. 356, 369 (2023) (quoting Guy v.

Baltimore, 100 U.S. 434, 443 (1880)). “[T]his antidiscrimination principle lies at

the very core of our dormant Commerce Clause jurisprudence.” Id. (citation and

quotation marks omitted); see also CTS Corp. v. Dynamics Corp. of Am., 481 U.S.

69, 87 (1987) (“The principal objects of dormant Commerce Clause scrutiny are

statutes that discriminate against interstate commerce”).

“[M]ost statutes that impose a substantial burden on interstate commerce do

so because they are discriminatory.” Ass’n des Eleveurs, 729 F.3d at 952. “[N]on-

3 24-2341 discriminatory laws that have only incidental effects on interstate commerce will

generally be upheld ‘unless the burden imposed on such commerce is clearly

excessive in relation to the putative local benefits.’” Ward v. United Airlines, Inc.,

986 F.3d 1234, 1239 (9th Cir. 2021) (quoting Pike v. Bruce Church, Inc., 397 U.S.

137, 142 (1970)). The dormant Commerce Clause does not protect “the particular

structure or methods of operation in a retail market.” Exxon Corp. v. Governor of

Maryland, 437 U.S. 117, 127–28 (1978).

Here, OOIDA failed to present evidence in support of its argument that AB

5 places a substantial burden on interstate commerce. OOIDA argues that AB 5

functionally prohibits certain kinds of truck drivers from working in California.

However, as OOIDA implicitly concedes, AB 5 does not preclude out-of-state

drivers from working in California; nor does it favor in-state drivers at the expense

of out-of-state drivers. At worst, AB 5 restricts what kind of drivers may operate

in California. See Exxon, 437 U.S. at 127 (“[T]he [dormant Commerce] Clause

protects the interstate market, not particular interstate firms, from prohibitive or

burdensome regulations”).

2. The B2B exception does not violate the dormant Commerce Clause.

When analyzing a regulation under the dormant Commerce Clause,

“[d]iscrimination . . . means treating similarly situated in-state and out-of-state

economic interests differently in a way that favors the in-state interests.” Ward,

4 24-2341 986 F.3d at 1239. A regulation that “‘treat[s] all private companies exactly the

same’ does not discriminate against interstate commerce.” Ass’n des Eleveurs,

729 F.3d at 948 (quoting United Haulers Ass’n, Inc., 550 U.S. at 342).

OOIDA maintains that only in-state drivers can qualify for the B2B

exception, making it discriminatory, but does not argue that the B2B exception

itself is discriminatory. Rather, the organization contends that the B2B exception,

when considered in conjunction with federal regulations applicable to drivers

working in interstate commerce, discriminates against out-of-state drivers. We

disagree with OOIDA’s interpretation of these federal regulations. But even if we

agreed, OOIDA fails to explain how these regulations could render the B2B

exception discriminatory when the regulations apply to all drivers engaged in

interstate commerce, including California-based drivers.

3. The B2B exception does not violate the Equal Protection Clause.

“When conducting rational basis review of economic legislation that disparately

treats similarly situated groups, we ask whether there is any reasonably

conceivable state of facts that could provide a rational basis for the classification.”

Olson v. California, 104 F.4th 66, 77 (9th Cir. 2024) (en banc) (citation and

quotation marks omitted). Rational basis “is a fairly forgiving standard, given the

wide latitude afforded to states in managing their economies.” Am. Soc’y of

Journalists & Authors, Inc. v. Bonta, 15 F.4th 954, 965 (9th Cir. 2021) (citation

5 24-2341 and quotation marks omitted). “[T]he party attacking a law must ‘negate every

conceivable basis which might have supported’ the distinctions drawn.” Id.

(quoting Angelotti Chiropractic v. Baker, 791 F.3d 1075, 1086 (9th Cir. 2015)).

OOIDA argues that the B2B exception violates the Equal Protection Clause

because it favors intrastate drivers over their interstate counterparts. We disagree.

The B2B exception treats businesses differently than individual workers. It does

not draw a distinction between intrastate and interstate drivers. Moreover, there is

a rational basis for the distinction between businesses and individual workers. For

example, the California Legislature may have concluded that the risk of worker

misclassification was diminished when the contracting parties were sophisticated

and had nearly commensurate bargaining power.

AFFIRMED.

6 24-2341