The California Trucking Association (CTA) filed a lawsuit in November 2019 in the U.S. District Court for the Southern District of California challenged the application of California’s Assembly Bill 5 (AB 5) to the trucking industry, specifically arguing that it violates the Dormant Commerce Clause of the U.S. Constitution, among other claims.
AB 5, enacted in 2019 and effective January 1, 2020, codified the “ABC test” to determine whether workers are classified as employees or independent contractors. The “B” prong of the test, which requires that a worker perform work outside the usual course of the hiring entity’s business to be considered an independent contractor, effectively prohibits the traditional leased owner-operator model in trucking, as owner-operators’ work (hauling freight) is central to a motor carrier’s business.
Plaintiffs argued that AB 5 was preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA), which prohibits states from enacting laws affecting a motor carrier’s prices, routes, or services. The Dormant Commerce Clause and Equal Protection Clause were also cited as grounds for challenge.
On December 31, 2019, District Judge Roger Benitez granted a preliminary injunction, halting AB 5’s enforcement against the trucking industry, finding that the law likely violated FAAAA preemption by restricting motor carriers’ ability to use independent contractors, a core component of interstate trucking. The Ninth Circuit Court of Appeals reversed this injunction in its April 2021 published opinion, ruling that AB 5 was a generally applicable labor law that did not sufficiently impact prices, routes, or services to be preempted by the FAAAA. The injunction remained in place pending further appeals. The U.S. Supreme Court declined to review the case in June 2022, returning it to the Southern District of California and dissolving the injunction.
The Owner-Operator Independent Drivers Association (“OOIDA”) is the international trade association representing the interests of independent owner-operators and professional drivers on all issues that affect truckers. More than 150,000 members of OOIDA are men and women in all 50 states and Canada who collectively own and/or operate more than 240,000 individual heavy-duty trucks and small truck fleets. Its national headquarters is located on the outskirts of Kansas City, in Grain Valley, MO.
OOIDA joined the litigation in 2022 as an intervenor, focusing on the interests of small-business truckers, particularly those operating interstate. After the Supreme Court’s denial, CTA and OOIDA filed renewed motions for a preliminary injunction, combining arguments on FAAAA preemption, the Dormant Commerce Clause, and Equal Protection. They contended that AB 5’s ABC test, by effectively banning leased owner-operators, imposed an undue burden on interstate commerce, violating the Dormant Commerce Clause. This clause, inferred from Article I, Section 8 of the U.S. Constitution, prohibits states from enacting laws that discriminate against or excessively burden interstate commerce.
On March 15, 2024, Judge Benitez rejected the renewed motions for a preliminary injunction, ruling against CTA and OOIDA on all claims. He concluded that AB 5 did not violate the Dormant Commerce Clause, as it lacked discriminatory intent or effect favoring California truckers over out-of-state truckers. Without such discrimination, the court declined to engage in Pike balancing, noting that only a “small number of cases” have found nondiscriminatory burdens substantial enough to violate the clause.
In August 2024, the CTA announced it would not pursue further appeals, ending its four-and-a-half-year legal battle. OOIDA continued the fight, filing an appeal with the Ninth Circuit in August 2024. Their brief focused on the Dormant Commerce Clause, arguing that AB 5’s ABC test “effectively prohibits an entire sector of small business truckers” from operating as independent contractors in California, creating a significant burden on interstate commerce. They also reiterated the Equal Protection claim, citing the B2B exemption’s incompatibility with federal regulations.
California’s Attorney General responded in November 2024, asserting that AB 5 does not prohibit owner-operators outright and that its regulatory costs do not trigger Pike balancing. The state argued that the law’s intent was to protect workers, not to discriminate against interstate commerce.
On May 16, 2025 the Court of Appeals for the 9th Circuit issued an unpublished Memorandum Opinion in the case of Owner-Operator Independent Drivers Association, Inc. v. Bonta – Case # 3:18-cv-02458-BEN-DEB. It concluded – among other findings – that “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). ”