CTA will appeal AB5 decision, impacting when injunction will be lifted

The current injunction blocking enforcement of AB5 will stay in place until the 9th Circuit, which overturned the injunction, issues what is known as its mandate, formalizing its decision. That mandate can come seven days after the deadline for filing a petition expires; that deadline is now May 26 as a result of the extension. Assuming that the CTA goes ahead and appeals the three-member panel’s decision, that seven-day period is moot.

But the mandate also can be lifted seven days after the petition is denied, if the CTA appeal is turned down. When that happens is the big unknown in the process: How long will it be before the 9th Circuit rules on the request for an en banc hearing positively or negatively?

The seven-day clock would start when that denial is handed down, if it is denied. When that will be is far from certain, according to attorneys contacted by FreightWaves.

As the Scopelitis law firm said in an email it sent out when the appellate court lifted the AB5 injunction, after reviewing the different calendar requirements, “it is difficult to predict the precise date when the injunction will be lifted and AB5 can be enforced against motor carriers.” 

Scopelitis said at the time that it could be as early as May 19, but that assumed no appeal before the May 12 deadline that was initially in effect. That appeal already has been extended and it is assumed CTA will go ahead with its appeal before the new May 26 deadline. 

If the en banc petition is accepted, and the larger court panel hears the CTA appeal, there would be no mandate handed down by the appellate court and the injunction would remain in place. 

There is another complex scenario in which the en banc petition is denied and the CTA appeals to the full U.S. Supreme Court. There would be a possibility that the lifting of the injunction could be stayed while the Supreme Court is deciding whether to take the CTA case, followed by the chance that the Supreme Court takes the case. But that remains a few legal steps away from the current situation.

AB5 is a law governing the definition of independent contractors. It contains the ABC test, which the California Legislature, using the findings of a 2018 state court case known as Dynamex, set up as a three-pronged test to guide decisions on defining independent contractors versus employees. The B prong supports defining a worker as an employee if he or she is engaged in activity that is central to the employer, such as a trucking company hiring an independent truck owner to move freight. 

The CTA case argued that a federal law, the Federal Aviation Administration Authorization Act of 1994, had language that would block a law such as AB5. The circuit court agreed enough to hand down a preliminary injunction blocking enforcement of AB5. The three-judge appellate decision last week reversed the injunction.

If there is no en banc appeal granted, the case reverts to the lower court that handed down the original injunction. It did not end with the appellate court decision. But given that a potential conflict between F4A and AB5 was at the heart of the CTA case, and the appellate court shot that down in its decision, other legal approaches would presumably be required if the CTA pursues its lawsuit.

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