Client Alerts & Insights
California AB5 Update: Federal Appeals Court Denies Request To Stay District Court’s Preliminary Injunction
March 31, 2020
Authored By:
While the transportation and logistics world has naturally been occupied with rapidly developing circumstances surrounding the COVID-19 crisis, the United States Court of Appeals for the Ninth Circuit has delivered a welcome interim victory to motor carriers in California.
On March 30, 2020, the U.S. Court of Appeals issued a decision denying a request made by the International Brotherhood of Teamsters (the “Teamsters”) to stay the preliminary injunction that currently enjoins the enforcement of California Assembly Bill No. 5 (“AB5”) against motor carriers in California. By way of background, AB5 would mandate employee status for any driver performing services in the usual course of a hiring entity’s business. Thus, AB5 would, if enforced, make it impossible for motor carriers to utilize owner-operators and would, instead, force classification of all drivers as employees.
On January 16, 2020, Judge Roger Benitez of the United States District Court for the Southern District of California issued a decision granting a preliminary injunction precluding enforcement of AB5 with respect to motor carriers in the State of California. Specifically, Judge Benitez ruled that AB5 is preempted by the Federal Aviation Administration Authorization Act. The Teamsters are appealing the district court’s decision and had hoped that the federal appellate court would issue a stay of the injunction pending the appeal, functionally reversing Judge Benitez’ decision before hearing the appeal on its merits. Tellingly, even though the injunction operates against the State of California, and the State of California is also appealing Judge Benitez’ decision, the State of California did not join in the Teamsters’ request for a stay. Fortunately, the federal appellate court concluded that the Teamsters had not made an adequate showing that the Teamsters would be irreparably injured absent a stay, that a stay would not substantially injure the other parties, or that a stay would be in the public interest.
In short, while the appeal will continue, the federal appellate court’s decision is welcome news for California motor carriers and their customers because operations may continue without fear of any enforcement action under AB5 pending the outcome of the appeal on the merits.
For any questions related to AB5, please contact a member of Benesch’s Transportation & Logistics Practice Group.
Marc S. Blubaugh at mblubaugh@beneschlaw.com or 614.223.9382.
Latest News
California AG’s Carbon Health Settlement Raises the Stakes for MSO-PC Structures and Continuity Planning in California
The California Attorney General’s June 2026 settlement with Carbon Health marks the first-of-its kind resolution of an enforcement action directly targeting an MSO-PC structure under California’s corporate practice of medicine (“CPOM”) doctrine.
Supply Chain Security – C-TPAT Program Growing in Significance for U.S. Operations
Geopolitical challenges are triggering executive-level focus on supply chain security across industrial sectors and transportation service providers, including renewed interest in the Customs-Trade Partnership against Terrorism (“C-TPAT”) program.
BREAKING: Seventh Circuit Holds Text Messages are not Telephone Calls Under Section 227(c)(5) of the TCPA
In a significant post-Loper Bright win for defendants, the Seventh Circuit issued its decision in Steidinger v. Blackstone Medical Services, No. 25-2398, affirming a trial court ruling that “§ 227(c)(5) [of the TCPA] does not permit plaintiffs to sue for the receipt of unwanted texts . . . .”
Connecticut’s New PFAS Rules: What Businesses Need to Know About the Regulations and Covered Product Categories
Connecticut has joined the growing roster of states cracking down on per- and polyfluoroalkyl substances (“PFAS”), the so-called “forever chemicals” long prized for their water resistance, stain resistance, and non-stick performance.