Supreme Court Ruling Could Result in Supply Chain ‘Armageddon’

An imminent ruling from the US Supreme Court on a controversial California law (AB 5) that bans truck drivers from being hired as independent contractors could result in a collapse of the supply chain capacity in California ports which account for more than 42% of goods coming into the US.

Any day now we expect the US Supreme Court to decide whether to take up a case from the 9th Circuit Court of Appeals known as California Trucking Association vs. Bonta (SCOTUS Docket No. 21-194). 

The CTA has sued to overturn a California law known as AB 5 that bans the hiring of independent contractors throughout the entire state of California. CTA’s lawsuit seeks an exemption from the law’s requirements for truck drivers on a variety of legal grounds – including interference with inter-state commerce.

If the US Supreme Court denies the petition to hear this case, a lower court injunction would be immediately lifted and AB 5 would immediately go into effect in the truck industry.

If AB 5 were to be imposed on truck drivers, the impact would be the elimination of approximately 70,000 independent truck drivers from operating in California and it would have a catastrophic impact on the state’s ports, exacerbating the nation’s supply chain crisis.

“If you thought the nation’s supply chain problems were bad already, wait until this crazy new law is implemented in California to ban 70,000 independent truck drivers from picking up goods from California’s ports,” Carl DeMaio stated. 

42% of US goods come in through Long Beach and Los Angeles Ports.

“If the Supreme Court rejects this case, we are looking at a supply chain Armageddon that will negatively impact every American. If California Governor Gavin Newsom doesn’t suspend this law, he will surely be known as the Grinch who steals Christmas across the country this year,” DeMaio Continued.

California Governor Gavin Newsom has the power to suspend AB5 – but he has steadfastly refused to do so and so far has offered only token actions to address the port slowdowns in his state and the shortage of truck drivers.

Listen to Carl talk about the negative impact that AB-5 would have on Californians (and the entire country) HERE!

Photo Credit: Getty Images

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