The AB5 truck driver lawsuit most people mean is California Trucking Association v. Bonta, the federal case the trucking industry used to try to block California’s independent-contractor law from applying to motor carriers. It failed. After a preliminary injunction, a Ninth Circuit reversal, a denied Supreme Court petition, and a final district-court dismissal in March 2024, AB5 is fully enforceable against trucking companies operating in California. A follow-up appeal by the Owner-Operator Independent Drivers Association was rejected in May 2025, and the first penalties against carriers were issued in October 2025.
Why Trucking Fought the Law
AB5, signed by Governor Gavin Newsom on September 18, 2019, and effective January 1, 2020, codified the “ABC test” from Dynamex Operations West, Inc. v. Superior Court. A worker is presumed to be an employee unless the hiring company proves all three prongs: the worker is free from the company’s control, performs work outside the company’s usual business, and is customarily engaged in an independent trade of the same kind.1California Department of Industrial Relations. Independent Contractor Versus Employee
Prong B is the trucking problem. A motor carrier’s business is moving freight. An owner-operator hired by that carrier is moving freight. The carrier almost never clears Prong B, which effectively ends the independent owner-operator model as it had long existed. Industry estimates put the number of affected independent truckers in California at roughly 70,000.2American Trucking Associations. AB5 What We Know About California’s Independent Contractor Statute
California Trucking Association v. Bonta
The California Trucking Association filed suit in the U.S. District Court for the Southern District of California in October 2018, before AB5 had even been signed, challenging the application of the ABC test to motor carriers.3Barclay Damon. California Trucking Association v. Bonta, 996 F.3d 644 The case, originally styled California Trucking Association v. Becerra and later renamed California Trucking Association v. Bonta (Case No. 3:18-cv-02458), carried the industry’s main argument.
The FAAAA Preemption Argument
The CTA’s central claim was that AB5 was preempted by the Federal Aviation Administration Authorization Act of 1994, which bars states from enacting laws “related to a price, route, or service of any motor carrier.”4American Bar Association. What Is the Present Status of FAAAA Preemption in Trucking By effectively eliminating the owner-operator model, the CTA argued, AB5 forced carriers to restructure or leave the state, directly affecting prices and services. Judge Roger T. Benitez agreed and granted a preliminary injunction blocking enforcement of the law against the trucking industry.
The Ninth Circuit Reversal
California appealed. On April 28, 2021, a Ninth Circuit panel reversed. The majority held that AB5 is a “generally applicable labor law” affecting the carrier-workforce relationship without binding or freezing prices, routes, or services, and that its connection to the things the FAAAA protects is “tenuous, remote, or peripheral.”5U.S. Court of Appeals for the Ninth Circuit. California Trucking Association v. Bonta, Nos. 20-55106 and 20-55107 Judge Bennett dissented, arguing the law significantly limits carriers’ ability to provide flexible services and scale operations.
The Supreme Court Denies Review
The CTA petitioned the U.S. Supreme Court. The Owner-Operator Independent Drivers Association filed an amicus brief in support, as did the U.S. Chamber of Commerce and a coalition of trade associations. On June 30, 2022, the Supreme Court denied certiorari without noted dissent.6SCOTUSblog. California Trucking Association, Inc. v. Bonta The CTA warned that 70,000 owner-operators had “seven days to cease long-standing independent businesses.”7FreightWaves. California Trucking Braces for AB5 Supreme Court Won’t Hear Appeal The preliminary injunction was formally lifted in August 2022.
Remaining Claims and Final Dismissal
On remand, the CTA pressed claims under the dormant Commerce Clause and the Equal Protection Clause. A Third Amended Complaint filed in May 2023 asserted four counts: express FAAAA preemption, implied preemption, a Commerce Clause violation, and an Equal Protection violation alleging legislative animus toward trucking.8California Attorney General. CTA v. Bonta Dismissal Order The animus theory relied in part on public statements by Assemblywoman Lorena Gonzalez, the bill’s sponsor, including a September 2019 floor statement about eliminating an “outdated broker model” and a November 2019 tweet distinguishing between construction truckers and owner-operators working for trucking companies.
On March 15, 2024, the district court entered judgment for the state on all counts, finding that remarks by a single legislator are insufficient to establish animus on the part of an entire legislative body and that AB5 does not violate the Commerce Clause.9FindLaw. California Trucking Association v. Attorney General Rob Bonta
OOIDA v. Bonta: The Follow-Up Appeal
After the CTA stepped back, the Owner-Operator Independent Drivers Association carried the case to the Ninth Circuit. In a memorandum opinion filed May 16, 2025, a three-judge panel (Callahan, Desai, and De Alba) affirmed the district court, holding that AB5 “neither discriminates against interstate commerce nor imposes an excessive burden upon it.”10California Attorney General. Owner-Operator Independent Drivers Association v. Bonta, No. 24-2341 The panel rejected OOIDA’s argument that the business-to-business exemption discriminates against interstate drivers, noting it treats all private companies the same regardless of whether they cross state lines. The Ninth Circuit then denied a request for en banc rehearing, closing the primary federal challenges.11FreightWaves. Likely First AB5 Trucking Enforcement Action in California Snags Three Companies
Attorney General Rob Bonta called AB5 “essential in preventing the exploitation of workers misclassified as independent contractors, including in the trucking industry.”12California Attorney General. Statement of Attorney General Bonta Regarding Ninth Circuit Ruling
The Parallel State Case: Cal Cartage
The federal track was not the only one. In November 2020, a California appellate court in People v. Superior Court (Cal Cartage Transportation Express) separately held that the FAAAA does not preempt AB5’s application to motor carriers.13U.S. Chamber of Commerce. People of the State of California v. Superior Court (Cal Cartage Transportation Express) Cal Cartage petitioned the U.S. Supreme Court, which denied certiorari on October 4, 2021.14SCOTUSblog. Cal Cartage Transportation Express LLC v. California Both tracks ended the same way.
The First Enforcement Action Against Carriers
For more than three years after the injunction was lifted, no agency used AB5 to impose penalties specifically against a trucking company. That changed on October 30, 2025, when the California Labor Commissioner’s Office cited Mega Nice Trucking LLC, Ryder Last Mile Inc., and Costco Wholesale Corporation for misclassifying 58 delivery drivers.15California Department of Industrial Relations. Labor Commissioner Cites Costco, Ryder Last Mile, and Mega Nice Trucking for Worker Misclassification
The total assessment came to $868,128, with roughly $663,000 designated for the drivers. The agency found failures to pay minimum wage and overtime, denial of required meal and rest breaks, and falsified payroll records. The Labor Commissioner applied a joint employer theory, holding Costco and Ryder Last Mile equally responsible alongside Mega Nice Trucking because they scheduled deliveries, mandated uniforms, enforced protocols, and closely monitored driver performance. The investigation began in July 2024 after complaints from two former employees. All three companies have appealed the citations.16Staffing Industry Analysts. Costco, Trucking Firms Jointly Cited $868,000 for Alleged Misclassification
How Carriers Are Complying
With the legal challenges exhausted, three main compliance paths have emerged.
Reclassification to Employee Status
The most straightforward route is to convert owner-operators to employees. The carrier gains control over schedules and routes and takes on California’s full employment obligations: overtime, meal and rest breaks, workers’ compensation, and the rest. Many larger carriers moved to this model before the litigation ended.11FreightWaves. Likely First AB5 Trucking Enforcement Action in California Snags Three Companies
The Dual-Authority Brokerage Model
Other carriers have split their operations, separating the motor carrier entity from a freight brokerage entity. A broker arranges transportation rather than performing it, so contracting with an owner-operator who holds their own motor carrier authority is argued to satisfy Prong B. The approach carries risk. The separation between carrier and broker operations has to be maintained in practice, and the driver must still satisfy Prongs A and C independently.
The Business-to-Business Exemption
AB5 includes a B2B exemption under California Labor Code § 2776 that shifts classification analysis from the ABC test to the older Borello multifactor test. The exemption is demanding. The hiring entity must prove all twelve statutory requirements, including that the driver maintains a separate business location, advertises publicly, owns their own equipment, can negotiate rates, and is free to work for multiple companies.17California Department of Labor. B2B Requirement Chart for Motor Carrier Industry A representative of the Attorney General’s office told a court in 2025 that he was not aware of any company that had successfully operated under the B2B exception.18FreightWaves. OOIDA Makes Solo Case in Court That California’s AB5 Should Exempt Trucking
Where Things Stand
As of mid-2026, every major AB5 truck driver lawsuit has been resolved in the state’s favor, and the law is fully enforceable against carriers operating in California. The California Trucking Association reports that most owner-operators have either left the state or adjusted their business practices to comply, and freight market data has not shown severe capacity disruption attributable to the law.11FreightWaves. Likely First AB5 Trucking Enforcement Action in California Snags Three Companies The Mega Nice action, reaching upstream through a joint-employer theory to Ryder and Costco, signals that the state is prepared to pursue not just small carriers but the corporate clients whose logistics choices shape how drivers are classified.