Proposed Legislation to Create National Hiring Standard, Reduce Influence of CSA BASICs

U.S. House representatives have introduced an amendment to H.R. 1120 that would affect the trucking industry in several ways. H.R. 1120 was originally introduced by the House in 2013 as a way to prevent uncertainty in the labor market, and the amendment seeks to do the same with the trucking industry. The overall goals of the proposed language are to improve interstate commerce through creating a national standard for motor carriers.

What H.R. 1120 Would Do

The primary purpose of the new proposal would be to nationalize hiring standards for motor carriers. Under the language of of the bill, freight forwarders, brokers, shippers, and receivers would be required to do the following before hiring a motor carrier:

  • Ensure that the motor carrier has current and accurate registration with the Federal Motor Carrier Safety Administration;
  • Check that the motor carrier has the minimum amount of insurance required under law; and
  • Check that the motor carrier does not have an “unsatisfactory” rating for safety.

The proposed standards are a way to put nationally recognized best practices into law..

Currently the FMCSA uses the Compliance, Safety, Accountability program to quantify and rate each motor carrier under each motor carrier’s Behavior, Analysis, and Safety Improvement Categories, known as CSA BASICs. But according to many in the industry, the current standards and rules under CSA BASICs are confusing and should not be used as a tool in hiring motor carriers. CSA BASICs rates a motor carrier on the following categories:

  • Unsafe Driving;
  • Hours-of-Service Compliance;
  • Driver Fitness;
  • Controlled Substance/Alcohol Regulation Compliance;
  • Vehicle Maintenance;
  • Hazardous Materials Compliance; and
  • Crash Indicator.

While rating motor carriers based on CSA BASICs can be helpful to the FMCSA, it too often is overly complicated for those companies hiring motor carriers. If passed, the bill would replace this system by simply requiring a freight forwarder, shipper, receiver, or broker to find out whether the motor carrier is safe or not.

Impact on the Industry

This proposed legislation would go a long way to provide stability to an increasingly unstable legal landscape. As many transportation companies know, negligent selection of a motor carrier can cripple a company’s business plans. CSA BASICs does not help in that regard because it increases the number of ways a plaintiff can accuse a company of being negligent. Of course brokers, shippers, receivers, and freight forwarders have a responsibility to act reasonably and safely in selecting a motor carrier, but CSA BASICs has many categories that can be picked apart and scrutinized by plaintiff’s attorneys. As a way to mitigate that problem, under the proposed legislation in H.R. 1120, hiring would be based on a simple safe or not safe rating issued by the FMCSA. Having one standard that companies can look to before hiring a motor carrier can go a long way in stabilizing the industry.

The trucking industry’s legal landscape continues to change and develop. As it does, trucking companies will be well served to have a truck law focused law firm on their side to help them when they need it. The attorneys at Anderson and Yamada, P.C. are ready to represent you and your company’s interests.

FMCSA Unveils Enhanced DataQs

The Federal Motor Carrier Administration (FMCSA) has unveiled an enhanced DataQs website at https://dataqs.fmcsa.dot.gov/Default.aspx

The FMCSA press release regarding the enhanced DataQs website is as follows:

The Federal Motor Carrier Safety Administration (FMCSA) recently launched an enhanced DataQs Website with added features to improve user experience. As part of FMCSA’s overall Data Quality Program, DataQs enables motor carriers, drivers, FMCSA employees, State Partners, and the public to improve the accuracy of motor carrier and driver safety violations and crash data.

You will see a new login page but the web address is the same. While most users will enter the same login information, DataQs has sent some users an email with a new username due to changes in the username requirements. New features include an updated design to improve user experience and a step-by-step guide to assist you when requesting a review of FMCSA-issued data.

Other enhancements included in the enhanced DataQs:

  • New login page, create account page, and My DataQs dashboard
  • Help Center with more frequently asked questions
  • Clearer terminology (for example, challenges are now referred to as Requests for Data Reviews (RDRs))
  • Search capabilities within the List of Requested Reviews

FMCSA’s enforcement and compliance programs are data-driven and the Agency, together with its State Partners, is committed to continuously improving safety data. Better data means safer roads, and the enhanced DataQs Website is an important part of our continuous improvement efforts.

If you have questions or comments, please contact us at https://dataqs.fmcsa.dot.gov/ContactUs/Default.aspx or call the the DataQs Technical Support line at 877-688-2984.

Thank You,
DataQs Team
U.S. DOT/Federal Motor Carrier Safety Administration

FMCSA Updates SMS Methodology

The Federal Motor Carrier Safety Administration (FMCSA) has enhanced the Safety Measurement System (SMS) Methodology so that it includes violations based on new cell phone use regulations and provides more detailed breakouts of some existing brake, wheel, and coupling regulations. In February, when the January snapshot is released, motor carriers may notice the following two changes.

  1. The addition of five texting and cell phone use violations in the Unsafe Driving Behavior Analysis and Safety Improvement Category (BASIC) as outlined below. The violations reflect FMCSA’s decision on January 3, 2012 to ban commercial drivers from using mobile telephones while driving, which includes a ban on texting. Motor carriers should discuss the new violations with their drivers to ensure that they are aware of these requirements.
    Added Carrier SMS Unsafe Driving BASIC Violations
    Section Violation Description Shown on Driver/Vehicle Examination Report Given to Commercial Motor Vehicle (CMV) Driver after Roadside Inspection Violation Group Description Violation Severity Weight
    177.804(b) Failure to comply with 49 CFR 392.80 – Texting while Oper a CMV – Placardable HM Texting 10
    177.804(c) Fail to comply with 392.82 – Using Mobile Phone while Oper a CMV – HM Phone Call 10
    392.80(a) Driving a commercial motor vehicle while texting Texting 10
    392.82(a)(1) Using a hand-held mobile telephone while operating a CMV Phone Call 10
    392.82(a)(2) Allowing or requiring driver to use a hand-held mobile tel while operating a CMV Phone Call 10
  2. A breakout of six current Vehicle Maintenance violations into 22 that provide more descriptive and detailed information about compliance with existing brake, wheel, and coupling regulations. This change will ensure that SMS remains aligned with improvements recently made to roadside data collection systems. Those improvements are the results of a joint FMCSA and Commercial Vehicle Safety Alliance effort to increase data uniformity through improved processes and tools. This change will help to clarify who the responsible party is for the violations, either the motor carrier or the Intermodal Equipment Provider.

FMCSA is revising Appendix A of the SMS Methodology document to take these changes into account. The agency will re-post the document to the Compliance, Safety, Accountability (CSA) Website at the same time the January SMS snapshot is released. Stay tuned by subscribing to the CSA Outreach Website at http://csa.fmcsa.dot.gov/stay_connected.aspx.

Start the New Year Right with a Quick Checkup

Every business should periodically check its legal status and make sure that all information listed by various governmental agencies is up to date and correct. The checkup is not difficult and, unless you find something that needs to be updated or corrected, it should not be time consuming. Below is a list of what you should check on:

1.  Secretary of State Registrations.  Check the status of your business on the Secretaries of State websites in those states where your business is incorporated, organized or  formed, in which it is registered as a foreign corporation authorized to do business, or where you have trade name(s) registered. You need to confirm that all of the information listed is current and correct and, most importantly, that your business is in good standing. If it is not, you need to update the information.

Particular care needs to be taken in naming your registered agent. A registered agent is the person you have designated to receive legal notices on behalf of the business. Whoever is named as registered agent needs to understand the importance of the role and that adverse legal consequences likely will result if  an appropriate response is not made in a timely manner. That person should be an officer, director, member or owner of the company. Oftentimes the business’s lawyer will be the registered agent. (See below regarding the FMCSA’s BOC-3 process agent requirement.)

2.  FMCSA.  Check the FMCSA Registration and Insurance website to confirm that the information listed is current and correct and, most importantly, that all of the authority you thought you had remains active.  We recently were contacted by a carrier located in the Midwest who was totally unaware that its authority had been revoked because a cargo insurance certificate was not on file (HHG carriers must still file proof of cargo insurance).

The FMCSA requires carriers and brokers to designate agents by filing a form BOC-3. Carriers must designate agents in each state they are authorized to operate in or though, which means every state since there is no geographical limitation. Brokers are required to designate agents in any state where they have an office or write a contract, which is not necessarily every state. Nevertheless, most carriers and brokers use companies to  make “blanket filings” on their behalf, which means the company designates an agent for the carrier or broker in every state.

Who you use to make a blanket BOC-3 process agent filing can have serious consequences.  You need to know how and how quickly you will be informed of anything served on the BOC-3 process agent. You should not simply hire the lowest cost blanket company since you may pay dearly for saving a buck now.

The carrier mentioned above also ran into problems when it received a copy of a notice of a lawsuit on December 28 even though the documents were served on the carrier’s BOC-3 process agent on December 7.  The carrier stated that it had no recollection of ever hiring the blanket company.  I suspect they hired the blanket company because they received a fax solicitation from it and the price was cheap.  However, the consequences will be expensive.  The problem now is that the lawsuit was filed in small claims court where the carrier’s response was due within 14 days after the December 7 service date. Thus, the 14 day deadline had expired a week before the carrier even found about the lawsuit.  It is very likely that a default judgment for thousands of dollars will be entered against the carrier even though it may have had valid defenses to the claim.

3.  SMS &  MCS-150.  Check the SMS website and determine your safety scores in each of the basics and figure out what violations you might be able to challenge through DataQs.  If you haven’t already, spend some time looking at your scores and the information provided and learn about the new system. Of course, if any of the basic information concerning your company is incorrect, correct it.  You also need to update your carrier profile by filing an updated MCS-150 form at lease once every two years. Failure to update that information can adversely affect your CSA Basic scores.

Updates from the TLA Annual Conference

We (John & Kevin) recently attended the Annual Conference of the Transportation Lawyers Association and want to pass on to you several of the major issues discussed.

To CSA or Not CSA. As you know, the issue of “carrier qualification” under CSA is a hot topic, and it has been argued and generally accepted by the industry that shippers, brokers and other users of carriers must use CSA and the “basics” to establish standards for the carriers they will use.

This prevailing understanding was turned upside down by several presenters who argue that only the FMCSA is empowered to decide if a carrier is safe enough to operate. That is, 49 USC 385.1 states that Part 385 “establishes FMCSA’s procedures to determine the safety fitness of motor carriers, to assign safety ratings, to direct motorcarriers to take remedial action when required, and to prohibit motor carriers determined to be unfit from operating a CMV.” Thus, the argument goes, unless the FMCSA has determined that a motor carrier is unfit to operate and either assigned it an unsatisfactory safety rating or placed its equipment or drivers out of service, a user is justified in using that motor carrier to provide service. Stated another way, the FMCSA gives its stamp of approval to carriers rated satisfactory and conditional and also to those that are unrated, regardless of what the basics or any other information shows. As a result, a user need only check to make sure a carrier has not been rated unsatisfactory or otherwise placed out of service. Further, if a user establishes any other carrier qualification standard, such as refusing to use a carrier if it has one or more basic scores above a certain level, then it is opening itself up to attacks by, for example, plaintiff lawyers, who can then ask why the user did not establish a more strict standard. For example, if a user establishes a policy that it will not use any carrier with any basic score above 70, the user will be asked why it did not set the standard at 65? Or 60? Or 50? And, further, would not the user agree that a carrier with a score lower than 70 is safer than one with a score of 70?

Needless to say, this argument and position created consternation amongst the lawyers. On the one hand, lawyers recognized that the argument was legally valid, but, on the other hand, they did not know how they could advise their clients to ignore the information that is now readily available. As a group, I do not believe there was any consensus amongst the lawyers as which approach was the better way to deal with CSA. This undoubtedly is a situation where attorneys will need to advise their user clients of the two approaches and the attendant risks of each and let the user client to make the decision.

CSA: Not a Fait Accompli. The dilemma discussed above may be rendered moot, however. It appears that CSA will face a legal challenge once the FMCSA issues its proposed rulemaking establishing its new “safety fitness determination” (SFD) procedures. That proposed rulemaking will revise the current 49 CFR Part 385 procedures for Compliance Reviews and the assignment of satisfactory, conditional or unsatisfactory ratings. The anticipated challenge will argue that CSA was implemented without following the requirements imposed by the Administrative Procedures Act and that the foundation upon which CSA is built is inherently flawed, based on subjective rather than objective standards, and fails to meet the standards required by the courts for expert opinions.

In the Meantime, Use DataQ’s. There was a strong consensus that carriers, in order to protect themselves, should actively challenge every questionable violation using the FMCSA’s DataQs program.

Spoliation was another topic that received considerable attention, which probably is the hottest legal issue nationally and the area of the law that is developing most rapidly. Spoliation is the failure of a party to preserve evidence when it knows or should know that the evidence is relevant to pending or future litigation. The duty arises upon the happening of a triggering event, for example, by the occurrence of a truck accident or freight damage. The triggering event is not the filing of a lawsuit, but rather the occurrence that gives rise to potential litigation. Failure to preserve evidence can have dire consequences.

In case earlier this year, Knight Transportation was found guilty of spoliation for failing to preserve a truck and its tires and for destroying or altering its Qualcomm communications. The truck had been involved in a fatal accident, and the driver did not stop, but drove 1400 miles and then arranged to have the tires replaced. Although Knight claimed it was unaware of the tire replacement, the court did not believe Knight. In addition, although Knight’s employee preserved some Qualcomm communications, it did not preserve the communications during the most critical days before and after the August 11 accident. Knight’s employee said his failure to preserve the “screen shots” for August 8-12, although he saved them for August 13-17, was an oversight. The court did not believe him. The penalty imposed against Knight was extreme: Knight’s pleadings and defenses to liability were stricken and the plaintiff was given the opportunity to add a claim for punitive damages.

Claims of spoliation are not limited to just the “big” cases. Quite frequently carriers, when asked to provide the logs for a driver who was involved in an accident months or even years prior, respond by saying “We threw them out because the regulations [49 USC 395.8(k)] only require us to maintain them for six months.” However, that is not a defense to a claim of spoliation when the carrier knew there had been an accident since any accident might result in litigation. If the carrier cannot produce the driver’s logs, a claim of spoliation might be allowed and, if it is, sanctions will be imposed. One possible sanction is an instruction to the jury that they can and should presume that the logs would have been adverse to the carrier’s position.