Federal Motor Carrier Safety Administration Shuts Down Company

The FMCSA recently reported that they shut down an Ohio trucking company for violating agency regulations. The regulations that were allegedly violated revolved around safety issues. This comes in a string of company shutdowns that the agency has announced in a relatively short period of time.

The shutdown of the company came after the agency performed a spot check of the company’s trucks. Allegedly, the company’s fleet of trucks were operating in violation of out-of-service orders and a total of 43 safety violations. Many of the issues involved braking system issues, defective brake parts, and other equipment problems.

Legal Authority to Shut Down Companies

The FMCSA is authorized to inspect and shut down trucking companies and their fleets through a regulation. That important regulation is found in 49 C.F.R § 386.72, known as the Imminent Hazard regulation. This regulation has its origin in 49 U.S. Code § 521 and other safety statutes related to trucking companies.

This all-important regulation has the power to wreak havoc on a company and its finances. The agency is authorized to shut down a company when in their judgment the company is an imminent hazard because continued operation of the company would be substantially likely to cause:

  • death;
  • serious illness;
  • severe personal injury; or
  • substantial endangerment to health, property, or the environment.

So anytime the FMCSA inspects a company and finds that operation of that trucking company could result in one of these things, they will likely shut the company down. And in addition to these factors, the FMCSA can also shut a company down when the agency feels like transportation of hazardous material poses an imminent hazard to the public.

At this juncture, a company shut down is just the beginning. In addition to being shut down, your company will face fines that will need to be paid before beginning work again, and a company executive could even face criminal penalties. Of course, a company can challenge this agency action, and that may be the best option for a company, but it will be a legal battle.

Plan for Future

In this situation, the best defense is staying prepared and taking action, if necessary. This means that your company needs a plan and scheme to stay in compliance with federal safety regulations. This can be a daunting task given the number and complexity of regulations that every trucking company faces, but it is absolutely necessary if you want your company to stay on the road.

One of the most important steps you can take to plan for the future and take action is to have a partner with valuable legal, regulatory experience. At Anderson and Yamada, P.C. we are the legal partner that your company deserves and needs to make a plan for the future. Our experience is invaluable when it comes to ensuring that your company stays on the right side of federal regulations and that your company stays on the road. Contact us for all your trucking company’s legal needs.

Trucking Industry Gets Some Predictability With Bill Passage

Washington D.C. seems to contain a political environment where little if anything gets done anymore. As a refreshing change from this culture, the trucking industry should benefit from the recent passage of a six-year highway bill. The final vote in the house on the bill was 363 to 64 in favor.

While there were some positive aspects to the bill, the trucking industry did not get everything that they wanted. The amendment process lasted for two days and the house voted out several initiatives sought after by the trucking industry. The bill fell short of the spending that the White House originally asked for in their budget. Now the bill goes to the U.S. Senate for approval before it heads to the White House for a signature of approval or veto.

Positive Changes for Trucking Industry

Among the changes being heralded by the industry are the improvements that roads will see because of increased spending. This should increase safety and efficiency in the areas where money is spent. In total the bill calls for $325 billion in spending over a six-year period.

Additionally, an amendment was passed that deals with state wage and labor laws. As this blog has discussed in the past, there has been a rash of litigation going after trucking companies for violating state labor laws related to wages, breaks, and other provisions. The position of companies in this fights has been that the Federal Aviation Administration Authorization Act preempts states from regulating truck drivers and trucking company’s wages.

Instead of continuing the fight over this dispute with state, the industry pushed for Congress to clarify the issue. The amendment will keep states from applying state labor laws to truckers or their companies when they are subject to the Federal Department of Transportation hours of service rules. This was particularly welcome news to trucking companies doing business in California and other states within the 9th Circuit Court of Appeals’ jurisdiction.

Failed Initiatives

The bill passage was not a complete victory for trucking companies. One amendment that sought to increase the possible load weights of trucks traveling on interstate highways was defeated. So while some states allow for 90,000 pound loads with a sixth axle, that will not be the case for the entire country. Critics of the non-passage argue that failing to include this in the bill will hurt American competitiveness.

Other measure that failed to reach a majority vote included doing away with FMCSA’s CSA scores. That system puts gives trucking companies of a certain size a grade that potential customers can look up and decide whether they want to use the company for business.  An amendment to do away with a future graduated CDL program was also voted down.

Trucking Law Firm for the Future

At Anderson and Yamada, P.C. we track and follow all the important developments in the trucking industry. You can rest assured that we can give the counsel and advice that your company deserves when it comes to the laws, regulations, and rules that impact the trucking industry. Contact us about your trucking law needs.

New FMCSA Regulations to Take Effect

There are a number of regulations recently proposed by the Federal Motor Carrier Safety Administration that will soon take effect. As the trucking industry is well aware, the FMCSA continues to propose, publish, and enforce regulations that have a major impact on how business is done.

The primary regulation making headlines that will soon be in effect is the FMCSA mandate that all interstate trucks have an Electronic Logging Device. These devices are meant to reduce the large amount of paperwork that is already being done by truck drivers and companies, and instead allow drivers to report their duty hours through an electronic device that is hardwired to their truck’s motor.

Known as the ELD Mandate, the rule will give companies two years to comply with its provisions. This rule was first proposed in 2014, and stems from the passage of MAP-21 in 2012 that was supposed to lead the trucking industry into the 21st century through progress mandated by the FMCSA and other agencies.

According to reports, the ELD Mandate will not require a specific type of ELD, as long as whatever ELD is used complies with the specifics of the rule. The FMCSA has confirmed that this can even mean certain cell phones and tablets can be used as long as there is a hard-wired connection to the truck’s motor.

Driver Coercion Rule                              

Another rule the FMCSA wants to publish on the same timeline as the ELD Mandate is the Driver Coercion Rule. This rule was first proposed in 2014 as well, and it would prohibit motor carriers, chippers, receivers, or other transportation intermediaries from covering a driver to brake safety regulations.

The Driver Coercion Rule is unlike anything that the FMCSA has attempted to regulate before. It is not yet clear what types of behavior would constitute coercion under the proposed rule, and as an industry that necessarily works off of deadlines, mandated shipping times, and other constraints, any final rule could be loaded with problems. The final rule was submitted to the Office of Management and Budget on July 2015, and it has been there ever since.

Industry Learning to Deal With Regulations

The trucking industry continues to be inundated with regulations. Learning how to comply with those regulations is key for any company to survive. Federal agencies in Washington, D.C. have the power to shut a company down and really impact the bottom line when they feel like a regulation is not being followed. That is why it is so important for any trucking company to have a legal partner that understands and apply all the state and federal regulations that the industry faces.

At Anderson and Yamada, P.C. our practice is dedicated to serving the needs of the trucking industry. Over several decades we have worked with industry companies to provide them with their legal needs, and we look forward to doing so with your company. If you are a trucking company, contact us. We look forward to working with and serving you.

Challenging Federal Regulations

As an industry that makes its money by traveling in, around, and through states, the trucking industry must deal with federal regulations. Federal regulations are a different breed of animal in our system of justice. Regulations are created, administered, and enforced by federal officials. These officials largely are not elected, and enjoy job security that is akin to that of judges.

Regulators on the federal level are empowered to do their jobs through some sort of federal legislation. Because our country is so large, and there are so many different industries and sectors of the economy, congress and the executive branches of government have opted to empower bureaucrats with the ability to regulate the many aspects of our economic lives.

Every agency in the federal government has at its core some legislation that describes what it is, what it regulates, and sets bounds for its work. For example, there is the Federal Motor Carrier Safety Administration. It was created in the year 2000 by congress, and was given the mission to improve the safety of commercial motor vehicles as enunciated in the Motor Carrier Safety Act of 1999.

Federal Agencies Have Limits

If you look at the mission and purpose of the FMCSA, for example, it is broad and ambiguous as to what it is actually empowered to do. And when federal legislation lacks specificity, an agency can take broader and broader powers to accomplish its mission. And the opposite is true too, if legislation specifically says what an agency can or cannot do, then the agency is necessarily limited in the rules it can publish and enforce.

Putting these issues aside, every agency and its rules are regulated by something known as the Administrative Procedures Act. This act is the framework that each agency must work within to make, administer, and enforce rules in any given industry. At the heart of this act is the requirement that no agency will take actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Additionally, agencies are prohibited from making regulations that do not adhere to the procedures that are required by law, meaning the provisions of any legislation giving an agency power.

It is most commonly using one or both of these two avenues that a person, company, or entity can challenge the legality of an agency’s action. In fact, it was this approach that a group successfully challenged the FMCSA’s daily driving limit regulations. In that lawsuit, Owner-Operator Independent Drivers v. FMCSA, 494 F. 3d 188 (D.C.Cir. 2007), a group successfully challenged the fact that the FMCSA did not publish their procedures and data that they used to come to the conclusions that based the rule they published. As a result, the court overturned the rule and it was not implemented until the agency followed the procedures outlined by law.

This is just one example of many where agency rules or regulations have been successfully challenged under the APA. It is a check and balance against regulators and officials that are not elected to the positions of power that they enjoy. At Anderson and Yamada, P.C. we understand federal regulations, state and federal law, and court opinions as they apply to the trucking industry. For all your trucking law needs, contact us. We look forward to being your partner.

A 40 Year Review: From Economic Regulation to Safety Regulation

Last month was my fortieth year anniversary of practicing transportation law. When I began practicing in 1975 the focus of the ICC was on economic regulation that limited the service carriers could provide both geographically and commodity-wise. Existing carriers could protest an application for new or an extension of authority and did so aggressively. To obtain authority to provide service a carrier had to establish at an administrative hearing that it was required by the “present or future public convenience and necessity”, which the protestants argued and presented evidence was not the case. Economic regulation also included rate regulation and the publication and filing of tariffs that had the force of law. The “filed rate doctrine” required a carrier to collect its tariff rate under all circumstances.  Brokers were virtually non-existent because they were required to charge their brokerage fee in addition to the carrier’s tariff charges.  Economic deregulation proceeded at a rapid pace to where we are today where essentially anyone with the desire and nominal resourses can obtain operating authority.

Safety regulation is now the face of regulation.  The FMCSA’s implementation of its Compliance, Safety, Accountability (CSA) program, and its subprogram Safety Measurement System (SMS), in 2010 has impacted all carriers and will continue to unless Congress reins it in. In addition, the FMCSA was on the cusp of implementing its Unified Registration System (URS) last Friday, October 23, until it delayed implementation of virtually all provisions until September 30, 2016.

The URS (not to be confused with the Unified Carrier Registration (UCR) system) requires Form MCSA-1 to be filed on-line by all for-hire carriers (exempt and non-exempt) and private motor carriers, brokers, freight forwarders, intermodal equipment providers, hazmat safety permit applicants and cargo tank facilities.  All entities filing will be assigned a USDOT number that will be the only identifier issued. There will no longer be MC, FF or MX number assigned but they can continue to be used, although the FMCSA encourages carriers to remove them from vehicles. This means that it is possible for a carrier, freight forwarder or broker to use their old numbers as the distinct identifier required by MAP-21.

An MCSA-1 will need to be filed within 30 days of any change in operation, including name, address and other contact information, for cancellation of registration, for reinstatement of registration, for designation or changes of process agents, and by both the transfer and transferee when a registration/operating authority is transferred (in order to track owners and prevent reincarnated or chameleon carriers).  Most important, a biennial update must be filed every two years. The FMCSA will send out a reminder letter 30 days before a biennial update is due, and failure to file the update will result in the registration being deactivated and the possible imposition of civil penalties.

The MCSA-1 is proposed to be an interactive on-line application akin to tax preparation software, but it is not yet on-line. The hard copy is 26 pages long and likely will be confusing to many filers, many of who will need outside assistance. In addition, the application process undoubtedly will become slower, probably much slower than the time it takes now, which is about 45 days if the applicant has its insurance and process agent filings ready to file without delay.

Entities that already have USDOT numbers have been granted a one year reprieve. However, for those entities that do not have a USDOT number, they will need to begin using the MCSA-1 form to file on-line beginning December 12, 2015, about seven weeks from now. How that works remains to be seen. This seven week period presents a window of opportunity. Entities that need to apply for authority can do it between now and December 12 under the current system that is known. For example, a carrier that wants to set up a broker subsidiary or affiliate as a separate entity, or vice versa, can do that under the current system for the next seven weeks. After December 12 the MCSA-1 on-line application will be required.

The foregoing short summary points out only some of the provisions of the new URS system. It is by no means a complete and comprehensive summary. If you have any questions about the URS, please call John or Kevin at 503-227-4586.