Regulatory and Legislative Update - August 2023

Contents

Regulation and Enforcement

• FMCSA to revisit state regulation of drivers’ rest breaks
• Three devices removed from list of registered ELDs
• FMCSA updates technical guidance on ELDs
• Brian Stansbury appointed FMCSA’s chief counsel
• FMCSA rejects driver’s requested exemption from multiple HOS requirements

Legislation

• Senate DOT funding bill would block younger driver program mandates
• Senate bill would establish a carrier selection standard
• House bill would overturn minimum training requirements for new drivers
• Senate bill would bar FMCSA from implementing a speed limiter rule

Courts

• Federal law preempts negligent selection claim against broker, appeals court rules

Advocacy and Comment

Regulation and Enforcement

FMCSA to revisit state regulation of drivers’ rest breaks

The Federal Motor Carrier Safety Administration has taken the unusual step of inviting two states to seek relief from adverse regulatory actions that FMCSA itself had executed. During the Trump administration, FMCSA declared that meal and rest break (MRB) regulations in California and Washington were preempted by federal law to the extent that they applied to interstate commercial motor vehicle (CMV) drivers. In an August 14 Federal Register notice, the agency announced that it would entertain petitions from California and Washington for waivers from those decisions. FMCSA gave the states until November 13 to file petitions.

In its notice, FMCSA said that the states did not need to argue that FMCSA erred in its rationale for issuing the preemption declarations and encouraged them “to include arguments that do not depend on a conclusion that the Agency's preemption determinations were erroneous.” The states need only to demonstrate to FMCSA’s satisfaction that a waiver from preemption is in the public interest and is consistent with the safe operation of CMVs, FMCSA said.

Given that FMCSA solicited petitions for waivers on its own initiative, it would be reasonable to assume that the agency under the Biden administration is predisposed to reverse the preemption rulings through the mechanism of waivers. However, FMCSA did ask the states to address three specific issues: (1) whether and how the MRB laws have affected the health and safety of intrastate drivers, who are not covered by the preemption declarations; (2) whether enforcement of the laws on interstate CMV drivers will exacerbate existing truck parking shortages and create additional dangers to drivers and the public; and (3) whether enforcing the MRB laws on interstate CMV drivers.

For the Federal Register notice, visit https://www.federalregister.gov/d/2023-17463.

Three devices removed from list of registered ELDs

Effective July 25, FMCSA has removed ALLTRUCKERS ELD, PRIMELD and SECURE ELD from the list of registered electronic logging devices (ELDs) and placed them on the list of revoked devices due to a failure to meet the minimum requirements established in 49 CFR part 395, subpart B, appendix A. Motor carriers using revoked devices must immediately discontinue their use and replace them within 60 days of the revocation. In the interim, carriers must revert to paper logs or logging software.

FMCSA also had initially revoked the registration of GOLDEN ELD with the same effective date, but it promptly reinstated the device. For a list of registered and revoked ELDs, visit https://eld.fmcsa.dot.gov/List.

FMCSA updates technical guidance on ELDs

FMCSA on July 31 updated its regulatory guidance to address several issues related to the operation of ELDs. The guidance answers questions related to the editing of automatically recorded driving time, the duty status change events that must be included in ELD output files, the caching of ELD data, and the operation of ELDs that have multiple components. For the latest regulatory guidance, visit https://www.fmcsa.dot.gov/guidance.

Brian Stansbury appointed FMCSA’s chief counsel

FMCSA has named Brian Stansbury chief counsel, replacing Earl Adams, Jr., who recently became the agency’s deputy administrator. Prior to joining FMCSA, Stansbury was a partner at King and Spalding LLP where he served as a member of the firm’s environmental, health, and safety practice. Originally from Houston, Stansbury received his bachelor’s degree from the University of Texas and a juris doctor degree from the University of Virginia School of Law.

FMCSA rejects driver’s requested exemption from multiple HOS requirements

FMCSA has denied an application from truck driver John Olier for exemptions from the 11-, 14-, and 70-hour rules withing the hours-of-service regulations along with all mandatory rest periods, including the 10-hour and 30-minute breaks. Olier had contended in his application that “current forced work/rest periods force me to drive outside my body’s healthy Circadian Rhythm,” creating “unsafe conditions not only for me but for other drivers and the general public.” FMCSA said the exemption would not likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent the exemption. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-15170.

Legislation

Senate DOT funding bill would block younger driver program mandates

Changes in the Safe Driver Apprenticeship Pilot Program apparently are in the cards as the Senate version of the Department of Transportation funding bill (S. 2437) includes language similar to that in the House version (H.R. 4820) that would invalidate two conditions FMCSA has placed on participation in the program. The pilot program was established by the Infrastructure Investment and Jobs Act in 2021 to test the use of commercial drivers aged 18 to 20 in interstate operations.

Although the language is drafted differently, S. 2437 – like H.R. 4820 – would bar FMCSA from requiring use of inward facing cameras or motor carrier registration of an apprenticeship program with the Department of Labor. H.R. 4820 and S. 2437 have been approved by their respective House and Senate committees and are awaiting floor consideration. For information on S. 2437, visit https://www.congress.gov/bill/118th-congress/senate-bill/2437. For information on H.R. 4820, visit https://www.congress.gov/bill/118th-congress/house-bill/4820.

Senate bill would establish a carrier selection standard

Sens. Deb Fischer (R-Nebraska) and Mike Crapo (R-Idaho) introduced a bill (S. 2426) to establish a carrier selection standard for shippers, brokers, and others until FMCSA completes a rulemaking to revise safety fitness determination standards. Under the legislation, until FMCSA finalizes a safety fitness rule, selection of a motor carrier would be considered reasonable and prudent if the contracting entity verifies no earlier than 45 days prior to the date of the shipment that the carrier is licensed, registered, and insured and has been confirmed by FMCSA to be in compliance with all required FMCSA safety standards.

S. 2426 is similar but not identical to House legislation (H.R. 915) sponsored by Reps. Mike Gallagher (R-Wisconsin) and Seth Moulton (D-Massachusetts) that was approved in May by the House Transportation & Infrastructure Committee. Among the differences in the bills is the mechanism for the safe harbor for shippers and brokers. The House bill requires verification of registration and insurance and the lack of a determination that FMCSA has found the carrier unfit to operate.

The Senate bill, however, requires a more affirmative determination by requiring that the contracting entity obtain a statement by FMCSA that the motor carrier either is confirmed to meet all FMCSA operating requirements or is not confirmed to meet one or more FMCSA requirements to operate as a motor carrier. The Senate bill also requires a safety fitness rulemaking within one year rather than 18 months in the House bill, and it states that FMCSA “shall consider the use of all available data to determine the fitness of a motor carrier.” The House bill includes no such language.

For more on S. 2426, visit https://www.congress.gov/bill/118th-congress/senate-bill/2426. For more on H.R. 915, visit https://www.congress.gov/bill/118th-congress/house-bill/915.

House bill would overturn minimum training requirements for new drivers

Rep. Bob Good (R-Virginia) re-introduced a bill (H.R. 4738) that would invalidate the regulation finalized in 2016 that establishes minimum training requirements for entry-level CMV operators. The legislation currently has 14 co-sponsors. Good had introduced the same bill in October, but it died at the end of the 117th Congress. For more on H.R. 4738, visit https://www.congress.gov/bill/118th-congress/house-bill/4738.

Senate bill would bar FMCSA from implementing a speed limiter rule

Sen. Steve Daines (R-Montana) has introduced legislation (S. 2671) that would prohibit FMCA from implementing any rule requiring that vehicles over 26,000 pounds operating in interstate commerce be equipped with a speed limiting device set to a maximum speed. In May 2022, FMCSA published an advance notice of supplemental proposed rulemaking stating that it planned to proceed with the speed limiter rulemaking that had been proposed late during the Obama administration. The Trump administration had shelved the rulemaking but had not formally withdrawn it as it had several others. For more information on S. 2671, visit https://www.congress.gov/bill/118th-congress/senate-bill/2671.

Rep. Josh Brecheen (R-Oklahoma) recently introduced similar legislation in the House. The more significant development, however, is that the House version of the DOT appropriations bill (H.R. 4820) includes a provision that would have the same effect, at least during fiscal 2023. The Senate version of the bill (S. 2437) includes no provision on the matter.

Courts

Federal law preempts negligent selection claim against broker, appeals court rules

For the second time this year, a federal appeals court has ruled that the Federal Aviation Administration Authorization Act (FAAAA) preempts a negligent selection claim against a freight broker. In July, the U.S. Court of Appeals for the Seventh Circuit upheld a lower court ruling that the safety exception within FAAAA did not allow a claim against GlobalTranz for retaining a carrier involved in a fatal highway crash.

The Seventh Circuit decision followed an April decision in the Eleventh Circuit holding that FAAAA’s safety exception for state action did not apply to negligence claims against a broker – in that case, Landstar Ranger – for stolen goods. (See Regulatory Update, April 2023.) Although the two cases are similar, the GlobalTranz decision arguably is more significant because the case is directly related to highway safety, unlike the Landstar case. The safety exception of FAAAA allows for laws that are within a state’s regulatory authority with respect to motor vehicles. The Seventh Circuit ruled that a common law negligence claim enforced against a broker is not a law that is “with respect to motor vehicles.”

Three federal appeals courts now have addressed the applicability of FAAAA preemption to negligent selection of carriers by brokers and two have sided with brokers. Previously, the Ninth Circuit appeals court ruled against C.H. Robinson in a decision that the U.S. Supreme Court let stand in June 2022. At the time, the Ninth Circuit was the only appeals court to address the issue, and it is common for the U.S. Supreme Court to ignore cases when no conflict exists. Now that two other circuits have reached contrary conclusions, a Supreme Court review would be more likely should one or both cases make its way to the court on appeal.

Advocacy and Comment

The Red Light Green Light Issue

(1) The report on the Seventh Circuit decision in GlobalTranz is an encouraging development. The Court got it right. State law causes of action including negligent selection were trumped by the F4A Act. The federal standard for carrier selection of brokers is found in 49 C.F.R. 371 and requires the choosing of a “licensed, authorized and insured carrier.”

That is the best answer to the red light green light problem facing shippers and brokers. The FMCSA, not every shipper and broker, must make that ultimate determination. The Agency is the one that must certify new entrants as “fit to operate on the nation’s roadways.”

(2) In this context the Senate Bill discussed above could do far more harm than good if enacted in its present state. It opens the door for new safety fitness standards to be imposed without rulemaking, only obfuscating which carriers are safe for use. The Agency has been working on a new safety fitness rule using unproven algorithms which over the past dozen years have consistently been rejected by the National Academies of Science, the DOT and Congress itself in the FAST Act. The Agency is nowhere near proposing a new safety fitness rule. Moreover, any deviation from the current objective safety fitness finding which opened the door for use of roadside inspections and use of DataQ decisions based on pure hearsay without judicial appeal would violate due process and the Administrative Procedure Act.

To be sure, the pejorative finding that over 95% of the authorized carriers are “unrated” needs to be changed to "licensed to operate”. Like the issuance of a CDL, an applicant should be required to meet the new entrant audit standards before beginning to operate. That can and should be done through the new carrier audit procedure immediately upon the filing of the application.

Clearly, the shipper and broker community needs a red light green light as part of its carrier vetting system, not just to avoid vicarious liability, but also to be assured that the new entrant is a bona fide carrier with a verifiable fleet. Using the CDL analogy or the rules applicable to other regulated professions, once certified by the licensing body as fit to practice or operate, the licensee loses its authority to operate or is disbarred based upon administrative due process for good cause shown.

In this regard, interstate commerce is unique in that federal authority trumps state law. The Department of Transportation has jurisdiction over interstate trucking to make and enforce uniform rules with respect to vetting regulated carriers and intermediaries and protecting the shipping and traveling public. No legitimate constituents in interstate trucking advocate arbitrary and capricious over regulation yet the DOT must set and enforce “the rules of the road” which protect the traveling public against unsafe drivers and the supply chain against fraud.

(3)  With respect to the Congressional overture to DOT to appoint an anti-fraud task force, the request has been presented formally to its Office of Inspector General which has the  broad power and authority to investigate and prosecute criminal fraud in trucking.  Representatives of all segments of the industry are actively supporting the Braun / Bost proposal. Although better security and supply chain protocols are being implemented, one reliable source reports that losses due to systemic fraud are up 400%.

Protecting stakeholders against unsafe drivers and organized fraudsters is a job only the Federal Government can do. This issue should heat up once Congress returns and major supporters conduct their annual Congressional fly-ins. Recipients interested in tracking these issues should contact their sponsoring organization or email asectt@gmail.com.