Regulatory and Legislative Update - October 2021

Contents

Regulation and Enforcement

• DOT seeks input on ‘supply chain resilience’ in freight and logistics
• FMCSA rule to link clearinghouse data to CDL
• Reporting requirement for FMCSA COVID declaration kicked in October 1
• FMCSA renews steel company’s exemptions from HOS and securement rules
• Oak Harbor Freight Lines seeks exemption on driver training instructors
• Keep Truckin seeks windshield exemption

Legislation

• Infrastructure bill remains in limbo
• Senate bill would bar vaccination mandate for interstate passenger travel

Courts

• Supreme Court acts in two cases related to trucking

Advocacy and Comment

Regulation and Enforcement

DOT seeks input on ‘supply chain resilience’ in freight and logistics

The U.S. Department of Transportation is requesting comments by October 18 on ways to address near-term and future constraints in the transportation sector, especially for ports, rail, and trucking. The information request is part of the Biden administration’s efforts to strengthen the nation’s supply chains and is more specifically linked to the Supply Chain Disruptions Task Force established by the White House in June. DOT is one of several departments that have issued such requests in response to the White House efforts regarding supply chain disruptions.

Although the request is broad, DOT asked for input on various specific topics, including infrastructure and operational bottlenecks; shortages of essential cargo-handling equipment (such as chassis and containers); warehousing capacity and availability; challenges and opportunities related to technology; and workforce development.

The information request presumes some key Biden administration priorities, such as addressing climate change and promoting unionization. For example, one of the specific topics DOT seeks input on is “the effects of climate change on transportation and logistics infrastructure and its implications for supply chain resiliency.” The document also requests input on “key opportunities and challenges with respect to the existing and future workforce to ensure a well-functioning freight and logistics supply chain and achieve the President's goal of increasing good-paying jobs with the choice of a union.”

For the Federal Register notice, visit https://www.federalregister.gov/d/2021-19974. To view comments, visit https://www.regulations.gov/document/DOT-OST-2021-0106-0001.

FMCSA rule to link clearinghouse data to CDL

FMCSA issued a final rule that will require states to take action to downgrade a commercial driver’s license (CDL) or commercial learner’s permit (CLP) if they receive notice from the agency that a driver is barred due to a violation in the drug and alcohol clearinghouse. The rule also will require states to query the drug and alcohol clearinghouse before issuing, renewing, upgrading, or transferring a CDL or CLP and to block such actions if the driver is barred. The rule is effective November 8, but compliance is not required until November 18, 2024.

The rule aims to minimize a blind spot under current regulations. Today, a motor carrier cannot hire a CDL driver unless the carrier queries the clearinghouse and confirms that the driver has no drug and alcohol violations for which the driver has failed to complete a return-to-duty protocol. However, a driver who tests positive in a pre-employment drug test for another employer might be able to drive for up to a year in the most extreme cases until his or her current employer conducts a required annual clearinghouse query. Or a driver who tested positive arguably could obtain operating authority and fail to comply with the drug testing consortium requirements under the regulations. Although this latter situation would be a severe violation, enforcement might prove difficult until FMCSA conducted the new entrant safety audit.

The new rule adds another layer of enforcement by eliminating commercial driving privileges if FMCSA notifies the state of a violation or if a prohibited driver seeks to renew, upgrade, or transfer a CDL. The change also will permit all traffic safety enforcement officers – not just those operating under the Motor Carrier Safety Assistance Program – to readily identify prohibited drivers by conducting a license check during a traffic stop or other roadside intervention, FMCSA said.

One change that surprisingly did not generate any opposition from driver groups is a clarification of how employers’ reports of “actual knowledge” of prohibited drug or alcohol use would be maintained in the clearinghouse. The final rule states that reports of actual knowledge based on a citation or other document charging driving under the influence in a CMV would remain in the clearinghouse for five years or until a driver completes a return-to-duty process regardless of whether the driver is ultimately convicted of the offense.

For the Federal Register notice of the final rule, visit https://www.federalregister.gov/d/2021-21928.

Reporting requirement for FMCSA COVID declaration kicked in October 1

The most recent version of the emergency declaration concerning relief from certain regulatory requirements for trucking operations that directly assist coronavirus (COVID) relief efforts included a new reporting requirement. As of October 1, motor carriers that voluntarily operate under the terms of the declaration must report within five days after the end of each month concerning their reliance on the declaration. To report, motor carriers will access their portal account at https://portal.fmcsa.dot.gov/login, log in with their FMCSA portal credentials, and access the Emergency Declaration Reporting under the Available FMCSA Systems section of the page. For more information on the emergency declaration and other guidance and relief related to COVID, visit https://www.fmcsa.dot.gov/COVID-19.

FMCSA renews steel company’s exemptions from HOS and securement rules

FMCSA has renewed the exemption granted Cleveland-Cliffs Steel, LLC (Cliffs), formerly ArcelorMittal Indiana Harbor, LLC, from certain hours-of-service (HOS) and cargo securement rules and requests public comment by November 1 on the renewal. The exemptions apply to drivers who transport steel coils less than a mile on public roads between the company’s production and shipping locations. For more information, visit https://www.federalregister.gov/d/2021-21233.

Carrier seeks exemption on driver training instructor qualifications

Oak Harbor Freight Lines, Inc., has applied for an exemption from the qualification requirements pertaining to entry-level driver training (ELDT) theory instructors. The exemption would allow the company’s safety supervisor to conduct classroom (theory) training for entry-level drivers who intend to operate commercial motor vehicles (CMV) used in the transportation of hazardous materials (HM). The company states the exemption is warranted due to the safety supervisor’s experience and expertise related to the transportation of HM. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-19440.

Keep Truckin seeks windshield exemption

FMCSA requests public comment by October 22 on an application for exemption from Keep Truckin, Inc., to allow its AI Dashcam system, which is equipped with cameras, to be mounted lower in the windshield on commercial motor vehicles than is currently permitted. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-20469.

Legislation

Infrastructure bill remains in limbo

Congress has yet to resolve the political conflicts – mostly within the Democratic Party itself – that would be needed to move forward with an infrastructure bill (H.R. 3684) that includes several notable provisions related to motor carriers. The legislation is linked politically with a proposed $3.5 trillion budget reconciliation bill that includes numerous spending priorities of progressive Democrats. Some liberal House Democrats are refusing to support final passage of the Senate infrastructure bill until they have assurances that their priorities within the budget bill will remain intact.

Although the fate of the infrastructure bill is up in the air, if the bill passages, it probably will be the Senate version, which is significantly less controversial within the trucking industry. Rep. Peter DeFazio (D-Oregon), chairman of the House Transportation & Infrastructure Committee, in late September offered a motion that the House agree to the Senate amendment. If passed, that motion would send the Senate version of H.R. 3684 to the White House for President Biden’s signature. However, the Democratic majority in the House is razor thin and enough Democrats have objected so far to stall House passage.

The Senate-passed version of H.R. 3684 includes a number of notable provisions related to trucking, including a three-year pilot program to allow interstate operations by drivers under 21 under terms that are very similar to what is called for in the so-called DRIVE-Safe Act. (For details of the Senate-passed bill, see Regulatory Update, August 2021.)

Although several relatively non-controversial provisions of the House-passed bill also are in the Senate version, the Senate bill does not include some highly controversial measures that the House had passed. Those include increased minimum insurance coverage for trucking companies, a near-term restoration of public Compliance, Safety, Accountability metrics; a rulemaking on screening drivers for sleep apnea; and a comprehensive review of hours-of-service regulations, including last year’s final rule. (For details of the House-passed bill, see Regulatory Update, June 2021.)

Senate bill would bar vaccination mandate for interstate passenger travel

Sen. Mike Lee (R-Utah) introduced legislation (S. 2847) that would prohibit the federal government from mandating vaccination against COVID-19 for interstate passenger travel. The bill would apply to common carriers in all modes, including motor passenger carriers. For more information, visit https://www.congress.gov/bill/117th-congress/senate-bill/2847.

Courts

Supreme Court acts in two cases related to trucking

As it convened for a new term, the Supreme Court on October 4 issued orders in two cases related to scope of federal preemption of state action related to trucking. Regarding Cal Cartage Transportation Express vs. California, the court decided not to review a California state court’s ruling that the California Supreme Court’s interpretation that essentially bars independent contractor drivers in trucking does not run afoul of the preemption established in the Federal Aviation Administration Authorization Act of 1994 (F4A).

Although the Cal Cartage case fundamentally rests on the same question – whether F4A preempts a restrictive state ABC test for worker classification in trucking – it is different in various respects from the case in which the California Trucking Association is seeking Supreme Court review of an adverse ruling from the U.S. Court of Appeals for the Ninth Circuit concerning the application of the state’s AB 5 law to motor carriers. For example, the Cal Cartage case does not directly address AB 5 and – perhaps more important – it was an appeal from a state court that was not even the highest California state court.

So while the Supreme Court’s refusal to hear the Cal Cartage case certainly is not good news for the trucking industry, it might not indicate that the CTA case also is headed for the same fate. Many observers believe the Supreme Court likely will hear the case because the Ninth Circuit decision directly contradicts the 2016 ruling from the U.S. Court of Appeals for the First Circuit in a case involving a Massachusetts ABC test that was essentially the same as the AB 5 test.

The State of California is scheduled to respond October 12 to CTA and the various transportation-related organizations that have filed in support of CTA’s appeal. A Supreme Court decision on whether to hear the case could come within weeks after that filing. If the court declines to hear the CTA case, California would be free to impose the requirements of AB 5 on motor carriers immediately. If the court agrees to hear the case, it could be next year or potentially even 2023 before it renders a decision, depending on when the court schedules arguments.

Another trucking-related case in which there was an order on October 4 was C.H. Robinson Worldwide vs. Miller. The issue in that case is somewhat similar in that it involves federal preemption of state action, but in this case the issue is whether state common law negligence claims against freight brokers are preempted by F4A. The key question is whether a lawsuit against a broker filed after a highway accident qualifies under F4A’s “safety exception,” which preserves the “safety regulatory authority of a State with respect to motor vehicles.” The Ninth Circuit had ruled that the lawsuit in question did qualify and was not preempted.

No guarantee that the Supreme Court will hear the case, the request indicates that the court is seriously considering a review.

Advocacy and Comment

As noted above, comments are due on October 18, 2021, in response to the President’s administrative agenda and questions outlined for discussion. Clearly, the administration is trolling for support of its progressive pro-labor union agenda. The proposals, which have been tabled on the administrative and legislative level, ignore the fact that the highway infrastructure is being held hostage yet again and that the big government idea of unionization is being touted as a panacea for the driver shortage.

The key issues facing trucking in the supply chain infrastructure as a whole are not addressed and could be exacerbated by the proposed administrative agenda. The creation of an "Infrastructure Czar" to make multi-modal policy decisions is contrary to the National Transportation Policy and the commitment to insure fair competition in a competitive marketplace.

While filing comments by the current due date will probably not change federal administrative policy, it is important to our industry that supply chain issues, the driver shortage, and the pending independent contractor issues be accurately discussed and that the pitfalls of proposed administrative and legislative changes be debated.