Trucking Matters

www.motorcarrierlawyer.com
Volume 1, Issue 1 LEGAL NEWS FOR THE TRUCKING COMMUNITY October 2004

Inside This Issue:

1. You've Just Had A DOT Compliance Review . . . Now What Do You Do?
2. Your Safety Rating: Taking a Look at Factor 6— Recordable Accident Rates
3. Did You Know . . . ?

You've Just Had A DOT Compliance Review . . . What Happens Next?

Mary Helen Delgado, Esq.

You've just been visited by a safety investigator from the United States Department of Transportation (DOT), Federal Motor Carrier Safety Administration (FMCSA) who was there to conduct a compliance review, or "CR" as investigators commonly call it. What can you expect to happen next?

In most cases, even before the safety investigator showed up, you probably received a letter from the FMCSA's Division office in the state in which your principal place of business is located. That letter would have advised you that the FMCSA had scheduled a compliance review, what types of documents the investigator would review, and it would request confirmation of the date and time for the scheduled review. You probably even spent a little time making sure your records were in order and preparing for the compliance review.

During the CR, the investigator checked to make sureyour motor carrier operations were in compliance with the Federal Motor Carrier Safety Regulations, the Hazardous Materials Regulations, and/or the Commercial Regulations. The investigator also checked to make sure you had the documents required by those regulations.

Once the safety investigator completes the investigation, he or she is required to give you a copy of the investigation report, which you probably signed. (The report, just like the investigation itself, is also called a "CR").

The CR will show all the violations the investigator discovered during the compliance review and will give you recommendations for correcting the violations and bringing your operations into compliance. The CR will also show your company's proposed safety rating.

So, as a result of one compliance review, two things could happen: 1) you could receive a fine for the violations discovered, and 2) your safety rating could be changed—on very rare occasions, it will be upgraded but many times it will be downgraded from "satisfactory" to "conditional" or "unsatisfactory" or from "conditional" to "unsatisfactory."

Behind the Scenes

After you are given a copy of the investigation report, what happens next? The safety investigator is required to conduct the compliance review according to established agency policies and procedures found in a four-volume document called the Field Operations Training Manual (FOTM). But that doesn't always happen.

When the investigator gets back to his office after conducting the CR, he reviews the report, checks the violations discovered, analyzes the findings, and determines whether, according to the FOTM, your company will be issued a civil penalty in the form of a Notice of Claim. To determine the amount of the penalty, the investigator plugs in various data about your operations, such as any prior history of offenses, the company's or driver's gross income, and the violations discovered into a computer program called the Uniform Fine Assessment (UFA). That program then determines the number of violations to be charged and the amount for each penalty.

You Receive a Fine . . . React Quickly

If the FMCSA takes enforcement action against you based on the violations discovered during the compliance review, you will receive a Notice of Claim soon after the CR. A Notice of Claim is the document the agency sends to you which describes the violations for which you are being fined; it also lists the number of violations with which you are charged, the penalties for each violation, and the total amount of the penalty. The Notice of Claim is the equivalent of the agency filing a lawsuit against you; you should not ignore it. Ignoring a letter from the Federal Motor Carrier Safety Administration could cost your company a lot of money.

The agency will usually send you a copy of its rules of practice—the procedures and rules it uses to conduct the proceedings against you—with the Notice of Claim. Those rules, however, have strict deadlines. You only have 15 calendar days to reply to the Notice of Claim and your reply must include specific information. If you don't reply in the correct manner, fail to reply at all, or file a late reply, you might lose your case and have to pay a hefty fine.

"Ignoring a letter from the Federal Motor Carrier
Safety Administration could cost your company
a lot of money."

That's why it is very important not to ignore, misplace, or delay reading, and replying to, any correspondence from the FMCSA.

Your Safety Rating: Taking A Look At Factor 6: Recordable Accident Rates

Mary Helen Delgado, Esq.

Several years ago, Congress passed the Motor Carrier Safety Act of 1984. This law directed the Secretary of Transportation to establish a procedure to determine the safety fitness of commercial motor vehicle (CMV) owners and operators. The Secretary then delegated that responsibility to the Federal Motor Carrier Safety Administration (FMCSA). The FMCSA established the Safety Fitness Procedures which are found in Part 385 of Title 49 of the Code of Federal Regulations (CFR). The agency uses these fitness procedures to "determine the safety fitness of motor carriers, to assign safety ratings, to direct motor carriers to take remedial action when required, and to prohibit motor carriers receiving a safety rating of "unsatisfactory" from operating a commercial motor vehicle(CMV). 49 CFR §385.1.

The process of assigning your company a safety rating begins with a compliance review. Upon completion of the review process, the agency assigns your company a safety rating of "Satisfactory,""Conditional,"or "Unsatisfactory." See Glossary of Terms above for explanation.
Your safety rating is composed of the results of several areas of your motor carrier operations reviewed by the FMCSA. The agency looks at the motor carrier's compliance with specific acute or critical regulations. According to the FMCSA, "Noncompliance with acute regulations and patterns of non-compliance with critical regulations are quantitatively linked to inadequate safety management controls and usually higher than average accident rates."

The FMCSA also looks at the following "factors" to determine your safety rating:

Factor 1 General--Parts 387 and 390
Factor 2 Driver--Parts 382, 383 and 391
Factor 3 Operational--Parts 392 and 395
Factor 4 Vehicle--Parts 393 and 396
Factor 5 HazMat--Parts 397, 171, 177 and 180
Factor 6 Accident Factor--Recordable Rate

The FMCSA safety investigator will not make any determination of accident preventability at the time he or she conducts the compliance review. In fact, the agency will not even consider preventability unless the motor carrier contests its safety rating.
If you believe unpreventable accidents were calculated into your safety fitness rating, you should consider contesting your rating; it is possible your safety rating could be upgraded.

Many cases involving the issue of preventability have made their way before the FMCSA because a motor carrier has received an "unsatisfactory" rating for Factor 6—the recordable accident rate. Usually, a motor carrier believes that certain accidents should not be included in the computation of the safety rating because the accident was not its fault.

For the FMCSA to consider preventability, the motor carrier must present "compelling evidence that the recordable rate is not a fair means of evaluating its accident factor." Agency case law indicates that a motor carrier must submit a signed police report containing the investigating officer's badge number, and an insurance report, if one was generated, signed by the investigator. If no police report was prepared, the agency will accept the insurance investigation report alone. Usually, this insurance investigation report or accident report must be prepared by an independent third-party, not by the motor carrier or its driver.

Any report you do submit to the FMCSA must meet the following standard:

If a driver, who exercises normal judgment and foresight could have foreseen the possibility of the accident that in fact occurred, and avoided it by taking steps within his or her control which would not have risked causing another kind of mishap, the accident was preventable.

Case Study

In many cases, preventability is difficult to prove when the motor carrier's driver hits another vehicle from behind. But in one case decided by theagency, the motor carrier submitted evidence that another vehicle suddenly moved from two lanes to the truck driver's left into a position directly in front of the truck driver as the truck driver was preparing to make a right turn from the right lane. Apparently, the rogue driver stopped suddenly when a pedestrian entered the crosswalk. The truck driver's vehicle then struck the other driver's vehicle from behind.

According to the FMCSA's decision in this case, the investigating officer concluded that indeed, the other driver had moved suddenly across two lanes then stopped in front of the truck driver's vehicle. The driver who changed lanes was issued a citation for improper lane change. The FMCSA ruled that the truck driver could not have anticipated the sudden movement across two lanes followed by an immediate stop by the other vehicle and the truck driver could not have taken "effective" evasive action to avoid the crash. Therefore, in those circumstances, the crash was not preventable and should not have been included in the computation of the motor carrier's recordable accident rate. Because the motor carrier had challenged the FMCSA's use of that one accident, and it was taken out of the computation, the motor carrier's safety rating was upgraded from "Conditional" to "Satisfactory." In the Matter of R-Own Express, Inc., Docket No. FMCSA-2004-17237, March 23, 2004.

DID YOU KNOW . . .

• If you take corrective action after the compliance review but before a Notice of Claim is issued to you, the FMCSA is more inclined to take into consideration your attempts to correct those violations when it decides whether to reduce the amount of your fine. There is no guarantee that your penalty will be reduced but your attempts to correct the problems are very strong evidence that you are willing to comply.

• If you file for bankruptcy, the FMCSA does not automatically stop its enforcement proceedings against you. While the agency may not be able to immediately collect a judgment against you, the agency can still make a determination whether you, as a bankrupt carrier, violated Federal safety rules. The agency can still assess a penalty and seek a judgment against you.

• If you offer for transport or transport placardable quantities of hazardous materials (HM), you must have a written security plan that complies with the requirements of 49 CFR §172.800-804. At a minimum, your security plan must address:  1) Personnel Security--measures to confirm information provided by job applicants who may have access to or handle HM; 2) Unauthorized Access to HM—-measures to address the risk that unauthorized person may gain access to HM or to vehicles which will transport HM; and 3) En Route Security--measures to address the security risks of HM shipments en route to their destination, including storage incidental to shipment of HM.

GLOSSARY OF TERMS

The following is a list of terms used in this newsletter and their meanings:

ACUTE REGULATION - Regulations where noncompliance is so severe as to require immediate corrective action regardless of the carrier's overall safety posture.

COMPLIANCE REVIEW- Commonly called a "CR," it is an in-depth examination at the principle place of business of a motor carrier's business operations. The CR examines the hours of service, maintenance and inspection, driver qualification, commercial drivers license requirements, hazardous materials, and other safety and transportation records.

CRITICAL REGULATION - Regulations where noncompliance relates to management and/or operational controls.

NOTICE OF CLAIM - Also known as a "claim letter," the Notice of Claim is the document the FMCSA uses to start a civil penalty proceeding. It describes the types of violations for which you are being fined, the number of violations charged, the penalties for each violation, and the total amount of the penalty. It also gives you information on your procedural rights.

SAFETY RATING - This is an assignment of safety fitness that falls into three categories: Satisfactory— means that a motor carrier has in place and functioning adequate safety management controls to meet the safety standards prescribed by the Federal Motor Carrier Safety Regulations; Conditional—means a carrier does not have adequate safety controls in place to ensure compliance and as a result could have occurrences of certain listed types of violations; and Unsatisfactory—means a carrier does not have adequate safety controls in place to ensure compliance and, as a result, has had occurrences of certain listed types of violations.

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Mary Helen Delgado, is a private attorney in the San Francisco Bay Area. Before entering private practice, she was the Senior Trial Attorney for the Federal Motor Carrier Safety Administration's, Western Service Center where she managed legal enforcement and compliance matters for the agency's fourteen western states. Ms. Delgado can be reached at (925) 756-1645 (phone) or at helen-delgado@sbcglobal.net

This publication is designed to provide general information regarding the subject matter covered. It is provided with the understanding that it will be used as an informational guide only. While this information is intended, but not guaranteed, to reflect current legal developments, we do not represent or guarantee that it will be complete or up-to-date at the time you view it. Although prepared by a professional, this publication should not be used as a substitute for legal advice regarding your specific situation. If you need legal advice, you should consult an attorney.