Interstate Authority Requirements: A Trap for the Unwary

Monday, July 19, 2010 by Transportation Lawyer
Whether a carrier needs interstate authority depends on a number of things but begins with the threshold question whether any of the shipments it is handling are in "interstate commerce."  What constitutes "interstate commerce" can sometimes be a difficult question to answer with certainty. As a general rule, all legs of shipments moving between different states or between a state and a foreign country without "coming to rest" (in itself a complex determination)  are considered to be in "interstate commerce." A motor carrier performing any part of the transportation services on such shipments --even if that carrier's particular services are performed entirely within one state--must (unless an exception applies) have appropriate interstate authority.  
 
Since the SAFETEA-LU Technical Corrections Act of 2008, interstate authority may be required regardless of the size of the motor vehicle used for transportation. So motor carriers using smaller vehicles, such as delivery companies and messenger services, are also subject to this concern. Carriers who believe they are subject only to state regulations because they never leave their home state should review whether their services include handling of shipments in "interstate commerce." If so, they should determine whether an exception applies, or obtain the required authority and as needed come into compliance with the Federal Motor Carrier Safety Laws and the Federal Motor Carrier Leasing Regulations.

New Amendments to Resolution 600b

Thursday, March 18, 2010 by Transportation Lawyer
The Cargo Services Conference (CSC) of the International Air Transport Association (IATA) has adopted amendments to Resolution 600b, which is the standard set of terms of conditions utilized in international air waybills. IATA will soon be circulating the Finally Adopted Resolution (FAR) memo listing all the adopted amendments to the CSC Members for filing with the required government authorities.  Once the required approvals are obtained, the amendments will be declared effective accordingly.  The timelines for implementation of the new amendments to Resolution 600b will be provided in the declaration of effectiveness memo.  Accordingly, indirect air carriers participating in international air transport should track forthcoming IATA developments to ensure compliance with IATA directives.

States To Cease Collecting UCR Fees Until Further Notice

Thursday, March 11, 2010 by Transportation Lawyer

On March 11, 2010, the UCRA Board voted to prohibit states from collecting any UCR fees for 2010 until a final rule is published by the FMCSA or until further notice from the Board.  The Board concluded that the FMCSA regulatory guidance issued last week allowing for the collection of 2010 fees at 2009 rates would lead to severe administrative problems for the program.  The Board’s resolution had been circulated to all of the states that participate in the UCRA.  The federal rule to set the 2010 fees is anticipated to be issued this summer.

FMCSA releases Pre-employment Screening Program website

Friday, February 26, 2010 by Transportation Lawyer

The FMCSA just released the website for the upcoming Pre-employment Screening Program (PSP).  This signals the next phase of the CSA 2010 roll out despite the uncertainty of various of its features.  As mentioned in our recent CSA-2010 webinar, the PSP is a new database developed by the FMCSA that can be accessed by motor carriers to obtain accident and roadside inspection data for individual drivers.  The website is available at: http://www.psp.fmcsa.dot.gov

The database is only available to motor carriers and, based on the FAQ included on the website, can only be used for pre-employment purposes.  In other words, carriers cannot use the database to access information on currently employed or leased drivers.  Carriers wishing to access the PSP must sign an Enrollment Agreement and pay both an annual enrollment fee ($25 for small carriers of less than 100 power units and $100 for larger carriers) and a $10/record fee.  Also, before accessing the records of a particular driver, carriers must obtain a written consent (a sample is included in the Enrollment Agreement) from the driver authorizing such access.  This may be how the FMCSA plans to monitor the improper use of the site – by tracking motor carriers that are checking current driver force rather than checking for drivers applying for employment.  Individual drivers can obtain their own report for a fee of $10.   Carriers might wish to start using the site to obtain a sense of how such data will impact driver recruiting, for example, how many more drivers will be found to be unemployable.
 

9th Circuit Issues Ruling in ATA Port Litigation

Friday, February 26, 2010 by Transportation Lawyer
On Wednesday, February 24th, the Ninth Circuit issued an opinion declining to direct the District Court to issue an injunction against 8 aspects of the Port of Los Angeles concession agreement implemented as part of its Clean Truck Program.  The expansion of the previously issued injunction was requested by the American Trucking Associations and challenged those elements of the concession agreement not previously enjoined by the District Court; it did not challenge those aspects of the Clean Truck Program that are intended to improve air quality.  This Ninth Circuit opinion did not involve the previously issued injunction that prohibits the Port of Los Angeles from enforcing an owner-operator ban, meaning that Los Angeles remains prohibited from enforcing the owner-operator ban.  This most recent decision does vacate the District Court order which had allowed enforcement of a placarding requirement that was contained in the concession agreement, but otherwise, the ruling had little impact on drayage operations at the port.  The District Court conducted its hearing on the parties’ summary judgment motions on Thursday, February 25th, and an order on those motions is expected shortly.  In is anticipated, however, that the order will preserve most issues for trial on the merits which is set to commence April 20th.

New Decision Explains Electronic Discovery Duties

Friday, January 22, 2010 by Transportation Lawyer

Whether involved in class action defense, truck accident litigation, or cargo loss and damage claims, a recent order from a New York federal court will likely impact transportation litigation going forward.     

Six years ago, Judge Shira A. Scheindlin, of the Southern District of New York authored the Zubulake decision.  The Zubulake decision provided the basis for current law and rules regarding the discovery of electronically stored information (“ESI”).  Recently, Judge Scheindlin has issued another decision involving ESI that will likely be looked to by other courts when addressing similar issues: The Pension Committee of the University of Montreal Pension Plan, et al., v. Banc of America Securities, et al., 05-civ-9016, (S.D. N.Y. January 10, 2010)(as corrected on January 15, 2010)(collectively, the “Order”).

In her order entitled “Zubulake Revisited: Six Years Later,” Judge Scheindlin found that – although the case did not present any egregious examples of purposeful destruction of documents – the plaintiffs failed to timely institute written litigation holds and were careless and indifferent in their preservation and collection of documents after the duty of preservation arose.  Judge Scheindlin sanctioned the Plaintiffs, with an instruction to the jury allowing the jury to assume missing documents were bad for Plaintiffs, requiring Plaintiffs to pay certain attorney’s fees and costs to Defendant, and ordering Defendant to search backup tapes for additional information.

This case is interesting because most cases addressing discovery of ESI, particularly those awarding sanctions, involve egregious behavior.  The facts of this case, however, are much more pedestrian – a party that didn’t instruct all persons with electronic documents relating to a matter in litigation to preserve all those documents with a formal litigation hold letter; gathering relevant documents was largely left to operational employees without supervision; together with other factors that led the court to describe the party’s ignorance and indifference towards discovery (including the search for and preservation of electronic documents).

Courts have previously held that failure to instruct relevant employees to preserve documents constituted gross negligence.  Likewise, courts have previously held issuing a litigation hold memorandum and delegating the task of identifying relevant documents to operational level employees is not enough. 

However, this court clarifies that instructions to employees to provide the company’s counsel with relevant documents via phone, e-mail, a memorandum, and in a monthly litigation update are not sufficient to satisfy the duties of preservation and production – since the employees were not instructed to preserve all relevant documents and there was little supervision over the preservation and collection. 

The concepts forming the basis for the Order are not novel or new.  But because these concepts were used to justify an award of sanctions where there was no intent to destroy documents or other shocking behavior, and because the author of modern law on this subject spends 87 pages laying out the rules that justify these sanctions, it is increasingly likely other courts will follow suit.
 

FMCSA Hours-of-Service Announcement Suggests Direction of Possible Changes

Friday, January 8, 2010 by Transportation Lawyer

The FMCSA has announced three public listening sessions as it prepares to issue a notice of proposed rulemaking on hours-of-service requirements for property-carrying commercial motor vehicle drivers. All sessions are scheduled to begin at 9 a.m.: January 19 in Arlington, VA, January 22 in Dallas, and January 25 in Los Angeles. Comments may also be submitted.

The announcement may suggest the direction of the FMCSA’s thinking on changes to the current rules. It asks for input on several issues including, among others, whether mandatory short rest periods during the work day, or an hour less of driving time for overnight driving, would improve driver alertness, and the impact of mandating two overnight off-duty periods, e.g., from midnight to 6 a.m., as a component of a clock restart. The announcement appears at 75 Fed. Reg. 285 (Jan. 5, 2010).
 

New Illinois laws affecting truck drivers

Wednesday, January 6, 2010 by Transportation Lawyer
As of January 1, 2010, several new laws have taken affect in Illinois that affect truck drivers, including uniform 80,000-pound truck access, a uniform speed limit, and a ban on texting while driving.

FMCSA Modifies Rules for Intermodal Equipment

Monday, January 4, 2010 by Transportation Lawyer
The Federal Motor Carrier Safety Administration has amended its rules governing intermodal equipment which became effective in December 2008. The amendments are effective immediately. Among other things, the amendments permit use of the Global Intermodal Equipment Registry, developed by the Intermodal Association of North America, to meet equipment identification requirements, and extend, from December 17, 2009 to June 30, 2010, the deadline for compliance with certain provisions pertaining to driver-vehicle inspections. The FMCSA’s announcement appears at 74 Fed. Reg. 68703.

Wisconsin CDL changes

Thursday, December 31, 2009 by Transportation Lawyer

After recently identifying a number of discrepancies between Wisconsin statutes and federal regulations, the FMCSA is requiring Wisconsin make several changes to its commercial driver license program. 

All changes take effect January 1, 2010.

Extension for compliance with "roadibility" rule for intermodal container chassis

Thursday, December 31, 2009 by Transportation Lawyer

The Federal Motor Carrier Safety Administration has extended the Dec. 17 deadline for compliance on its "roadability" rule for intermodal container chassis to June 30, 2010, according to the American Trucking Associations.

The extension applies to Intermodal Equipment Provider (IEP), motor carrier and driver compliance with the Driver Vehicle Inspection Report recordkeeping requirements. It does not, however, apply to FMCSA inspection, repair and maintenance requirements.
 

Enforcement of stricter rules for new entrants into the trucking industry

Thursday, December 31, 2009 by Transportation Lawyer

The Federal Motor Carrier Safety Administration has begun enforcement of stricter rules for new entrants into the trucking business.

The rule, which went into effect Wednesday, significantly raises the bar for would-be carriers. Previously, an applicant simply had to certify that he understood the safety rules and clear a safety audit before he could get permanent registration. That was too easy, the agency said. Now if an applicant commits any of a number of specific violations, he will fail the audit. If he does not correct the violation, his application will be denied.
 

IC status under siege by Senate

Thursday, December 31, 2009 by Transportation Lawyer

Sen. John Kerry, D-Mass., has introduced legislation aimed at preventing employers in industries, including trucking, from misclassifying workers as "independent contractors" in order to avoid paying taxes or benefits.

The Taxpayer Responsibility, Accountability and Consistency Act of 2009 would amend the Internal Revenue Code to address Section 530 "safe harbor" provisions. Part of the Revenue Act of 1978, these provisions allow workers to be classified as "independent contractors" rather than "employees" in industries where such designations are part of long-standing, recognized practice.
 

Port truckers can drive old trucks while waiting

Thursday, December 31, 2009 by Transportation Lawyer

 

To be consistent with a new California Air Resources Board ruling, the Port of Los Angeles has made another amendment to its tariff to allow certain truck drivers to continue operating their old trucks beyond the Jan. 1, 2010 ban date. The CARB rule, issued last week, will allow truck drivers that have purchased a new truck or retrofit with private funds to use their existing trucks through April 30, 2010.

The Port's announcement will allow the same extension to drivers who are waiting for their new truck to be delivered or for the retrofit to be installed. To qualify for the extension, the truck must be a Level 3 retrofit and also have a 25 percent NOx reduction capability.

The Port of Long Beach made similar changes to its tariff. However, if the retrofit on order does not have this additional NOx reduction capability, it will not meet the San Pedro Bay Ports environmental requirements so the extension will not be allowed in either port.
 

FMCSA Announces Meeting and Other Plans on New Hours of Service Regulations

Tuesday, December 1, 2009 by Transportation Lawyer

The FMCSA has announced that its Motor Carrier Safety Advisory Committee (MCSAC) will hold a committee meeting via conference call on December 7, 2009. The conference call is open to the public, and the FMCSA is seeking participation by “safety advocacy groups, State safety agencies, motor carriers, motor carrier associations, owner-operators, drivers, and labor unions.”

The MCSAC will be requested to provide advice and recommendations on the hours of service requirements for drivers of property-carrying vehicles following the FMCSA settlement agreement with the group Public Citizen and others. That agreement requires the FMCSA to submit a Proposed Rule within 9 months, and publish a Final Rule within 21 months, after the October 26, 2009 settlement date. The FMCSA said other steps will include public listening sessions across the country and the opportunity for public comment on the forthcoming proposed rule.

The deadline for written comments on this topic is December 3, 2009. For more information, see Motor Carrier Safety Advisory Committee Public Meeting, 74 Fed. Reg. 62882 (Dec. 1, 2009).
 

Succession planning

Friday, November 20, 2009 by Transportation Lawyer


A good first step in succession planning for any size business is evaluating the usefulness of a power of attorney in the operation of your company.  Who will sign checks?  Who can deal with other banking, regulatory or legal issues?  For many small single-owner businesses, the owner’s inability to attend to the day-to-day mechanics of running the company can be satisfied with the execution of a power of attorney naming a trusted employee or family member.  In larger companies, where equity ownership includes multiple persons, it isn’t necessarily the day-to-day operations that present problems.  However, both the company and other equity owners will need assurance they can deal with a legally appointed personal representative, and the existence of a power of attorney can eliminate the need for a court proceeding. 

The time is now to consider these issues – unique to every business – and plan ahead.