Transportation Blog

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.

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.
 

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.
 

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).
 

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.

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.
 

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.
 

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.
 

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.
 

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).
 

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.