It will come as no surprise to anyone that during the last few years the Federal Motor Carrier Safety Administration (FMCSA) has increased substantially the dollar amount of the civil penalties (euphemism for “fines”) claimed from trucking companies for violations of the Federal Motor Carrier Safety Regulations (FMCSRs). With more compliance reviews and enhanced penalties for violations of the regulations, this has become the FMCSA’s primary means to improve safety.
But, it was a real eye-opener when I was recently contracted by a small non-NTA member trucking company that had undergone a review and now found itself in receipt of an FMCSA Notice of Claim for $33,000. Even more stunning, of the total amount claimed, $30,000 was attributable to only four alleged violations of the “70 hours in 8 days” rule, which equates to more than $7,400 per violation. While the carrier is contesting the claim and may have meritorious defenses to at least some of the charges, for other carriers the message should be clear – achieve and maintain compliance with the safety regulations or face the prospect of civil penalties much larger than would have been assessed just a few years ago.
Of course, being in compliance with the rules is not only the best way to avoid civil penalties, it also provides a carrier the best insurance against being selected for a review in the first place. This is because the FMCSA uses its Motor Carrier Safety Status Measurement System (SafeStat) to identify carriers for compliance reviews, and SafeStat (theoretically) targets only “the worst of the worst” for reviews. However, SafeStat is not foolproof, and consequently even carriers who do strive to comply with the rules can find themselves the subject of a compliance review. But, the manner in which the carrier responds to the compliance review can influence whether and in what amount a civil penalty will be claimed by the FMCSA, and can also impact the carrier’s prospects for success in challenging the claim, if it elects to do so.
Treat the investigator just like you would if you were stopped on the highway. You have to pass the attitude test. He is not there to put you out of business – he is just doing his job. It is generally recommended that the carrier take a reasonably cooperative approach to a compliance review, at least as long as the demeanor of the investigator remains cordial. This does not mean conceding to unreasonable demands, such as signing an admission that one or more violations occurred or providing an involuntary explanation of the significance of a given document. But, when documents are requested that the investigator has the right to inspect (and this generally includes about all of the carrier’s records), resisting the request is unlikely to accomplish anything other than to convince the investigator that he is on the right track and prolong the compliance review.
The attitude displayed by the carrier should be that of concern for the safety of its operation. While the carrier may not be aware of problems, if they exist, the carrier wants to know about them so they can be corrected. If the compliance review eventually results in assessment of a civil penalty and the carrier elects to contest a claim, a positive attitude toward safety is a factor that has been cited in the decisions as grounds for reducing the penalty amount. While maintaining a cooperative attitude, the carrier should assign a knowledgeable employee (in the case of a small carrier, this might be the owner) to remain with the investigator at all times while the review is under way. To the greatest extent possible, the investigator’s access to the carrier’s personnel should be limited to just the assigned individual.
A record should be made of all documents that for any reason could not be provided. This information can prove useful later on, particularly if it develops that the records selected for review do not comprise a representative sample. Also, the carrier employee assigned to the investigator may also be able to provide further explanation for documents which on their face appear to establish a violation but which, when properly understood, reflect wholly lawful operation. On the other hand, the assigned employee (and any other employee who may interact with the investigator) should be cautioned not to make any statement that would represent an admission of a violation.
At the conclusion of the compliance review, the investigator will present a computer-generated report summarizing his/her findings, and will then request that the report be signed by the carrier to acknowledge receipt of it. The carrier should sign the report as requested, but should decline (and should instruct its employees to decline) to sign any other documents that were generated during the course of the review. There is no requirement that the carrier sign any such documents, which may contain admissions that can later be used against them. Ordinarily, the report will include a list of “Requirements and Recommendations” including a request that the carrier send a letter to the State Office of the FMCSA within 15 days describing actions taken in response to the review. The letter should be sent as requested, but again, care should be taken to word the letter as to avoid admitting that violations have occurred. Finally, the report will contain a proposed Safety Rating.
Following completion of the audit, the carrier should immediately take action to correct any deficiencies that may have been discovered and to document the actions taken and when. This is probably a good idea in any event, but there is another reason beyond pure concern for safety that should motivate any carrier anticipating receipt of a Notice of Claim as a result of the review to act swiftly to bring its operations into compliance with the safety regulations.
For those cases where a civil penalty is subsequently claimed, the FMCSA, through its Chief Safety Officers, has frequently stated that actions by a carrier to achieve compliance with the safety regulations taken after the compliance review is completed but before a Notice of Claim is received can be a factor potentially warranting a reduction in the penalty. But, because the time between completion of the compliance review and the issuance of any resulting Notice of Claim will be very brief, prompt action will be required of any carrier hoping to avail itself of this opportunity to potentially reduce the ultimate penalty amount.
Hopefully, a review of any of the readers of this publication will result in a “Satisfactory” safety rating and be closed without assessment of a civil penalty. However, if a Notice of Claim is received, it is imperative that the carrier act promptly to preserve its rights if it desires an opportunity to reduce the amount of the claimed penalty. Under the FMCSA’s Rules of Practice (49 CFR Part 386), the carrier must serve its written reply within thirty days following service of the claim. Failure to reply in the precise manner specified in the Rules of Practice can and likely will result in the Notice of Claim becoming a “final order” with only limited opportunity for the carrier to seek reduction in the penalty amount. Similarly, if a hearing is desired by the carrier, it must be requested within the time period specified for the carrier’s reply, or any right to a hearing will be waived.
Of course, all of the above could have been avoided if the carrier had belonged to their state association or another interstate association, such as the NTA (www.ntassoc.org). If so, they could have received all the help they needed to pass a compliance review in the first place. Don’t wait until it is too late. Join the NTA today and make sure your company is safe and compliant!