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Owner-Operator Independent v. Federal Motor Carrier Safety Administration

August 26, 2011

OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., ET AL., PETITIONERS,
v.
FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION, RESPONDENT.



Petition for Review of a Final Rule of the Federal Motor Carrier Safety Administration. No. FMCSA-2004-18940.

The opinion of the court was delivered by: Wood, Circuit Judge.

ARGUED FEBRUARY 7, 2011

Before ROVNER and WOOD, Circuit Judges, and GOTTSCHALL, District Judge.

Three commercial truck drivers and the Owner-Operator Independent Drivers Associa- Hon. Joan B. Gottschall, of the United States District Court for the Northern District of Illinois, sitting by designation. tion (OOIDA) have petitioned for review of a final rule issued by the Federal Motor Carrier Safety Adminis- tration (FMCSA or Agency) about the use of elec- tronic monitoring devices in commercial trucks. Electronic On-Board Recorders for Hours-of-Service Compliance, 75 Fed. Reg. 17,208 (Apr. 5, 2010). Though the briefing raises a litany of issues that would make for a difficult and exhaustive Administrative Law final exam, in the end we find that we can dispose of the petition on a narrow basis. We conclude that the rule cannot stand because the Agency failed to consider an issue that it was statutorily required to address. Specifically, the Agency said nothing about the requirement that any regulation about the use of monitoring devices in com- mercial vehicles must "ensure that the devices are not used to harass vehicle operators." 49 U.S.C. § 31137(a). We therefore grant the petition and vacate the rule.

I Federal regulators have long limited the number of hours during which commercial truck drivers may operate their vehicles in a given day and over the course of a week. Between 1940 and 2003, the permissible "hours of service" (HOS) went largely unchanged for most drivers. The basic idea has remained constant: to protect driver health and to ensure highway safety by reducing driver fatigue and thus fatigue-related accidents. To keep track of a trucker's time on the road and, to the extent possible, his time spent sleeping, the regulations require a driver to document four statuses: (1) driving; (2) on duty, not driving (e.g., sitting at a loading dock or filling up the gas tank); (3) in the sleeper-berth (a small compartment in the cab of the truck with a bed); and (4) off duty. 49 C.F.R. § 395.8(b) (2010). The regulations set out daily limits for time spent either driving or other- wise on duty, and they establish a daily minimum for consecutive hours off duty. That minimum is subject to an exception for time spent in the sleeper-berth. This allows drivers to split their off-duty hours into two parts if they rest in the truck. The regulations also cap the total hours a driver may spend on duty in a given week (which can be measured in either seven- or eight- day units depending on the carrier).

Traditionally, drivers have recorded their hours in paper logbooks (referred to a driver's "record of duty status," id. at § 395.8) to demonstrate compliance with the HOS regulations. Individual drivers must keep copies of their records-of-duty status for seven days. They then submit the records to their motor carrier, which must retain them for six months. Id. at § 395.8(k). As one might imagine, this paper-based system is not free from problems of manipulation and falsification, and those problems have long been a subject of concern.

In 2003, the FMCSA issued a final rule that sub- stantially, and controversially, changed the HOS numbers and how they would be measured. Hours of Service of Drivers; Driver Rest and Sleep for Safe Opera- tions, 68 Fed. Reg. 22,456 (Apr. 28, 2003). The 2003 rule increased the daily driving limit, reduced the daily on- duty limit, increased the daily off-duty requirement, retained the sleeper-berth exception, and created a 34- hour restart rule as a new exception to the weekly on- duty cap. See id. at 22,457, 501-02. Following a petition for review, however, the D.C. Circuit held that the 2003 revised rule was arbitrary and capricious because the "agency failed to consider the impact of the rules on the health of drivers, a factor the agency must consider under its organic statute." Public Citizen v. FMCSA, 374 F.3d 1209, 1216 (D.C. Cir. 2004).

Although the court's decision ordinarily would have required vacatur of the rule, Congress overrode that consequence in legislation that granted the Agency temporary relief and kept the 2003 rulemaking in effect until the earlier of either a new rule from the Agency or one year. Surface Transportation Extension Act of 2004, Part V, Pub. L. 108-310, § 7(f), 118 Stat. 1144, 1154.

The Agency went back to the drawing board, but it ulti- mately made only one small change to the rule. In 2005 it issued a final rule with the revised HOS regulations. Hours of Service of Drivers, 70 Fed. Reg. 49978 (Aug. 25, 2005). Again, the new HOS rule did not survive judicial review in one piece. This time, the Agency erred be- cause (1) it failed to allow meaningful comment on the driver-fatigue model it used to justify increasing the daily driving limit and in creating the 34-hour restart provision, and (2) it failed adequately to explain its reasons for adopting this model, which figured heavily in the Agency's cost-benefit analysis. These two flaws, the D.C. Circuit concluded, were serious enough to require more changes to the rule. OOIDA v. FMCSA, 494 F.3d 188, 199-206 (D.C. Cir. 2007).

Nestled within the Agency's larger consideration of the HOS rules is the more narrow, but still controversial, regulatory issue before us. In the notice of proposed rulemaking for the 2003 rule, the Agency considered requiring truckers to use electronic on-board records (EOBRs) instead of logbooks for documenting their records of duty status. The Agency defines an EOBR as "an electronic device that is capable of recording a driver's hours of service and duty status accurately and auto- matically." 49 C.F.R. § 395.2 (2011). An EOBR must be "integrally synchronized" with a truck's engine, id.; this allows the device to be linked simultaneously with both the engine and the driver's telephone so that con- temporaneous updates can be sent either through cellular technology or via satellite to a remote server. To meet the Agency's performance requirements, the amount of data an adequate EOBR must be capable of recording is extensive: the truck's registration number, the date and time, the location of the truck, the distance traveled, the hours in each duty status for a 24-hour period, the motor carrier's name and Department of Transportation number, the weekly basis used by the motor carrier (either seven or eight days) to calculate cumulative driving time, and even the document numbers or name of the shipper and goods being shipped. Id.; 49 C.F.R. § 395.16 (2010). At a less technical level, an EOBR is essentially a device implanted into a truck that records significant amounts of data about the truck's location, how it is being used, how it has been used over time, and that uses satellite technology to allow nearly instant electronic transmission of this data to the trucker's employer (that is, the motor carrier).

During the 2003 rulemaking procedure, the Agency determined that "falsification of logbooks . . . [is] wide- spread." Public Citizen, 374 F.3d at 1214 (citing 65 Fed. Reg. 25,540, 25,558 (2000)). Ultimately, however, it decided not to require EOBRs as part of its comprehensive overhaul of the HOS rules, see 68 Fed. Reg. at 22,488-89. It gave several reasons for that decision. The most sig- nificant was that it believed that, as of then, it could not adequately estimate the costs or benefits of an EOBR, in part because the market was small (which made cost estimates difficult), and in part because it had not tested available devices or those in current use (which made benefits, like increased compliance, difficult to estimate). Id. In addition, the Agency wanted more time to address the concerns that had been expressed about secondary uses of data and about the effects of EOBRs on privacy. Id. at 22,489. Even though it con- cluded that it could not justify a general EOBR require- ment in 2003, the Agency promised "to continue research on EOBRs and other technologies." Id. at 22,488. Public Citizen criticized the Agency's decision not to adopt an EOBR requirement, to the extent that the reason was a lack of information about the potential costs and benefits of an EOBR mandate. 374 F.3d at 1220-22. The court could not "fathom" why the Agency had not "even taken the seemingly obvious step of testing existing EOBRs on the road, or why the agency ha[d] not at- tempted to estimate their benefits on imperfect empirical assumptions." Id. at 1222. The court characterized the absence of information about how much EOBRs could increase compliance as "willful," given the lack of testing.

Id. This was especially glaring since the Agency had allowed voluntary EOBR use for over 15 years at the time. Id. After Public Citizen, in the rulemaking conducted under the temporary stay from Congress, the Agency did not address EOBRs.

In 2004, the Agency made good on its promise to investi- gate EOBRs further when it issued an optional advanced notice of proposed rulemaking indicating that it was still considering an EOBR mandate. Electronic On-Board Recorders for Hours-of-Service Compliance, 69 Fed. Reg. 53386 (Sept. 1, 2004). That advance notice led to a formal notice of proposed rulemaking in 2007, which considered three regulatory issues: (1) new performance standards for EOBR technology; (2) the use of EOBRs to "remediate regulatory noncompliance"; and (3) incen- tives to promote voluntary use of EOBR technology. Electronic On-Board Recorders for Hours-of-Service Compliance, 72 Fed. Reg. 2340, 2343 (Jan. 18, 2007). The noncompliance measure was the most significant of the three and is the focus of our review. The Agency proposed requiring EOBR use for carriers found to have an HOS violation of greater than 10 percent for any two compliance reviews in a two-year period. The Agency calls this the "2x10 remedial directive." As the Agency described this option in its final rulemaking, the 2x10 remedial directive would apply to "a relatively small population of companies and drivers with a recurrent HOS compliance problem." 75 Fed. Reg. at 17,211. In the section of the notice of proposed rulemaking that lists statutes authorizing the FMCSA to promulgate regula- tions regarding monitoring devices, the Agency acknowl- edged that Congress contemplated rules mandating electronic monitoring devices in the Truck and Bus Safety and Regulatory Reform Act of 1988. 72 Fed. Reg. at 2341. This statute, the Agency realized, also "requires the Agency to ensure that any such device is not used to 'harass vehicle operators.'" Id. (quoting 49 U.S.C. § 31137(a)).

After receiving and considering a significant number of comments to the proposed rule, the Agency promul- gated the 2010 final rule now before us. In so doing, the Agency produced two reports related to its reasons for not requiring EOBRs in 2003--a Regulatory Impact Analy- sis that weighed potential costs and benefits of re- quiring EOBRs, and a Privacy Impact Assessment. In the end, it decided on a rule under which motor carriers "that have demonstrated serious noncompliance with the HOS rules will be subject to mandatory installation of EOBRs." 75 Fed. Reg. at 17,208. The 2010 rule abandoned the proposed 2x10 directive in favor of a stricter "1x10 remedial directive." Under the 1x10 direc- tive, the Agency will issue a remedial order--requiring installation of EOBRs for all the trucks in a motor carrier's fleet--to any carrier found to have a greater than 10 percent rate of noncompliance with HOS rules in any single "compliance review." Id. A remedial direc- tive would make the EOBRs mandatory for a period of two years; after that, a carrier, if it desired, could in theory return to using the logbooks. Id. at 17,211. The Agency adopted the ...


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