DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Parts 365, 371, and 375 [Docket No. FMCSA-2012-0322]
FMCSA Policy on the Suspension of
Operating Authority for Hostage Load
Violations
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of enforcement policy.
----------------------------------------------------------------------- SUMMARY: FMCSA provides notice of the
Agency's new policy concerning
enforcement of its household goods
(HHG) motor carrier and broker
regulations. FMCSA may take
enforcement action when a HHG motor
carrier or broker knowingly and
willfully fails, in violation of a contract,
to deliver or unload at the destination
a shipment of HHG for which charges
have been estimated and for which
payment has been tendered. A motor
carrier or broker found holding a HHG
shipment hostage may be subject to
suspension of registration for a period of
not less than 12 months to not more
than 36 months.
DATES: This decision is effective October
18, 2012.
FOR FURTHER INFORMATION CONTACT: Brodie Mack, Jr., Commercial
Enforcement and Investigations
Division, Federal Motor Carrier Safety
Administration, 1200 New Jersey
Avenue SE., Washington, DC 20590,
(202) 366-8045; email
brodie.mack@dot.gov.
SUPPLEMENTARY INFORMATION: Background
The U.S. Department of
Transportation (DOT) assumed responsibility for regulating the HHG
industry in 1996 from the Interstate
Commerce Commission (ICC). Congress
terminated the ICC in the ICC
Termination Act of 1995 (Pub. L. 104-
88, 109 Stat. 803). Consequently, DOT
inherited the responsibility of handling
consumer complaints regarding
deceptive business practices and
hostage shipments. In 2000, FMCSA
was delegated the responsibility for
enforcement of HHG consumer
protection in the Motor Carrier Safety
Improvement Act of 1999 (MCSIA),
Public Law 106-159, 113 Stat. 1748.
However, FMCSA lacked the authority
to fully address brokers and motor
carriers engaged in the practice of
holding HHG shipments hostage in
violation of a contract. Congress
responded by including the "Household
Goods Movers Oversight Enforcement
and Reform Act of 2005" in the Safe,
Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for
Users (SAFETEA-LU). In SAFETEA-
LU, Congress specifically addressed
(codified at 49 U.S.C. 14915) the
problem of persons, including, but not
limited to, brokers and motor carriers,
who hold HHG shipments hostage. The
statute defines a hostage shipment,
establishes civil and criminal penalties,
and permits the suspension of the
operating authority registration of a
motor carrier or broker from 12 to 36
months when it holds a shipment
hostage.
Policy
Pursuant to 49 U.S.C. 14915, any
person, including a motor carrier or
broker, that holds a HHG shipment
hostage is subject to a $10,000 civil
penalty for each violation. Each day the
goods are held hostage may constitute a
separate violation. In addition with the
publication of this policy statement
FMCSA may suspend a broker or motor
carrier's registration for a period of not
less than 12 months or more than 36
months. The suspension of a carrier's or
broker's registration extends to and includes any carrier or broker having
the same ownership or operational
control as the suspended carrier or
broker.
FMCSA may suspend a carrier's or
broker's registration upon a
determination by FMCSA that the
carrier or broker knowingly and
willfully failed, in violation of a
contract, to deliver or unload at the
destination of a shipment of HHG for
which charges have been estimated and
for which payment has been tendered.
Pursuant to 49 U.S.C. 13707(b)(3)(A),
payment is tendered when a shipper
pays: (1) 100 percent of the charges
contained in a binding estimate
provided by the carrier; (2) not more
than 110 percent of the charges
contained in a nonbinding estimate
provided by the carrier; (3) or in the
case of a partial delivery of the
shipment, the prorated percentage of the
charges.
FMCSA will take action to suspend a
carrier's or broker's registration for
hostage load violations in accordance
with the procedures in 49 U.S.C. 13905.
FMCSA may determine that a hostage
load violation has occurred based on the
results of an investigation, an Agency
determination as stated in a final order,
or admission by the motor carrier or
broker. FMCSA initiates a proceeding to
suspend the carrier's or broker's
registration by issuing an order to the
carrier or broker to show good cause
why the registration should not be
suspended in accordance with 49 U.S.C.
13905. The order provides notice of the
alleged violation, explains how to
submit a written response with
supporting documentation, and informs
the registered entity that failure to
respond and demonstrate good cause
will result in suspension of its
registration.
The Agency Official who issued the
order reviews the registered entity's
response. After reviewing the response,
the Agency Official issues a written
decision and may take one of three
actions. First, he or she may enter an
order suspending the entity's registration, if the registered entity
failed to show good cause why its
registration should not be suspended.
Second, the Agency Official may enter
an order directing the registered entity
to come into compliance, if the Agency
Official determines that corrective
action is more appropriate than
suspension. The compliance order
informs the carrier or broker that willful
failure to comply may result in
suspension or revocation of registration.
Third, the Agency Official may
determine that suspension is not
appropriate and enter an order
terminating the proceeding. This
mirrors the procedure the Agency
follows when taking action under 49
U.S.C. 13905 to suspend, amend or
revoke operating authority registration
generally, for non-HHG motor carriers as
well as HHG carriers. See 77 FR 46147,
46149 (Aug. 2, 2012).
In determining whether to initiate a
registration suspension for hostage load
violations FMCSA generally considers a
motor carrier's six-year compliance
history. The six-year period is
consistent with FMCSA's penalty
assessment policies regarding "history
of prior offenses" under 49 U.S.C.
521(b)(2)(D) and "pattern of violations"
warranting assessment of maximum
civil penalties under section 222 of
MCSIA, see 69 FR 77828 (Dec. 28, 2004)
and 74 FR 14184 (Mar. 30, 2009), and
its determinations under 49 U.S.C.
13902 and 13905 on willingness and
ability to comply with applicable
regulations. See 77 FR 46147, 46144-
46149 (Aug. 2, 2012). Accordingly,
FMCSA may suspend the registration of
a carrier or broker found holding a
shipment hostage for a first time for no
less than 12 months pursuant to 49
U.S.C. 14915. If a carrier or broker
commits a second hostage load violation
within 6 years of the first violation,
FMCSA may suspend its registration for
24 months. If a carrier or broker
commits a third violation within 6 years
of the first violation, FMCSA may
suspend its registration for 36 months.
Issued on: September 18, 2012.
William A. Bronrott,
Deputy Administrator.
[FR Doc. 2012-25678 Filed 10-17-12; 8:45 am]
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