[Federal Register: June 10, 1998 (Volume 63, Number 111)] [Notices] [Page 31827-31829] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr10jn98-142] ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Federal Highway Administration Petition for Declaratory Order Regarding Application of Federal Motor Carrier Truth In-Leasing Regulations AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of denial of petition for declaratory order. ----------------------------------------------------------------------- SUMMARY: The Owner-Operator Independent Drivers Association, Inc. (OOIDA), Howard Jenkins, Marshall Johnson, Susan Johnson and Jerry Vanboetzelaer filed with the FHWA a petition for declaratory order (the OOIDA petition) seeking a formal ruling by the FHWA that New Prime, Inc., dba Prime, Inc. (Prime) and Success Leasing, Inc. (Success) violated certain provisions of the federal motor carrier truth-in- leasing regulations (49 CFR part 376). This petition was filed after the U.S. District Court for the Western District of Missouri dismissed petitioners' class action complaint against Prime and Success, seeking enforcement of these regulations, on the ground that FHWA has primary jurisdiction to determine whether the regulations have been violated. The FHWA is denying the OOIDA petition because it fails to raise any issues not adequately addressed by existing legal precedent which require the special expertise of this agency. Although denials of petitions for declaratory orders will not ordinarily be published in the Federal Register, the FHWA is publishing this decision to [[Page 31828]] provide guidance to courts, carriers, owner-operators and other interested parties regarding the agency's general policy in handling such petitions, particularly those involving issues arising under the truth-in-leasing regulations. This policy applies to all petitions for declaratory orders, regardless of whether filed in connection with private litigation. FOR FURTHER INFORMATION CONTACT: Mr. Michael J. Falk, Motor Carrier Law Division, Office of the Chief Counsel, (202) 366-1384, Federal Highway Administration, Department of Transportation, 400 Seventh Street, SW., Washington, D.C. 20590. Office hours are from 8 a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: The OOIDA Petition On March 5, 1998, OOIDA and four owner-operators filed a petition for declaratory order seeking a ruling from the FHWA that Prime and Success violated the truth-in-leasing regulations. Petitioners initially sought damages and enforcement of these regulations by filing a class action complaint, under 49 U.S.C. 14704, in the U.S. District Court for the Western District of Missouri. However, the court dismissed the complaint on the ground that the FHWA had primary jurisdiction to resolve the issues in controversy. According to the OOIDA petition, several owner-operators leased equipment to Prime which they obtained through lease-purchase agreements with Success, an equipment leasing company allegedly under common ownership with Prime. Under the terms of these lease-purchase agreements, Prime deducted rental/purchase payments for the equipment from the owner-operators' compensation and remitted the money to Success. Owner-operators were also required to remit money into several reserve funds maintained by Success to cover the cost of repairs and maintenance of the equipment. Owner-operators who terminated their leases with Prime were not refunded their reserve fund balances. Petitioners claim that Prime violated 49 CFR 376.12(i) because its leases failed to specify the terms of any lease-purchase agreement authorizing the carrier to deduct lease purchase payments from lessor compensation. They also allege that the reserve funds maintained by Success are escrow funds within the meaning of 49 CFR 376.2(f), and that any balances in these funds must be returned to them with interest, within 45 days of termination of their leases, under 49 CFR 376.12(k). Petitioners contend that the district court's dismissal of their complaint, potentially with prejudice: (1) conflicts with their right to seek private enforcement by filing a civil action under Sec. 14704; (2) conflicts with congressional intent to eliminate DOT's role in resolving private disputes; and (3) improperly applied the doctrine of primary jurisdiction, which is limited to cases where the reasonableness of a federal regulation is in dispute and an agency's technical expertise is necessary to resolve the issues before the court. Petitioners have appealed the dismissal of their complaint to the Court of Appeals for the Eighth Circuit. Consequently, petitioners request, in the alternative, that the FHWA rulethat it lacks primary jurisdiction over regulatory issues where a private party has elected to litigate these issues in federal district court under 49 U.S.C. 14704. Petitioners further contend that FHWA's technical expertise is not needed in this case because the Interstate Commerce Commission (ICC) previously ruled on the applicability of the part 376 escrow provisions to carrier-affiliated equipment leasing companies in Dart Transit Company--Petition for Declaratory Order, 9 I.C.C. 2d 700 (1993). Petitions for Declaratory Orders Although fairly new to the FHWA, petitions for declaratory orders were a common device for obtaining guidance from the ICC in resolving disputes within that agency's jurisdiction. An agency's authority to issue declaratory orders comes from Sec. 5(d) of the Administrative Procedure Act, 5 U.S.C. 554(e), which gives agencies ``sound discretion'' to issue declaratory orders to ``terminate a controversy or remove uncertainty''. The FHWA intends to exercise this authority much more selectively than the ICC because Congress, in transferring several ICC functions to the Department of Transportation (DOT) through the ICC Termination Act of 1995 (ICCTA), envisioned that DOT would generally not become involved in resolving disputes between private parties. The ICCTA expanded the rights and remedies of persons injured by carriers by providing for private enforcement of its provisions in court. Under 49 U.S.C. 14704, an injured party may seek both damages and injunctive relief against a motor carrier in federal district court to redress violations of part 376. In discussing this provision, the House Transportation and Infrastructure Committee stated that DOT should not allocate its scarce resources to resolving essentially private disputes, and that the right of private enforcement ``will permit these private, commercial disputes to be resolved the way that all other commercial disputes are resolved--by the parties''. H. Rep. No. 104-311, pp. 87-88. The FHWA believes that issuing declaratory orders, except in extraordinary circumstances, would undermine the Congressional intent to keep DOT out of private commercial disputes, particularly where one of the parties has filed suit in federal court under Sec. 14704. Accordingly, although the FHWA reserves the right to issue declaratory orders to resolve controversies between third parties in appropriate circumstances, it will generally do so only in cases having industry- wide significance that raise issues not adequately addressed by existing legal precedent. Primary Jurisdiction The doctrine of primary jurisdiction is ``a doctrine specifically applicable to claims properly cognizable in court that contain some issue within the special competence of an administrative agency.'' Reiter v. Cooper, 507 U.S. 258 (1993), at 268. In contrast to the doctrine of exhaustion of administrative remedies, it does not require parties to seek relief from the agency before invoking the jurisdiction of the court. The court, when faced with an issue it believes requires the special expertise of an agency, has equitable discretion to give that agency the first opportunity to pass on the issue by staying further proceedings and giving the parties a reasonable opportunity to seek an administrative ruling. However, an agency is not required to rule on issues directly referred to it by a court or, as in this case, indirectly referred to it following a court's order of dismissal. If an agency declines to issue a ruling, the court must then resolve the issues without the benefit of the agency's views. See Atchison, Topeka & S.F. Ry. Co. v. Aircoach Transp. Ass'n, 253 F.2d 877 (D.C. Cir.,1958). Although the FHWA does not agree with petitioners' contention that the doctrine of primary jurisdiction applies only to issues involving the reasonableness of a federal regulation, it does agree that special expertise is generally not needed to resolve disputes regarding the part 376 truth-in-leasing regulations. These regulations contain specific, straightforward, non-technical requirements which a court is ordinarily competent to construe. Consistent with the Congressional intent underlying 49 U.S.C. 14704, the FHWA will generally [[Page 31829]] decline to exercise its primary jurisdiction with regard to court referrals involving violations of part 376. Conclusion The OOIDA petition does not raise issues which require special expertise by the FHWA. The questions of whether Prime's leases contain the necessary terms required by Sec. 376.12(i), or whether escrow funds were returned within 45 days of lease termination, are fairly straightforward matters clearly within the competence of a court to resolve. Although part 376 does not expressly apply to carrier- affiliated equipment leasing companies, the ICC fully addressed the applicability of the regulations to such entities in the Dart decision. The FHWA sees no reason to revisit this issue. Accordingly, OOIDA's petition for declaratory order is denied. In Washington, District of Columbia, this 29th day of May, 1998. Gloria J. Jeff, Deputy Administrator, Federal Highway Administration. [FR Doc. 98-15391 Filed 6-9-98; 8:45 am] BILLING CODE 4910-22-P