January 2007

From the editors of CCH's Transportation products, here are summaries of the important recent developments in the area for the past month.  Complete coverage of these issues, and many more, appear in our print and electronic products, including: Aviation Law Reporter, Commercial Aircraft Transactions, Issues in Aviation Law and Policy, Federal Carriers Reporter, Federal Motor Carrier Safety Administration Decisions, and Motor Carrier Liability.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact me directly at aaron.broaddus@wolterskluwer.com.

Aviation News

U.S. Remains Optimistic on Comprehensive EU Aviation Deal
State Department Deputy Assistant Secretary for Transportation Affairs John R. Byerly said he is “absolutely optimistic” that the U.S. and the European Union will reach a comprehensive transatlantic aviation agreement, despite the U.S. decision to withdraw a proposed rule that would have relaxed some of the regulations governing foreign investment in U.S. carriers. The EU had seen this measure as a critical element toward reaching an agreement on open skies. In an interview with CCH, Byerly said “it's inevitable that sooner or later” the two sides will have to reach an agreement. Talks between the U.S. and EU tentatively scheduled for early January will try to “plot a path forward” toward a comprehensive agreement, he noted. The important thing is to “remember where we began last November (2005).” At that time, the U.S. and the EU announced that they had reached a tentative agreement that would allow each party's carriers to operate freely across the Atlantic between any point in either market.

DOT Withdraws Foreign Ownership Proposal
After reviewing a multitude of public comments, including those received from Congress, the Department of Transportation withdrew its proposal to change the rules governing international investment in U.S. airlines. In announcing the withdrawal on December 5, Transportation Secretary Mary E. Peters reaffirmed the U.S. commitment to completing a market-opening aviation agreement with the European Union. “It was clear from reviewing the comments that the Department needs to do more to inform the public, labor groups and Congress about the benefits of allowing more international investment. We need a stronger national consensus about the best means of achieving that objective,” Peters said. First issued in November 2005, and amended in May 2006, the proposal would have allowed international investors more input in the marketing, routing, and fleet structures of U.S. airlines, while retaining current domestic ownership and labor protections.

DOT Proposes E-Filing Phase-In for Airline Data Submission
A new Department of Transportation proposal would phase-in electronic filing of required recurrent financial, traffic, operational, and consumer reports by U.S. and foreign air carriers. According to DOT, the proposed action would enhance security of the data, eliminate carriers' mailing costs and the need for the Department to keypunch hardcopy data, and provide the reporting air carriers with immediate notification and a receipt from the Department. Covering 11 different report types, the proposal would allow carriers to log on to a secure website and submit the data they are required to file with DOT's Office of Airline Information. Selected Alaskan air carriers are participating in a successful e-filing pilot program for submitting their T-100 traffic data, DOT said. According to the proposal, the T-100 and T-100(f) would be the initial reports selected for e-filing, and 60-day notices would be issued prior to implementing the e-filing requirement for other forms and schedules.

FAA Updates Civil Penalty Procedural Rules
In order to reflect updated information and recent statutory changes, the Federal Aviation Administration has amended certain procedural regulations it uses when assessing civil penalties for violations of federal aviation and hazardous materials transportation statutes. The technical amendment, which took effect on December 5, revises the regulations governing notification, hearings, appeals, and the penalty assessment process. Specifically, amendments were made to Part 13 of Title 14, Code of Federal Regulations, to incorporate changes regarding judicial review of final agency decisions in hazardous materials cases, due to enactment of the Safe, Accountable, Flexible, Efficient Transportation Act: A Legacy for Users (SAFETEA-LU). In addition, several regulatory provisions were amended in order to clarify certain definitions, reflect new agency addresses and websites, and correct outdated statutory references.

Repair Station Rules Revamp Proposed
In an effort to reflect changes in aviation technology and repair station business practices, the Federal Aviation Administration has issued a proposed rulemaking to revise the aircraft repair station ratings system and require repair stations to establish a quality program. The proposed amendments also would make additional changes critical to maintaining safety, including requiring a repair station to maintain a capability list, designating a chief inspector, and having permanent housing for its facilities, equipment, materials, and personnel. The proposal also specifies instances when FAA may deny a repair station certificate and addresses particular cases where a previously-held certificate had been revoked. In addition, recent revisions to the repair station regulations would be clarified.

Pecuniary, Nonpecuniary Damages Awarded Under DOHSA
In an action governed by the Death on the Highs Seas Act, a federal court has awarded pecuniary and nonpecuniary damages to the parents, siblings, and a cousin of a 28-year-old Egyptian passenger who died in the 1999 crash of EgyptAir Flight 990. The court found that the relatives' dependency and pecuniary loss was supported by evidence that the passenger had been a central figure in an extremely close family, had made regular cash contributions to help support his parents, and also had provided support in varying amounts to his siblings and cousin. Accordingly, based upon the passenger's age, education, and economic prospects, the court awarded pecuniary damages in varying amounts to reflect each relative's loss of support in light of the passenger's contributions to them prior to his death. In addition, the court awarded nonpecuniary damages based upon the relatives' loss of the passenger's care, comfort, and companionship, as well as the importance of the passenger's role in his family (Air Crash Near Nantucket Island, Mass., on October 31, 1999 (EDNY) 31 Avi. 18,342).

GARA Barred Claim Against Rebuilt Part's Original Maker
A products liability claim against the manufacturer of an aircraft vacuum pump was barred by the General Aviation Revitalization Act of 1994, a federal court ruled. The pump had been manufactured beyond GARA's 18-year repose period and the plaintiffs had failed to challenge the manufacturer's assertion that the pump's design also was outside the repose period. According to the court, there was no basis to restart the repose period with respect to the manufacturer based on the pump's overhaul by a third party, since courts typically restart repose periods upon overhaul only with respect to the defendants who perform the overhaul (Brewer v. Dodson Aviation (WDWash) 31 Avi. 18,297).

Emotional Distress Claims Barred in Deranged Passenger Incident
Two passengers who alleged that an air carrier had jeopardized the safety of their flight by permitting a visibly deranged person aboard the aircraft failed to state a claim for negligent infliction of emotional distress, the Indiana Supreme Court ruled. Although their alleged psychological injuries did not arise out of or accompany any physical injuries, the passengers argued that they had sustained sufficient actual and constructive physical impact required to recover under Indiana's “direct impact” test. Finding that the passengers' increased sweating, breathing, pulse, heart rate, adrenaline, and acuteness of the senses —allegedly caused by breathing the deranged passenger's cigarette smoke and experiencing vibrations from his stomping feet —were natural responses to fear and anxiety, the court said they provided, at most, a slight and tenuous physical impact (Atlantic Coast Airlines v. Cook (IndSCt) 31 Avi. 18,356).

Pilot's On-Call Time Not Part of FMLA Eligibility Calculation
An airline pilot's reserve-duty time did not count as “hours of service” for the purposes of eligibility for benefits under the federal Family and Medical Leave Act of 1993 (FMLA), a federal appeals panel ruled. The pilot, who claimed that her employer had unlawfully denied some of her FMLA leave requests, argued that her reserve-duty time should have been counted as hours of service because her activities had been so curtailed as to be considered compensable working time. During reserve-duty time, the pilot was prohibited from drinking alcohol, and was required to answer the telephone and report to the airport within one hour of a telephone call. In addition, the pilot's contract with the carrier required that she be paid a guaranteed minimum compensation amount for reserve-duty time. However, the court found cases presenting similar, or even more restrictive, circumstances in which it had been held that the employees' activities were not so curtailed as to require the on-call time to be considered compensable working time within the meaning of FMLA. Furthermore, the court held that the payment of compensation does not necessarily convert on-call time into hours worked (Knapp v. America W. Airlines (10thCir) 31 Avi. 18,308).
 
FTCA Barred Claim for Negligent Aircraft Inspection
A claim brought against the U.S. government stemming from an allegedly negligent inspection of an amateur-built experimental aircraft was barred under the discretionary function exception to the Federal Tort Claims Act, a federal court ruled. Following the failure of an engine purge valve that had not been lock-wired upon installation, the aircraft had been forced to make an emergency landing, resulting in personal injuries to its occupants. The plaintiffs claimed that the government was liable for their damages because a Federal Aviation Administration inspector had failed to discover the defect while conducting a required inspection prior to issuing an airworthiness certificate for the aircraft. However, the court determined that FTCA's discretionary function exception precluded tort actions based on the alleged negligence, concluding that it is the owner's responsibility to maintain a private aircraft's airworthiness. Although certain FAA advisory circulars may have shown that the inspector had a duty that he failed to perform, the circulars lack the force of a law or regulation and do not mandate a specific course of conduct/action, the court noted (Bollinger v. U.S. (EDWash) 31 Avi. 18,320).
 

Surface Transportation News

Local Rail Ordinance Preempted by Federal Statute
A state appellate court ruled that a municipal ordinance prohibiting the obstruction of a railroad-highway grade crossing by a train for more than 10 minutes, unless the train was continuously moving or unable to move due to circumstances beyond the rail carrier's control, was preempted by the Federal Railroad Safety Authorization Act of 1994 (FRSA). The rail carrier was cited for violating the ordinance by blocking a highway grade crossing for 157 minutes. The carrier challenged the citation, arguing that it had not violated the ordinance because the train was stopped at the crossing for reasons beyond its control. Alternatively, the carrier argued that the ordinance was unenforceable because it was preempted by federal statute. The village asserted that the circumstances of the stop were within the control of the carrier and argued that the ordinance was not subject to preemption because the ordinance did not relate to rail safety. The trial court agreed with the village.

On appeal, it was determined that the municipal ordinance did, in fact, relate to railroad safety because it essentially was an attempt to regulate train speed and length, both of which are covered by federal safety regulations. Furthermore, upon examination of the federal statute, it was determined that the exceptions to the preemption provision only were available to the state, not municipalities. Consequently, since federal regulations dealing with train speed and length existed, and the exceptions to preemption were only available to the state, the municipality's ordinance was unenforceable. Village of Mundelein v. Wisconsin Central R.R. (IllAppCt) ¶84,470

Shipper's Recovery Precluded by Failure to File Written Claim
A seller of goods that failed to submit a claim in writing within nine months of delivery for goods lost during interstate transportation was not entitled to recover damages under the Carmack Amendment, a federal district court ruled. The carrier was hired to transport three shipments of women's wear apparel from Miami, Florida, to Sharon Springs, New York. Upon delivery, shortages were discovered in each shipment. Damage claims were filed for each shipment by the purchaser of the goods and its broker. Two of the damages claims were withdrawn and one was denied by the carrier. The seller of the goods failed to file any damage claims with the carrier prior to filing suit. The carrier filed a motion for summary judgment, alleging that the seller was not entitled to recover because it had not filed a timely written claim for damages.

The seller admitted that it had not filed a written claim with the carrier, but asserted that the carrier's alleged failure to respond to the claims filed by the purchaser in accordance with federal regulations resulted in its being estopped from insisting on compliance with the nine-month filing requirement. Based on the facts presented, it was determined that the carrier's alleged failure to fulfill its regulatory requirements did not constitute a basis for the seller to evoke estoppel. The evidence showed that the carrier had done nothing to indicate to the seller that it did not have to file a written claim within nine months as required by the bill of lading. Accordingly, the seller's damage claims were denied. One Step Up. Ltd. v. J.B. Hunt Transp. Servs. Inc. (SDNY) ¶84,471

Reconsideration Motion Did Not Toll Review Filing Deadline
A carrier's petition for judicial review of a final agency order was denied by a federal court of appeals because it was not filed in a timely manner. The carrier sought review of a decision by the Federal Motor Carrier Safety Administration imposing civil penalties for federal safety violations. The July 26, 2004, final agency order was issued on August 3, 2004. As such, a petition for judicial review of the final agency order was required to be filed within 30 days of the issuance of the order. The carrier argued that the order was not final until July 2005 when its motion to vacate, which was treated by the agency as a motion for reconsideration, was denied. This assertion was rejected based on federal law, which states that, unless expressly required by statute, an agency action deemed final is final for purposes of judicial review whether or not there has been presented or determined any form of reconsideration. Consequently, it was determined that the carrier's review petition, which was filed more than a year after the final agency order was issued, was deemed untimely. Thus, the request for review was dismissed. New Prime, Inc. v. FMCSA (8thCir) ¶84,472

Insurer's Liability Unaffected by MCS-90 Endorsement
In an unpublished opinion, a federal court of appeals reversed a lower court's decision holding that a MCS-90 endorsement attached to an insurance policy issued to a motor carrier required the insurance company to pay more than the policy required. A self-insured motor carrier was involved in an accident that resulted in a fatality and injuries to another motorist. Before damage claims could be settled, the carrier and its supplemental primary insurance carrier filed for bankruptcy. The injured motorist filed a declaratory judgment action seeking a determination that an excess insurer that had attached an MCS-90 endorsement to the carrier's policy was responsible for the first $1 million of any judgment. The motorist asserted that the MCS-90 endorsement and public policy required the insurer to drop down and pay first dollar coverage for the motorist's injuries, even though under the applicable insurance policies, its liability would not attached until the damage award exceeded $3.65 million.

A federal district court concurred, finding that the excess carrier that had attached the MCS-90 endorsement to its policy was required to pay the first $1 million of any judgment in favor of the injured driver of the passenger vehicle. The insurer appealed, arguing that it only should be required to pay if the judgment was in excess of $3.65 million because the MCS-90 endorsement did not change the point at which its liability attached. The appellate court agreed with the insurer, finding that the MCS-90 endorsement did not alter its liability, but merely prohibited it from utilizing policy conditions to disclaim coverage. McGirt v. Gulf Ins. Co. (4thCir) ¶84,473

Associations Lacked Standing to Challenge PHMSA Rulemaking
A federal court of appeals dismissed a petition seeking review of a final rule issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA) because the petitioners lacked standing to challenge the rulemaking. Several associations, representing hazardous materials manufacturers, shippers, and transporters, had challenged a PHMSA final rule addressing the loading, unloading, and storage of hazardous materials. The rulemaking established guidelines for determining whether a hazardous material will be subject to federal regulations. The associations challenged the final rule, asserting that the rulemaking was inadequate because it left gaps in the safety regulations. The agency argued for dismissal of the action based on its contention that the associations lacked standing to challenge the final rule.

In order to establish standing, a petitioner must: (1) show that it has suffered an injury, (2) establish a connection between the injury and the conduct complained of, and (3) demonstrate a likelihood the injury will be redressed by a favorable decision. The association claimed that its members were injured in two ways: first, they would face increased costs related to complying with local requirements; and second, they would be harmed by the alleged gap or void in federal, state, and local safety regulations governing the unloading of hazardous materials by consignees. Based on the evidence presented, it was determined that the associations did not have standing to challenge PHMSA's rulemaking because they were unable to establish a link between any alleged injuries and the final rule. Thus, the petition for review was dismissed.
American Chemistry Council v. DOT (DCCir) ¶84,474

Magladry Named Director of NTSB Office of Highway Safety
National Transportation Safety Board Chairman Mark V. Rosenker has appointed Bruce A. Magladry as the Director of the Office of Highway Safety. In this position, he will oversee all operations of the Office, coordinate highway safety program activities at the NTSB, and monitor new developments affecting highway transportation safety. Magladry joined NTSB in 1988 as a human factors specialist investigating and analyzing operator behavior in all modes of transportation.

In 1998, he became the Chief of Investigations in the Office of Highway Safety and, in 2001; he was named the Deputy Director of that office. He has served as Acting Director of Highway Safety since March 2005. During his tenure, Magladry participated in numerous accident investigations, including the Fox River Grove, Illinois schoolbus/grade crossing accident; the Silver Spring MARC train accident; The Brightfield marine accident in New Orleans; and the TWA Flight 800 explosion off Long Island.
Before joining NTSB, Magladry held positions in law enforcement and took part in a research project funded by the National Institute of Justice. The project involved the development of a computerized artificial intelligence system for the investigation of burglaries. It was the first in the world to utilize artificial intelligence concepts as a new method of investigating crimes. (NTSB Press Release No. SB-06-71, December 8, 2006)

DHS Targets Rail Transit of High-Risk Hazardous Materials
The Department of Homeland Security (DHS) is targeting the rail transportation of high-risk hazardous materials and has issued a notice of proposed rulemaking intended to strengthen the security of the nation's rail systems in the highest threat urban areas. The proposed rule will be posted to the Federal Register on December 21.

DHS said December 15 that the proposed rule is part of a package of new security measures that will require freight rail carriers to ensure 100 percent positive hand-off of Toxic Inhalation Hazard (TIH) materials. Freight carriers will be required to establish security protocols for custody transfers of TIH rail cars in high-threat urban areas and appoint a rail security coordinator to share information with the federal government. The rule also calls for formalizing the Transportation Security Administration's (TSA) freight and passenger rail inspection authority.

``A toxic emission from an attack against a chemical facility or hazardous chemicals in transit is among the most serious risks facing America's highest threat areas,'' said Homeland Security Secretary Michael Chertoff. ``We're going to take a significant percentage of that risk off the table,'' Chertoff said.

According to DHS, the freight rail industry already has begun to implement several key security measures, such as tracking and substantially reducing the standstill time for unattended freight cars transporting TIH materials in high-threat urban areas. Using industry data, TSA will create a tracking system that will allow the federal government to determine the location of rail cars carrying TIH materials within minutes.
Meanwhile, DHS noted that the Department of Transportation will be proposing regulations to require railroads to analyze safety and security concerns when determining the route for a freight train carrying certain types of hazardous materials. (Sarah Borchersen-Keto, CCH Washington, DC Correspondent)

Higher Fines Proposed for Violations of Rail Safety Rules
The Federal Railroad Administration has issued a proposed rulemaking that would substantially increase the civil penalty guideline amounts assessed against railroads for violating various federal rail safety regulations. The increased penalties are intended to encourage railroads to focus on safety compliance and improve the rail industry's overall performance. The last comprehensive revision of these guidelines occurred in 1988.

FRA Administrator Joseph H. Boardman explained that FRA evaluated each of the more than 2,000 provisions of the federal rail safety regulations using a five-point severity scale. The measure takes into consideration the likelihood that a rail accident or graver consequences will occur as a result of failing to comply with a particular section of the regulations. At the low end of the scale, the guideline penalty amount would be $1,500. At the high end of the scale, where a violation is extremely likely to result in an accident or incident, the guideline penalty amount would be $8,500. Willful violations would range from $2,500 to $11,000. The current statutory maximum of $27,000 for grossly negligent violations or for patterns of repeated violations that have caused an imminent hazard of death or injury, or have caused death or injury to individuals, would remain unchanged.

Examples of some of the increased fines the FRA is proposing include: operating a train above the track speed limit (from $2,500 to $8,500); not providing a timely response to a report of malfunctioning highway-rail grade crossing equipment (from $2,500 to $6,500); and not performing a pre-departure inspection of a freight car (from $2,000 to $5,000). Under the proposal, most fines would increase, but in some instances the amounts would remain unchanged or be reduced where data and experience have shown that a failure to comply with a specific regulatory provision poses less of a safety risk.

Shipper's Rate Complaint Not Subject to Three-Year Limitation
The Surface Transportation Board (STB) ruled that a federal statute requiring that proceedings initiated by the Board be completed within three years did not mandate the automatic dismissal of a rate complaint filed by a shipper. A rail carrier filed a motion for automatic dismissal after a rate complaint filed by a shipper was not concluded within three years. The rate complaint was filed in 2003 by AEP Texas North Company against BNSF Railway Company but was not concluded within the required three years because it had been held in abeyance pending the conclusion of a rulemaking proceeding.
The carrier asserted that the proceeding was subject to automatic dismissal because it had not been concluded in a timely manner. The STB disagreed, finding that the carrier had misinterpreted the statute and had ignored contrary caselaw. Based on well-established precedent, the STB determined that the three-year limitation provision was applicable only to proceedings undertaken by the agency on its own initiative. As such, a rate complaint filed by a shipper was not subject to the three-year limitation. Thus, the complaint was not subject to dismissal. AEP Texas N. Co. v. BNSF Ry. Co. (STB) ¶37,221

Safety Violation Affirmed; Civil Penalty Assessed
A carrier violated Federal Motor Carrier Safety Regulations (FMCSRs) by allowing a driver to operate a vehicle that was not equipped with an automatic transmission as required by the driver's skill performance certificate, the Federal Motor Carrier Safety Administration ruled. The carrier was cited for using a physically unqualified driver and assessed a civil penalty. The carrier submitted a timely reply to the Notice of Claim in which it denied the charge, arguing that the driver had passed his skill performance evaluation (SPE) in an unmodified commercial motor vehicle with features similar to those operated by the carrier, and noted that the driver's SPE certificate did not require any vehicle modifications.

In support of the charge, the Field Administrator (FA) submitted a declaration by the safety investigator who conducted the carrier's compliance review and administered the driver's SPE test. The safety investigator's declaration established that the driver's SPE certificate clearly stated that the driver was limited to operating CMVs equipped with automatic transmission or clutch. Because the carrier's vehicles were not so equipped, the carrier was found to have committed the violation as charged. Additionally, with regard to the assessed penalty, it was determined that appropriate consideration had been given to the applicable statutory factors. Therefore, a final order affirming the violation was issued and the carrier was ordered to pay a civil penalty in the amount of $3,190. Alan F. Heuerman and Timothy Heuerman d/b/a Heuerman Brothers Trucking, (FMCSA) ¶51,156

New Study Focuses on Work Schedule to Address Worker Fatigue

As part of an ongoing effort to target the highest risks and major causes of train accidents, the Federal Railroad Administration (FRA) has released a study that provides a strong scientific rationale for evaluating railroad employee work schedules to address worker fatigue. Human factor errors have been responsible for nearly 40 percent of all train accidents over the past five years, and an FRA evaluation of the research findings confirms that fatigue plays a role in approximately one out of four of those accidents.

FRA Administrator Joseph H. Boardman stated that the goal of the research was to determine if a fatigue model could accurately and reliably predict an increased risk of human error that could contribute to the occurrence of a train accident. Under the study, researchers analyzed the 30-day work schedule histories of locomotive crews preceding approximately 1,400 train accidents and found a strong statistical correlation between the crew's estimated level of alertness and the likelihood that they would be involved in an accident caused by human factors. In fact, the relationship is so strong that the level of fatigue associated with some work schedules was found to be equivalent to being awake for 21 hours following an 8-hour sleep period the previous night. At this level, train accidents consistent with fatigue, such as failing to stop for red signals, were more likely to occur.

Boardman added that this fatigue study is an important part of the FRA's National Rail Safety Action Plan, a comprehensive effort to target the major causes of railroad accidents. The report, entitled ``Validation and Calibration of a Fatigue Assessment Tool for Railroad Work Schedules, Summary Report,'' as well as a supplemental agency evaluation, can be found online at www.fra.dot.gov. (FRA Press Release, November 29, 2006)

Request for Temporary Alternative Rail Service Granted
A shipper's request for temporary alternative rail service was granted by the Surface Transportation Board. Under federal statute, temporary alternative rail service will be authorized if the STB finds that, over an identified period of time, there is a substantial, measurable deterioration or other demonstrated inadequacy in rail service provided by the incumbent carrier. In support of its petition, the shipper claimed that there had been a measurable deterioration in the rail service provided by the incumbent carrier that was not likely to be restored to an adequate level, and asserted that it had a commitment from another railroad to provide services without interfering with the operations of the incumbent carrier. Based on the evidence presented, the STB concluded that the shipper had met the criteria necessary for an order of temporary alternative rail service. Thus, the petition was granted. Pyco Inds., Inc.-Alternative Rail Service-South Plains Switching, Ltd. Co. (STB) ¶37,222

Partial Revocation of Trackage Rights Exemption Granted
A partial revocation of a class exemption permitting a modified trackage rights arrangement was granted by the Surface Transportation Board (STB). According to the petitioner, the trackage rights arrangement was necessary to allow Montana Rail Link, Inc. (MRL) to move sediment from a shipper's facility to a disposal site over BNSF's rail lines.

The parties had expressly agreed to the terms of the proposed agreement, but sought to ensure that the trackage rights granted were temporary. As such, the carrier filed a petition for a partial revocation of the exemption that would result in the expiration of the trackage rights agreement on a date certain. The petition was necessary because trackage rights approved under class exemptions normally remain effective indefinitely, regardless of any limiting contract terms. The request for the partial revocation would permit the exempted trackage rights to expire on December 31, 2010, which would satisfy the parties' requirements that the trackage rights arrangement be temporary. Because the STB determined that limiting the term of the trackage rights was consistent with the limited scope of the previously exempted transaction, and would have no adverse effect on shippers on the line, the request was granted. Montana Rail Link, Inc.-Trackage Rights Exemption-BNSF Ry. Co. (STB) ¶37,223

Carrier's Reply Satisfied Regulatory Requirements
A notice of final agency order was vacated and an informal hearing was called after it was determined that a motor carrier's reply to a Notice of Claim complied with regulatory requirements. The carrier was issued a Notice of Claim, charging it with three violations of the Federal Motor Carrier Safety Regulations. The carrier filed a timely reply to the Notice, denying the charges and requesting an informal hearing. The Field Administrator asserted that the carrier had defaulted because its reply had not satisfied the regulatory requirements. The carrier disagreed, arguing that it had complied with the reply requirements by denying each allegation and raising an affirmative defense. Based on the evidence presented, the carrier's reply was deemed adequate because it denied each allegation and stated the grounds for contesting the claim. As such, the carrier had not defaulted. Thus, the notice of final agency order was vacated and the carrier's request for an informal hearing was granted. Paul Lawrence Bishop (FMCSA) ¶51,157

Civil Penalty Properly Calculated
The Federal Motor Carrier Safety Administration held that a civil penalty assessed against a motor carrier had taken into consideration all of the statutory factors required by the Federal Motor Carrier Safety Administration's Uniform Fine Assessment (UFA) program. The carrier had been cited for, and convicted of, five federal safety violations for requiring or permitting a driver to drive more than 70 hours in eight consecutive days. However, due to flaws in the UFA program, the proposed civil penalty was deemed inappropriate, and the Field Administrator (FA) was required to resubmit the penalty calculations.

In the revised UFA, the assessed penalty was based on three violations, instead of the five contained in the original assessment calculations. The FA asserted that, based on the per-count Recommended Penalty and the overall Recommended Penalty, three violations were the appropriate number to be multiplied by the per-count Recommended Penalty in order to stay within the overall Recommended Penalty range. Upon review, it was determined that the civil penalty had been properly calculated. Thus, the carrier was ordered to pay $5,070. St. Cloud Meat & Provisions, Inc. d/b/a Gold Country Trucking (FMCSA) ¶51,158