June 2009

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.

Hot Topic

Direct-Observation Drug Testing Upheld by Appeals Court
The Department of Transportation regulation mandating direct-observation specimen collection for all return-to-duty and follow-up urine testing for employees who previously have failed or refused to take drug tests is neither arbitrary/capricious nor facially invalid under the Fourth Amendment to the U.S. Constitution, a District of Columbia appellate panel ruled. According to the court, DOT acted neither arbitrarily nor capriciously in concluding that the growth of an industry devoted to circumventing drug tests—coupled with returning employees' higher rate of drug use and heightened motivation to defeat the test—presented an elevated risk of cheating on return-to-duty and follow-up tests that justify the mandatory use of direct observation.

And, given the combination of the vital importance to transportation safety, the employees' participation in a pervasively regulated industry, their prior violations of drug regulations, and the ease of obtaining cheating devices capable of defeating standard drug-testing procedures, the regulation is facially valid under the Fourth Amendment, the court determined. Although the effectiveness of such a search compared to available alternatives may be relevant to the government's interest in conducting the search, there is no per se requirement that the government use the least intrusive practicable means, the court commented.

Consequently, given the proliferation of cheating devices, direct observation furthers the government's interest in effective drug testing, the court said. Furthermore, employees who intentionally have violated a valid drug-testing regulation (at least in the relatively recent past) have less of a legitimate interest in resisting a search intended to prevent future violations of that regulation than employees who never violated the rule. Finally, with respect to the rule's requirement that employees disrobe in order to allow direct observers to verify the absence of any cheating devices, it is only somewhat more invasive than direct observation, which already requires exposure of employees' genitals to some degree, the court remarked. As such, and because DOT permissibly found the disrobing requirement necessary in order to detect certain widely-available cheating prosthetic devices, it represents a reasonable procedure for situations posing such a heightened risk of cheating as to justify direct observation in the first place. BNSF Ry. Co. v. Dep't of Transp. (DCCir) 33 Avi. 17,754 and Federal Carriers Reporter ¶84,601.

NTSB Expresses Concern About Hazmat Transportation
On May 14, 2009, National Transportation Safety Board (NTSB) Member Deborah A.P. Hersman testified before the U.S. House of Representatives Committee on Transportation and Infrastructure, Subcommittee on Railroads, Pipelines and Hazardous Materials about the safety of hazardous material transportation. Her testimony focused on the transportation of lithium batteries, the use of wet lines on tanker trucks, and the loading and unloading of hazardous materials from tank trucks and railroad tank cars. According to Hersman, the Pipeline and Hazardous Materials Safety Administration (PHMSA) has failed to act on NTSB recommendations addressing these safety issues.

The NTSB has recommended that, in regard to lithium batteries, PHMSA: (1) require the reporting of all incidents involving lithium battery fires; (2) retain and examine batteries that have failed; and (3) eliminate the exemptions allowing the transportation of some lithium batteries without proper labeling. Lithium batteries are commonly found in watches, cameras, cell phones, and laptop computers. Failed batteries can ignite spontaneously, posing a safety hazard when they are transported in aviation.

On the issue of wet lines on tanker trucks, Hersman noted that PHMSA has not taken steps to eliminate wet lines, even though the Department of Transportation stated 20 years ago that allowing gasoline to be transported in wet lines was “unreasonable” and “illogical.” Wet lines on tanker trucks are found underneath the liquid tanks, and are unprotected from collisions with other vehicles. The NTSB has determined through testing that these unprotected wet lines are susceptible to damage in collisions with most types of vehicles on the road today. These collisions can lead to spillage of up to 50 gallons of a flammable product, like gasoline, which could catch fire.

Finally, Hersman testified that the NTSB had investigated eight accidents involving the loading and unloading of hazardous materials from tank trucks and railroad tank cars in the five years ending in 2003. The accidents resulted in evacuations, injuries and, in some cases, fatalities. According to Hersman, the investigations revealed inadequate federal enforcement of safety requirements and procedures affecting loading and unloading operations. As such, the NTSB continues to urge PHMSA to exert more effective oversight on these types of operations, Hersman noted. Federal Carriers Reports, Report Letter No. 1560, June 19, 2009.

Aviation News

Congress Scrutinizes Aviation Safety Issues . . .
In the run-up to the reauthorization of Federal Aviation Administration funding, congressional lawmakers have convened three hearings so far this month, all of which sought insight into the agency's role in the oversight of commercial air carriers as well as the responsibilities of carriers themselves. U.S. Senate lawmakers held two subcommittee hearings on June 10 and 17, while the U.S. House of Representatives' Aviation Subcommittee followed up with its own hearing on regional air carriers and pilot workforce issues. Testifying before both the Senate and House subcommittees were FAA Administrator J. Randolph Babbitt, Department of Transportation Inspector General Calvin L. Scovel, III, and Mark V. Rosenker, Acting Chairman of the National Transportation Safety Board.

Among the issues addressed was pilot fatigue; one of the factors cited during the NTSB's ongoing investigation into the crash of Colgan Air Flight 3407 in Buffalo, New York. "Human fatigue ... has been on the [NTSB's] Most Wanted List since it was created 19 years ago," said Acting NTSB Chairman Rosenker. Acknowledging that fatigue remains a very real aviation safety issue, FAA Administrator Babbitt stated that, "[w]hile aviation has incorporated many technologies over the years to prevent accidents by addressing findings from NTSB accident investigations, human factors remain a source of risk."

Asserting that improving human performance is a key to improving aviation safety, Babbitt said that FAA's January 2009 proposal on upgraded training standards for pilots, flight attendants, and dispatchers [is the most comprehensive upgrade to FAA training requirements in 20 years, and is aimed at using best practices and tools to help those individuals avoid mistakes and respond better if/when mistakes are made. For his part, House Aviation Subcommittee Chairman Jerry F. Costello (D-Ill.) called for an industry-wide look at strengthening pilot training requirements, contending that FAA's regulations are too broad and the minimums too low. "There must be 'One Level of Safety' between major and regional airlines—mandated rather than just recommended by the FAA," Costello charged, indicating that he intends to draft legislation to address some of those concerns.

"As critical as the government's role in the safety of the air transportation is, however, the air carriers must be equal partners in making certain the air transportation system functions safely," Senate Commerce, Science and Transportation Chairman Jay Rockefeller (D-W.Va.) remarked, adding that, "[a]irlines must make commitments to embrace the best practices across the industry if they are going to improve safety in a meaningful manner." Speaking on behalf of pilots, Airline Pilots Association President John Prater pointed to the current code-share arrangements under which the nation's major airlines employ regional partners on shorter-haul routes as a potential source of the problem. In these arrangements, major airlines control ticket pricing and schedules, and regularly move flights among their regional partners based upon cost. Because regional airlines must be extremely cost-competitive to garner business from the major carriers, reducing training as a cost-saving measure can easily result in gaps in a new pilot's knowledge, Captain Prater said, advancing that carriers must view training as an investment that pays dividends over time and not as a cost to be kept to the bare legal minimum. Aviation Law Reports, Report Letter No. 1406, June 25, 2009.

. . . as FAA Sounds Industry "Call to Action"
On June 15, senior officials from the nation's airlines, pilot unions, and the Federal Aviation Administration agreed on several major actions to improve safety programs and pilot training at U.S. airlines. Transportation Secretary Ray LaHood and FAA Administrator Randy Babbitt hosted the "Call to Action" to identify immediate steps to strengthen and improve pilot hiring, training, and testing practices at carriers that provide regional service as well as this country's major airlines. The participants agreed on best practices for pilot record checks that would result in a more expansive search for all records available from a pilot's career. The expanded search would include all records maintained by the FAA, as well as records an airline already receives from past employers.

In addition, airlines and unions agreed to review existing pilot training programs over the next several months, according to FAA-issued guidance, in order to see how they can be strengthened. To address concerns about pilot fatigue, Babbitt said that FAA will initiate rulemaking to rewrite the standards for pilot flight and duty time in order to incorporate recent scientific research regarding the factors that lead to fatigue. Babbitt said that he also will ask all of the airlines to operate safety-reporting systems such as Flight Operations Quality Assurance (FOQA) and the Aviation Safety Action Program (ASAP) to provide better data about safety issues.

Airline and union officials recommended the development of pilot mentoring programs that would expose less-experienced pilots to the safety culture and professional standards practiced by their more senior counterparts. Those programs could pair experienced pilots from the major airlines with pilots from their regional carrier partners. Characterizing pilot training as the "bedrock of aviation safety," Airline Pilots Association President John Prater said that his organization stands ready to work together with the airlines and university aviation programs to develop and put into place mentoring and career development programs that would position new pilots to succeed. However, major airlines also should provide the oversight of code-share partners through periodic safety audits of flight operations, training programs, maintenance, and inspections, Captain Prater maintained. Aviation Law Reports, Report Letter No. 1406, June 25, 2009.

NTSB Makes More Accident Investigation Information Public
In an effort to further bring the National Transportation Safety Board into compliance with legislative and executive mandates to foster a more open and transparent government, the agency on June 1 began the practice of releasing all accident investigation public dockets to its Internet website. "The Safety Board's reputation for comprehensive and thorough investigations can only be further enhanced by providing such easy access to the materials related to the accidents we investigate," Acting NTSB Chairman Mark V. Rosenker said. To access the Board's public dockets, website visitors should go to NTSB's Freedom of Information Act Reading Room (http://www.ntsb.gov/Info/foia_fri-dockets.htm) and select the desired links from the lists of dockets organized by transportation mode. Aviation Law Reports, Report Letter No. 1405, June 11, 2009.

FAA, USAF Work Together to Reduce Flight Delays
The Federal Aviation Administration and the U.S. Air Force have joined forces to explore ways that civilian flights can regularly use airspace normally reserved for the military in an effort to reduce delays. Entitled the Adaptive Airspace Concept, the effort is designed to relieve delays on commercial and general aviation flights in circumstances such as thunderstorms, unusually heavy air traffic, or other constraints limiting the number of planes that can pass through the nation's commercial airspace.

The Department of Defense already has turned over portions of so-called "special use" airspace to FAA to ease air traffic delays during seasonal periods of heavy air travel—such as the days preceding Thanksgiving and Christmas. According to FAA, last Thanksgiving, the agency created "express lanes" for commercial flights using military airspace on the East and West Coasts, as well as in the Midwest and Southwest. Along those lines, one of the ideas under consideration is expanding the Air Force's available airspace and dividing it into area "boxes." Under such a scheme, the Air Force could shift its operations into areas of the sky that FAA doesn't need and let civilian traffic fly through those areas that allow for the most efficient movement of airplanes. Aviation Law Reports, Report Letter No. 1406, June 25, 2009.

FAA Order on NY-Area Airspace Redesign Passes Muster
The Federal Aviation Administration's approval of a multi-phased plan to redesign and modernize the airspace over the New York/New Jersey/Philadelphia metropolitan area—including shifted flight paths, reallocated management of particular airspace sectors amongst air traffic control facilities, and adoption of new flight procedures—was based upon a procedurally sound and substantively reasonable environmental impact analysis and, as such, was neither arbitrary nor capricious, a federal appellate panel ruled in an unpublished decision. According to the court, none of the objections to the FAA order implementing the plan amounted to a significant procedural deficiency, and none indicated that the agency had failed to take a "hard look" at the environmental consequences of its action as required under prior case law.

In addition, the court found that the FAA did not violate the federal transportation law provision prohibiting the Secretary of Transportation from adopting a project requiring the use of a public park/historic site absent a prudent and feasible alternative. The agency was entitled to deference, the panel said, articulating that the challengers to the order implementing the plan had failed to impugn FAA's screening methodology or to offer a serious argument that the agency had failed to adequately consider any property that might have suffered a constructive use.

Also without merit was the challengers' argument that the agency had violated the statutory provision by having delayed additional noise impact analyses for several parks, which later were summarized in, and appended to, the Record of Decision without an opportunity for further public comment. However, the statute does not require such an additional process, the court instructed, adding that the implementing regulation merely directs the agency generally to make diligent efforts to involve the public in preparing/implementing its environmental analysis procedures. Given FAA's extensive public outreach effort and its thorough process of environmental review, the agency complied with those requirements, the panel determined.

Finally, FAA did not violate federal air pollution control laws or national ambient air quality standards. Because FAA reasonably concluded that the redesign was exempt from a conformity determination under the regulatory exemption for projects that will result in de minimis emissions of criteria pollutants, a challenge to the agency's reliance upon its presumed-to-conform list need not be reviewed, the court held. As the agency sensibly reasoned, a project that decreases emissions cannot cause more than a de minimis increase in emissions or otherwise be regionally significant; therefore, the agency did not conduct a conformity determination. County of Rockland, New York, v. Fed. Aviation Admin. (DCCir) 33 Avi. 17,809.

Carrier's Unilateral Change Was a "Minor Dispute" Under RLA
A federal appeals court ruled that an air carrier met its burden of showing that, with respect to flight attendants working under expired collective bargaining agreements (CBAs) during negotiations for replacement contracts, its unilateral adjustment of flight attendant work schedules to accord with the federal aviation regulation (FAR) specifying duty/rest-period limits for flight attendants (rather than the previously employed FAR governing such limits for flight crews) constituted a "minor dispute" under the Railway Labor Act that was subject to resolution via arbitration. The Flight Attendant FAR permits an airline to schedule its flight attendants according to either the guidelines published therein or those in the FAR applicable to flight crews, the court instructed, noting that, although the carrier had adhered to the Flight Crew FAR throughout the duration of the CBAs, the contracts at issue referred only to "the F.A.R.s" or "the applicable FAR maximum," and did not explicitly establish which of the two FARs was applicable to flight attendant scheduling.

Furthermore, the contracts also contained management rights clauses that reserved "without limitation" the carrier's right to "establish and, from time to time, amend, suspend or revoke rules, regulations and procedures ... [and] to establish new routes, services, schedules and areas of service," the court observed, holding that the CBAs' management rights clauses arguably provided justification for the carrier to unilaterally interpret and apply the ambiguous contractual language concerning the FARs.

The union's argument that the application of the Flight Crew FAR to flight attendant schedules constituted an implied term of the contracts was without ample support, the court held, reasoning that the union's assertion depended upon a conclusion that the CBAs unambiguously had contained such an implied term. The existence of that implied term was not clearly established in the record of the case, however. Therefore, its existence was a matter of contractual interpretation that the RLA leaves exclusively to the Board of Adjustment.

Finally, as there was evidence to support contentions on both sides of the issue of whether past practices under the contracts had created such an implied term, the existence of that term was arguable and had to be decided in arbitration, the court determined, vacating the trial court's preliminary injunction against the carrier and remanding the case with instructions to dismiss for lack of subject matter jurisdiction. Ass'n of Flight Attendants, CWA v. Mesa Air Group, Inc. (9thCir) 33 Avi. 17,798.

Surface Transportation News

Motor Carrier Financial Responsibility Requirements Under Review
Revisions to the financial responsibility requirements for motor carriers are currently being considered by the Federal Motor Carrier Safety Administration (FMCSA). The agency issued a notice of proposed rulemaking in response to a petition submitted by the Government of Canada. The Canadian government's petition sought to allow Canadian insurance companies to issue proof of financial responsibility and commercial motor vehicle insurance policies to Canadian motor carriers operating in the United States. Currently, Canada-domiciled motor carriers operating in the U.S. must maintain, as evidence of financial responsibility, insurance policies issued by U.S. insurance companies. Under the proposed rule, Canadian insurance companies that are found to be financially sound will be permitted to issue insurance policies and sign the Forms MCS-90 and MCS-90B on behalf of Canada-domiciled motor carriers without the need for fronting arrangements with a U.S.-based insurance company, as is currently required under the existing rules. Federal Carriers Reports, Report Letter No. 1560, June 19, 2009.

Movement of Train Crews Is Part of Interstate Transportation
A motor passenger carrier hired to transport rail-crews within the State of Nevada was operating wholly in interstate commerce, a federal district court ruled. The carrier had been engaged in the movement of train crews within the state of Nevada. The state's transportation authority had attempted to regulate the carrier by revoking its operating authority in certain areas of the state. The carrier challenged the revocation, asserting that it was not subject to state jurisdiction because all of its transportation was interstate in nature and therefore, subject to the jurisdiction of the Federal Motor Carrier Safety Administration (FMCSA).

Generally, transportation provided exclusively within a state may be considered interstate transportation if it is pre-arranged and an integral part of an interstate journey. Based on the evidence presented, the court concluded that the transportation services provided by the carrier were wholly in interstate commerce because they were contractually arranged and an integral part of the trains' interstate journey. Accordingly, the carrier's operation within the State of Nevada was deemed to be interstate in nature; therefore, it was subject exclusively to the licensing jurisdiction of the FMCSA. Brown's Crew Car of Wyoming v. Nevada Transp. Auth. (DNev) Federal Carriers Reporter ¶84,598.

Revised Definition of “Motor Carrier” Not Retroactively Applied
The motor carrier exemption to the Fair Labor Standards Act (FLSA) was not applicable to drivers of light-weight vehicles between August 10, 2005, and June 6, 2008, according to a Massachusetts federal court. A driver that transported goods in interstate commerce using light-weight vehicles had sued his employer for unpaid overtime wages incurred between August 10, 2005, and June 6, 2008. Prior to the enactment of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), the Motor Carrier Act (MCA) exempted motor carrier employers from the overtime provisions of the FLSA for most employees engaged in activities affecting the safe operation of motor vehicles transporting goods in interstate commerce. However, SAFETEA-LU changed the scope of the MCA exemption by amending the definition of “motor carrier.” The revised definition limited the MCA exemption to drivers of “commercial” motor vehicles, i.e., a vehicle with a gross vehicle weight greater than 10,000 pounds. Thus, effective August 10, 2005, the motor carrier exemption to the FLSA overtime provisions became inapplicable to drivers of light-weight vehicles.

On June 6, 2008, the SAFETEA-LU Technical Corrections Act of 2008 (TCA) restored the pre-SAFETEA-LU definition of “motor carrier” by striking the word “commercial.” The employer argued that the revision represented an amendment to a provision of SAFETEA-LU; therefore, it took effect August 10, 2005. While the employer correctly noted that the TCA amendments to SAFETEA-LU were to take effective retroactively as if they had never occurred, the court concluded that the provision at issue here had amended the ICC Termination Act, not SAFETEA-LU. Thus, it was not retroactively effective.

In further support of the determination that the restoration of the Pre-SAFETEA-LU definition of “motor carrier” was not retroactively applicable, the court cited a subsequent provision of the TCA that provides a one-year “safe harbor” from violations of the FLSA incurred before August 10, 2006, for employers that did not have actual knowledge that their employees had become “covered employees.” The court reasoned that, if Congress had intended the amendment to be retroactive to August 10, 2005, the “safe harbor” provision would not have been necessary. Thus, based on the plain language of the law, it was determined that the amendment to the definition of “motor carrier” had been amended SAFETEA-LU; therefore, it was not to be retroactively applied. Benoit v. Tri-Wire Eng'g Solutions, Inc. (DMass) Federal Carriers Reporter ¶84,602.

Contributory Negligence Results in Reduction of FELA Award
A federal court of appeals ruled that an injured rail employee was not entitled to full damages under a Federal Employers Liability Act (FELA) claim because he had been deemed 50-percent responsible for the accident that caused his injury and the exception to the contributory negligence provision was not applicable. The rail employee filed a FELA claim against his employer, alleging that he had been injured in an accident that had been caused by the railroad's failure to maintain a company vehicle in a safe condition. A jury awarded the employee damages in the amount of $700,000, but also found him 50-percent responsible for the accident, which should have resulted in a reduction of the damage award.

Under FELA, damages awarded to an injured employee will be reduced by a finding of contributory negligence on the part of the employee, unless it is determined that the employer had violated “any statute enacted for the safety of employees” and that violation had contributed to the accident. Pursuant to this exception, a federal district court ruled that the railroad's violation of a state regulation requiring vehicles used by railroad worker to be maintained in a safe condition entitled the employee to full damages.

On appeal, the railroad argued that only state regulations enforcing “federal railroad safety laws” qualified as exceptions to FELA's contributory negligence provision. Based on the plain language of the statute, the appellate panel agreed with the railroad, holding that only state regulations that support or implement federal safety requirements are to be treated as if they were federal regulations. As such, the violation of a state regulation governing the safety of motor vehicles used by railroad employees, which did not implement or relate to any safety concerns based on federal rail law, would not negate the effects of the employee's contributory negligence on the damage award, the court held. Consequently, while the determination of liability was affirmed, the damage award was reduced by half. Fletcher v. Chicago Rail Link, L.L.C. (7thCir) Federal Carriers Reporter ¶84,605.

FRA Regulations Revised to Conform to RSIA Provisions
The Federal Railroad Administration (FRA) has issued a direct final rule amending its regulations dealing with emergency waivers from safety regulations and the process for disqualifying an individual from performing safety-sensitive functions. The amendments to the emergency waiver procedures incorporated a provision of the Rail Safety Improvement Act of 2008 (RSIA), which sets forth specific procedures for obtaining waivers from a safety rule, regulation, or standard during an emergency situation or event. The revisions will make the existing procedures consistent with the RSIA and will permit the FRA to provide railroads certain operational relief during emergencies while maintaining public safety.

The amendments to the individual disqualification procedures also are meant to bring the regulations in line with a provision of the RSIA, which expands the scope of 49 U.S.C. §20111(c) concerning the disqualification of individual from performing safety-sensitive functions. Under the RSIA, violations of the laws governing the transportation of hazardous materials are added to the list of disqualifying events. The revisions also include changes to the disqualification process aimed at assuring the prompt and efficient handling of disqualification proceedings, while affording administrative due process to those against whom such proceedings are initiated. The revisions, which were instituted under the agency direct final rulemaking process, will take effect July 20, 2009, unless adverse comments or hearing requests are received before June 18, 2009. Federal Carriers Reports, Report Letter No. 1559, June 8, 2009.