Appeals Court Rejects New Motor Carrier Hours of Service Regulations

Date: Jul 19, 2004

The United States Court of Appeals for the District of Columbia Circuit slammed the Federal Motor Carrier Safety Administration of the Department of Transportation ("FMCSA") in a decision issued Friday, July 16, rejecting the new motor carrier Hours of Service ("HOS") regulations as arbitrary and capricious. The appeal was brought by Public Citizen and was supported by other public interest groups.

FMCSA adopted the new HOS rules in April, 2003, after extensive comments and consideration over a 3-year period. Congress in the ICC Termination Act of 1995 directed DOT to review the HOS rules which had been in effect since 1962. The Federal Highway Administration had issued an Advance Notice of Proposed Rulemaking in November, 1996. The new rules have been in effect since January, 2004.

The court overturned the HOS rules for failure to consider the impact of the rules on the health of drivers, a factor mandated for consideration by Congress. The court distinguished consideration of the health of drivers from consideration of the impact of the health of drives on vehicle safety, also a statutorily mandated factor. In addition, the court listed 4 other concerns about the new HOS rules; and while it cast substantial doubt on the survivability of those provisions, it did not rule specifically on those issues pending review by FMCSA on the rules regarding drivers' health. These concerned (i) an increase in the maximum driving time per day from 10 to 11 hours, (ii) a provision continuing the rule allowing drivers to meet their required rest time in sleeper berths by splitting the time into two segments, (iii) whether DOT fully evaluated the effect of a provision allowing drivers to restart the work week after 34 hours of off-duty time, and (iv) dropping the proposal to require use of electronic onboard recorders instead of continuing to permit the manual preparation of driver logs. Congress also directed DOT to study the use of electronic recording devices. The court criticized FMCSA for failing to "evaluate seriously" whether such devices should be utilized, including the failure to conduct tests.

The new HOS rules will remain in effect for 45 days while the government determines whether to appeal this decision to either the full panel of the D.C. Circuit or to the Supreme Court. If the decision is not stayed, it could have several interesting ramifications. First, the new rules have had the effect of reducing drive-time availability, thereby increasing costs and reducing driver supply. A set-aside would re-activate the former rules until FMCSA issues a new ruling. Taking into account the approaching election and the potential for a change in administration, it could be years before new rules are issued. Second, the constraints on motor carriers--along with the capacity problems affecting rail service--have caused the railroads to initiate more aggressive pricing for their services, particularly for intermodal service. This decision could temper those pricing impacts. Third, any revised rules issued by FMCSA in response to the court's decision could be much harsher than those adopted in 2003 based on the court's comments. That could strain motor carrier service even more when new rules ultimately are issued and become effective.