FMCSA Policy on the Suspension of Operating Authority for Hostage Load Violations

William A. Bronrott
Federal Motor Carrier Safety Administration
October 18, 2012

[Federal Register Volume 77, Number 202 (Thursday, October 18, 2012)]
[Rules and Regulations]
[Pages 64050-64051]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25678]


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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.

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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

[[Page 64051]]

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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