[Federal Register Volume 69, Number 248 (Tuesday, December 28, 2004)]
[Notices]
[Pages 77828-77830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28343]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2004-19882]


Section 222 of the Motor Carrier Safety Improvement Act of 1999; 
Clarification of Agency Policy Statement

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of clarification; agency policy statement.

-----------------------------------------------------------------------

SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA) 
clarifies its September 8, 2000 policy statement implementing section 
222 of the Motor Carrier Safety Improvement Act of 1999. Section 222 
requires the agency to assess maximum statutory penalties if a person 
is found to have committed a pattern of violations of critical or acute 
regulations, or previously committed the same or a related violation of 
critical or acute regulations. This notice clarifies the agency use of 
previous violations to assess maximum penalties under section 222. It 
also discusses the notification procedures and extraordinary 
circumstances that may warrant assessment of less than the maximum 
penalty.

[[Page 77829]]


DATES: December 28, 2004.

FOR FURTHER INFORMATION CONTACT: Mary Pat Woodman, Chief of the 
Enforcement and Compliance Division (MC-ECE), (202) 366-9699, FMCSA, 
400 Seventh Street, SW., Washington, DC 20590. You may also e-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

Statutory Authority

    Section 222 of the Motor Carrier Safety Improvement Act of 1999 
(MCSIA), (Public Law 106-159, 113 Stat. 1748, 1769, Dec. 9, 1999; 
codified in 49 U.S.C. 521 note) directed the Secretary of 
Transportation to:
    (a) Ensure that motor carriers operate safely by imposing civil 
penalties at a level calculated to ensure prompt and sustained 
compliance with Federal motor carrier safety and commercial driver's 
license laws.
    (b) Establish and assess minimum civil penalties for each violation 
of laws referred to under (a) above; and, assess the maximum civil 
penalty for each violation by any person who is found to have committed 
a pattern of violations of critical or acute regulations or to have 
previously committed the same or a related violation of critical or 
acute regulations.
    (c) If the Secretary determines and documents that extraordinary 
circumstances exist which merit the assessment of any civil penalty 
lower than any level established above, the Secretary may assess such 
lower penalty. Further, in cases where a person has been found to have 
previously committed the same or a related violation of critical or 
acute regulations, extraordinary circumstances may be found to exist 
when the Secretary determines that repetition of such violation does 
not demonstrate a failure to take appropriate remedial action.

September 8, 2000, Policy Statement

    On September 8, 2000, FMCSA sent a policy memorandum changing its 
fine assessment policy to meet the requirements of section 222 to its 
Field Administrators, Enforcement Team leaders, and State Directors. 
The memorandum defined a pattern of violations or previously committed 
violations as three cases within the last six years. The policy 
memorandum, in pertinent part, states:

(Page 1, third paragraph, beginning with the second sentence)

    The three cases will consist of two cases which have been closed 
followed by discovery of new violations, all of which involve the 
same Part (e.g. Part 395). The six year period is measured from the 
end of the first to the end of the third compliance review (CR). If 
a case is appealed, the time needed to process the appeal should not 
be included as part of the six year period. If the third CR (and 
subsequent CRs) reveals violations of the same Part cited in two 
previous CRs within the last six years, a ``pattern of violations'' 
or ``previously committed violations'' is established and the claim 
letter should assess the maximum penalty for that count(s).

    An electronic copy of the policy memorandum is available through 
DOT's Docket Management System (DMS) Web site at http://dms.dot.gov, by 
using the docket number of this notice, FMCSA-2004-19882. The DMS 
facility is located on the Plaza Level of the Nassif Building, 400 
Seventh Street, SW., Washington, DC.

General Discussion of Questions

    We received several questions on the interpretation and 
implementation of FMCSA's policy memorandum. The agency addresses these 
questions and clarifies its implementation policy.

1. Will the Agency use Enforcement Cases Closed Before Issuance of the 
Policy Memorandum To Support Assessment of the Maximum Penalty?

    MCSIA was signed into law on December 9, 1999, and FMCSA was 
created effective January 1, 2000. However, FMCSA did not provide 
guidance regarding implementation of section 222 until its September 8, 
2000, policy memorandum was issued. We believe fairness to the motor 
carrier industry will be best served by using enforcement cases closed 
after September 8, 2000, as prior violations to support assessing 
maximum penalties under section 222 of MCSIA. Therefore, the agency 
will not use enforcement cases closed before September 8, 2000.

2. What Type of Agency Action Constitutes a Finding That a Violation 
was Committed for Purposes of Assessing the Maximum Penalty Under 
Section 222?

    The policy memorandum provided that section 222 of MCSIA applies 
when there are two closed cases followed by discovery of new violations 
of the same Code of Federal Regulations (CFR) Part within a 6-year 
period, measured from the end of the first Compliance Review (CR) to 
the end of the third CR. It stated that the previous cases had to be 
closed but did not indicate whether an agency adjudication of the 
violations is required before a closed enforcement case is used as the 
basis for assessing the maximum civil penalty. We interpret section 222 
as requiring that a previous enforcement case include either: (1) An 
explicit adjudicatory finding of a violation by the agency (Assistant 
Administrator or a DOT Administrative Law Judge); (2) an express 
admission of liability by the respondent in its reply to the Notice of 
Claim (NOC) and in a settlement agreement; or (3) a Final Agency Order 
issued under 49 CFR 386.14(e), based on respondent's failure to reply 
to the NOC.\1\
---------------------------------------------------------------------------

    \1\ A Notice of Claim (NOC) becomes a Final Agency Order if the 
respondent fails to reply to the NOC within the time prescribed by 
49 CFR 386.14. Under these circumstances, the NOC becomes the Final 
Agency Order 25 days after it is served.
---------------------------------------------------------------------------

    A settlement agreement lacking in language admitting liability will 
not be considered a prior violation for purposes of section 222. 
Therefore, in response to a NOC advising respondent that payment will 
constitute an admission of the violations set forth in the NOC, payment 
of a civil penalty will constitute an express admission of liability. 
In response to a NOC that lacks such an advisory, payment of a civil 
penalty will not be construed as a prior violation for purposes of 
section 222, unless accompanied by a written admission of violations 
alleged in the NOC.

3. How is the 6 Year Period Calculated for Determining When the Maximum 
Penalty Will Be Assessed?

    The 6 year period is determined by starting with the closing date 
of the CR or roadside inspection in the third enforcement case and 
determining whether there are two prior closed enforcement cases 
against the respondent involving violations of the same CFR Part during 
the immediately preceding 6 years. Because we are requiring an 
adjudication or admission of liability before using a previous 
enforcement case as a finding of a committed violation, a case will be 
considered closed as of the date of the Final Agency Order.\2\ In the 
event the case is resolved without a Final Agency Order, the relevant 
date will be the date of the response to the NOC enclosing payment of 
the civil penalty or the date the settlement is executed by both 
parties, whichever is later.\3\
---------------------------------------------------------------------------

    \2\ The case is considered closed following issuance of the 
Final Agency Order and the exhaustion of any post order notions such 
as a Petition for Reconsideration. However, if a Petition for 
Reconsideration of the Final Agency Order in a previous case is 
pending before the agency, the case should not be considered closed.
    \3\ If a settlement agreement concludes a case pending before an 
Administrative Law Judge or the Assistant Administrator, the closing 
date would be the date the settlement agreement is accepted by the 
decisionmaker.

---------------------------------------------------------------------------

[[Page 77830]]

4. What Extraordinary Circumstances Warrant Assessment of Less Than the 
Maximum Penalty?

    Requests to reduce the penalty based on extraordinary circumstances 
will be considered on a case-by-case basis. Section 222 of MCSIA does 
not define the term ``extraordinary circumstances,'' but expressly 
provides that extraordinary circumstances meriting a reduction in the 
maximum penalty may be found to exist if we determine and document that 
repetition of the violation does not demonstrate a failure to take 
appropriate remedial action. Although the statute does not limit 
application of the extraordinary circumstances factor, we do not 
believe it is appropriate to attempt to define all possible potential 
extraordinary circumstances, except as indicated in the next section. 
The respondent carries the burden to demonstrate that extraordinary 
circumstances merit a reduction in the maximum penalty in response to 
the NOC and during the adjudication of the case.

5. What Type of Notice Will Be Required Before Assessing the Maximum 
Penalty?

    Although section 222 of MCSIA does not specifically require prior 
notice to offenders that future violations may result in the imposition 
of maximum penalties, the September 8, 2000, policy statement provided 
that offenders should be given such notice as part of the close-out of 
the second CR. This guidance is now modified and the agency may assess 
maximum penalties in all appropriate cases. To address this issue, we 
(1) modified our standard NOC to advise respondents of the requirements 
of section 222 of MCSIA, and (2) published this amended policy 
statement in the Federal Register and posted it on FMCSA's Web site at 
http://www.fmcsa.dot.gov. No additional notice requirements are 
necessary.

6. Do FMCSA Service Centers Have Authority To Settle Cases Subject to 
Section 222 for Less Than the Maximum Penalty?

    Section 222(a) of MCSIA provides that the Secretary ``should ensure 
that motor carriers operate safely by imposing civil penalties at a 
level calculated to ensure prompt and sustained compliance with Federal 
motor carrier safety and commercial driver's license laws'' (emphasis 
added). Section 222(b)(2) requires the Secretary to assess the maximum 
penalty in appropriate circumstances. A question was raised on whether 
Service Centers may settle cases subject to section 222 for less than 
the maximum penalty, provided the maximum penalty is assessed in the 
NOC.
    Civil Penalties are ``assessed'' in the NOC and are ``imposed'' in 
an agency Order or settlement agreement. Since the literal language of 
the statute requires that maximum penalties be assessed (but not 
necessarily imposed) in section 222 cases, this would arguably permit 
settlement of cases below the maximum penalty, provided the negotiated 
penalty (the penalty actually imposed) is calculated to ensure prompt 
and sustained compliance with the Federal Motor Carrier Safety 
Regulations. To ensure uniformity in implementing section 222, FMCSA 
Service Centers will not, at this time, be permitted to settle section 
222 cases for less than the maximum penalty assessed. However, 
settlement agreements establishing terms of payment will be permitted. 
As the agency gains more experience in applying section 222, this 
settlement limitation will be evaluated.

    Issued on: December 16, 2004.
Annette M. Sandberg,
Administrator.
[FR Doc. 04-28343 Filed 12-27-04; 8:45 am]
BILLING CODE 4910-EX-P