United States: NAS Releases Its Compliance Safety Accountability System Report

Lawrence J Hamilton II is a Partner at Holland and Knight's Jacksonville office and Jameson B Rice is an Associate at the Tampa office



HIGHLIGHTS:

  • The Federal Motor Carrier Safety Administration (FMCSA) may overhaul how it evaluates the safety of the carriers it regulates following the release of a new study by the National Academies of Sciences, Engineering and Medicine (NAS).
  • The NAS on June 27, 2017, released its 132-page report, which concluded that the SMS was conceptually sound and reasonable but needed to be improved. While complimentary of various ideas and efforts of the FMCSA, the report validated complaints of carriers that the SMS data was not consistent or reliable and stated that "there is a particular concern about false negatives and false positives among smaller carriers, which results from not having much data with which to judge them."
  • In another significant development relating to the use of CSA data, a proposal is being discussed in Congress that would establish a national hiring standard for motor carriers. The "Transportation and Logistics Hiring Reform Act of 2017" (H.R.1568 and S.1345), would prohibit CSA data from being used for negligent hiring claims.

The Federal Motor Carrier Safety Administration (FMCSA) may overhaul how it evaluates the safety of the carriers it regulates following the release of a new study by the National Academies of Sciences, Engineering and Medicine (NAS). The authors of this alert have covered the previous actions that led to the withdrawal of the proposed Safety Fitness Determination (SFD) rule that was based upon the data analyzed in the study. (See Holland & Knight alerts, " Is the Proposed Safety Fitness Determination Rule in Jeopardy?", Jan. 19, 2017; and " Proposed Safety Fitness Determination Rule Withdrawn, Unlikely to Return," May 1, 2017).

The NAS study examined how well the FMCSA's Safety Measurement System (SMS), part of its Compliance, Safety, Accountability (CSA) program, identifies high-risk carriers. Amid concerns that the data used by the agency did not accurately reflect the safety of the carriers, Congress mandated the study as part of the 2015 Fixing America's Surface Transportation (FAST) Act and ordered that the SMS data be removed from public view pending the study's results. However, the FMCSA under the Obama Administration proposed the SFD rule shortly thereafter, even though such rule would have expanded use of the same data that was being evaluated at the direction of Congress.

The proposed SFD rule would have updated the agency's safety fitness rating methodology and replaced the current three-tier federal rating system of "satisfactory-conditional-unsatisfactory" for federally regulated commercial motor carriers (in place since 1982) with a "fit" or "unfit" rating. Critics argued that the proposed SFD rule was based on inaccurate data, was counter to the will of Congress and should not be promulgated.

Following the presidential election, in the face of such strong opposition and in light of the Trump Administration's policy to reduce government regulation, the FMCSA's withdrawal of the proposed SFD rule on March 17, 2017, came as little surprise. When the rule was withdrawn, the agency stated that it "must receive the Correlation Study from the National Academies of Science (NAS), as required by the Fixing America's Surface Transportation (FAST) Act, assess whether and, if so, what corrective actions are advisable, and complete additional analysis before determining whether further rulemaking action is necessary to revise the safety fitness determination process." 82 Fed. Reg. 14848 (March 23, 2017).

The NAS on June 27, 2017, released its 132-page report, which concluded that the SMS was conceptually sound and reasonable but needed to be improved. While complimentary of various ideas and efforts of the FMCSA, the report validated complaints of carriers that the SMS data was not consistent or reliable and stated that "there is a particular concern about false negatives and false positives among smaller carriers, which results from not having much data with which to judge them." The NAS report recommended that over the next two years regulators develop a more "statistically principled approach" based on an "item response theory." In other words, the NAS recommended further study, and a more in-depth methodology that delves deeper into the data and measures the performance of individual commercial vehicles.

In response to the NAS report, the FMCSA issued a statement that: "The Agency has received the National Academy of Sciences report and is reviewing its findings and recommendations. As specified in Section 5221 of the Fixing America's Surface Transportation (FAST) Act, the Agency will provide its response to Congress and to the USDOT Office of the Inspector General within 120 days of the report being provided to Congress."

In light of the report's findings, and the suggestion of the NAS that a new, more statistically sound approach needs to be developed, the proposed SFD rule is unlikely to be resurrected anytime soon. If the proposed rule does return, it is expected to look very different in light of the NAS study and recommendations. In addition, the data collected by the FMCSA and the way that it is used may receive an overhaul if the agency adopts the report's findings.

In another significant development relating to the use of CSA data, a proposal is being discussed in Congress that would establish a national hiring standard for motor carriers. The "Transportation and Logistics Hiring Reform Act of 2017" (H.R.1568 and S.1345), would prohibit CSA data from being used for negligent hiring claims. The proposal is favored by shippers, brokers, freight forwarders, intermediaries and other participants involved with arranging freight transportation because it would insulate them from certain claims as long as they follow an established protocol. Specifically, the proposed legislation would provide certain protections to a shipper, broker, freight forwarder, customs broker, non-vessel-operating common carrier, ocean freight forwarder, ocean transportation intermediary, interchange motor carrier and/or warehouse which, before tendering a shipment to a motor carrier (including a household goods motor carrier), but not more than 35 days before the pickup of the shipment by the motor carrier, verifies that the motor carrier, at the time of such verification:

  • is properly registered with the FMCSA
  • has obtained the minimum insurance required by federal law
  • has not been given an "unsatisfactory" safety rating or ordered to discontinue operations by the FMCSA

Compliance with this hiring standard would prohibit any CSA, SMS or other "motor carrier data" created or maintained by the FMCSA from being used as evidence against an entity in a civil action for damages resulting from a claim of negligent selection or retention of such motor carrier. It is too early to predict whether this proposed legislation will be passed.

Clients may contact the authors of this alert for additional details. Holland & Knight's https://www.hklaw.com/ClientSectors/Transportation-Infrastructure/Transportation Team will continue to monitor the proposed SFD rule as well as the proposed hiring standard legislation and will provide further updates as they develop.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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