Don’t discount the CSA settlement

FMCSA reaffirms that determining carrier fitness is its job

Q Even after the settlement of NASTC et al. v. FMCSA, our insurer is still advising brokers and shippers to use SMS methodology in carrier selection. (See “FMCSA, trucking groups settle CSA lawsuit,” page 46.) I thought the purpose of the settlement was to end the misconception that SMS methodology established a new credentialing standard and requires shippers and brokers to second-guess the agency’s ultimate determination under current law.

Henry Untitled 1A You are right about the purpose and intent of the settlement. It concerns me that industry pundits and certain publications ignore the clear language of the settlement and adhere to the old misconception that Compliance Safety Accountability SMS methodology is intended to establish a new duty of due diligence in carrier selection for use by shippers and brokers. Even the plaintiff’s bar, which stands the most to gain from advice like this, is upset, blogging in one case that, “FMCSA Caves Again to Industry – Changes Disclaimer on SMS Data.”

A judicially agreed settlement is binding on the agency and is far more important in defending shippers’ and brokers’ decisions with respect to carrier selection than “off the cuff” remarks by agency officials, or advice of the type you suggest.

Accepting a duty to vet carriers is deadly for brokers.

At the outset, it is important to remember why the lawsuit was brought and what issues the settlement sought to address. Petitioners’ appeal was based on the anti-competitive effect of release of the data without clarification that SMS methodology was a program under development for the agency’s sole use in credentialing carriers. Petitioners argued that publication could establish no new standard of carrier selection or duty upon shippers and brokers to bar carriers from use. An examination of the clear language of the settlement confirms that those issues have been addressed squarely. Under the settlement, the agency:

• Affirmed that CSA/SMS methodology was developed for its use in monitoring carriers;

• Removed any ambiguity concerning the application of current federal safety regulations, 49 C.F.R. 385, reaffirming the agency’s regulatory obligation to authorize carriers as fit to operate on the nation’s roadways;

• Directed the reader away from SMS methodology to Licensing & Insurance to determine what carriers are authorized to use; and

• Clearly states that authorized carriers not shown as “Unsatisfactory” or placed out of service are authorized for use.

In other words, the new settlement language makes it clear that it is the agency’s duty to determine safety fitness. With respect to your insurer’s advice that SMS be used, your counsel, a friend and respected transportation lawyer, says it best:

“I must respectfully disagree with the advice that brokers need to investigate a carrier’s safety record. That is a very slippery slope and plays right into the hands of ambulance-chasing tort lawyers who are expert at creating ‘issues’ where none actually exist so as to perpetuate their legalized blackmail schemes.

“We all know that the only legal duty brokers have is to retain duly certificated motor carriers to transport their clients’ freight. FMCSA – not the broker – is the gatekeeper as to whether a motor carrier is fit to operate, and if so, then the broker may use the carrier. Period. End of inquiry. It’s FMCSA’s job, no one else’s. Brokers do not have and never had a legal duty to drill down and second-guess or double-check on whether FMCSA is doing its job or not.

“By telling brokers that they ‘should investigate a carrier’s safety record’ and that they ‘must also verify CSA data regularly because the scores change monthly,’ you are playing right into the hands of tort lawyers and reinforcing the fiction that a legal duty exists, which sets a high bar for brokers to meet. Also, as a practical matter, it is impossible for brokers to investigate the safety record of each one of thousands of small motor carriers it may use on any given day.

“The ‘duty’ you describe effectively hands tort lawyers a loaded machine gun to use against our broker clients because it suggests that a court should apply a phantom standard that does not exist under longstanding principles of transportation law but only recently has become the favorite new litigation blackmailing tool of tort lawyers looking for another pocket to pick. The legal ‘duty’ or ‘standard’ does not exist, and accordingly such claims against brokers should be defended vigorously.”

For additional information on the settlement, go to

– Henry Seaton is a transportation lawyer who represents carriers.



* The Federal Motor Carrier Safety Administration is proposing to revise the use of binding arbitration in its civil penalty forfeiture proceedings to eliminate the “Night Baseball” format that involves sealed envelopes and to replace it with a format in which the arbitrator determines the final civil penalty and the amount of time to pay it. To comment, go to; the docket number is FMCSA-2003-14794.

* Rubik Avetyan and sons Alfred and Allen last month were sentenced in the U.S. District Court for the Middle District of Pennsylvania for their role in a consumer fraud scheme involving illicit double brokering of motor carrier loads. Alfred and Allen Avetyan were sentenced to 60 months in jail, while Rubik Avetyan was sentenced to 50 months in jail. The defendants were ordered to pay more than $1.1 million in restitution.

* Kulwant Lasher, co-owner of Los Banos, Calif.-based Lasher Brothers Trucking Co., was sentenced last month in the U.S. District Court for the Eastern District of California to four years and nine months in prison after pleading guilty in October to various charges, including conspiracy to avoid paying taxes and conspiring to bribe an officer of the Internal Revenue Service. His brother Tarlochan was sentenced to one year in prison, and both face three years of supervised release after serving their terms.

* Thomas Watson and Cathy Watson, principal operators of the now-dissolved TomCat Trucking Inc., pled guilty in February to conspiracy to violate federal hazardous materials transportation regulations by transporting numerous loads of placardable quantities of hazardous materials between January and July 2009 following a January 2009 out-of-service order revoking their operating certificate.