Headline: FMCSA and Three Trade Associations Agree to Settlement on CSA
As a result of mediation, the FMCSA and three motor carrier trade associations -- The National Association of Small Trucking Companies (NASTC), The Expedite Alliance of North America (TEANA), and the Air & Expedited Motor Carrier Association (AEMCA) –- have agreed to settlement of the pending petition for review in the U.S. Court of Appeals about publication of CSA 2010/SMS methodology before following agency rulemaking procedures.
The three trade associations sought to postpone publication of percentile rankings and “Alert” designations for carriers. They argued that the SMS methodology was a work in progress intended for the Agency’s own use, but that shippers and brokers were misconstruing the data as a new de facto safety rating system –- which could result in the blackballing of 57% of the ranked carriers in the SMS database which had one or more “alert” that the Agency had found fit to operate under current law.
As a result of the settlement, the Agency has agreed to change its website disclaimer and remove the term “Alert” with respect to any of the reported BASICs. The new disclaimer language which will appear on the SMS website on March 25 follows below.
With respect to the settlement, Petitioners issued the following statement:
“We applaud the Agency for affirmatively restating its sole duty to credential carriers as safe for operation over the nation’s roadways. We believe these changes will disabuse shippers and brokers of the misconception that SMS methodology, percentile rankings of carriers, and monitoring thresholds are intended for their use in determining carrier fitness. This important settlement confirms for a confused industry that it is still the job of the FMCSA to certify carriers. Now the SMS website will direct readers to the Agency’s Licensing & Insurance database to confirm that carriers are authorized under existing Federal Motor Carrier Safety Regulations, and will reaffirm that unless a carrier is rated as unsatisfactory or out of service, the Agency has determined it is fit for use.”
Additional statements of participants and interested parties follow the text of the new SMS disclaimer below.
For additional information, please contact:
Henry Seaton
Seaton & Husk, LP
2240 Gallows Road
Vienna, VA 22182
(703) 573-0700 (office)
(703) 283-4251 (cell)
New SMS Disclaimer
The FMCSA will replace any ALERT symbol currently displayed in orange on the SMS public website with the following symbol displayed with the color gold, as viewed on the banner at http://csa.fmcsa.dot.gov/default.aspx, as a fill color: 
The FMCSA will replace the current language displayed on the public SMS website screen entitled “USE OF SMS DATA/INFORMATION” with the following:
The data in the Safety Measurement System (SMS) is performance data used by the Agency and enforcement community. A symbol, based on that data, indicates that FMCSA may prioritize a motor carrier for further monitoring. The symbol is not intended to imply any federal safety rating of the carrier pursuant to 49 USC 31144. Readers should not draw conclusions about a carrier’s overall safety condition simply based on the data displayed in this system. Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 CFR Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation’s roadways. Motor carrier safety ratings are available at http://safer.fmcsa.dot.gov and motor carrier licensing and insurance status are available at http://li-public.fmcsa.dot.gov/
symbol, based on that data, indicates that FMCSA may prioritize a motor carrier for further monitoring. The symbol is not intended to imply any federal safety rating of the carrier pursuant to 49 USC 31144. Readers should not draw conclusions about a carrier’s overall safety condition simply based on the data displayed in this system. Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 CFR Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation’s roadways. Motor carrier safety ratings are available at http://safer.fmcsa.dot.gov and motor carrier licensing and insurance status are available at http://li-public.fmcsa.dot.gov/
Finally, the FMCSA will delete the word “established,” currently used in the phrase “established intervention thresholds,” from the footnote contained in the Legend on the public SMS website that defines what is meant by the symbol. The FMCSA will also delete the word “established” from the phrase “established intervention thresholds” in any other place the phrase appears on the public SMS website.
symbol. The FMCSA will also delete the word “established” from the phrase “established intervention thresholds” in any other place the phrase appears on the public SMS website.
Henry E. Seaton, Counsel for Petitioners stated:
“Our issue with the Agency was that premature publication of SMS data before rulemaking effectively put the cart before the horse. The industry perceived SMS publication as effectively replacing the current safety fitness rating system with dire adverse consequences on competition, efficiency and small carrier viability. As a result of this settlement, the Agency, while maintaining its commitment to transparency and accountability, has affirmed its statutory duty to credential carriers as safe to operate under 49 U.S.C. 31144. The new disclaimer should allay the industry’s fear of heightened vicarious liability because it correctly enunciates the limited purpose and use of CSA 2010 methodology by the Agency. Ultimately, highway safety should not be about competition, peer groupings or the assignment of artificial monitoring thresholds. It must be about equipping the Agency to efficiently monitor and police interstate motor carriers and certify on a simple pass-fail basis that carriers are fit for use unless placed out of service or rated unsatisfactory after due process. This settlement makes clear that shippers and brokers are not required to second guess the FMCSA’s safety fitness determination based on SMS methodology and percentile rankings.”
David Owen, President of NASTC, said:
“We have always been a strong supporter of safety and look forward to working with the Agency to develop SMS methodology as a fair and balanced progressive intervention tool for its internal use. This important settlement should end the misapprehension in the industry that release of SMS data was intended as an abrogation of the Agency’s duty to certify carriers or as a replacement for existing safety rules. Industry fears that the low monitoring thresholds set by the Agency were somehow a new measuring stick for creating vicarious liability under state law has been eliminated by this clarifying disclaimer. SMS methodology remains a work in progress developed by the Agency for its own use. Encouragement of contractual barriers to use of carriers based upon percentile rankings and monitoring thresholds is unwarranted, unjustified and contrary to the goals of the National Transportation Policy which is to encourage efficiency and competition.”
Jimmy DeMatteis, President of Des Moines Truck Brokers, Inc., stated:
“The entire industry, including shippers, brokers and carriers both large and small, should thank the three trade associations who had the foresight to take the heat and sue the FMCSA to require this clarification of the intended use of CSA/SMS methodology. The publication of this data in December arbitrarily branded approximately half of the carriers we consider for use as ‘Under Alert,’ and a confused industry was led to believe that a new credentialing standard had been put into place which would require us to exclude carriers the Agency had determined were fit to operate. The effect on the spot market, competition, small business and economy would have been catastrophic if this clarification had not been negotiated. It eliminates industry confusion and a mistaken belief that shippers and brokers should not rely upon the Agency’s ultimate fitness determination in selecting carriers for use. This is a ‘game changing’ settlement which can only benefit our industry.”
Tom Sanderson, President of Transplace, expressed satisfaction with this settlement, stating:
“We are pleased to see the Agency affirm its duty to credential carriers as safe for operation under existing law. Prior to this settlement, CSA had confused shippers and brokers over their duties in carrier selection under federal law. Industry pundits should take note that the predictions of adverse consequences on brokers and small carriers from the CSA/SMS methodology were premature. The threat of vicarious liability facing the shipper and broker community based upon misapplication of state law has been diminished by this settlement. The Agency has affirmed that shippers and brokers fulfill their duty of due diligence by confirming that the carrier is authorized by the Agency and has sufficient insurance coverage.”
Steve Sample, President of Tyme-It Transportation, Inc. stated:
“Under federal statute, motor carriers are solely responsible for compliance with the Federal Motor Carrier Safety Regulations and the FMCSA is charged with the duty of certifying carriers as safe for use. This settlement reaffirms federal statutes, will end confusion, and allay vicarious liability fears of shippers and brokers which has led to the mistaken belief that they must second guess the Agency’s ultimate fitness determination to the detriment of competition and efficiency.”
Scott Michaelis, Manager of Logistics Operations at Southern States Cooperative, Inc., stated:
“As a major shipper of farm supplies, we use hundreds of small interstate for-hire carriers, many of whom are ‘unrated’ under the current statute and who are not measured under SMS methodology. We are a strong supporter of Petitioners’ effort and believe the settlement language is strong confirmation of our long held belief that the FMCSA is solely charged with determining carrier safety fitness and that the shipping community can use carriers which are licensed, authorized and insured by the Federal Government without establishing elaborate protocols to second guess the Agency’s ultimate determination.”
Matthew J. Jewell, Executive Vice President and Chief Legal Officer of property broker Forward Air, Inc., and the Air and Expedited Motor Carriers Association’s representative at the mediation with the FMCSA commented on the settlement:
“The broker and shipper communities have been concerned that CSA 2010 would be misconstrued by courts, and exploited by the plaintiffs’ bar, as setting forth a vicarious liability litmus test for shippers and brokers in their carrier selection process. We did not believe the FMCSA intended that result when it rolled out CSA 2010 and this settlement clearly supports that belief. In this settlement, the FMCSA has stated unequivocally that these scores are not ‘intended to imply a federal safety rating of the carrier pursuant to 49 USC 31114 and that absent an ‘Unsatisfactory safety rating pursuant to 49 C.F.R. Part 385 . . . [a carrier] is authorized to operate on the nation’s roadways.’ This settlement reconfirms that the FMCSA is the final and only arbiter of which motor carriers are authorized to operate over our roadways. That duty does not fall to shippers and brokers. This settlement should remove much of the uncertainty, anxiety and doubt that brokers and shippers have experienced about vicarious liability for carrier selection since the adoption of CSA 2010. We greatly appreciate the FMCSA’s willingness to address our concerns and provide the shipping and broker communities with some much needed clarity and comfort.”
SETTLEMENT OF LITIGATION WITH FMCSA TIMELY
Settlement of the court case brought by three trade associations against the FMCSA over publication of CSA/SMS data could not have been more timely, Petitioners state. Pursuant to the Settlement Agreement entered into in NASTC et al. v. FMCSA, the Agency has issued a new disclaimer which makes clear that current Federal Motor Carrier Safety Regulations remain in place, that SMS data is intended primarily for its own internal use, and that it has not abrogated its obligation to certify carriers as safe to operate on the nation’s roadways. Users of the website are directed to the Licensing & Insurance portal and are advised that unless carriers are rated as unsatisfactory or placed out of service, the current Agency determination of fitness has not been changed by release of SMS data.
Petitioners point out that this settlement comes on the heels of a recent Morgan Stanley study, which demonstrated that 55% of the shippers had been led to believe SMS methodology should be used in determining whether to use otherwise licensed, authorized and insured carriers. Another Wall Street pundit reported that release of the data would adversely affect small carriers and large 3PLs alike, and could result in carrier bankruptcies and diminished capacity. James Scapellato in Transport Topics (2/28/2011) stated, “As a former DOT regulator and prosecutor, I find the conscious public release of unreliable CSA information simply wrong. It confuses and misleads members of the public who trust in the DOT’s pronouncements.”
In issuing their Press Release concomitantly with the Agency’s announcement of its changed disclaimer, Petitioners praised the Agency for recognizing the unintended vicarious liability consequences of releasing SMS data in its initial form, and for eliminating the confusion which surrounded the initial publication. Petitioners noted that the removal of the pejorative characterization that carriers were “Under Alert,” and the Agency’s reaffirmation of its duty to certify carriers as safe, were important steps to allay fears of a frightened and confused industry. “This settlement was needed to combat misuse of SMS methodology by the plaintiff’s bar to establish vicarious liability where none is intended under federal law,” Petitioners stated.
Settlement Agreement in NASTC et al. v. FMCSA – Why is It Important?
Background
Under pressure from other governmental agencies and Congress, the FMCSA in 2003 announced its CSA 2010 initiative. Then called Comprehensive Safety Analysis 2010, the program was initiated for the purpose of ultimately allowing the Agency to provide an actual safety rating for the over 500,000 motor carriers (for-hire, private and exempt) subject to the Agency’s safety oversight under 49 U.S.C. 31144.
The Agency is required, under the current motor carrier safety fitness rules, to certify carriers as fit for operation over the highways, but it has limited resources to conduct a thoroughgoing compliance review and only audits approximately 17,000 carriers a year placing approximately 6,000 out of service.
Under this system, although a comprehensive safety review is not conducted of all carriers, highway deaths involving regulated commercial motor vehicles fell by 20% in 2009 to their lowest levels in decades.
In launching CSA 2010, the FMCSA and its partners through CVSA (Commercial Vehicle Safety Alliance) developed an all-inclusive compliance recordation system which would ultimately rely on roadside inspections, tickets and warnings, the assignment of severity ratings and the ranking of carriers by peer groups, to identify carriers for progressive intervention. The Agency believed this would allow a comprehensive analysis and permit it to assign safety ratings more cost-effectively.
Through the development stage of this program, the Agency’s methodology was tested in trial states and as 2010 approached, data concerning the progress of the program began to be released. It became clear that the Agency would establish low thresholds for commencing progressive intervention in seven BASIC areas. At the threshold level, each carrier would receive an initial letter providing notice that its percentile rankings were above the monitoring or investigation level set by the Agency.
Third party providers which monitored the scoring in the test states quickly suggested that based upon the percentile thresholds (65 or 80 percent) approximately two-thirds of the motor carrier industry would be above the monitoring threshold in one of the seven areas of measurement.
When it became public knowledge that the Agency would label carriers above these thresholds as “marginal” or “deficient” and that the methodology would be released to the public in 2010, before completion of the academic study commissioned by the Agency to evaluate the methodology, various carriers and brokers expressed concern that the system would brand carriers in December of 2010 as somehow unfit for use with catastrophic effects on the ability of branded for-hire carriers to obtain freight.
The FMCSA, committed to the rollout of CSA 2010 before the end of the year, stuck to its self-imposed schedule and told a Congressional oversight committee that the material would be released to the public before completion of the supporting study. This alarmed the Petitioners in this case, which represent over 2,500 of the small motor carriers who in turn make up over 90% of the carriers regulated by the FMCSA. Petitioners saw that shippers and brokers, out of fear of increased vicarious liability under CSA 2010, were prospectively placing termination provisions in shipper/carrier contracts which would result in loss of business for carriers above the enforcement thresholds.
When neither postponement of release until rulemaking nor satisfactory disclaimer language could be agreed upon with the Agency, Petitioners were forced to institute suit, challenging early release because of the Agency’s failure to comply with the Administrative Procedure Act. After denial of a temporary restraining order, the Agency’s data was published on December 13 with disclaimer language which replaced the pejorative terms “marginal” or “deficient” with the term, “Under Alert” and made other modifications which were somewhat helpful.
Unfortunately, the modified disclaimers released with the initial publication were insufficient to limit the devastating unintended consequences of public release which Petitioners had feared. Wall Street analyses released within 2 months of publication suggested that 55% of the shippers would not use carriers with poor CSA 2010 scores under any circumstances. Wall Street quickly confirmed that CSA 2010 would have critical adverse consequences on small carriers, reducing competition and affecting the entire transactional spot market which allows the efficient return of emptying equipment to point of reload.
With the release of CSA 2010, some significant additional facts became apparent. After initially promoting CSA as a Comprehensive Safety Analysis to rate half a million regulated carriers, the Agency to its credit discovered that the vast majority of the carriers it regulates do not generate enough statistical data to warrant measurement under the system. As a result, only 97,000 of the half million carriers were initially peer grouped, but these include the vast majority of the actual for-hire over-the-road carriers operating more than a handful of units. Although observers of the program had suggested that two-thirds of all peer grouped carriers would be above the enforcement thresholds, the redaction of two of the seven BASICs reduced the number of carriers actually placed under Alert to 57% of the carriers measured – still a major portion of the nation’s total highway transportation capacity.
The broker community, whose only requirement under federal regulation is to arrange transportation utilizing an “authorized carrier,” was thrown into a state of confusion. A committee established by the TIA to examine additional safety credential protocols was confused and conflicted.
The week the settlement was negotiated, Transport Topics issued a 38 page report on CSA. It was replete with multiple advertisements from vendors selling CSA monitoring services to brokers, while at the same time printing commentary from a former DOT regulator which concludes, “I find the conscious public release of unreliable CSA information simply wrong. It confuses and misleads members of the public who trust in DOT’s pronouncements.” See Transport Topics, February 28, 2011 at p. 5.
Settlement of NASTC et al. v. FMCSA goes a long way to eliminate industry fear over the vicarious liability consequences of release of SMS data. Importantly, the Agency has affirmed that the current Federal Motor Carrier Safety Regulations remain in place and that SMS methodology is being developed for its use in discharging its existing safety credentialing requirements under 49 U.S.C. 31144, not for establishing a new credentialing standard for shippers and brokers.
The Agency affirmatively states that carriers, unless rated unsatisfactory or placed out of service, are certified as eligible to operate on the nation’s roadways, and directs the reader to the Agency’s Licensing & Insurance website to determine whether individual carriers are eligible for use.
This important language fits the federal broker’s regulation which places no safety duty upon the broker other than to retain an “authorized carrier”.
Armed with this clarification and redaction of the pejorative term “Under Alert,” Petitioners submit that the destructive effects of publication of SMS data on competition and efficiency have been thoroughly reversed. The over 50% of the peer grouped carriers who were branded as “Under Alert” should no longer be in jeopardy of losing business or bankruptcy as a result of publication, and the important spot market which allows for a rationalization of supply and demand can continue intact.
CSA 2010 is a work in progress. Issues with its ultimate implementation including due process, profiling, peer grouping, weighting of particular violations, enforcement anomalies, the citing of paperwork violations as fatigue, and other issues remain. Yet, those issues can be timely and properly addressed in the context of the rulemaking proceeding on safety fitness standards which the Agency has said is forthcoming.
The issue affirmatively addressed in the NASTC et al. v. FMCSA settlement was whether shippers and brokers desiring to avoid vicarious liability need to use SMS methodology to second guess the Agency’s ultimate safety fitness determinations. The settlement makes clear the Agency has not abrogated its safety fitness duty and that the federal standard enforced by the Agency is the proper standard on which the industry can rely.
FMCSA AND THREE TRADE ASSOCIATIONS
AGREE TO SETTLEMENT ON CSA/SMS METHODOLOGY
On Wednesday March 9, 2011, the FMCSA and Petitioners announced settlement in NASTC et al. v. FMCSA. As a result, key changes will be made by the Agency to its SMS public website for each carrier by March 25, 2011. Those changes are as follows:
Replace any ALERT symbol currently displayed in orange on the SMS public website with the following symbol of the exclamation mark inside a gold triangle:
Revise the disclaimer language on the SMS website to read:
“The data in the Safety Measurement System (SMS) is performance data used by the Agency and enforcement community. A symbol, based on that data, indicates that FMCSA may prioritize a motor carrier for further monitoring. The symbol is not intended to imply any federal safety rating of the carrier pursuant to 49 USC 31144. Readers should not draw conclusions about a carrier’s overall safety condition simply based on the data displayed in this system. Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 CFR Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation’s roadways. Motor carrier safety ratings are available at http://safer.fmcsa.dot.gov and motor carrier licensing and insurance status are available at http://li-public.fmcsa.dot.gov/.”
symbol, based on that data, indicates that FMCSA may prioritize a motor carrier for further monitoring. The symbol is not intended to imply any federal safety rating of the carrier pursuant to 49 USC 31144. Readers should not draw conclusions about a carrier’s overall safety condition simply based on the data displayed in this system. Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 CFR Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation’s roadways. Motor carrier safety ratings are available at http://safer.fmcsa.dot.gov and motor carrier licensing and insurance status are available at http://li-public.fmcsa.dot.gov/.”
In their accompanying Press Release, the Petitioners stated:
As a result of mediation, the FMCSA and three motor carrier trade associations -- The National Association of Small Trucking Companies (NASTC), The Expedite Alliance of North America (TEANA), and the Air & Expedited Motor Carrier Association (AEMCA) –- have agreed to settlement of the pending petition for review in the U.S. Court of Appeals about publication of CSA 2010/SMS methodology before following agency rulemaking procedures.
The three trade associations sought to postpone publication of percentile rankings and “Alert” designations for carriers. We argued that the SMS methodology was a work in progress intended for the Agency’s own use, but that shippers and brokers were misconstruing the data as a new de facto safety rating system –- which could result in the blackballing of 57% of the ranked carriers in the SMS database which had one or more “alert” that the Agency had found fit to operate under current law.
As a result of the settlement, the Agency has agreed to change its website disclaimer and remove the term “Alert” with respect to any of the reported BASICs. The new disclaimer language which will appear on the SMS website on March 25…
We applaud the Agency for affirmatively restating its sole duty to credential carriers as safe for operation over the nation’s roadways. We believe these changes will disabuse shippers and brokers of the misconception that SMS methodology, percentile rankings of carriers, and monitoring thresholds are intended for their use in determining carrier fitness. This important settlement confirms for a confused industry that it is still the job of the FMCSA to certify carriers. Now the SMS website will direct readers to the Agency’s Licensing & Insurance database to confirm that carriers are authorized under existing Federal Motor Carrier Safety Regulations, and will reaffirm that unless a carrier is rated as unsatisfactory or out of service, the Agency has determined it is fit for use.
Hopefully this settlement is important in the continuing vicarious liability debate which so troubles the trucking industry.
The attempt by plaintiff’s bar to use state vicarious liability concepts to trump federal statutes is tort reform in the wrong direction. In its negotiated settlement the FMCSA has made clear, “Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 C.F.R. Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation's roadways.” This clarification is monumental in disabusing plaintiff’s bar of the argument that an unrated carrier is somehow unfit for use or subject to further inquiry under the old SEA or new SMS methodology.
If we as transportation lawyers can now just leave CSA 2010/SMS methodology alone and let the Agency perfect it for its own use after Administrative Procedure Act scrutiny, the settlement will have achieved its desired results.
Highway safety is not ultimately about peer groupings, percentile rankings, artificial monitoring standards or the blackballing of carriers in some kind of game of “Dancing with the Stars” aimed at eliminating contestants.
Yet to be tried, much less presented to any appellate court, is the strong preemption argument that the FMCSA’s ultimate safety decision should trump state vicarious liability law. Motions to dismiss shippers and brokers from accident lawsuits absent their direct negligence are appropriate. SMS methodology is not an approved standard for even the Agency’s use. Certainly we should not be advising clients to embrace it. If brokers and shippers use it, they not only arbitrarily lose capacity, they lose any basis for a motion in limine to strike the admission of SMS percentile rankings or to challenge its flawed data under Daubert.
Fortunately, several of our colleagues are using federal preemption in defense of vicarious liability suits and we can look for important legal developments in this area over the next several years.
Ultimately, deregulation guaranteed open and fair competition among all carriers, large and small, over “routes, rates and services”. Highway safety is the continuing goal of federal regulation and certifying carriers as safe for use is the sole obligation of the FMCSA and are legal principles upon which we all should agree.
What the Settlement Accomplished
1. Affirmed CSA 2010/SMS methodology developed for Agency’s use in monitoring carriers/not as a new safety standard for use by brokers.
2. Cited 49 U.S.C. 3114 which is the Agency’s sole duty under existing law to certify carriers as safe as basis for rulemaking.
3. Removed any ambiguity concerning application of existing federal safety regulations, 49 C.F.R. 385/reaffirmed application of Agency’s duty to authorize carriers as fit to operate on nation’s roadways.
4. Directed reader away from SMS methodology to Licensing & Insurance to determine which carriers are authorized to use.
5. In affirming existing safety fitness determination, the Agency clearly said authorized carriers not shown as “unsatisfactory” or placed out of service were authorized for use/importantly “unrated carriers” are hence confirmed as authorized for use.
6. Eliminates inflammatory term, “Under Alert” replacing this warning symbol with ambiguous exclamation point.
7. Eliminates the term “established” threshold, deleting any implication that SMS methodology has been approved under rulemaking.
How the Settlement Can Be Used
1. Ratification of the Agency’s sole safety duty under existing law settlement establishes Agency’s ultimate determination as federal safety fitness standard trumping SMS methodology as some new standard.
2. Clarifies that 85% of carriers which are “unrated” are safe to use.
3. Establishes federal standard as gold standard for use in implied and expressed preemption argument with respect to state law/motion to dismiss or summary judgment motion viable under preemption.
4. By directing carrier to safety fitness determination, language sets up motion in limine to preclude use of SMS methodology in state law causes of action if brokers or shippers have not adopted and used it.
5. Under existing law, 49 C.F.R. 371, the broker is required only to arrange for transportation using an “authorized carrier”. Settlement makes clear the Agency determines safety standard and who is authorized, completing and explaining broker’s duty and absent of need to “second guess” the Agency.
6. Elimination of “established threshold” language allows brokers’ and shippers’ defense attorneys to explain SMS is “work in progress” and that its data and methodology are unreliable, unapproved for the Agency’s own use, and should be subject to Daubert standards if used.
7. Allows shipper or broker to establish carrier qualification standards relying on objective standards if wish to be “uber” diligent which conform to existing compliance review crash data standards without the “catch 22” of embracing SMS standards and either losing 50% of capacity or having to explain why contract barriers were set above monitoring thresholds.
