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DND International, Inc. v. Federal Motor Carrier Safety Administration

United States Court of Appeals, Seventh Circuit

December 15, 2016

DND International, Inc., Petitioner,
Federal Motor Carrier Safety Administration, Respondent.

          Argued September 24, 2015

         Petition for review from the Federal Motor Carrier Safety Administration. No. FMCSA-2014-0159 - John Van Steenburg, Assistant Administrator.

          Before Manion, Rovner, and Hamilton, Circuit Judges.

          Manion, Circuit Judge.

         DND International is a trucking company whose operations were frozen in April 2014 when the Federal Motor Carrier Safety Administration (FMCSA) declared DND an imminent hazard and gave it only a few hours to pull its trucks off the road. This case started with a tragic accident on an unlit road on the night of January 27, 2014, when driver Renato Velasquez of DND International crashed his semi-truck into two emergency vehicles and another semi which were stopped on an Illinois highway. An Illinois Toll Authority employee was killed and a police officer was seriously injured. As a result of this tragedy, the FMCSA immediately revoked Velasquez's commercial-driving privileges.

         The FMCSA then opened a company-wide investigation into whether DND's drivers were following federal regulations designed to keep exhausted drivers off the roads. This investigation went on for approximately two months, and it appears to have been quite thorough. It entailed many interviews, examination of records, verification of statistics, and a number of interactions among FMCSA personnel. In fact, at the conclusion of the investigation, the Field Administrator of the Midwestern Service Center, Darin Jones, in consultation with the FMCSA Director of Enforcement, legal counsel, and FMCSA headquarters, spent one full week reviewing all relevant information to ensure all the results were accurate before he made his decision to issue an imminent-hazard out-of-service order, also known as an IHOOSO.

         Significantly, all during the two-month investigation DND was permitted to continue normal operations. It was later determined that during the two-month period there were two or three minor problems, but otherwise the company operated fully and efficiently without incident. Nevertheless, on April 1, 2014, the FMCSA issued an IHOOSO without warning, directing DND to immediately halt its trucking operations nationwide. This was not an order telling the company it must conclude all deliveries and not dispatch new deliveries or pickups. Rather, trucks were ordered to immediately stop within eight hours, no matter where the trucks were, and no matter what loads were in the process of being delivered.

         DND petitioned for administrative review of the IHOOSO. In response, an administrative law judge (ALJ) opened a hearing nine days after the freeze order issued and rendered his decision after another six days. The ALJ ultimately found that the IHOOSO should not have been issued, and he revoked it, noting that the IHOOSO was an effective "death penalty" to this small company. As best we can tell from the record and from the oral argument, the company has ceased doing business during the pendency of this action. The sudden halt to the company's operations put the company out of business. As shown below, this petition for review does not focus on the irretrievable damage suffered by DND, but rather seeks to correct a decision of an assistant administrator that upheld the ALJ grant of relief to DND. As a result, the case is moot and this court lacks the jurisdiction to provide DND any relief. Thus, we dismiss the petition for review for want of Article III standing.

         I. Background

         On January 27, 2014, DND driver Renato Velasquez was passing through DuPage County, Illinois on Interstate 88 when he crashed into a semi-truck and two emergency vehicles with their lights flashing. In the resulting compliance review, the FMCSA found that Velasquez was driving more hours than federal regulations allow. The review also disclosed that during the week before the accident, Velasquez falsified his duty-status log four times. He was declared an imminent hazard to the public on February 10, 2014, and ordered to immediately stop commercial driving.

         Although DND's other drivers were allowed to continue operating, the FMCSA's compliance review was not limited to Velasquez. The agency found that some other DND drivers had similar violations from driving more hours than allowed or falsifying duty-status logs. Duty-status logs should reflect where drivers are located at a given time. These are strict-liability regulatory violations. False records can thus reflect intentional wrongdoing; they can also result inadvertently when a driver is relying on his imperfect memory to report when and where he drove. The FMCSA examines these records because, by tracking driving hours and locations, the government intends to keep exhausted truckers off the road.

         The FMCSA's company-wide compliance review showed several regulatory violations among DND drivers as a group. Three times, DND drivers drove more hours than allowed. And three times, duty-status logs were inaccurate. The FMCSA did not find these violations merited the "critical" safety rating, which would have required DND to halt operations.

         Instead, as a result of its compliance review, the FMCSA issued the "conditional" safety rating to DND on March 21. This particular type of safety rating allowed DND to continue its trucking operations. This rating also issued 54 days after the Interstate 88 accident that triggered the FMCSA's compliance investigation. On March 21, the agency met with DND, which initiated changes. On March 28, DND sent the agency an email stating that it was installing electronic on-board recorders (EOBRs) in every single one of its commercial vehicles. EOBRs are integrated into truck engines and automatically generate duty-status records, which means that DND drivers have no way to falsify reports on how many hours they are driving, when, and where. EOBRs are also a technology that the FMCSA recommends to reduce fatigued driving.

         Thus, by all accounts, the safety risk that DND posed was, by the end of March, substantially resolved by cooperation between DND and the FMCSA. The offending driver had been removed. DND was under investigation, and it was initiating additional safety ...

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