FMCSA Cracks Down on Reincarnated Carriers

April 27, 2012

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A new rule from the Federal Motor Carrier Safety Administration makes it tougher for carriers that have been sanctioned to reincarnate themselves under a new identity.

The agency last week posted a final rule that changes its procedures in several areas affecting truck lines, intermodal equipment providers, brokers, freight forwards and hazmat proceedings.

The key change: paying a full civil penalty in an enforcement proceeding does not give the entity the ability to unilaterally avoid an admission of liability. Such a payment constitutes admission of all of the facts in a Notice of Claim, unless the entity and the agency agree otherwise.

The agency also will review out-of-service orders before they go into effect on reincarnated operations that have a history of breaking the rules. And it will consolidate the records of reincarnated entities with their predecessors' records.

Carrier interests generally support the move to clarify agency policy on admission of liability, albeit with some reservations, the agency said. The agency's decision turned on its contention that businesses with a lot of financial resources could afford to repeatedly violate the rules by simply paying the fine.

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