Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-05175/USCOURTS-caDC-00-05175-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 22, 2001 Decided June 5, 2001

No. 00-5175

Truckers United for Safety, et al.,

Appellants

v.

Kenneth M. Mead, The Inspector General,

Department of Transportation,

Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 98cv02793)

Anthony J. McMahon argued the cause and filed the briefs

for appellants. Edward M. McClure entered an appearance.

Eric M. Jaffe, Assistant United States Attorney, argued

the cause for appellee. With him on the brief were Wilma A.

Lewis, United States Attorney at the time the brief was filed,

and R. Craig Lawrence, Assistant United States Attorney.

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 1 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Before: Edwards, Chief Judge, Williams and Henderson,

Circuit Judges.

Opinion for the Court filed by Chief Judge Edwards.

Edwards, Chief Judge: In keeping with its mission to

enforce motor carrier safety regulations, the Office of Motor

Carriers ("OMC") initiated compliance review investigations

into appellants' record keeping practices. As part of that

effort, the Department of Transportation's Office of Inspector

General ("DOT OIG") was engaged to use its purported

search and seizure authority to obtain appellants' business

records. Under the legal framework in effect at the time of

the underlying events, the Inspector General Act of 1978,

Pub. L. No. 95-452, 92 Stat. 1101 (1978) ("Inspector General

Act" or "Act"), the Inspector General ("IG") had no authority

to engage in the kinds of criminal investigations at issue

here-criminal investigations that are at the heart of an agency's general compliance enforcement responsibilities. We

therefore hold that appellants are entitled to the return of

records and other property seized from them during the IG's

ultra vires investigations and seizures.

Following the IG's investigation of appellants, and subsequent to appellants' filing of the lawsuit in this case, Congress

enacted the Motor Carrier Safety Improvement Act of 1999,

Pub. L. No. 106-159, 113 Stat. 1748, 1773 (1999) ("MCSIA").

The District Court found that the MCSIA granted the IG

new authority to conduct investigations of motor carriers'

fraudulent and criminal activities related to DOT's operations

and programs. Truckers United for Safety v. Mead, 86

F. Supp.2d 1, 19 (D.D.C. 2000). In reaching this conclusion,

the District Court correctly rejected the IG's argument that

the 1999 law merely clarified that his office always possessed

the authority to conduct such investigations. Id. at 19 n.7. It

is also undisputed that the MCSIA does not retroactively

authorize IG investigations that were conducted prior to its

enactment. Therefore, the District Court erred in holding

that, although the IG violated the Inspector General Act, he

was nonetheless entitled to summary judgment because the

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 2 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

actions taken by the IG in 1998 are authorized by the 1999

law.

Finally, appellants contend that, because there is a threat

that the office of the IG will exceed its authority under the

MCSIA, we should construe the new law narrowly and then

grant an injunction preventing the IG from violating the

statute in the future. Although appellants are entitled to

relief for unlawful actions taken pursuant to the Inspector

General Act, there is no live dispute under the MCSIA.

Accordingly, we vacate the District Court's decision insofar as

it purports to construe the MCSIA, and we dismiss appellants' claims resting on their construction of the MCSIA; the

issues focused on the meaning and future application of the

MCSIA are not ripe for review.

I. Background

A. Statutory Framework

1. Inspector General Act

The Inspector General Act established the Office of Inspector General ("OIG") in order to facilitate "objective inquiries

into bureaucratic waste ... and mismanagement." NASA v.

Fed. Labor Relations Auth., 527 U.S. 229, 240 (1999). The

IG's mandate focuses on systemic agency-wide issues. Congress created the OIG to "provide leadership and coordination and recommend policies for activities designed ... to

promote economy, efficiency, and effectiveness in the administration of, and ... to prevent and detect fraud and abuse in,

such programs and operations." 5 U.S.C. App. 3 s 2(2).

There are limits to the IG's powers, however. Most prominently, the Act specifically prohibits the OIG from assuming

"program operating responsibilities." 5 U.S.C. App. 3

s 9(a)(2).

The general parameters of the Inspector General Act are

fairly clear cut. First, Congress consolidated pre-existing

agency offices into the OIG, thereby transferring the various

offices' investigative duties to the OIG. In the case of the

DOT, Congress mandated that the responsibilities of offices

such as the "Office of Investigations and Security" and the

"Office of Audit" be consolidated into the OIG. 5 U.S.C. App.

3 s 9(a)(1)(k). Second, the Act defines the IG's core role as

preventing fraud and abuse, by conducting audits and investigations relating to agency programs and operations. 5

U.S.C. App. 3 ss 2(1), 4(a)(1), 6(a)(2). Finally, Congress

authorized agencies to make discretionary transfers of duties

to the OIG. However, discretionary transfers of authority

only can be made if the duties are properly related to the

functions of the IG, further the purpose of the Act, and do not

constitute program operating responsibilities. 5 U.S.C. App.

3 s 9(a)(2).

Congress structured the OIG to promote independence and

objectivity. The Inspector General Act indicates that Inspectors General will be appointed directly by the President and

confirmed by the Senate. 5 U.S.C. App. 3 s 3(a). An IG is

under the general supervision of the head of the agency, but

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 3 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

the head of the agency may not interfere with any IG

investigation. Id. In a similar vein, Inspectors General

report directly to Congress regarding their agencies. Id.

Furthermore, the OIG has investigatory means at its disposal, such as subpoena power and access to regulated motor

carriers' records to aid it in fulfilling its mission. 5 U.S.C.

App. 3 ss 3(a), 6(a). The OIG also may, in appropriate

circumstances, conduct searches and seizures. See 28 C.F.R.

s 60.3.

In 1999 Congress passed the MCSIA which further addresses the power of the DOT IG. In particular, s 228 of the

MCSIA states:

(a) IN GENERAL.--The statutory authority of the Inspector General of the Department of Transportation

includes authority to conduct, pursuant to Federal criminal statutes, investigations of allegations that a person or

entity has engaged in fraudulent or other criminal activity relating to the programs and operations of the Department or its operating administrations.

(b) REGULATED ENTITIES.--The authority to conduct investigations referred to in subsection (a) extends

to any person or entity subject to the laws and regulations of the Department or its operating administrations,

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 4 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

whether or not they are recipients of funds from the

Department or its operating administrations.

s 228, 113 Stat. at 1773. This statutory provision was not in

effect when the IG investigated appellants.

2. Operations of the Department of Transportation

Under the Motor Carrier Safety Act of 1984, Pub. L. No.

98-554, 98 Stat. 2829 (1984), the Secretary of the DOT has

authority to issue regulations governing vehicle safety. See,

e.g., 49 U.S.C. s 31133(a). The Secretary's authority includes

the power to initiate an investigation, subpoena witnesses and

records, and inspect motor carriers or documents belonging

to motor carriers. 49 U.S.C. ss 502(a), 504(c)(1)-(2), 506(a).

The IG has no responsibility in these areas of operation.

The Secretary of Transportation has delegated this authority to the Federal Highway Administration ("FHA"), which in

turn has issued federal motor carrier safety regulations. See

49 U.S.C. s 104; 49 C.F.R. ss 350.1-399.207. Until January

1, 2000, FHA's Office of Motor Carriers administered the

regulation of interstate motor carriers. However, pursuant

to the MCSIA, responsibility for administering regulations

governing interstate motor carriers was transferred to the

Federal Motor Carrier Safety Administration ("FMCSA").

The Motor Carrier Safety Act of 1984 authorizes the FHA

to enforce safety regulations and conduct compliance reviews.

49 U.S.C. s 31115. The FHA can itself bring a civil action or

request that the Attorney General enforce a regulation or

prosecute an alleged violator. 49 U.S.C. s 507 (b). The Act

prescribes both civil and criminal penalties for violations of

the safety regulations. 49 U.S.C. s 521. Although the FHA

is authorized to oversee motor carrier compliance with safety

regulations, the Motor Carrier Safety Act of 1984 does not

authorize the FHA to engage in searches and seizures.

B. Underlying Events

During the period preceding the events at issue in this

case, the DOT OIG and the OMC embarked on a joint project

reviewing motor carrier operations. See Joint OIG/OMC

Review of Motor Carrier Operations, reprinted in J.A. 40.

The "objective" of the joint project was "to combine the

efforts of OIG and OMC staffs in a joint investigative review

of specific motor carriers to create a greater deterrence to

motor carrier violations of the Federal Motor Carrier Safety

Regulations." Id. The effort targeted "all motor carrier

operating areas subject to falsification and having a direct

impact on safety," including drivers' hours of service, driver

medical certificates and testing for drugs. Id. The document describing the joint project specifically noted that the

"focus of the review will not be on OMC operations." Id.

Under this project, according to appellees, the OMC engages

in regulatory compliance reviews of motor carriers and refers

egregious violators to the IG. The IG pursues criminal

investigation of the misconduct.

Appellants, Florilli, Northland, Kistler, Lone Wolf, and

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 5 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

K&C, individual trucking companies, each have been investigated by the DOT IG. The record on appeal describes events

involving K & C and Lone Wolf, companies operating from

the same location, to illustrate the role the IG played in

investigating appellants. On July 13, 1998 the OMC sent an

investigator to K & C and Lone Wolf to conduct a compliance

review. Subpoena (July 14, 1998), reprinted in J.A. 66.

Lone Wolf believed that the review had been triggered by a

complaint filed by a disgruntled driver. DOT asserted that

the investigation was an attempt to uncover falsification of

"hours of service" logs, that is, records of the number of

consecutive hours drivers are on the road without a rest.

The Company refused to cooperate with the compliance review, although it agreed to comply with the investigation of

the underlying complaint. Letter from Lone Wolf Counsel,

reprinted in J.A. 54. On July 14, 1998 the OMC served a

subpoena on the companies demanding that the companies

produce all documents necessary to the investigation. Subpoena (July 15, 1998), reprinted in J.A. 66. The companies

refused to comply. On October 22, 1998 a special agent of

the DOT IG, Eric Johnson, obtained a warrant to search the

premises of the companies. Search Warrant (Oct. 22, 1998),

reprinted in J.A. 73. On the following day, Johnson executed

the search warrant and seized the relevant documents. See

Declarations, reprinted in J.A. 57, 58, 60, 62, 64, 65.

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 6 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

C. Procedural History

Truckers United for Safety ("TUFS"), a nonprofit organization of motor carriers, along with the individually named

companies, filed suit in District Court alleging that the DOT

IG lacked legal authority to engage in the contested compliance review investigations. Appellants sought preliminary

injunction and declaratory relief because, they argued, the IG

was not authorized to engage in DOT operations, specifically

investigation of standard compliance with federal motor carrier safety regulations. Appellants also sought the return of

any seized materials that had not already been returned by

the Government. Appellee filed a motion for summary judgment, asserting that TUFS lacked standing and that the DOT

IG acted within its authority in authorizing the investigations.

The District Court found that the Inspector General Act

did not authorize the DOT IG to conduct investigations into

motor carrier compliance. Truckers United for Safety v.

Mead, 86 F. Supp.2d at 19. As a result the IG had no

authority to search appellants' premises or seize their records. Id. However, the District Court found that the

MCSIA amended the Inspector General Act, and constituted

a new grant of authority broad enough to encompass the kind

of investigations at issue here. Id. Although the OIG did

not have the authority to investigate appellants as part of a

compliance review in 1998, the District Court explained that

the MCSIA has given the IG authority to do so in the future.

Id. The District Court therefore concluded that the IG was

entitled to summary judgment on the merits. Id. Because

appellants' claims arise from an appeal of a summary judgment ruling, we review the District Court's ruling de novo.

See, e.g., Ctr. for Auto Safety v. NHTSA, 244 F.3d 144, 147

(D.C. Cir. 2001).

II. DISCUSSION

A. Standing

The IG has asserted, and the District Court agreed, that

TUFS lacks standing to pursue claims on behalf of its memUSCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 7 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

bers, the individual trucking companies. We find this argument to be plainly wrong.

TUFS asserts no basis for organizational standing, see

Havens Realty Corp. v. Coleman, 455 U.S. 363, 378-79 (1982),

Am. Trucking Ass'ns v. United States Dep't of Transp., 166

F.3d 374, 386 (D.C. Cir. 1999), because it asserts no cognizable injury to the organization or its activities. It is clear,

however, that TUFS has asserted more than enough to

satisfy the requirements of representational standing. See,

e.g., Hunt v. Washington State Apple Adver. Comm'n, 432

U.S. 333, 342-43 (1977) (setting out the requirements for

associations to have standing); Am. Trucking, 166 F.3d at

385; Int'l Bhd. of Teamsters v. Pena, 17 F.3d 1478, 1482-83

(1994).

TUFS asserts, and the Government does not dispute, that

the individual trucking companies are members of the association. TUFS further claims that the IG injured individual

trucking companies by conducting unlawful investigations and

seizing their records. These claims, which are substantial

and well documented, easily satisfy the injury/causation/redressability requirements of Article III of the Constitution.

See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992). Furthermore, it is uncontested that TUFS' members

have standing to sue in their own right; the interests that

TUFS seeks to protect are indisputably germane to the

organization's purpose; and neither the claims asserted nor

the relief requested requires the participation in the lawsuit

of each of the organization's individual members. Hunt, 432

U.S. at 343. TUFS therefore has representational standing

to sue on behalf of its members.

B. The Legality of the IG's Investigations and Seizures in

1998 Pursuant to the Inspector General Act

The principal issue in this case is whether the IG had

authority in 1998 to investigate motor carriers' compliance

with safety regulations. The District Court held that the

legislative history and structure of the Inspector General Act

make it plain that Congress did not intend to grant the IG

authority to conduct investigations constituting an integral

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 8 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

part of DOT programs. The trial court also held that the

Secretary of DOT could not transfer to the IG his authority

to investigate motor carriers' compliance with federal motor

carrier safety regulations. The District Court therefore concluded that the IG acted outside the scope of his authority in

conducting investigations of motor carriers' compliance with

the federal safety regulations. We agree with this conclusion.

The IG has authority to investigate the DOT's administration of programs and operations. In carrying out its charge,

"honest cooperation" between the IG and agency personnel

can be expected. NASA, 527 U.S. at 242. The IG, however,

is not authorized to conduct investigations as part of enforcing motor carrier safety regulations--a role which is central

to the basic operations of the agency. See, e.g., Winters

Ranch P'ship v. Viadaro, 123 F.3d 327 (5th Cir. 1997) (upholding IG's subpoena because it was part of an investigation

to test the effectiveness of the agency's conduct of a program

and not part of program operating responsibilities); Burlington N. R.R. Co. v. Office of Inspector General, 983 F.2d 631

(5th Cir.1993) (refusing to enforce IG's subpoena because

Inspectors General have no authority to engage in regulatory

compliance investigations that are part of an agency's general

functioning).

The record in this case makes it clear that, when he

investigated the plaintiffs and seized their records, the DOT

IG was not engaged in an investigation relating to abuse and

mismanagement in the administration of the DOT or an audit

of agency enforcement procedures or policies. Rather, the

DOT IG merely lent his search and seizure authority to

standard OMC enforcement investigations. In other words,

the DOT IG involved himself in a routine agency investigation

that was designed to determine whether individual trucking

companies were complying with federal motor carrier safety

regulations. This was beyond his authority.

Under 5 U.S.C. App. 3 s 9(a)(1)(K), the Office of Investigations and Security, Office of Audit of the Department, the

Offices of Investigations and Security, Federal Aviation Administration, and External Audit Divisions, Federal Aviation

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 9 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Administration, the Investigations Division and the External

Audit Division of the Office of Program Review and Investigation, Federal Highway Administration, and the Office of

Program Audits, Urban Mass Transportation Administration

were consolidated as part of the OIG. Congress did not,

however, indicate that these investigative units were to conduct investigations into motor carrier compliance with safety

regulations or that consolidation of these offices authorized

the OIG to engage in criminal investigations of particular

motor carriers, in contravention of the Inspector General Act.

5 U.S.C. App. 3 s 9(a)(2). The DOT IG was not authorized,

pursuant to the Act's consolidation of duties, to search appellants' premises and seize their records as part of a compliance

review which was under the jurisdiction of the FHA.

Finally, under 5 U.S.C. App. 3 s 9(a)(2), the Secretary of

DOT may transfer additional powers and duties to the IG

beyond those responsibilities specifically defined in the Inspector General Act. However, the Secretary's transfer of

authority is explicitly limited to exclude matters that constitute "program operating responsibilities." Id. As the District Court correctly found, there was no valid transfer of

authority in this case.

On the record at hand, there can be no doubt that the IG

violated the Inspector General Act when he conducted the

disputed investigations and seizures of appellants' records in

1998. The actions of the IG were ultra vires, causing injury

to appellants for which they are entitled to relief.

C. Actions Arising Under the MCSIA

The District Court found that, as of December 1999, after

the occurrence of the investigations and seizures that are in

dispute in this case, the IG was granted authority pursuant to

the MCSIA "to conduct investigations of motor carriers' fraudulent and criminal activities that are related to the

DOT's operations and programs." Truckers United for Safety v. Mead, 86 F. Supp.2d at 19. The District Court's opinion

thus appears to suggest that the enactment of the MCSIA

mooted appellants' challenges to the IG's unlawful actions

taken before its passage. Id. That holding is erroneous and

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 10 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

it is hereby reversed. The District Court also denied appellants' request for declaratory and injunctive relief that would

bar the IG from engaging in unlawful actions in the future

pursuant to the MCSIA. Because appellants' claims rest on a

fear of injuries that have yet to arise under the MCSIA, we

dismiss them as unripe.

The IG argues that even though the MCSIA does not

directly govern the 1998 investigations, the MCSIA provides

evidence that, even in 1998 before the MCSIA was enacted,

the OIG had authority to investigate appellants. To substantiate this position, the IG points to a comment in the Congressional Record that s 228 "clarifies Congressional intent with

respect to the authority of the IG, reaffirming the IG's ability

and authority to continue to conduct criminal investigations of

parties subject to DOT laws or regulations, whether or not

such parties receive Federal funds from the Department."

145 Cong. Rec. H12874 (daily ed. Nov. 18, 1999); 145 Cong.

Rec. S15211 (daily ed. Nov. 19, 1999). This sparse piece of

legislative history cannot carry the day for the IG.

Prior to the passage of s 228, the statutory and legal

framework defining the IG's authority focused on the IG's

role as an independent and objective investigator of agency

fraud and abuse. These responsibilities contrasted with the

responsibilities delegated to other offices in the DOT which

were in charge of implementation and enforcement of the

motor carrier safety regulations. Within this institutional

framework the IG was not authorized to engage in ordinary

compliance reviews, even those potentially implicating criminal punishments. The characterization of the MCSIA as

"clarifying" in the Congressional Record does not undermine

this finding. The DOT's attempt to read s 228 as a retroactive authority has no legitimate basis.

A much harder question in this case concerns appellants'

requests for a judicial declaration that s 228 of the MCSIA

did not amend the Inspector General Act to authorize the IG

to conduct investigations of the sort that are at issue in this

case and an injunction barring such criminal investigations in

the future. In other words, appellants ask that we reverse

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 11 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

the District Court's holding that s 228 of the MCSIA created

new authority for the DOT IG. Section 228--for example,

the language sanctioning IG investigations of "fraudulent or

other criminal activity"--is hardly free from ambiguity and it

is far from clear that it expands the authority of the IG as the

District Court found. We need not reach these issues, however. We agree that the District Court's decision construing

the MCSIA cannot stand, but not for the reasons asserted by

appellants. Rather, we hereby vacate the District Court's

decision insofar as it addresses the scope of the MCSIA,

because the issues raised by appellants regarding the scope of

s 228 are not ripe for review.

The disputed actions taken by the IG in this case occurred

in 1998 under the Inspector General Act. The MCSIA had

not yet been enacted, so there is no evidence before the court

concerning investigations or seizures taken pursuant to the

MCSIA. Appellants claim that the IG's future conduct under

the MCSIA may violate the law; but, of course, this court has

no way of knowing what the DOT IG may do in the future.

The only matters of relevance that are before the court at

this time are the text of s 228 of the MCSIA, the District

Court's construction of the statutory provision, and the parties' differing opinions as to what the new law means. This is

not enough to justify an opinion from this court on the

meaning of s 228, because such an opinion would be purely

"advisory" and thus beyond this court's authority under Article III of the Constitution. Cf. Los Angeles v. Lyons, 461

U.S. 95 (1983) (Speculative claims about possible future

harms do not afford a basis for equitable relief.).

There will be no ripe case fit for judicial review until the

Government acts to apply the statute "in a concrete factual

setting." Truckers United for Safety v. Fed. Highway Admin., 139 F.3d 934, 937 (D.C. Cir. 1998) (citing Abbott Labs. v.

Gardner, 387 U.S. 136 (1967), rev'd on other grounds, Califano v. Sanders, 430 U.S. 99 (1977)). It is possible that, since

passage of the MCSIA, the DOT IG has, in practice, properly

exercised its authority. Without any particular action by the

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 12 of 13
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

IG before us for review, the question of future relief is not fit

for determination.

In assessing whether a case is ripe for review, we must

consider not only the "fitness of the issues" for judicial

review, but also whether a delay in judicial consideration of

the issues will cause undue "hardship" to appellants. See

City of Houston v. Dep't of Hous. & Urban Dev., 24 F.3d

1421, 1431-32 (D.C. Cir. 1994). The closest appellants come

to raising a claim of hardship is in asserting that the investigations of Florilli, Kistler, K & C and Lone Wolf are "continuing," implying that appellants persist in being harmed as

a result of the underlying events. However, this harm results from searches and seizures authorized by the IG in 1998,

not actions initiated by the IG following the enactment of the

MCSIA.

The main hardship that may result to appellants from

delayed review of the IG's proper role under the MCSIA is

the need to file another suit. However, the burden of pursuing future litigation is not enough, by itself, to demonstrate

hardship justifying premature judicial decision-making. See

id. at 1432.

III. Conclusion

Because the DOT IG acted without lawful authority in

investigating appellants and seizing their records pursuant to

the Inspector General Act, the Government is hereby ordered

to return all materials seized during the ultra vires searches

of appellants' premises. We also hereby vacate the District

Court's decision regarding the scope of s 228 of the MCSIA

and dismiss appellants' claims resting on their construction of

the MCSIA; the issues focused on the meaning and future

application of s 228 are not ripe for review.

USCA Case #00-5175 Document #600671 Filed: 06/05/2001 Page 13 of 13