Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-01118/USCOURTS-caDC-01-01118-0/pdf.json

Parties Involved:
American Trucking Associations, Inc.
Amicus Curiae for Petitioner
Darrell Andrews Trucking, Inc.
Petitioner
Federal Motor Carrier Safety Administration
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 8, 2002 Decided July 26, 2002

No. 01-1118

Darrell Andrews Trucking, Inc.,

Petitioner

v.

Federal Motor Carrier Safety Administration,

Respondent

On Petition for Review of an Order of the

Federal Motor Carrier Safety Administration

Henry E. Seaton, III argued the cause for petitioner.

With him on the briefs were James E. Scapellato and John T.

Husk.

Robert Digges, Jr. and Erika Z. Jones were on the brief for

amicus curiae American Trucking Associations, Inc. in support of petitioner.

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H. Thomas Byron, III, Attorney, U.S. Department of

Justice, argued the cause for respondent. On the brief were

Robert S. Greenspan and August E. Flentje, Attorneys. Edward R. Cohen, Attorney, entered an appearance.

Before: Ginsburg, Chief Judge, Rogers and Garland,

Circuit Judges.

Opinion for the Court filed by Circuit Judge Garland.

Garland, Circuit Judge: Darrell Andrews Trucking, Inc., a

commercial motor carrier, petitions for review of an order of

the Federal Motor Carrier Safety Administration (FMCSA)

assigning Andrews a "conditional" safety rating. The agency

gave Andrews that rating because it violated a regulation

requiring carriers to maintain all documents that support its

drivers' records of duty status. The FMCSA found that

Andrews removed its drivers' toll receipts from driver-specific

files, where they could be used to verify the number of hours

a driver was on the road, and commingled them with the

receipts of all other drivers so that the tolls could not be used

for verification. Andrews challenges the FMCSA's decision

on a number of grounds, including a claim that the agency

improperly changed its original interpretation of the recordkeeping regulation. We reject that challenge and all of the

others but one. We remand the case to the agency for

consideration of the sole issue that it failed to address below.

I

Congress has directed the Secretary of Transportation to

prescribe regulations establishing a procedure for determining the safety fitness of the owners and operators of commercial motor vehicles. 49 U.S.C. s 31144(b); see MST Express

v. Department of Transp., 108 F.3d 401, 402 (D.C. Cir. 1997).

The Secretary has delegated that responsibility to the

FMCSA. 49 C.F.R. s 1.73.1 Pursuant to Part 385 of its

__________

1 Motor carriers were initially regulated by the Interstate Commerce Commission. Motor Carrier Act, Pub. L. No. 74-255, 49

Stat. 543 (1935). In 1966, Congress transferred regulatory authority to the Department of Transportation, which delegated it to the

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regulations, the FMCSA assigns motor carriers one of three

possible safety ratings: "satisfactory," "conditional," or "unsatisfactory." 49 C.F.R. s 385.3; see id. s 385.7 (listing

factors considered in determining safety ratings, including the

frequency of accidents and the frequency and severity of

regulatory violations); see generally MST Express, 108 F.3d

at 402-03.2 The agency conducts compliance reviews, "on-site

examination[s] of motor carrier operations," in order "to

determine whether a motor carrier meets the safety fitness

standard" and which rating it should be assigned. 49 C.F.R.

s 385.3; see id. s 385.9.

To ensure that truck drivers are awake and alert on the

road, Congress has also directed the Secretary of Transportation to prescribe the maximum number of hours they may

operate their vehicles in a given time period. See 49 U.S.C.

s 31502(b). To implement that directive, the FMCSA has

promulgated regulations that fix maximum driving times, 49

C.F.R. s 395.3, and require each driver to keep a record of

duty status (RODS)3 that records his or her driving times for

each 24-hour period, id. s 395.8. In order to permit the

FMCSA to ensure compliance with the maximum-hours limitations, the regulations further require each motor carrier to

"maintain records of duty status and all supporting docu-

__________

Federal Highway Administration (FHWA), which, in turn, promulgated the regulations discussed below. The FMCSA, which has

now taken over those responsibilities, was created by the Motor

Carrier Safety Improvement Act of 1999, Pub. L. No. 106-159, 113

Stat. 1748. See 49 C.F.R. s 1.73. For the sake of convenience, we

will refer to both the FMCSA and its predecessor agencies as the

FMCSA.

2 Although "a carrier that receives a conditional rating is permitted to continue its normal operations," insurance companies use the

ratings and shippers consult them when selecting carriers. MST

Express, 108 F.3d at 403. A carrier that receives an unsatisfactory

rating may not transport certain hazardous materials or more than

15 passengers. Id. at 403-04 (citing 49 C.F.R. s 385.13).

3 For convenience, we will use the abbreviation RODS to refer to

both "record of duty status" and "records of duty status."

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ments for each driver it employs for a period of six months

from the date of receipt." 49 C.F.R. s 395.8(k)(1).

On November 9, 2000, during an on-site compliance review,

FMCSA investigators determined that Andrews had violated

agency regulations. The investigators found maximum-hours

violations as well as false RODS. Compliance Review, J.A. at

48-49, 55, 57-58. In addition, they cited Andrews for failing

to properly maintain supporting documents for the RODS.

Specifically, the investigators noted that, although Andrews

"receives [an] envelope containing each driver's expenses (toll

receipts, fuel receipts, CAT scale receipts, ...)," it separates

out the toll receipts and files them "all together" with those of

the other drivers. J.A. at 51. The result, the investigators

said, is that the "carrier is not able to cross reference toll

receipts back to the driver's RODS." Id. Moreover, if the

toll receipts had been maintained as received, the investigators believed that "more falsification would have been discovered." J.A. at 55. Based on Andrews' treatment of the toll

receipts, the investigators cited the carrier for violating

s 395.8(k)(1), the recordkeeping regulation. As a consequence of that violation, together with an unrelated citation

for an excessively high accident rate, the compliance review

assigned Andrews the lowest of the three possible safety

ratings: "unsatisfactory." J.A. at 49.

Andrews sought administrative review before the FMCSA.

The carrier conceded that it maintained the toll receipts in

the ordinary course of its business. In re Darrell Andrews

Trucking, Inc., No. 2001-8686, slip op. at 8 (FMCSA Jan. 19,

2001). Andrews argued, however, that the receipts were not

"supporting documents" within the meaning of s 395.8(k)(1),

because it did not use them to verify the information in its

drivers' RODS. It further contended that, even if the toll

receipts were supporting documents, the regulation did not

require that such documents be kept in a manner that

permitted their correlation with the driver to whom they

corresponded.

The FMCSA disagreed. First, it concluded that, under

s 395.8(k)(1), "supporting documents" include documents that

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"can be used to verify information on the driver's records of

duty status"--not only those that the carrier actually does

use. Andrews Trucking, FMCSA slip op. at 9-10 (emphasis

added) (citing Regulatory Guidance for the Federal Motor

Carrier Safety Regulations, 62 Fed. Reg. 16,370, 16,425 (Apr.

4, 1997)). Second, the FMCSA thought it reasonable to

construe the maintenance requirement as requiring carriers

to maintain the documents in a usable condition. Id. at 10.

As did the investigators, the agency noted that although each

Andrews driver turns in a "trip envelope" that contains his or

her toll and other receipts, thereafter "the toll receipts are

removed and all filed together in one central location." Id. at

8. This " 'salad shooter' approach," the FMCSA held, "does

not comply with the spirit of the law and frustrates proper

enforcement." Id. at 11 (quoting In re A.D. Transport

Express, Inc., No. 00-05-296052, slip op. at 5 (FMCSA May

22, 2000), aff'd, A.D. Transport Express, Inc. v. United

States, 290 F.3d 761 (6th Cir. 2002)). In particular, it "frustrates an investigator[']s ability to connect the supporting

document (toll receipt) and the RODS," and leaves the investigator "unable to use the toll receipt to check for hours-ofservice or falsification violations of the driver." Id. at 8.

Finally, the agency concluded that prior compliance reviews

had put Andrews "on notice that [its] method of retention of

supporting documents (including toll receipts) does not conform to the regulatory requirements." Id. at 9.

Although the FMCSA upheld Andrews' s 395.8(k)(1) violation, it raised the carrier's overall safety rating to "conditional" because it found that one of the accidents on its record

had been non-preventable. Id. at 11-13. Andrews now

petitions for review of the determination that it violated

s 395.8(k)(1). See 28 U.S.C. s 2344.

II

This court must uphold a decision of the FMCSA unless it

is "arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law." 5 U.S.C. s 706(2)(A); El Conejo

Americano of Texas, Inc. v. Department of Transp., 278 F.3d

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17, 19-20 (D.C. Cir. 2002). We accord "substantial deference

to [an] agency's interpretation of its own regulations," Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994), and

will affirm the FMCSA's interpretation of one of its regulations unless "it is plainly erroneous or inconsistent with the

regulation itself." Corridor H Alternatives, Inc. v. Slater,

166 F.3d 368, 372 (D.C. Cir. 1999) (internal quotation marks

omitted); see Auer v. Robbins, 519 U.S. 452, 461 (1997).

Andrews raises five main challenges to the FMCSA's decision. According to Andrews, the requirement that it maintain each driver's toll receipts, and that it refrain from

combining them with the receipts of all other drivers: (i)

constitutes a change in the original regulation, promulgated

without the required notice and opportunity for comment; (ii)

even if not a change, was applied to Andrews without fair

notice; (iii) imposes increased and unapproved recordkeeping

burdens, in violation of the Paperwork Reduction Act, 44

U.S.C. ss 3501-3520; (iv) was applied to Andrews without

adherence to proper adjudicatory procedures; and (v) was

imposed without consideration of a substantial countervailing

consideration. We consider Andrews' five challenges below.4

III

Andrews' first argument is that the interpretation of

s 395.8(k)(1) upon which the FMCSA based its decision constitutes a substantial change in the agency's construction of

that regulation, and that it was unlawful for the agency to

make such a change without promulgating a new regulation

pursuant to the notice and comment provisions of the Administrative Procedure Act (APA), 5 U.S.C. s 553(c). See Appalachian Power Co. v. EPA, 208 F.3d 1015, 1024 (D.C. Cir.

2000) ("It is well-established that an agency may not escape

the notice and comment requirements ... by labeling a major

substantive legal addition to a rule a mere interpretation.");

Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579,

__________

4 Andrews raises a number of additional arguments, or variants

on the above arguments, which we have considered and rejected but

which are too insubstantial for extended discussion.

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586 (D.C. Cir. 1997) ("Once an agency gives its regulation an

interpretation, it can only change that interpretation as it

would formally modify the regulation itself: through the

process of notice and comment rulemaking."). To succeed

with this argument, Andrews must show that the "agency has

given its regulation a definitive interpretation, and later significantly revise[d] that interpretation." Alaska Prof'l Hunters Ass'n v. FAA, 177 F.3d 1030, 1034 (D.C. Cir. 1999).

Andrews contends that two elements of the FMCSA's

decision represent significant changes from the agency's prior, definitive position. Those are the agency's determinations

that: (a) toll receipts that the carrier does not itself use for

verification of RODS are "supporting documents" that the

carrier must maintain; and (b) the carrier must not only

preserve the toll receipts but also must refrain from removing

them from individually identifiable files and combining them

in a fashion that makes correlation with individual drivers

impossible. We consider each of these determinations below.

A

The FMCSA concluded that Andrews' toll receipts are

"supporting documents" because they could be used by the

carrier and the agency to check the accuracy of the drivers'

RODS. Andrews contends that the term applies only to

documents that a carrier actually uses to verify the RODS.

Because Andrews does not use toll receipts in its verification

process, the carrier contends that it is not required to maintain them.

Section 395.8(k) states:

Retention of driver's record of duty status. (1) Each

motor carrier shall maintain records of duty status and

all supporting documents for each driver it employs for a

period of six months from the date of receipt.

49 C.F.R. s 395.8(k). The regulation does not define "supporting documents" and, as a consequence, we are bound to

defer to a reasonable agency interpretation. The agency

interprets the term as encompassing any document that could

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be used to support the RODS, and notes that a toll receipt

(because it is normally date- and time-stamped) is such a

document. Although this may not be the only plausible

interpretation of "supporting document," it is hardly unreasonable. The agency further contends that to adopt Andrews' interpretation--which would permit each carrier to

exclude from the coverage of s 395.8(k)(1) any document it

chose simply by not using it for verification--would eviscerate

enforcement of the maximum-hours regulations. While that

may be an overstatement of the consequence of adopting

Andrews' view, the agency is nonetheless correct in arguing

that its own view is consistent with the regulatory purpose

and facilitates the agency's ability to ensure the veracity of

the RODS and the enforcement of the limits on driving time.

We thus conclude that the FMCSA's current interpretation

of s 395.8(k)(1) is a reasonable construction of its regulation.

Nonetheless, that interpretation might still trigger the requirements of notice and comment if it represents a significant change from a previous, definitive interpretation. We

are unable, however, to discern such a change.

In support of its contention that the FMCSA previously

interpreted "supporting documents" as limited to those actually "used by" a carrier, Andrews points to a passage from a

regulatory guidance that the agency issued in 1993 and

repeated verbatim in 1997:

Supporting documents are the records of the motor

carrier which are maintained in the ordinary course of

business and used by the motor carrier to verify the

information recorded on the driver's record of duty status. Examples are: Bills of lading ..., weight/scale

tickets, fuel receipts, fuel billing statements, [and] toll

receipts....

Regulatory Guidance for the Federal Motor Carrier Safety

Regulations, 58 Fed. Reg. 60,734, 60,761 (Nov. 17, 1993),

repeated in 62 Fed. Reg. 16,370, 16,425 (Apr. 4, 1997) (emphasis added). In focusing on this passage, however, Andrews

neglects the two sentences that immediately follow, and that

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appear to adopt a "can be used" (or "could be used") interpretation:

Supporting documents may include other documents

which the motor carrier maintains and can be used to

verify information on the driver's records of duty status.

Id. (emphasis added). The regulatory guidance thus offers

some support for the positions of both Andrews and the

FMCSA, and can only be described as--at best--ambiguous.

It cannot be said to mark a definitive interpretation from

which the agency's current construction is a substantial departure.

In further support of its argument, Andrews points to a

Notice of Proposed Rulemaking (NPRM) that the FMCSA

issued in 1998 but never finalized in a promulgated rule. The

NPRM was issued in response to Congress' directive, in the

Hazardous Materials Transportation Authorization Act of

1994, Pub. L. No. 103-311, s 113, 108 Stat. 1673, that the

FMCSA clarify the meaning of "supporting document" and

list those supporting documents that a carrier is required to

maintain. The statute directed the FMCSA to "prescribe

regulations amending part 395 of [C.F.R.] title 49," and to

include "[a] provision specifying the number, type, and frequency of supporting documents that must be retained by a

motor carrier." Id. s 113(a)(1), (b)(2). For purposes of those

new regulations, the legislation defined a supporting document as "any document that is generated or received by a

motor carrier or commercial motor vehicle driver in the

normal course of business that could be used, as produced or

with additional identifying information, to verify the accuracy

of a driver's record of duty status." Id. s 113(c) (emphasis

added). The congressional directive was not self-executing

(and did not indicate whether it was restating or changing the

agency's existing interpretation). Hence, because the

FMCSA never promulgated the contemplated regulation, the

statutory definition does not govern this case. It does,

however, provide support for the proposition that the agency's interpretation of "supporting document," as a document

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that "could be used" to verify the accuracy of a RODS, is

reasonable.

Needless to say, this is not the aspect of the NPRM to

which Andrews draws our attention. Instead, it contends

that statements in the notice show that the FMCSA understood its original 1982 interpretation of supporting documents

as limited to documents actually used by the carrier. But the

1998 NPRM is no less ambiguous (or, perhaps better put, no

less self-contradictory) than the guidances that preceded it.

The NPRM does state, as Andrews notes, that:

The FMCSA intended that the term "supporting document" refer to those specific documents, and only those

specific documents, that a motor carrier used in its

internally-developed system or program to verify the

accuracy of the driver's duty activities. It was not meant

to encompass all records, but only those that were,

indeed, used by the motor carrier, to verify the dates,

times, and locations the driver recorded.

Hours of Service of Drivers; Supporting Documents, 63 Fed.

Reg. 19,457, 19,459 (Apr. 20, 1998) (emphasis added). But

two sentences later, the NPRM destroys this clarity by

stating:

The regulatory guidance stated that supporting documents are the records of the motor carrier maintained in

the ordinary course of business that are used, or could be

used, by the motor carrier to verify the information

recorded on a driver's record of duty status.

Id. (emphasis added). Moreover, the NPRM then goes on to

state that it is "proposing to use the statutory definition of

supporting documents as provided by Congress in the Act,"

id.--i.e., the "could be used" definition--and declares that,

because "since 1982, [the FMCSA] has required that all

supporting documents must be collected and kept for six

months[,] [t]his collection of documents ... is not a new

paperwork burden." Id. at 19,464. In short, although "ambiguous" may be too charitable a word to describe these

conflicting passages in the NPRM, the one thing that is clear

is that the document cannot be regarded as a definitive

acknowledgment that the agency had previously regarded

"used by" rather than "could be used" as the appropriate

interpretation of "supporting documents."

Finally, we note that, while its Federal Register notices are

less than clear, the agency's prior informal adjudication on

this issue is quite clear and completely in accord with the

view of "supporting documents" relied upon by the FMCSA

below. In In re National Retail Transportation, Inc., No.

R1-92-03 (FMCSA Sept. 12, 1996), the FMCSA rejected a

carrier's claim, identical to that of Andrews, that the term

"supporting documents" should be limited to "those that the

motor carrier uses--instead of could have been used--for log

verification." Id., FMCSA slip op. at 6. If supporting documents were defined as the carrier urged, the FMCSA continued, "motor carriers could always escape responsibility for

retaining them merely by saying that they do not use them."

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Id. Instead, the agency said, s 395.8(k)(1) "provided [the

carrier] with reasonable notice of a duty to keep ordinary

business documents so that the record of duty status of its

drivers could be verified"--specifically including documents

containing "information such as mileage, origin, destination,

stops, expenses, [and] tolls." Id. at 5 (emphasis added).5

In sum, in the midst of the period in which the FMCSA

issued the ambiguous guidances relied upon by Andrews, it

issued a clear decision that confirms the interpretation applied by the agency in this case. Andrews is therefore unable

__________

5 Another FMCSA decision cited by Andrews, In re Ace Doran

Hauling & Rigging Co. (FMCSA Feb. 24, 2000), is inapposite.

That case involved the question of whether a motor carrier was

required to obtain and retain the toll receipts of drivers who, unlike

Andrews' drivers, were owner-operators rather than employees.

The agency concluded that "the supporting documents rule is not

applicable to toll receipts received by [Ace Doran's] owner operator

drivers since [Doran] does not reimburse them for highway tolls ...

and therefore does not, in the normal course of business, require

these drivers to submit toll receipts." Id., FMCSA slip op. at 2.

Here, by contrast, there is no dispute that Andrews does reimburse

its drivers, and does require them to submit toll receipts in the

ordinary course of its business.

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to show that the decision below represents a substantial

change in the agency's construction of s 395.8(k)(1).

B

Andrews further contends that, even if toll receipts are

supporting documents and therefore must be maintained,

s 395.8(k)(1) does not require motor carriers to maintain

them in a way that permits the FMCSA to match them with

their corresponding drivers. Andrews argues that the

phrase, "shall maintain ... all supporting documents for each

driver," requires maintenance only and does not specify the

manner in which the documents must be maintained. The

agency, by contrast, argues that "maintain" is reasonably

construed to mean maintain in a usable condition: here, that

the carrier may not take documents that it receives in a

format that permits identification of individual drivers, and

then merge them so that the individual identifications are

lost. Once again, we find the agency's interpretation reasonable.

Although s 395.8(k)(1) does not define "maintain," it is

hardly arbitrary to construe the regulation in light of its

purpose--which is to ensure "the enforceability of the hours

of service regulations and ... the protection to the public

which these regulations provide." Driver's Logs, 47 Fed.

Reg. 7702, 7702 (Feb. 22, 1982). If the carrier maintains the

toll receipts (which usually do not have the individual driver's

name on them) in the manner in which they arrive at its

office--i.e., in the individual driver's trip envelope--it is possible for both the carrier and the FMCSA to enforce those

regulations. If, instead, Andrews removes the receipts and,

without copying or otherwise marking them, combines them

with the receipts of all other drivers, correlation with individual drivers becomes impossible and the purpose of the regulation is frustrated. It is thus not unreasonable for the agency

to read "maintain" in a way that bars the latter practice.

Andrews seeks support for its position in the following

passage from the 1993 and 1997 guidances cited above:

Supporting documents may include other documents

which the motor carrier maintains and can be used to

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verify information on the driver's records of duty status.

If these records are maintained at locations other than

the principal place of business but are not used by the

motor carrier for verification purposes, they must be

forwarded to the principal place of business upon a

request by an authorized representative of [the FMCSA]

or State official within 2 business days.

58 Fed. Reg. at 60,761, repeated in 62 Fed. Reg. at 16,425

(emphasis added). Andrews contends that the italicized

clause recognizes that a carrier may keep records that it does

not use for verification, like the toll receipts in this case, at a

location remote from the place at which it keeps the driver's

RODS. But while Andrews is correct in concluding that

supporting documents may be removed from their original

location, the passage also makes clear that the documents

must quickly be returned upon the request of an FMCSA

investigator. And since the investigator's purpose in requesting return is to permit verification of the information in the

driver's RODS, it is not unreasonable for the agency to insist

that, if the documents are removed, they must be handled in

a fashion that permits them to be matched with their original

driver.

Andrews also contends that the FMCSA's decision in this

case amounts to the de facto adoption of a recordkeeping

requirement considered but rejected in the 1998 NPRM.

Like that requirement, Andrews asserts, the FMCSA decision requires the carrier to "toe tag" (label by driver) every

supporting document, create a system of cross-indexing, and

then file each document accordingly. But that is not an

accurate description of the decision below. This case involves

a document (a toll receipt) that Andrews concedes it receives

in the ordinary course of business, and that it receives in a

manner (inside the driver's trip envelope) that permits identification of the driver who submitted it. All the FMCSA's

decision requires is that Andrews retain such documents (for

six months) and refrain from destroying the agency's ability

to match them with their associated drivers by taking them

out of their original envelopes and tossing them into a common pile. In short, the FMCSA's decision does not require

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Andrews to index these documents; it merely bars the carrier

from de-indexing them (at least without copying or labeling

them first).6

Our conclusion, that the FMCSA has reasonably interpreted s 395.8(k)(1) as barring Andrews from irretrievably commingling its drivers' toll receipts, is in accord with the views

of the only other circuit to have considered the question. In

A.D. Transport Express, Inc. v. United States, the Sixth

Circuit considered the FMCSA's conditional rating of a motor

carrier that, like Andrews, treated its drivers' toll receipts in

a fashion that prevented their comparison with the associated

driver's RODS. 290 F.3d 761 (6th Cir. 2002), aff'g In re A.D.

Transport Express, Inc., No. 00-05-296052 (FMCSA May 22,

2000). A.D. Transport received a driver's packet from each

driver, containing (inter alia) the driver's toll receipts, bills of

lading, fuel receipts, and logs. When the payroll department

finished with the toll receipts, it "lumped" the receipts for all

its drivers "into one large envelope" for each month of the

year--making correlation of receipts and drivers impossible.

The FMCSA found A.D. Transport to have violated

s 395.8(k)(1), holding that "supporting documents must be

maintained by the carrier in a manner that will allow an

agency investigator to compare those documents to the

RODS." In re A.D. Transport, FMCSA slip op. at 5, quoted

in A.D. Transport, 290 F.3d at 766.

The Sixth Circuit affirmed, concluding that "the FMCSA's

interpretation of 49 C.F.R. s 395.8(k) is reasonable and consistent with the language of the regulations." A.D. Transport, 290 F.3d at 766. It found that A.D. Transport's practice

"rendered the toll receipts nearly useless in verifying a

driver's RODS," and that while it was semantically possible to

__________

6 Similarly, in A.D. Transport, discussed below, the FMCSA

emphasized that the toll receipts at issue there were "already

grouped nicely together by driver" when the carrier received them.

In re A.D. Transport, FMCSA slip op. at 6. It was only the

"carrier[']s own overt action that resulted in the separation of the

supporting documents from the RODS without first taking proper

steps to cross reference the documents back to the driver's RODS."

Id.

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construe "maintain" as requiring nothing more than what

A.D. Transport did, the FMCSA's interpretation better

served the statutory purpose of promoting the safe operation

of commercial motor vehicles. Id. at 767. Finally, the court

also held that, because the FMCSA's decision "did nothing

more than interpret an existing regulation" and "did not

change any existing law or policy," it "was an interpretative

rule exempt from the notice and comment requirements of

the Administrative Procedure Act." Id. at 768. We are in

accord with the views of the Sixth Circuit, and therefore

reject the claim of the petitioner here.7

IV

Andrews' next argument is that, even if the FMCSA's

interpretation of s 395.8(k)(1) is reasonable and unchanged,

"Andrews had no fair notice that its satisfactory safety rating

was in jeopardy" for failing to maintain its drivers' toll

receipts in an identifiable fashion. Andrews Br. at 18. In

General Electric Co. v. EPA, we held that "[i]n the absence of

notice--for example, when the regulation is not sufficiently

clear to warn a party about what is expected of it--an agency

may not deprive a party of property by imposing civil or

criminal liability." 53 F.3d 1324, 1328-29 (D.C. Cir. 1995).8

As the discussion in Part III.A suggests, there is something

to Andrews' argument that the agency has been less than

clear as to whether the term "supporting documents" extends

__________

7 Andrews correctly notes that, although the Sixth Circuit opinion

does not mention it, the carrier in A.D. Transport, unlike Andrews,

used the toll receipts to verify the accuracy of its drivers' RODS.

See In re A.D. Transport, FMCSA slip op. at 2, 3. That fact,

however, goes only to the question of whether the toll receipts

should be characterized as "supporting documents," not to the

manner of their retention. As we have concluded that Andrews' toll

receipts are supporting documents regardless of whether they are

actually used for RODS verification, the Sixth Circuit's decision is

directly on point regarding how such documents must be maintained.

8 General Electric applies where the a party is deprived of

"property," or where "sanctions are drastic." Id. at 1328-29.

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to records, like Andrews' toll receipts, that could be but are

not actually used by a carrier to verify its drivers' RODS.

Although the regulatory language may not itself be so unclear

as to implicate the General Electric rule, the selfcontradictory "clarifying" utterances of the agency could have

left a carrier confused about what was required of it. For

that, the agency has no one but itself to blame. Despite

Congress' 1994 direction that the FMCSA issue a regulation

elucidating the term's coverage, the agency has still inexplicably failed to act.

Notwithstanding the ambiguity of the regulatory guidances,

however, the FMCSA's 1996 opinion in National Retail

Transportation was crystal clear on this point. It expressly

rejected the claim that supporting documents are only those a

motor carrier actually uses, and specifically listed tolls as the

kind of information included within the realm of "supporting

documents."9 Moreover, Andrews' early reaction to its 2000

citation strongly suggests that the employer was not in doubt

that s 395.8(k)(1) requires it to maintain toll receipts. The

carrier's petition for administrative review did not dispute

that toll receipts are supporting documents, but claimed only

that the regulation did not require that "all supporting documents [be] filed by each driver." J.A. at 7 (emphasis omitted). Similarly, the affidavit of Andrews' safety director

acknowledged that "I retain toll receipts for at least six

months to comply with 49 C.F.R. 395.8(k)." Jones Aff. at 2

(J.A. at 14).10 Indeed, despite the legal arguments Andrews

__________

Because we conclude that Andrews received fair notice, we need not

decide whether the issuance of a "conditional" rating meets those

prerequisites.

9 Although Andrews contends that the FMCSA's decisions are not

widely available, it concedes that they are available on the FMCSA

website. Andrews Br. at 17 n.7. That is sufficient notice for a wellrepresented regulated entity as intensely interested in the issue as

is Andrews.

10 Andrews did dispute that toll receipts are supporting documents in the brief it filed in support of its administrative appeal.

J.A. at 38.

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raises here, the fact is that Andrews does retain its toll

receipts: the carrier was not downgraded for not having toll

receipts, but for refiling them in a manner that left them

useless.

The only remaining question, therefore, is whether Andrews had sufficient notice that the FMCSA regarded Andrews' practice of combining drivers' toll receipts as a violation of s 395.8(k)(1). On that point, this court has no doubt.

Under General Electric, an "agency's pre-enforcement efforts

to bring about compliance will provide adequate notice." 53

F.3d at 1329. And as the agency points out, Andrews was the

subject of many such efforts.

In response to the fair notice argument below, the FMCSA

held that Andrews "has previously been put on notice that

[its] method of retention of supporting documents (including

toll receipts) does not conform to the regulatory requirements," specifically citing Andrews' March 1997 compliance

review. Andrews Trucking, FMCSA slip op. at 9. In that

review, Andrews was cited for violating s 395.8(k)(1), because

its drivers had submitted "[f]alse reports of record of duty

status" and because "supporting documents are not identifiable to the driver[']s corresponding record of duty status."

J.A. at 62. The review went on to advise Andrews to "ensure

all documents supporting records of duty status (such as toll,

fuel[,] repair and other on-the-road expense receipts ...) ...

are identified to the corresponding drivers' record of duty

status." J.A. at 63 (emphasis added).11

Nor was March 1997 the first or last time Andrews was

warned prior to the instant citation. In Andrews' July 1991

compliance review, the FMCSA discovered ten instances in

__________

11 Andrews contends that it was entitled to regard this advice as

optional because it was listed in a part of the compliance review

sheet labeled "Recommendations." In light of the other instructions listed under the same heading, that was not a reasonable

reading. See J.A. at 63 (requiring Andrews, inter alia, to "ensure

all drivers are fully and properly qualified," "maintain all required

controlled substance testing records," and "ensure all drivers' records of duty status are accurate").

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which drivers had falsified their RODS. Administrative Record (A.R.) doc. 12, at 2. Andrews was cited for not having "a

system to effectively control the drivers' hours of service."

Id. at 6. The investigators specifically noted: "Carrier has

change[d] his method of filing documents since the last prosecution. Toll records are thrown in a box." Id. at 7. Thereafter, in a September 1993 compliance review, Andrews was

again cited for allowing drivers to submit "[f]alse reports of

records of duty status," and for allowing drivers to drive in

excess of the maximum-hour limitations. A.R. doc. 14, at 2.

The FMCSA specifically noted that Andrews had "reduce[d]

the probability of identifying a false record of duty status by

mainta[in]ing toll receipts by payroll period, not by driver."

Id. at 5. Finally, in a December 1997 compliance review, the

investigators once again noted that Andrews had "taken the

toll tickets from the driver's expense envelope and placed

these documents in a box with other driver[s'] toll tickets."

A.R. doc. 18, at 6. This meant, the investigators said, that

the toll receipts could not "be used to check the driver's logs

for accuracy." It "appear[ed]," they continued, that "the

carrier has taken steps to make it difficult to determine if the

drivers are in a specific location at a certain time." Id.12

Nor were these citations Andrews' only notice of the

FMCSA's interpretation of the recordkeeping requirements.

As we have discussed above, six months before it issued the

citation to Andrews, the FMCSA held in A.D. Transport that

a carrier's practice of removing toll receipts from its individual drivers' packets and combining them in large envelopes

__________

12 Andrews urges us not to consider these prior compliance

reviews, on the ground that they were not relied upon by the

FMCSA below and were outside the administrative record. Andrews is wrong on both counts. In the FMCSA opinion, the

associate director for motor carriers stated: "I have reviewed the

prior CRs [compliance reviews] conducted on this carrier and

conclude that Darrell Andrews Trucking has previously been put on

notice...." Andrews Trucking, FMCSA slip op. at 9. Moreover,

the certified index to the administrative record makes clear that the

compliance reviews of July 1991, September 1993, March 1997, and

December 1997 were all part of that record. See J.A. at 3-4.

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violated s 395.8(k)(1) and warranted a conditional safety rating. In re A.D. Transport, FMCSA slip op. at 6. Thus, even

if nothing else did, A.D. Transport put Andrews squarely on

notice that it should cease the filing practices against which it

had been repeatedly warned throughout the 1990s. This is

not a case in which a regulated entity required "extraordinary

intuition or ... the aid of a psychic" to anticipate being found

in violation of a regulation. United States v. Chrysler Corp.,

158 F.3d 1350, 1357 (D.C. Cir. 1998). Rather, it is a case in

which the carrier persisted in its ways despite clear and

repeated warnings from the relevant government agency.

Andrews, therefore, can find no refuge in the doctrine of fair

notice.

V

Andrews also argues that the requirement that toll receipts

be retained, and retained in a way that permits the FMCSA

to match them to its drivers' RODS, violates the Paperwork

Reduction Act, 44 U.S.C. ss 3501-3520. That statute bars

the enforcement of a recordkeeping requirement unless it is

first approved by the Office of Management and Budget

(OMB). Id. ss 3507, 3512. The FMCSA does not dispute

the application of the Act to the recordkeeping requirements

of s 395.8(k)(1), but argues that the statute has been satisfied

because OMB approved the regulation when it was promulgated in 1982. See Driver's Logs, 47 Fed. Reg. 53,383, 53,383

(Nov. 26, 1982); see also 63 Fed. Reg. at 19,464 (referring to

past OMB approvals of s 395.8(k)(1) recordkeeping requirements).

Andrews contends that the original approval by OMB is

insufficient because the FMCSA has materially changed the

meaning of the regulation, and that the new meaning amounts

to a new recordkeeping burden regardless of whether the

agency acknowledges the point by promulgating a new rule.

See 44 U.S.C. s 3507(h)(3) (providing that "an agency may

not make a substantive or material modification to a collection

of information after such collection has been approved by

[OMB], unless the modification has been submitted to [OMB]

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for review and approval"). This argument has little traction,

however, as we have already accepted the agency's position

that its current interpretation does not depart from the

original. Andrews might nonetheless prevail if it could demonstrate that, whatever the FMCSA thought in 1982, OMB

understood the regulation differently. But this Andrews

cannot do either, as the 1982 announcement of OMB approval

did not describe what documents either agency thought were

within the scope of the regulation. See 47 Fed. Reg. at

53,383.

In a related vein, Andrews argues that the FMCSA's latest

estimate of the burden posed by its current interpretation is

substantially higher than its estimate of the burden of the

original rule. If true, this could suggest that the agency is

indeed requiring more than it did when the rule was first

promulgated.13 The cited estimates, however, do not support

Andrews' argument.

Once again, the document Andrews points to is the 1998

NPRM. There, the FMCSA stated that it believed the

burden imposed by fully implementing the Hazardous Materials Transportation Authorization Act of 1994 "would be more

than is currently expected" and "at least 219,095,423 hours."

63 Fed. Reg. at 19,465. Although the NPRM did not state

the "currently expected" burden, Andrews points to a roughly

contemporaneous submission by the Department of Transportation that put the figure at 14,284,339 hours.14 Andrews

contends that the difference results from the Hazardous

Materials Act's requirement that all documents that "could be

used" to verify RODS must be retained and indexed, while

__________

13 However, because the paperwork burden of a regulation is

measured by computing the total number of "burden hours" it

imposes on a nationwide basis, an increased burden may only

indicate that there are now more carriers, more drivers, and more

documents of the same kind than there were in 1982. See, e.g.,

FHWA, Paperwork Reduction Act Submission, Supporting Statement at 6 (July 30, 1998).

14 FHWA, Paperwork Reduction Act Submission, Supporting

Statement at 6.

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the original regulation required nothing more than retention

of those documents that actually are used to verify RODS.

The 1998 NPRM, however, does not corroborate Andrews'

argument. The estimated 219,095,423-hour burden was not

for maintaining, in the manner in which they were received

by the carrier, all documents that could be used to verify a

driver's RODS. To the contrary, the agency indicated that

merely defining supporting documents as the 1994 Act defined them (i.e., as those that "could be" used) "is not a new

paperwork burden." Id. at 19,464. The "collection of documents" under that definition, the FMCSA said, "has been

calculated into past paperwork burden approvals of the Office

of Management and Budget." Id. Rather, the 219-millionhour burden was for a new rule the agency considered but did

not propose: a rule that would have required carriers to

"audit each one" of 23 supporting documents for a minimum

of five items, "compare the documents to the RODS," and

"fil[e] and stor[e] the 23 records." Id. at 19,465. That was

the task the agency said was "more than is currently expected" and that it rejected as too burdensome. Id. And as we

have explained in Part III.B above, that is not the task

required by the decision below.

In sum, because the FMCSA's decision in this case relies

upon a reasonable interpretation of a regulation previously

cleared by OMB under the Paperwork Reduction Act, and

does not represent the imposition of a new rule or recordkeeping burden, the Act does not bar enforcement of the

interpretation against Andrews.15

VI

Andrews further contends that, in reaching its decision to

downgrade the carrier's safety rating, the FMCSA violated

the procedural requirements of both the APA and the Constitution. In particular, it contends that the FMCSA improper-

__________

15 For the same reason, we reject Andrews' assertion that the

FMCSA violated the Regulatory Flexibility Act, 5 U.S.C. ss 601-

612, by effectively issuing a new rule without undertaking a costbenefit analysis to determine the rule's impact on small business.

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ly denied its request for an oral hearing and discovery.

These arguments require only brief mention.

Andrews argues that it was entitled to an oral hearing and

discovery by the provisions of 49 C.F.R. ss 386.35 and 386.43.

The FMCSA, however, held that those provisions do not

apply to the downgrading of a safety rating under Part 385,

but only to three specific types of proceedings under Part

386, none of which is at issue here. Andrews Trucking,

FMCSA slip op. at 3. This court has previously reached the

same conclusion. See MST Express, 108 F.3d at 405 (holding

that the procedures of Part 386 do not apply to a proceeding

to determine a carrier's safety rating, and that "a carrier that

disputes its safety rating is not entitled to an administrative

hearing"). Nor is there anything in the APA or any relevant

statute that requires these procedural incidents for informal

adjudications like this one. Accordingly, we are powerless to

order the agency to do more. See Vermont Yankee Nuclear

Power Corp. v. NRDC, 435 U.S. 519, 524 (1978); Hi-Tech

Furnace Sys., Inc. v. FCC, 224 F.3d 781, 789-90 (D.C. Cir.

2000); see also Trailways Lines, Inc. v. ICC, 766 F.2d 1537,

1546 (D.C. Cir. 1985) ("The conduct and extent of discovery in

agency proceedings is a matter ordinarily entrusted to the

expert agency in the first instance and will not, barring the

most extraordinary circumstances, warrant the Draconian

sanction of overturning a reasoned agency decision.").

Andrews' additional contention, that not providing an oral

hearing and discovery (principally regarding the unreliability

of toll records) violates the Due Process Clause of the Constitution, is also groundless. Without deciding whether the

conditional safety rating at issue deprives Andrews of the

kind of protected interest that triggers application of the

clause, see Lepelletier v. FDIC, 164 F.3d 37, 45 (D.C. Cir.

1999), it is clear that Andrews did receive due process here.

The FMCSA citation put Andrews on notice of the charges,

Andrews had an opportunity to present its arguments

through written briefs, and the carrier similarly had an

opportunity to present evidence of the unreliability of toll

receipts by affidavit. Procedural due process requires no

more in this kind of administrative setting. See Lomak

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Petroleum, Inc. v. FERC, 206 F.3d 1193, 1199-200 (D.C. Cir.

2000).

VII

Finally, we consider Andrews' argument that it was arbitrary and capricious for the FMCSA to downgrade the carrier's safety rating, based on its treatment of toll receipts,

when evidence shows that such receipts are unreliable. In

support, Andrews submitted an affidavit from its safety director, stating: "Toll receipts are not used to verify logs

because they have proven to be unreliable. On many occasions authorities mass produce toll receipts in order to handle

peak traffic volumes. Consequently, drivers often have receipts that do not reflect the actual time the driver is at that

location." Jones Aff. at 2 (J.A. at 14). The FMCSA's

decision did not address Andrews' contention regarding the

reliability of toll receipts.

Andrews' argument is a substantial one, and requires an

answer from the agency. See Frizelle v. Slater, 111 F.3d 172,

177 (D.C. Cir. 1997) (concluding that an agency decision was

arbitrary because it did not respond to non-frivolous arguments that could affect the agency's ultimate disposition). If

Andrews is correct, and toll receipts are in fact unreliable

(and misleading) records of the time drivers are actually on

the road, then it might well be arbitrary and capricious for

the agency to regard such worthless records as "supporting

documents" and to downgrade a carrier for failing to retain

them. Of course, we have no idea whether Andrews is

correct on this point. In National Retail Transportation, for

example, the agency rejected a similar argument on the

ground that there were serious flaws in the evidence of

unreliability offered by the motor carrier. National Retail

Transportation, FMCSA slip op. at 5-6. Perhaps that is the

case here as well. But without any explanation at all by the

agency, we cannot use that as a ground for affirming its

decision. See American Mun. Power--Ohio, Inc. v. FERC,

863 F.2d 70, 73 (D.C. Cir. 1988) ("[W]e cannot uphold the

agency's decision 'on the same basis articulated' where the

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agency's decision articulates none." (quoting Burlington

Truck Lines, Inc. v. United States, 371 U.S. 156, 169 (1962))).

We must therefore remand the case so that the FMCSA may

answer this argument. See Iowa v. FCC, 218 F.3d 756, 759

(D.C. Cir. 2000) (remanding where agency failed to address

substantial argument).

VIII

We conclude that the FMCSA reasonably interpreted the

relevant regulation, provided Andrews with fair notice of that

interpretation, complied with the requirements of the Paperwork Reduction Act, and afforded the carrier appropriate

process before downgrading its safety rating. However, because the agency failed to address a significant challenge to

the rationality of its decision in this case, we remand the case

to the agency for further proceedings consistent with this

opinion.

Remanded.

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