In an opinion issued Oct. 31, 2016, the U.S. Court of Appeals for the Seventh Circuit rejected a challenge to a Federal Motor Carrier Safety Administration (FMCSA) rule that will require most commercial motor vehicles to be equipped with an electronic logging device, or “ELD,” by December 2017 (the “ELD Rule”). We previously discussed the history and requirements of the ELD Rule in a Dec. 18, 2015 client alert.
The petition to challenge the ELD Rule was brought by the Owner-Operator Independent Drivers Association and two individual drivers. In denying the petition, the Seventh Circuit held that the ELD Rule sufficiently complies with a statutory directive that ELDs must be capable of “automatically” recording a driver’s hours of service, notwithstanding that some level of driver involvement will still be required to enter information into an ELD. The court also held that the FMCSA had sufficiently protected drivers from harassment, adequately considered the confidentiality of information that will be collected by ELDs, and was not required to conduct a cost-benefit analysis in promulgating the ELD Rule (although the court held that FMCSA’s research studies were sufficient even if a cost-benefit analysis were required).
In response to the petitioners’ challenge to the ELD Rule on Fourth Amendment grounds, the court held that even if the ELD Rule mandated a search or seizure for Fourth Amendment purposes, such a search or seizure was exempt from the warrant requirement under an exception for reasonable administrative inspections in “pervasively regulated industries.” The petitioners have indicated that they are considering their options to continue their challenge to the ELD Rule, potentially including an appeal to the U.S. Supreme Court.
Motor carriers that are subject to the ELD Rule should review their operations for compliance with the new requirements to prepare for the December 2017 deadline. In doing so, carriers should consider how compliance with the ELD Rule impacts other regulatory considerations, including compliance with federal truth-in-leasing regulations. In another recent decision that could impact how carriers comply with the ELD Rule, available here, the U.S. Court of Appeals for the Tenth Circuit held that a motor carrier violated truth-in-leasing regulations — specifically, 49 C.F.R. § 376.12(i) — by requiring, as a condition of entering into a lease arrangement, that truckers pay $15 each week for use of the carrier’s satellite communications system.
In considering how to manage the costs of the ELD Rule and the challenges of integrating different devices into communication and fleet management systems, carriers should consider all of their regulatory obligations to ensure regulatory compliance and prevent enforcement or litigation.
The Transportation Industry Team at McGuireWoods LLP
The transportation industry team at McGuireWoods LLP has extensive experience advising clients in the trucking industry regarding regulatory and risk management issues, and is available to respond to questions regarding the ELD Rule and other regulatory considerations.