Sunset Transp., Inc. v. Tex. Dep't of Transp.
| Decision Date | 21 April 2017 |
| Docket Number | NO. 03–14–00385–CV,03–14–00385–CV |
| Citation | 557 S.W.3d 50 |
| Parties | SUNSET TRANSPORTATION, INC. and MEL Transport, Inc. d/b/a Magnum Transportation, Inc., Appellants v. TEXAS DEPARTMENT OF TRANSPORTATION; James M. Bass, in his Official Capacity as Director of Texas Department of Transportation; Texas Department of Motor Vehicles; and Whitney Brewster, in her Official Capacity as Director of Texas Department of Motor Vehicles, Appellees |
| Court | Texas Court of Appeals |
Kent J. Lisenby, for Sunset Transportation, Inc., MEL Transport, Inc. d/b/a Magnum Transportation, Inc.
Amy Kovar Owens, for the Texas Department of Transportation, James M. Bass, in his Official Capacity as Director of Texas Department of Transportation, Whitney Brewster, in her Official Capacity as Director of Texas Department of Motor Vehicles.
Before Justices Puryear, Pemberton, and Bourland
Federal law requires inter state motor carriers to annually register and pay fees through what is known as the "Unified Carrier Registration" process. Texas law also imposes certain registration, fee, and financial-responsibility requirements on motor carriers as a prerequisite to operating intra state within our state's borders. The dispositive issues in this appeal concern whether an interstate motor carrier's compliance with the Unified Carrier Registration requirements excuses it, by virtue of either federal preemption or Texas law's own internal limitations, from complying with Texas requirements with respect to any intrastate operations it also conducts here. We conclude it does not, at least with respect to the Texas requirements at issue here.
At a much earlier juncture, the underlying litigation gave rise to an interlocutory appeal from a jurisdictional challenge that we addressed in Texas Department of Transportation v. Sunset Transportation, Inc. ( Sunset I ).2 As suggested in our opinion there, one needs an introductory explanation of a complicated regulatory scheme just to understand what the parties' dispute is about.
Regulation of interstate versus intrastate motor-carrier operations
The bedrock of this legal landscape is Congress's constitutionally enumerated power to regulate interstate commerce3 and the corresponding limitations on state power to discriminate against or unduly burden interstate commerce that this express grant has been held to imply.4 Under color of this authority, Congress has enacted statutes regulating motor-carrier operations in interstate commerce,5 including requiring such carriers to register for and obtain what is termed federal "operating authority" from the Department of Transportation (, the Federal Motor Carrier Safety Administration) as a prerequisite to market entry.6 This registration process, in turn, requires compliance with various additional prerequisites that include registering for and obtaining a "USDOT number" from the Department,7 filing with the Department the designation of an agent for service of process in each state through which the carrier operates,8 and providing proof of financial responsibility of a nature and minimum amount the Department prescribes.9
The Texas Legislature has similarly enacted regulatory statutes that apply to motor-carrier operations within this state. These enactments include Chapter 643 of the Texas Transportation Code,10 which imposes, as a prerequisite to operating a commercial motor vehicle on "a road or highway of this state," a regime of registration and filing requirements that is currently administered by the Texas Department of Motor Vehicles (TDMV).11 To obtain this Texas state version of operating authority, Chapter 643 requires a motor carrier to, inter alia , file an application providing its name, address, agent for service of process (if different), and a description of each motor vehicle requiring registration, accompanied by a $100 "application fee" plus a $10 fee for each vehicle.12 The registrant must also file proof of insurance13 for each vehicle, in an amount set by TDMV that cannot exceed the amounts prescribed in the counterpart federal requirements, accompanied by an additional filing fee.14 Assuming the registration is approved by TDMV, the agency issues a registration certificate and, for each vehicle, a "cab card" that must be carried onboard.15
Of particular importance for this case, Chapter 643 generally requires that a motor carrier's state operating authority must be renewed periodically, typically on an annual basis.16 The process for renewing a motor carrier's state operating authority generally entails payment of a registration renewal fee and providing evidence of continuing insurance.17 In addition to requiring proof of insurance in connection with an initial or renewal registration, Chapter 643 requires a motor carrier to make such a filing if it fails to maintain registration and has to register anew, or if it changes ownership or insurers.18
The TDMV has implemented these and related statutory requirements through rules now codified in Subchapter B of Title 43, Chapter 218 of the Texas Administrative Code.19 Specific provisions of significance to this case include:
Of final note, Chapter 643 and TDMV's rules authorize the agency to revoke a motor carrier's state registration on grounds that include failure to maintain the required insurance.26 In that event, a motor carrier has resort to a contested-case hearing process to oppose the action.27 If a registration is revoked, the motor carrier may retain its prior certificate of registration number by filing a "supplemental" application to "re-register" in lieu of a new original application, together with "adequate evidence that [it] has satisfactorily resolved the facts that gave rise to the ... revocation."28 But the supplemental application must be accompanied by a new filing of proof of insurance and a $100 insurance-filing fee.29
The parties agree that, for purposes of our analysis here, the federal registration regime applies to motor carriers that operate in interstate commerce ("interstate motor carriers"), while motor carriers that operate intrastate within Texas would be subject to the Texas regime. Their dispute arises in an area of overlap between the two regimes—interstate motors carriers who also operate intrastate in Texas. More specifically, the dispute concerns the ramifications of an additional layer of the federal regulatory regime applicable to interstate motor carriers—the Unified Carrier Registration Act of 2005 (UCR Act)30 —and the extent to which the UCR Act limits the authority Texas otherwise would exercise over the Texas intrastate operations of interstate motor carriers.
The UCR Act is best understood against a historical backdrop of federal measures that had authorized states to require (or more precisely, provided that states would not be considered to unduly or unreasonably burden interstate commerce by requiring) proof of the federal operating authority of an interstate motor carrier that operates through the states' respective boundaries.31 Initially, the federal government permitted these state laws to take the form of annual registration requirements with accompanying fees of up to $10 per vehicle, per year.32 Such requirements were to be administered by each participating state individually, meaning that interstate motor carriers were required to register and pay fees annually to each separate state through which their vehicles might pass during the ensuing year. To verify compliance, carriers would be issued a state-specific stamp that they would then affix to a multistate "cab card" (a/k/a "bingo card") that had to be carried within the vehicle.33
Over time, Texas and thirty-eight other states came to impose these registration and fee requirements, giving rise to complaints that state-by-state compliance under the "bingo card" system had grown too burdensome for interstate motor carriers.34 Acting on such concerns, Congress in the 1990s enacted legislation establishing a new "Single State Registration System," whereby an interstate motor carrier was deemed to have complied with the registration requirements of all of the participating states through which it operated if the carrier registered in a single "base State" and paid that state a total fee representing the sum of the individual states' fees, which the base state would then disburse among the relevant participating states according to their respective shares.35 In lieu of the "bingo card" and multiple state stamps of the...
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...the trial court, subject-matter jurisdiction is an issue that may be raised for the first time on appeal. See Sunset Transp., Inc. v. Tex. Dep't of Transp., 557 S.W.3d 50, 64 n. 81 (Tex. App.—Austin 2017, no pet.) ("While appellees did not perfect their own appeal and would generally be req......
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