Used Equipment Sales, Inc. v. Department of Transp., 93-1675

Citation54 F.3d 862
Decision Date23 May 1995
Docket NumberNo. 93-1675,93-1675
PartiesFed. Carr. Cas. P 83,972, 312 U.S.App.D.C. 29 USED EQUIPMENT SALES, INC., Petitioner, v. DEPARTMENT OF TRANSPORTATION; Federal Highway Administration; Federico F. Pena, Secretary of Transportation, Respondents.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

William E. Kenworthy, Washington, DC, argued the cause and filed the briefs for petitioner.

Edward Himmelfarb, Attorney, Dept. of Justice, Washington, DC, argued the cause for respondents. With him on the brief were Frank W. Hunger, Asst. Atty. Gen., and Freddi Lipstein, Attorney, Dept. of Justice, Washington, DC. Anthony J. Steinmeyer, Washington, DC, entered an appearance for respondents.

Before BUCKLEY, GINSBURG, and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

Used Equipment Sales, Inc., a motor carrier regulated under the Motor Carrier Safety Act of 1984, petitions for review in part of an order of the Federal Highway Administration determining that Used Equipment committed numerous violations of the Federal Motor Carrier Safety Regulations, 49 C.F.R. Sec. 391, et seq., and assessing penalties therefor. We hold that the FHWA did not err in imposing upon the petitioner 13 separate fines under 49 U.S.C. Sec. 521(b)(2)(A) for 13 times dispatching disqualified drivers, in violation of 49 C.F.R. Sec. 391.15, but that it lacked sufficient evidence to conclude that three of the violations of Sec. 391.15 constituted "substantial health or safety violation[s]."

I. BACKGROUND

The FHWA charged that Used Equipment committed 32 violations of the Federal Motor Carrier Safety Regulations, 49 C.F.R. Sec. 391, et seq. Thirteen of those violations were predicated upon 13 separate dispatches involving three drivers whose licenses had been suspended. See 49 C.F.R. Sec. 391.15(a) ("a motor carrier shall not ... permit a driver who is disqualified to drive a commercial motor vehicle"). An Administrative Law Judge held that each of the 13 dispatches constituted a separate "substantial health or safety violation ... which could reasonably lead to ... serious personal injury or death" within the meaning of 49 U.S.C. Sec. 521(b)(2)(A), and assessed a separate fine for each violation. Used Equipment appealed, but the Associate Administrator for Motor Carriers affirmed the decision of the ALJ.

Used Equipment now petitions for review of that portion of the Final Order in which the FHWA imposed civil penalties for the dispatch of disqualified drivers. It advances three arguments: first, that the 13 separate fines constitute "cumulative daily penalties" for violations of 49 C.F.R. Sec. 391.15 and that such penalties are not permitted by Sec. 521(b)(2)(A); second, that with respect to one of the drivers the ALJ's finding that it "should have known" of the disqualification is not supported by substantial evidence; and third, that the dispatch of that driver could not constitute a "substantial health or safety violation" in the absence of evidence showing that his license had been suspended for a health- or safety-related reason.

II. ANALYSIS

The FHWA may assess a civil penalty against a motor carrier under any of three separate provisions of 49 U.S.C. Sec. 521(b)(2)(A). First, for violation(s) of a "recordkeeping requirement," the agency may assess a penalty of up to $500 for each offense, where "[e]very day of a violation ... constitute[s] a separate offense." Second, for a "serious pattern of safety violations, other than recordkeeping requirements," the agency may assess a fine of up to $1,000 for each offense, up to a total of $10,000 for all offenses in the pattern. Finally, for "a substantial health or safety violation ... which could reasonably lead to ... serious personal injury or death," the agency may assess a penalty "not to exceed $10,000 for each offense." Although the fines challenged by Used Equipment were all imposed under the third provision, as will be seen below an understanding of the other provisions and of the structure of the penalty section of the statute is relevant to the petitioner's arguments.

A. The Thirteen Violations

Used Equipment argues first that the FHWA erred in charging a separate violation of 49 U.S.C. Sec. 521(b)(2)(A) for each violation of 49 C.F.R. Sec. 391.15. Characterizing the FHWA's imposition of 13 "substantial health or safety violations" predicated upon 13 violations of Sec. 391.15 as "cumulative daily penalties," the petitioner contends that "in the absence of express authority, per diem penalties may not be imposed." Moreover, because 49 U.S.C. Sec. 521(b)(2)(A) specifically provides that "each day" of a recordkeeping offense is a separate violation but makes no similar provision for a "substantial health or safety violation," Used Equipment urges that the Congress "explicitly withheld the right to charge per diem penalties for offenses that did not involve recordkeeping." The petitioner also cites a number of cases for the proposition that there is a presumption against the imposition of cumulative penalties for a continuing offense. See, e.g., Brown v. Ohio, 432 U.S. 161, 97 S.Ct. 2221, 53 L.Ed.2d 187 (1977) (auto theft conviction for ninth day of nine-day joyride improper where defendant also convicted based upon first day of theft); United States v. Bennett, 623 F.2d 52 (8th Cir.1980) (striking down two of three convictions for operating gambling business for three consecutive days).

Used Equipment's argument mischaracterizes the FHWA's decision. The FHWA did not impose "cumulative daily penalties" because it did not impose a fine for each day that a disqualified driver was on the road. Instead, as is clear from the ALJ's decision, which the agency affirmed and adopted, the FHWA imposed a fine for each time the petitioners dispatched a driver who was disqualified.

In another line of attack upon the 13 fines, Used Equipment first makes much of the fact that Sec. 521(b)(2)(A) does not provide in terms that each dispatch may be regarded as a separate violation. It then goes on to argue that "even if the statute authorized such treatment, there is no evidence in the record as to the number of occasions upon which each driver was 'dispatched.' "

Taking up the legal point first, we review the FHWA's interpretation of the statute it administers under the familiar teaching of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). As the Congress has not "directly spoken to the precise question" whether each dispatch of a disqualified driver is a separate "substantial health or safety violation," we will defer to the FHWA's interpretation if it is reasonable in light of the text, the structure, and the underlying purpose of Sec. 521(b)(2)(A). Id. at 842-43, 104 S.Ct. at 2781-82; see also American Water Works Ass'n v. E.P.A., 40 F.3d 1266, 1270 (D.C.Cir.1994).

We hold that the FHWA's interpretation of Sec. 521(b)(2)(A), making each separate act of a motor carrier in violation of an FHWA regulation--here each dispatch of a disqualified driver--a separate "health or safety violation" is entirely reasonable. First, as the ALJ observed, the provision of a separate penalty for "each" offense suggests that "multiple penalties are recoverable for a multiplicity of occurrences." More substantively, the FHWA argues that its interpretation advances the purpose of the Motor Carrier Safety Act to ensure "increased compliance with commercial motor vehicle safety and health regulations," see 49 U.S.C. Sec. 31131(a)(3), by deterring a motor carrier that has once dispatched a disqualified driver from doing so again. The petitioner's interpretation of Sec. 521(b)(2)(A), in contrast, would provide no such marginal incentive for a motor carrier that has already dispatched a disqualified driver. That would be analogous, as the agency points out, to the Congress providing that "a person who committed six bank robberies ... on six different dates ... committed a single offense." Absent a clear statutory statement to that effect, we should not attribute so counterintuitive an intent to the legislature in preference to a reasonable interpretation offered by the agency charged with administering the law.

Nor, contrary to Used Equipment's argument, does the portion of Sec. 521(b)(2)(A) that allows the FHWA to impose a fine of up to $10,000 for a "serious pattern of violations" demonstrate that the FHWA's interpretation of the Act is impermissible. Instead, it indicates only that when a carrier has committed a series of regulatory violations that do not each rise to the level of a "substantial health or safety violation," the FHWA is still authorized to charge that carrier with a "serious pattern of violations." See S.Rep. No. 424, 98th Cong., 2d Sess., 2 (1984), reprinted in 1984 U.S.C.C.A.N. 4769, 4785, 4786 ("serious pattern of violations" made out where violations "individually would not have a high probability of causing an immediate accident, but collectively demonstrate an unwillingness to exercise proper safety supervision or control, which will lead to accidents").

We turn now to the petitioner's challenge to the sufficiency of the evidence that there were indeed 13 separate dispatches. For no apparent reason, Used Equipment never raised this claim before the agency; therefore we do not have jurisdiction to entertain it. 49 U.S.C. Sec. 521(b)(8) ("No objection that has not been urged before the [agency] shall be considered by the court, unless reasonable grounds existed for failure or neglect to do so").

B. The Three Dispatches of MacDonald

Three of Used Equipment's 13 violations of Sec. 391.15 involved the dispatch of one MacDonald. It is undisputed that the petitioner violated Sec. 391.15 if Used Equipment "knew" or "should have known" that MacDonald's license was suspended when it dispatched him. The ALJ concluded that...

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