FMCSA's Confusing Excuse For Not Enforcing Own Rules

As freight fraud reaches epidemic levels, resulting in significant financial losses and stolen cargo, the Federal Motor Carrier Safety Administration (FMCSA) has yet to communicate clearly on its enforcement duties. The agency's statements regarding its ability to assess civil penalties for "commercial" violations have caused confusion among carriers, brokers, and other freight market participants.

Misinterpretation
FMCSA has repeatedly cited a 2019 Administrative Law Judge's ruling, known as the "Riojas decision," to claim it cannot fine bad actors for commercial violations. However, the Riojas case did not restrict FMCSA's enforcement capabilities. The case involved a family guilty of fraudulently reincarnating carriers and failing to disclose common ownership of several FMCSA-regulated entities. Judge J.E. Sullivan ruled that FMCSA lacked jurisdiction to assess fines on two counts but allowed fines for other violations, resulting in a $125,000 penalty. Despite this, FMCSA continues to use the Riojas decision to avoid pursuing civil penalties for commercial regulations, contributing to increased freight fraud and double brokering over the past five years.

Inconsistent Enforcement Practices
FMCSA's invocation of the Riojas decision is part of a broader pattern of inconsistent enforcement. The OP-1 form for motor carrier or broker authority warns of perjury charges for false information, yet fraudulent operations often use false addresses without facing these charges. FMCSA typically refers such cases to the DOT's Office of Inspector General under a statute prohibiting false statements. Attorneys Hank Seaton and Mark Andrews have criticized FMCSA's interpretation of Riojas, arguing it understates the agency’s enforcement powers.