New Federal Authority Over Unsafe "Reincarnated" Carriers

New federal statutory procedures are sought to identify trucking companies that are reincorporating simply in an effort to hide their poor driving safety records.

2012-07-07

July 07, 2012 (Press-News.org) The Federal Motor Carrier Safety Administration may soon take action against commercial trucking carriers known as "chameleon" or "reincarnated" carriers.

These carriers are able to disassociate themselves from their poor safety records and even avoid paying penalties simply by changing their company names. To become a "reincarnated" carrier, a company closes shop and then reincorporates as a different legal entity, with only superficial changes to the actual business. In many cases, the purpose is to avoid public safety supervision and enforcement that would force the company to improve its safety record.

Now it seems the FMSCA will subject these carriers to closer scrutiny in the hopes of providing safer roads and reducing the number of car and truck accidents. The Government Accountability Office, a federal watchdog, recommended that the FMCSA set up procedures to identify reincarnated carriers. The GAO recommended a "data-driven, risk-based vetting methodology" that would compare information from new carrier applications with existing carrier data. Relevant information could include the carriers' owners and ownership structure, officers, company addresses and phone numbers.

If a match is found between an existing carrier and a presumably new one, the FMCSA would then determine whether the carrier was seeking to evade enforcement. The carrier's previous safety record -- and whether it paid any outstanding fines for safety violations -- would be relevant at this stage. If the carrier's record was bad enough, the FMCSA could deny applications at this stage, keeping unsafe carriers off the road. The agency already applies these review procedures for new bus and moving company applications.

A new federal law, which addresses surface transportation reauthorization, gave the FMCSA authority to set a federal standard for motor carrier succession, opening the door for a new attack against reincarnated carriers. Previously, the agency was required to prove carrier company succession under a much more difficult standard. This made reincorporating a virtual free pass for ducking enforcement. The GAO's report is encouraging news for those waiting on the FMCSA to crack down on unsafe carriers. For people injured in accidents involving truck companies with poor safety records, there is hope that the road will be safer in the future.

If you or a loved one is injured in an accident involving a commercial trucking company, it is important to contact an experienced personal injury attorney who can help you understand your rights.

Article provided by The Venardi Law Firm
Visit us at www.vefirm.com/

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