SAN FRANCISCO — The United States Court of Appeals for the Ninth Circuit says it does not have the power to reverse the Federal Motor Carrier Safety Administration’s permits that allow Mexico-domiciled carriers to operate within the United States.
Petitioners in the case were the International Brotherhood of Teamsters, the Teamsters Joint Council No. 7, the Teamsters Joint Council No. 42; Advocates for Highway and Auto Safety and the Truck Safety Coalition. The Owner-Operator Independent Drivers Association joined the suit as an intervenor.
While the battle to keep Mexican trucks out of the U.S. goes back 35 years, the recent litigation stems from what the Inspector General of the Department of Transportation deemed were inadequate results of a pilot program to determine whether Mexico-domiciled trucks could operate safely within the United States.
The Inspector General noted that only 13 Mexico-domiciled carriers participated in the pilot program.
When the pilot began, the FMCSA said it would be necessary to have over 40 participating carriers to adequate assess the safety issues.
But despite the low participation, the agency decided that the results did adequately prove that Mexican carriers could operate safety within the U.S. and began issuing permits to carriers that applied and were approved.
The petitioners argued that FMCSA’s permits for Mexican firms were based on “arbitrary and capricious” reasoning, contrary to the Administrative Procedure Act.
But the Ninth Circuit ruled that Congress didn’t impose “any requirements of sample size or statistical validity” on the study’s results, effectively meaning federal courts have no way to determine whether the FMCSA’s decision was right or wrong, saying that “arbitrary and capricious review” did not apply in the absence of a statutory benchmark against which to measure an agency’s exercise of discretion.
Before 1982, trucking companies from Canada and Mexico could apply for a permit to operate in the United States, but in 1982, concerned that Canada and Mexico were not granting reciprocal access to American trucking companies, Congress passed and President Ronald Reagan signed a law that prohibited the U.S. government from processing permits for companies domiciled in those two countries.
The trucking dispute between the United States and Mexico has lingered since then.
The United States and Mexico attempted to resolve the impasse when negotiating the North American Free Trade Agreement.
After NAFTA took effect in 1994, the U.S. government announced a program that would gradually allow Mexico-domiciled trucking companies to operate throughout the United States.
Soon thereafter, however, the U.S. government announced that Mexico-domiciled trucking companies would be limited to specified commercial zones in southern border states.
Mexico then complained to a NAFTA arbitration panel about that limited access.
The panel ruled that the United States had to allow Mexico-domiciled trucking companies to operate throughout the United States, but also said the United States could require those companies to comply with the same regulations that apply to American trucking companies.
The panel also ruled that if the United States failed to allow Mexico-domiciled trucks to operate throughout the United States, Mexico would be permitted to impose retaliatory tariffs.
In response, Congress passed and President George W. Bush signed a law that authorized the Federal Motor Carrier Safety Administration, part of the Department of Transportation, to grant permits to Mexico-domiciled trucking companies so long as the trucking companies complied with U.S. safety requirements.
But as the U.S. government worked to establish a permitting regime, Congress passed and Bush signed another law requiring the Department of Transportation to implement a pilot program to ensure that Mexico-domiciled trucks would not make the roads more dangerous.
In 2007, the FMCSA instituted a pilot program, but Congress passed and President Barack Obama signed a law that expressly defunded the program before it was completed.
After Mexico imposed $2.4 billion in retaliatory tariffs in response, Congress passed and President Obama signed a law reinstating funds for the program. In 2011, the agency again instituted a pilot program that the FMCSA said Mexico-domiciled carriers could operate safely in the United States.