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TRUCKERS UNITED FOR SAFETY v. MEAD

March 1, 2000

TRUCKERS UNITED FOR SAFETY, ET AL., PLAINTIFFS,
V.
KENNETH M. MEAD, INSPECTOR GENERAL, DEPARTMENT OF TRANSPORTATION, DEFENDANT.



The opinion of the court was delivered by: Hogan, District Judge.

Memorandum Opinion and Order

This matter is before the Court on Plaintiffs' Amended Motion for Preliminary Injunction and Defendant's Motion to Dismiss or Alternatively for Summary Judgment.*fn1 Based on the briefs in support of those motions, the oppositions and replies thereto, the parties' oral arguments, and the supplemental briefs filed in response to recent legislation, the Court finds: 1) that only the individual plaintiffs have standing, and therefore, the Inspector General's Motion to Dismiss will be granted with respect to the organizational plaintiff; and 2) that, in light of a recent amendment to the Inspector General Act of 1978, Congress has provided the Inspector General of the Department of Transportation the authority to investigate motor carrier compliance with safety regulations.

I. Background

Plaintiffs are a number of named motor carriers and a not-for-profit corporation representing other unnamed motor carriers. Pursuant to 49 U.S.C. § 104 (1994), motor carriers are regulated by the Federal Highway Administration ("FHWA") of the U.S. Department of Transportation ("DOT"). The FHWA's responsibilities include investigating motor carriers' compliance with the Motor Carrier Safety Act of 1984, 49 U.S.C. § 31101-31504 ("MCSA"), and the Federal Motor Carrier Safety Regulations, 49 C.F.R. § 350.1-399.207 (1998) ("FMC Safety Regulations"). This case, however, does not arise out of the FHWA's investigative conduct. Rather, this case arises out of compliance investigations that are conducted by the Inspector General of DOT.

Although the FHWA's Office of Motor Carriers ("OMC") conducts regulatory compliance reviews on motor carriers, the Inspector General's office is also conducting criminal investigations of certain carriers. As it currently is implemented, the enforcement process allows OMC to conduct its compliance reviews and then refer egregious violators to the Inspector General for investigation. The Inspector General asserts that his investigations differ from those of OMC because the investigations focus on criminal conduct. The criminal nature of the Inspector General's investigation permits him to utilize a number of investigative techniques unavailable to OMC, for example, search warrants and seizure of documents.*fn2 In furtherance of his current investigations, the Inspector General has issued subpoenas, obtained search warrants, and effected those warrants on several of the plaintiffs' premises. Pursuant to these warrants, the Inspector General's office has seized some of the Plaintiffs' property. Plaintiffs seek a declaration, and injunctive relief pursuant to that declaration, that the Inspector General has exceeded the scope of his authority under the Inspector General Act of 1978, 5 U.S.C. app. 3 §§ 1-12 (1994) ("Inspector General Act" or the "Act").

The Inspector General has raised a number of arguments in defense of his investigatory conduct. First, the Inspector General claims that Plaintiffs lack standing to pursue this case. Second, the Inspector General argues that he has authority under several provisions of the Inspector General Act to investigate motor carrier compliance with DOT safety regulations. Finally, the Inspector General asserts that recent legislation has provided his office with the requisite authority to conduct such investigations. The Court addresses these arguments in turn.

II. Standing

As a preliminary matter, Defendant alleges that Plaintiffs lack standing to challenge the Inspector General's investigatory conduct. The case or controversy requirement of Article III of the U.S. Constitution requires a plaintiff to show: 1) that he suffered "injury in fact"; 2) that the injury be "fairly traceable to the challenged action of the defendant"; and 3) that the injury will be "redressed by a favorable decision." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); see Animal Legal Defense Fund, Inc. v. Glickman, 204 F.3d 229 (D.C.Cir. 2000). These requirements apply regardless of whether the plaintiff is an individual or an organization. See Spann v. Colonial Village, Inc., 899 F.2d 24, 27 (D.C.Cir. 1990) ("An organization has standing on its own behalf if it meets the same standing test that applies to individuals."). The Plaintiffs claim injury from the Inspector General's current investigation of several companies, and possible investigation of others in the future. Only five plaintiffs are currently being investigated by the Inspector General. The other plaintiff, TUFS, is an organization seeking to assist the five individual plaintiffs in representing other similarly situated motor carriers. Collectively, the plaintiffs seek class certification.

The Inspector General's investigations of the Plaintiffs involve searches of their premises and seizure of their business records. Plaintiffs allege that the Inspector General's searches of their premises disrupts their daily business, thereby costing them money. Similarly, Plaintiffs claim that by seizing their business records, the Inspector General, in essence, puts them out of business. In addition, the Inspector General interrogates the Plaintiffs' current and former employees, and therefore, drivers are reluctant to work for the Plaintiffs. Such investigative conduct surely creates an injury. As the Inspector General stated: "The only carriers that have suffered injury that could give them standing . . . are those that are actually under criminal investigation and have suffered some arguably adverse action." (Def.'s Mot.Dismiss at 7.)

Although investigative conduct, i.e., subpoenas, searches, and seizures, may create an injury to Plaintiffs, that injury does not arise until the conduct takes place. Further, judicial review should be conducted at the time an agency attempts to act, not when it simply indicates an intent to act. The Plaintiffs claim that they have suffered "injury in fact" because the Inspector General is conducting raids of their premises, seizing documents, interrogating employees and customers, and, in general, putting them out of business. For example, the Inspector General conducted a raid on Lone Wolf and K & C trucking, the facts of which were submitted in an amended complaint that added Lone Wolf and K & C as parties.

These raids were conducted in October 1998, after the FHWA attempted to subpoena documents from the companies and encountered opposition from the companies' attorney. Plaintiffs allege that this search was done in response to their challenges to the FHWA's authority to investigate. As described by the Plaintiffs, the force involved in the raid "included approximately 36 law enforcement vehicles and more than 40 law enforcement officers, mostly in combat dress and heavily armed." (Pl.'s Mot.Prelim.Inj. at 10.) The law enforcement officials then confined the employees and interrogated them individually. See id. "Officers acting at the request of an agent of the IG have seized all operating records of Lone Wolf and K & C, including computer software necessary for continuing operations." Id. at 12. The other individual Plaintiffs have also been subjected to similar criminal investigations conducted by the Inspector General.

TUFS, however, has not sufficiently alleged that its organization has suffered an injury. An organization can show injury in fact by "point[ing] to a `concrete and demonstrable injury to [its] activities,' not `simply a setback to the organization's abstract social interests.'" Id. (quoting Havens Realty Corp. v. Coleman, 455 U.S. 363, 379, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982)). "[A]n organization establishes Article III injury if it alleges that purportedly illegal action increases the resources the group must devote to programs independent of its suit challenging the action." Id. TUFS has made no allegations of this sort. TUFS merely claims that its members are subject to a common regulatory scheme. Nor does TUFS claim that any of its members has suffered or is about to suffer injury because of a possible Inspector General investigation beyond the general allegation that the Inspector General might someday choose to investigate a member company. "Since Article III prohibits federal courts from recognizing injuries that are neither `actual' nor `imminent,' we have no authority to reach the claim." American Trucking Ass'ns, 166 F.3d at 386.*fn3

III. Standard of Review

A. Jurisdiction

Plaintiffs bring their suit based on this Court's jurisdictional grant of authority in 28 U.S.C. § 1331, the federal question statute. This jurisdiction is premised on the Court's authority to determine whether federal officials are acting within the scope of their statutory authority or ultra vires — that is, "without any authority to act on subject," BLACK'S LAW DICTIONARY 1522 (6th ed. 1990). Plaintiffs do not rely on the Administrative Procedures Act, 5 U.S.C. § 701-706 (1994), and the Inspector General Act does not provide an administrative review provision.*fn4 "If a plaintiff is unable to bring his case predicated on either a specific or a general statutory review provision, he may still be able to institute a non-statutory review action." Chamber of Commerce of the United States v. Reich, 74 F.3d 1322, 1327 (D.C.Cir. 1996). "Nothing in the subsequent enactment of the APA altered the McAnnulty doctrine of review [holding that `acts of all [governmental'] officers must be justified by some law, and in case an official violates the law to the injury of an individual the courts generally have jurisdiction to grant relief, American School of Magnetic Healing v. McAnnulty, 187 U.S. 94, 108, 23 S.Ct. 33, 47 L.Ed. 90 (1902)]. . . . It does not repeal the review of ultra vires actions recognized long before, in McAnnulty." Dart v. United States, 848 F.2d 217, 224 (D.C.Cir. 1988), quoted in Reich, 74 F.3d at 1328. Thus, this Court has jurisdiction to review whether the Inspector General has acted ultra vires.

Nor does sovereign immunity bar this Court's review of the Inspector General's authority to conduct investigations. See Reich, 74 F.3d at 1328-29. Under the Larson doctrine, "if the federal officer, against whom injunctive relief is sought, allegedly acted in excess of his legal authority, sovereign immunity does not bar a suit." Reich, 74 F.3d at 1329 (citing Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 690-91, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949)). Therefore, this Court finds that it has jurisdiction under 28 U.S.C. § 1331, and sovereign immunity does not bar its review, see Larson, 337 U.S. at 690-91, 69 S.Ct. 1457, to determine whether the Inspector General is acting outside the authority granted to him to conduct investigations. See George v. Ishimaru, 849 F. Supp. 68, 72 (D.D.C. 1994) ("The Larson ultra vires line of cases is still valid law today, and authorizes this court today to grant the requested relief."), vacated as moot, No. 94-5111, 1994 WL 517746 (D.C.Cir. Aug.25, 1994).

B. Summary Judgment Standard

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c). A party is entitled to summary judgment if the record, viewed in the light most favorable to the nonmoving party, reveals that there is no genuine issue as to any material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); United States v. Spicer, 57 F.3d 1152, 1159-60 (D.C.Cir. 1995). The nonmoving party, however, "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Both parties agree that the essential facts of this case are not in dispute. Therefore, summary judgment is appropriate.

IV. Applicable Law

A. Motor Carrier Safety Act

The Motor Carrier Safety Act of 1984 authorizes the Secretary of Transportation to issue regulations pertaining to commercial motor vehicle safety. See 49 U.S.C. § 31133(a) (general powers of the Secretary); id. § 31136 (minimum standards to ensure proper maintenance, equipment, loading, and operation); id. § 31141 ("regulations on Government standards for inspection of commercial motor vehicles and retention by employers of records for inspection"); id. § 31144 (safety fitness of owners and operators); id. § 31502 ("requirements for qualifications and maximum hours of services of employee" as well as "safety of operation and equipment"); see also Truckers United for Safety v. Federal Highway Admin., 139 F.3d 934, 936 (D.C.Cir. 1998) (noting that the FHWA "has the authority to issue regulations pertaining to commercial motor vehicle safety"). The Secretary has delegated this responsibility to the FHWA, see 49 U.S.C. § 104, which issued the FMC Safety Regulations, 49 C.F.R. § 350.1-399.207. Both the MCSA and its implementing regulations authorize the FHWA to enforce safety regulations, which include conducting investigations of motor carriers for compliance. See 49 U.S.C. § 31115, 31133(a); 31142-31143, 31503; 49 C.F.R. § 385.1-.23, 386.1-.82, 390.1-.37; see also Truckers United, 139 F.3d at 936 (stating that the FHWA "has authority . . . to enforce th[e] regulations" it issues). The FHWA may conduct compliance reviews — "on-site examination[s] of motor carrier operations . . . to determine whether a motor carrier meets the safety fitness standard," 49 C.F.R. § 385.3 — or subpoena information from motor carriers, see 49 U.S.C. § 31133(a)(4). The MCSA, however, does not grant the FHWA authority to engage in searches and seizures. The MCSA and the FMC Safety Regulations also establish penalties and remedies for violators. See 49 U.S.C. § 31115, 31310; 49 C.F.R. § 383.53, 385.23, 386.21, 386.71, 386.81-.82, 390.37.

In addition to the specific investigation, enforcement, and penalty provisions in the MCSA, the FHWA has been delegated the "special authority" granted to the Secretary. See 49 U.S.C. § 501-526 . The Secretary's "special authority" includes the authority: 1) to subpoena witnesses and records, see id. § 502(d); 2) "on demand and display of proper credentials inspect the equipment of a carrier . . . and inspect and copy any record of a carrier," id. § 504(c)(1)-(2); and 3) to "begin an investigation under this chapter on the initiative of the Secretary or on complaint," id. § 506(a).

The FHWA is also authorized to enforce the provisions by bringing a civil action on its own, or requesting the Attorney General to enforce the MCSA or a regulation or order of the Secretary. See id. § 507(a)(b). The Attorney General can also prosecute a person violating the statute or a regulation. See id. § 507(b). In addition to investigative and enforcement authority, the "special authority" provisions also prescribe civil and criminal penalties for general violations, see id. § 521, reporting and record keeping violations, see id. § 522, evasion of regulation of motor carriers, see id. § 524, disobeying subpoenas, see id. § 525, and "general criminal penalt[ies] when [a] specific penalty [is] not provided," id. § 526.

It is clear that Congress has created a comprehensive administrative scheme for regulating motor carrier compliance with the MCSA and the FMC Safety Regulations. This scheme authorizes the DOT or its agents to investigate carriers to ensure compliance with regulations. Furthermore, it imposes civil and criminal penalties on motor carriers who fail to comply or who are found to have violated a regulation. Nowhere in Title 49 has Congress limited the DOT's ability to conduct investigations into criminal violations of motor carrier safety regulations. Rather, the inclusion of criminal penalties, as well as the provision requiring the Attorney General to prosecute a violator upon the Secretary's request, strongly indicate that Congress envisioned that DOT would conduct criminal investigations.

Pursuant to the authority granted to it, DOT, through its agents, the FHWA and OMC, has been assigning safety ratings to motor carriers, conducting compliance reviews of the carriers, subpoenaing records, and conducting criminal and civil investigations. See American Trucking Ass'ns v. Department of Transp., 166 F.3d 374, 376-77 (D.C.Cir. 1999) (reviewing FHWA's safety rating assignment criteria); United States v. McCord, Inc., 143 F.3d 1095, 1096, 1099 (8th Cir. 1998) (reviewing the sentence of a motor carrier who pled guilty to criminal charges based on a DOT investigation); Moishe's Moving & Storage, Inc. v. Skinner, No. 90 Civ. 7353, 1991 WL 190583 (S.D.N.Y. Sept.18, 1991) (reviewing DOT's authority to conduct onsite compliance reviews); see also (Pl.'s Supplemental Authority Ex. X (statement of Kenneth L. Pierson, Director of Motor Carrier Safety of the FHWA from 1980 to 1986) ("[A]t the FHWA a principal function of my office was investigation of compliance with regulations regarding motor carrier safety . . . and investigat[ing] and prepar[ing] criminal cases which were then referred to the Justice Department for prosecution.").)

B. Inspector General Act of 1978

In 1978, "fraud, abuse and waste in the operations of federal departments and agencies and in federally-funded programs [had] reach[ed] epidemic proportions." S.REP. No. 95-1071, at 4 (1978). In response to this fraud, abuse and waste, Congress enacted the Inspector General Act, which created offices of Inspector General in most agencies, including the DOT. The purpose of the Act is "to create independent and objective units" to "conduct and supervise audits and investigations related to the programs and operations" of certain federal agencies. 5 U.S.C. app. 3 § 2(1). In addition, the Inspectors General were created "to provide leadership and coordination and recommend policies for activities designed (A) to promote economy, efficiency, and effectiveness in the administration of, and (B) to prevent and detect fraud and abuse in, such programs and operations." Id. § 2(2).

The legislative history declares that the "purpose of this legislation is . . . to consolidate existing auditing and investigative resources to more effectively combat fraud, abuse, waste and mismanagement in the programs and operations" of certain federal agencies. S.REP. No. 95-1071, at 1. To this end, auditing and investigating resources were consolidated in an independent officer responsible for auditing and investigating programs and operations of his particular agency for the purpose of promoting economy and efficiency and combating fraud, abuse, waste and mismanagement. See 5 U.S.C. app. 3 §§ 2(1), (2)(B); see also NASA v. Federal Labor Relations Auth., 527 U.S. 229, 119 S.Ct. 1979, 1992, 144 L.Ed.2d 258 ...


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