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Inc. v. Unified Carrier Registration Plan Board

United States District Court, District of Columbia

October 18, 2017

12 PERCENT LOGISTICS, INC., et al., Plaintiffs,



         On September 14, 2017, Defendant Unified Carrier Registration Plan Board ("Board") held a meeting in which it decided to postpone the start of the annual registration period for motor carriers, brokers, and freight forwarders from October 1, 2017, to November 1, 2017. The Board adopted the 30-day postponement to give the Secretary of Transportation more time to act on a rate reduction proposal that the Board had submitted to the Secretary six months earlier. The manner in which the Board noticed the September 14th meeting did not comply with federal law. Under the Sunshine Act, 5 U.S.C. § 552b, the Board was required to publicly announce meeting information. Although the Board notified prior Board-meeting attendees of the September 14th meeting, it failed to publish information regarding the meeting's time, location, and subject matter in the Federal Register, as required by the Sunshine Act. Following the Board's action, Defendant Indiana Department of Revenue, which administers the website on which entities register, complied with the Board's 30-day postponement and delayed the start of the fee and registration collection period.

         Plaintiffs 12 Percent Logistics, Inc., and the Small Business in Transportation Coalition, a registrant and trade group representing registrants, respectively, filed suit against the Board and the Indiana Department of Revenue and its Commissioner, Adam J. Krupp, in his official capacity. They allege that they did not receive notice of the September 14th meeting and claim the 30-day postponement of the registration date harms them. Now before the court is Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction, in which Plaintiffs ask this court to enter an injunction that (1) reverses the Board's postponement of the registration date and compels the Board and the two state defendants (collectively "INDOR") to immediately begin accepting registrations and fees payments, and (2) prevents the Board from future Sunshine Act violations.

         The court concludes that Plaintiffs are not entitled to the drastic relief they seek. Although Plaintiffs have demonstrated that they are likely to prove that the Board violated the Sunshine Act when it failed to give proper notice of the September 14th meeting, the Sunshine Act does not authorize the court to invalidate the Board's decision to postpone the registration date. The court also finds that enjoining the Board from violating the Sunshine Act in the future is unwarranted when Plaintiffs have identified only one prior violation. Instead, the appropriate remedy for the Board's violation is to compel the Board to make public records memorializing what transpired at the non-conforming meeting. The court, therefore, orders the Board to immediately disclose all draft minutes, transcripts, and recordings of the September 14th meeting.

         Accordingly, Plaintiffs' Motion is granted in part and denied in part.

         I. BACKGROUND

         The Unified Carrier Registration ("UCR") program is a federally created system for registering and collecting fees from motor carriers, motor private carriers, brokers, freight forwarders, and leasing companies, whose commercial vehicles travel in interstate commerce. See 49 U.S.C. § 14504a. The UCR program is overseen and implemented by a 15-member board of directors ("the Board") appointed by the Secretary of Transportation. See Id. § 14504a(d)(1). The Board's primary function is to implement the "UCR Agreement, " an interstate agreement that governs the collection and distribution of fees paid by motor carriers and other covered entities, and registration and financial responsibility information. See Id. § 14504a(a)(8), (d)(2). Those businesses register with the UCR and pay fees annually, and that revenue is routed back to the states that have opted into the registration system. Id. § 14504a(f)(4), (h). Forty-one states participate in the UCR Agreement, but the District of Columbia does not appear to be one of them. See Def.'s Opp'n, ECF No.25, Ex. 1, ECF No.25-1 [hereinafter Jefferson Decl.], ¶ 3; see Unified Carrier Registration Sys., IN GOV UCR Application, (last visited Oct. 17, 2017) (identifying the District of Columbia as a "non-participating" state).

         The rates charged to UCR registrants are set by the Secretary of Transportation based on the Board's recommendations. 49 U.S.C. § 14504a(d)(7). Whenever the Board proposes a change to the annual rates, the Secretary is statutorily required to provide notice and an opportunity for public comment and to act on the Board's recommendation within 90 days. Id. § 14504a(d)(7). The UCR Plan pays Defendant INDOR to operate the program's registration website for the states that have opted into the system. See Compl., ECF No. 1 [hereinafter Compl.], ¶¶ 8-9; Compl., Attach. 1, ECF No. 1-1 [hereinafter Pls.' Exs.], at 37-43, 44-55 (Exs. 3 & 4).

         At a meeting held on March 14, 2017, the Board voted to recommend that the Secretary change the rates to be charged in 2018 and 2019. Compl. ¶25. The proposed rates were lower than those charged in recent years-a move the Board said at oral argument was prompted by the concern that the current fee structure, if continued, would cause the Board to exceed the amount of money it is lawfully permitted to hold. See 49 U.S.C. § 14504a(h)(3), (4); Hr'g Tr. (draft), Oct. 12, 2017, at 39. The new rate proposal, however, stalled in the hands of the Secretary, who took no formal action within the statutorily mandated 90-day period after the Board's recommendation. Compl. ¶¶ 26, 30.

         To give the Secretary more time to act, the Board convened a meeting on September 14, 2017, and voted to delay the start of the annual UCR registration period by 30 days. Compl. ¶27. The Board neither publicly announced nor submitted in the Federal Register any information about the September 14th meeting, but did send an e-mail to past Board-meeting attendees. Jefferson Decl. ¶ 9. The Board's decision shifted the start of registration for the coming calendar year from October 1, as called for by the UCR Agreement, to November 1. Pls.' Exs. at 13[1](Ex. 2). But because the Board did not push back the December 31, 2017, end-date for registration, the action compressed the registration period from three months to two months. Compl. ¶ 29. The Board directed Defendant INDOR, which accepts registrations and collects fees on the Board's behalf through a state-run website, to postpone the opening date for registration. Id. ¶¶ 8, 33; Jefferson Decl. ¶ 10. The Indiana Department of Revenue complied. Compl. ¶ 32-33, 70.

         Upset by the Board's Sunshine Act violation and its decision to postpone the start of registration, Plaintiffs filed a four-count Complaint on September 27, 2017. Count I alleges that the Board violated the Sunshine Act when it failed to properly notice the September 14th meeting. See Compl. ¶¶ 37-45. Count II alleges that the Board violated the Administrative Procedure Act ("APA"), 5 U.S.C. § 706, by holding the inadequately noticed meeting. Compl. ¶¶ 46-51. In Count III, the Plaintiffs assert that the Board's decision to delay the registration period was arbitrary and capricious, which also violated the APA. Id. ¶¶ 52-63. Lastly, Count IV alleges that INDOR acted "unlawfully" by postponing UCR registration until November 1 because it was obligated to begin accepting renewals and fees on October 1, under the terms of the UCR Agreement. Id. ¶¶ 64-71. (As discussed below, Plaintiffs subsequently abandoned Counts Hand III, and now proceed only as to Counts I and IV.)

         Plaintiffs simultaneously moved for a temporary restraining order and preliminary injunction against the Board. They ask the court to reverse the Board's decision to postpone the registration period, enjoin the Board from future violations of the Sunshine Act, and order INDOR to accept UCR registrations and fee payments on October 1. See Pls.' Mot. for TRO & Prelim. Inj., ECF No. 2 [hereinafter Pls.' Mot.].

         The Board opposed Plaintiffs' motion.[2] In their reply brief, Plaintiffs abandoned their APA claims, conceding that that the Board is not an "agency" subject to the requirements of the APA.[3]Pls.' Reply, ECF No. 29, at 10-11. After Plaintiffs' Motion was fully briefed, the court heard oral argument on October 12, 2017.


         A. Plaintiffs' Claim ...

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