Appendix — Department of Transportation v. Public Citizen
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03 358 SEP 6 2003
No.
In the Supreme Court of the United States
UNITED STATES DEPARTMENT OF TRANSPORTATION,
ET AL., PETITIONERS
D.
PUBLIC CITIZEN, ETAL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
APPENDIX TO THE
PETITION FOR A WRIT OF CERTIORARI
THEODORE B. OLSON
Solicitor General
KIRK K. VAN TINE Counsel of Record
General Counsel THOMAS L. SANSONETT!
PAUL M. GEIER Assistant Attorney General
Assistant General Counsel EDWIN S. KNEEDLER
PETER J. PLOCKI Deputy Solicitor General
Senior Trial Attorne
* JEFFREY BOSSERT CLARK
BRIGHAM A. MCCOWN Deputy Assistant Attorney
Chief Counsel General
MICHAEL J. FALK AUSTIN C. SCHLICK
Trial Attorney Assistant to the Solicitor
Federal Motor Carrier Safety General
Administration JOHN L. SMELTZER
Department of Transportation DAVID C. SHILTON
Washington, D.C. 20590 Attorneys
JOHN K. VERONEAU Department of Justice
General Counsel Washington, D.C. 20530-0001
Office of the United States (202) 514-2217
Trade Representative
Executive Office of the President
Washington, D.C. 20508
TABLE OF CONTENTS
Page
Appendix A (Court of appeals opinion filed Jan. 16,
2003) ........ . — — — — 1a
Appendix B (DOT rulemaking documents)
Applicaton Rule . 832
Safety Monitoring Rule ...... 125a
Auditor Certification Rule 203a
Appendix C (Court of appeals rehearing Order dated
Apr. 10, 2003) 221a
Appendix D (Statutes and regulations involved) 223a
Appendix E (Memorandum for the Secretary of
Transportation dated Nov. 27, 2002) . 232a
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Nos. 02-70986, 02-71249
PUBLIC CITIZEN; BROTHERHOOD OF TEAMSTERS, AUTO
AND TRUCK DRIVERS, LOCAL 70; CALIFORNIA LABOR
FEDERATION; CALIFORNIA TRUCKING ASSOCIATION;
ENVIRONMENTAL LAW FOUNDATION; INTERNATIONAL
BROTHERHOOD OF TEAMSTERS, PETITIONERS
NATURAL RESOURCES DEFENSE COUNCIL;
PLANNING AND CONSERVATION LEAGUE,
PETITIONERS-INTERVENORS
Vv.
DEPARTMENT OF TRANSPORTATION; FEDERAL MOTOR
CARRIER SAFETY ADMINISTRATION; NICHOLAS R.
WALSH, RESPONDENTS
INTERNATIONAL BROTHERHOOD OF TEAMSTERS;
BROTHERHOOD OF TEAMSTERS, AUTO AND TRUCK
DRIVERS, LOCAL 70; CALIFORNIA LABOR FEDERATION;
CALIFORNIA TRUCKING ASSOCIATION;
ENVIRONMENTAL LAW FOUNDATION; PUBLIC CITIZEN,
PETITIONERS
NATURAL RESOURCES DEFENSE COUNCIL;
PLANNING AND CONSERVATION LEAGUE,
PETITIONERS-INTERVENORS
V.
U.S. DEPARTMENT OF TRANSPORTATION; FEDERAL
MOTOR CARRIER SAFETY ADMINISTRATION; JOSEPH M.
CLAPP; NICHOLAS R. WALSH, RESPONDENTS
(la)
2a
Argued and submitted: Oct. 8, 2002
Filed: Jan. 16, 2003
Before: D.W. NELSON, HAWKINS and WARDLAW, Cir-
cuit Judges
OPINION
WARDLAW, Circuit Judge.
Petitioners’ challenge the Department of Transporta-
tion’s failure to conduct the requisite environmental
analyses prior to promulgating three regulations, the
combined effect of which will permit Mexico-domiciled
motor carriers to operate within the United States
beyond the current limited border zones, thus fulfilling
the United States’ obligations under the North Ameri-
can Free Trade Agreement. Upon completion of a
preliminary Environmental Assessment for two of the
three regulations, the Department of Transportation
decided that there was no need for further environ-
mental analysis. Petitioners claim that the Department
of Transportation’s failure to prepare an in-depth
Environmental Impact Statement for all three regula-
tions violates the National Environmental Policy Act of
1969, and that its further failure to conduct a “conform-
ity determination” to ensure that the regulations do not
disrupt applicable State Implementation Plans violates
the Clean Air Act. Although we agree with the impor-
1 The petitioners in this case are Public Citizen; the Brother-
hood of Teamsters, Auto and Truck Drivers, Local 70; the Cali-
fornia Labor Federation; the California Trucking Association; the
Environmental Law Foundation; and the International Brother-
hood of Teamsters. We will refer to them (as well as the Peti-
tioners Intervenors, discussed below) collectively, as “Petitioners”
unless otherwise noted.
3a
tance of the United States’ compliance with its treaty
obligations with its southern neighbor, Mexico, such
compliance cannot come at the cost of violating United
States law. Because we conclude that the Department
of Transportation acted without regard to well-
established United States environmental laws, we
grant the petitions.
I. LEGAL BACKGROUND
Before proceeding to the regulations at issue, it is
useful to examine the legal and regulatory context in
which they were promulgated. These regulations can
only be considered against the historical backdrop of
the National Environmental Policy Act of 1969, Pub.L.
No. 91-190, 83 Stat. 852 (1970) (codified as amended at
42 U.S.C. §§ 4321-4370f) (“NEPA”), the Clean Air Act,
42 U.S.C. §§ 7401-7671q (“CAA”), and the North
American Free Trade Agreement, Dec. 17, 1992, U.S.-
Can.-Mex., 32 I. L. M. 289 (chs. 1-9), 32 I. L. M. 605
(ehs. 10-22) (1993) (“NAFTA”).
A. National Environmental Policy Act of 1969
On January 1, 1970, President Richard Nixon signed
NEPA into law. Although various state and federal
environmental measures had been in place for decades,
this statute marked the first nationwide comprehensive
approach to regulating the interaction between Ameri-
cans and their environment. Prompted by a series of
environmental crises in the late 1960s, NEPA’s sweep-
ing reach reflected Congress’s conviction that “our
Nation’s present state of knowledge, our established
public policies, and our existing governmental insti-
tutions are not adequate to deal with the growing
environmental problems and crises the Nation faces.” S.
Rep. No. 91-296, at 4 (1969).
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Such broad policy creation was also reflected in the
statute’s first section, containing the congressional dec-
laration of purpose:
The purposes of this chapter are: To declare a
national policy which will encourage productive and
enjoyable harmony between man and his environ-
ment; to promote efforts which will prevent or
eliminate damage to the environment and biosphere
and stimulate the health and welfare of man; to
enrich the understanding of the ecological systems
and natural resources important to the Nation; and
to establish a Council on Environmental Quality.
42 U.S.C. § 4321. To accomplish these ends, Congress
imposed extensive procedural requirements on govern-
ment action affecting the environment. Paramount
among these were the requirements that all federal
agencies shall, “to the fullest extent possible”:
(A) utilize a systematic, interdisciplinary ap-
proach which will insure the integrated use of the
natural and social sciences and the environmental
design arts in planning and in decisionmaking
which may have an impact on man’s environment;
(B) identify and develop methods and pro-
cedures . . . which will insure that presently
unquantified environmental amenities and values
may be given appropriate consideration in
decisionmaking along with economic and technical
considerations;
(C) include in every recommendation or report
on proposals for legislation and other major
Federal actions significantly affecting the quality
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of the human environment, a detailed statement
by the responsible official on—
(i) the environmental impact of the proposed
action,
(ii) any adverse environmental effects which
cannot be avoided should the proposal be
implemented,
(iii) alternatives to the proposed action,
(iv) the relationship between local short-term
uses of man’s environment and the maintenance
and enhancement of long-term productivity, and
(v) any irreversible and irretrievable commit-
ments of resources which would be involved in
the proposed action should it be implemented.
Id. § 4332(2). Congress further directed that, again “to
the fullest extent possible,” “the policies, regulations,
and public laws of the United States shall be inter-
preted and administered in accordance with the policies
set forth in this chapter.” Jd. § 4332(1). This unequi-
vocal command has guided the United States’ environ-
mental policy for more than thirty years, and pervades
every aspect of government decisionmaking.
B. Clean Air Act
Federal air quality legislation dates back to at least
the wnid 19508, and the CAA itself to 1963, Pub.L. No.
88-206, 77 Stat. 393, but it was the substantial amend-
ment in 1970, Pub.L. No. 91-604, 84 Stat. 1713, that
gave the Act its modern, far-reaching scope. The Act
was amended again to further broaden its reach in 1977,
Pub.L. No. 95-95, 91 Stat. 749, and in 1990, Pub.L. No.
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101-549, 104 Stat. 2399. Before the 1970 Amendments,
there existed no federal air pollution standards, nor
mandatory enforcement mechanisms; federal officials
could only encourage states to develop air-quality
enforcement programs. All this was dramatically
altered by the 1970 Amendments, which mandated
national air quality standards and deadlines for their
attainment. Pub.L. No. 91-604, § 4, 84 Stat. at 1678-89.
These amendments also created an innovative federal-
state partnership structure whereby states were to
develop individual “implementation plans” to attain
compliance with federal standards, and the newly
created Environmental Protection Agency (“EPA”)
was charged with evaluating, overseeing, and enforcing
state compliance with these plans. Jd. The 1970
Amendments specifically addressed for the first time
hazardous pollutants and automobile exhausts, bringing
these “mobile sources” within the scope of the EPA’s
authority. Id. §§ 6-9, 84 Stat. at 1690-700.
The 1977 Amendments added an important pro-
cedural safeguard: they forbade the federal government
and its agencies from “engag{ing] in, supportling] in
any way or providling!] financial assistance for,
licens[ing] or permit [ting], or approv[ing], any activity
which does not conform to [an approved state] imple-
mentation plan.” 42 U.S.C. § 7506(c)(1). The Act
defined “conformity” broadly to include a restriction on
such things as “increas[ing] the frequency and severity
of any existing violation of any standard in any area,” or
“delay[ing] timely attainment of any standard . . in
any area.” Id. § 7506(c)(1)(B). This prevented the
federal government from hindering states’ abilities to
comply with the Act’s requirements. Finally, the 1990
Amendments vastly increased the list of regulated
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pollutants, as well as the EPA's eivil and eriminal
enforcement capabilities.
C. North American Free Trade Agreement
On December 17, 1992, President William J. Clinton
signed NAFTA, establishing a free-trade zone encom-
passing the United States, Canada, and Mexico. Upon
submission to Congress, it was enacted into law as the
North American Free Trade Agreement Implementa-
tion Act, Pub.L. No. 103-182, 107 Stat. 2057 (1993)
(codified as amended at 19 U.S.C. §§ 3301-3473) (effec-
tive Jan. 1, 1994).
NAFTA aimed to “CONTRIBUTE to the harmonious
development and expansion of world trade and provide
a catalyst to broader international cooperation” while
“STRENGTHEN[ING] the development and enforce-
ment of environmental laws and regulations.” Id.
pmbl., 32 I. L. M. at 297. Indeed, environmental con-
cerns dominated the debate over NAFTA in the United
States. President Clinton waited for over a year to
submit the agreement to Congress while the parties
negotiated a side agreement, the North American
Agreement on Environmental Cooperation, Sept. 14,
1993, U.S.-Can.-Mex., 32 I.L.M. 1480. The NAFTA
agreement itself explicitly permits member states to
adopt or maintain
standards-related measures, including any such
measure relating to safety, the protection of human,
animal or plant life or health, the environment or
consumers . . . includ{ing] those to prohibit the
importation of a good of another Party or the pro-
vision of a service by a service provider of another
Party that fails to comply with the applicable
8a
requirements of those measures or to complete the
Party’s approval procedures.
NAFTA art. 904(1), 32 L. L. M. at 387.
The treaty as enacted into United States law specifi-
cally determined that in the case of a conflict between
the treaty and federal law, federal law would prevail. 19
U.S.C. § 3312(a)(1) (“No provision of the Agreement
. which is inconsistent with any law of the United
States shall have effect.”). Congress also made clear
that NAFTA cannot be construed “to amend or modify
any law of the United States, including any law
regarding . . . the protection of human, animal, or
plant life or health [or] the protection of the environ-
ment.” Jd. § 3312(a)(2).
II. PROCEDURAL HISTORY
Before us are three regulations, all promulgated on
March 19, 2002 by the Federal Motor Carrier Safety
Administration (“FMCSA”), an agency within the
Department of Transportation (collectively DOT“).
These regulations will permit complying Mexico-
domiciled trucks to operate in the United States beyond
specified border zones. They are: (1) Application by
Certain Mexico Domiciled Motor Carriers to Operate
Beyond United States Municipalities and Commercial
Zones on the United States Mexico Border, 67 Fed.
Reg. 12,702 (Mar. 19, 2002) (“Application Rule”); (2)
Safety Monitoring System and Compliance Initiative
for Mexico Domiciled Motor Carriers Operating in the
United States, 67 Fed. Reg. 12,758 (Mar. 19, 2002)
(“Safety Rule”); and (3) Certification of Safety Audi-
tors, Safety Investigators, and Safety Inspectors, 67
Fed. Reg. 12,776 (Mar. 19, 2002) (“Certification Rule”).
Under current law, such vehicles are allowed only in so-
9a
called “border zones”—specially designated areas near
the United States-Mexico border. Application Rule, 67
Fed. Reg. at 12,702. The regulations were issued in
compliance with a rider to the 2002 Appropriations Act
for DOT, which conditioned funding for permitting
Mexican truck traffic into the United States on DOT’s
issuance of appropriate safety and inspection rules. See
Department of Transportation and Related Agencies
Appropriations Act, 2002, § 350, Pub.L. No. 107-87, 115
Stat. 833, 864 (2001) (“Appropriations Act”). Peti-
tioners assert that DOT failed to examine adequately
the environmental consequences of these regulations,
as required by NEPA and CAA.
Foreign trucks are permitted to enter the United
States only if they are authorized to do so. See
generally 49 U.S.C. §§ 13501-13541, 13901-13908; 49
C.F.R. § 365.101-.511. DOT is generally required to
grant such permission to any carrier that is “willing and
able to comply with” certain statutes and regulations.
49 U.S.C. § 13902(a)(1). In 1982, however, Congress
enacted the Bus Regulatory Reform Act of 1982, which
imposed a two-year moratorium on the entry of motor
carriers domiciled in a “contiguous foreign country,”
Pub.L. No. 97-261, § 6(g), 96 Stat. 1102, 1107-08, such as
Mexico. This moratorium was renewable for subse-
quent two-year intervals by the President “in the
national interest.” Jd., 96 Stat. at 1108. The morato-
rium remained in place, through a series of presidential
orders, until September 19, 1996.
2 See 60 Fed. Reg. 12,393 (Mar. 2, 1995); 57 Fed. Reg. 44,647
(Sept. 25, 1992); 55 Fed. Reg. 38,657 (Sept. 17, 1990); 53 Fed. Reg.
36,430 (Sept. 15, 1988); 51 Fed. Reg. 34,079 (Sept. 23, 1986); and 49
Fed. Reg. 35,001 (Aug. 30, 1984).
10a
Before the last two-year extension expired, the ICC
Termination Act of 1995 was signed into law, causing all
“existing restrictions on operations of motor carriers
domiciled in any contiguous foreign country
pursuant to section 6 of the Bus Regulatory
Reform Act of 1982” to remain in effect unless and until
the President expressly rescinded them for a statuto-
rily acceptable reason, including “obligations of the
United States under a trade agreement.” 49 U.S.C.
§ 13902(c).
On February 6, 2001, a specially convened treaty
arbitral panel determined that the United States’
continued refusal to permit the entry of Mexican trucks
beyond the restricted border zones violated NAFTA.
Thereafter, as recited in the EA prepared by DOT,
President George W. Bush “announced his intent to
comply [with this ruling] by modifying the moratorium,
pursuant to his statutory authority, once FMCSA [was]
ready to issue. regulations governing Mexico-
domiciled [trucks] seeking United States operating
authority.”
After the NAFTA arbitral panel issued its opinion,
DOT published Notices of Rulemaking for the Appli-
cation and Safety Rules on May 3, 2001. See 66 Fed.
Reg. 22,371 (May 3, 2001) (Application Rule); 66 Fed.
Reg. 22,415 (May 3, 2001) (Safety Rule). Meanwhile, in
1999, Congress had enacted the Motor Carrier Safety
Improvement Act, mandating that DOT “complete a
rulemaking to improve training and provide for the
certification of motor carrier safety auditors . . . to
conduct safety inspection audits and reviews.” 49
U.S.C. § 31148(a). The FMCSA was in the process of
preparing these rules in 2001.
lla
On December 18, 2001, the 2002 DOT Appropriations
Act was signed into law. Pub.L. No. 107-87, 115 Stat. at
833. Section 350 of that Act provides:
(a) No funds limited or appropriated in this Act
may be obligated or expended for the review or pro-
cessing of an application by a Mexican motor carrier
for authority to operate beyond [the border zone}
until the Federal Motor Carrier Safety Admini-
stration [issues safety and auditor-certification
regulations, and conducts safety studies that meet
certain specified criteria].
(c) No vehicles owned or leased by a Mexican
motor carrier may be permitted to operate beyond
[the border zone] under conditional or permanent
operating authority granted by the Federal Motor
Carrier Safety Administration until—
(1) the Department of Transportation Inspector
General conducts a comprehensive review of border
operations. . land]
(2) [t]he Secretary of Transportation certifies in
writing in a manner addressing the Inspector
General’s findings . . that the opening of the
border does not pose an unacceptable safety risk to
the American public.
Id. § 350, 115 Stat. at 864-68 (codified at 49 U.S.C. §
13902 note).
DOT subsequently modified the Application, Safety,
and Certification Rules to comply with the require-
ments of the Appropriations Act. Recognizing the need
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to comply with the regulations implementing NEPA,
DOT prepared a preliminary Environmental Assess-
ment (“EA”) for the Application and Safety Rules
evaluating their likely environmental impact. DOT
determined that a full Environmental Impact State-
ment (“EIS”) was not required, concluding that the
proposed rules did not “significantly affect{ ] the quality
of the human environment.” 42 U.S.C. § 4332(2)(C).
Thus, it issued a Finding of No Significant Impact
(“FONSI”) along with the EA on January 16, 2002.
DOT did not prepare an EA for the Certification Rule
because it determined that this regulation fell into the
categorical exclusions from the EA/EIS requirement in
the NEPA regulations. As a result, DOT also did not
include the Certification Rule in its FONSI. Nor did
DOT prepare a CAA conformity determination for any
of the regulations because it determined that certain
categorical exceptions to the conformity-determination
requirement applied to them.
All three regulations were published in the Federal
Register as “Interim Final Rules” on March 19, 2002.
The Application Rule updates the requirements for
Mexican carriers applying to use United States roads
including the applicants’ ability to comply with certain
United States truck safety regulations. See Application
Rule, 67 Fed. Reg. at 12,735-40. Furthermore, the appli-
cation form requires the carriers to agree to undergo
pre-authorization safety audits, provide proof of in-
surance, and submit to inspection every three months.
Id. at 12,715. The Safety Rule extends “provisional”
operating authority to Mexican carriers for the first
eighteen months they are licensed to enter the United
States, subjecting them to intensified inspection during
that period. Safety Rule, 67 Fed. Reg. at 12,771-73.
13a
Upon successful completion of this initial period, car-
riers become eligible to receive “permanent” operating
authority, under which they remain subject to less
intensive monitoring and inspection. See id. The
Certification Rule establishes certification procedures
for the requisite personnel to conduct safety and
compliance inspections. Certification Rule, 67 Fed.
Reg. at 12,779.
Petitioners filed a timely petition challenging the
validity of the Application and Safety Rules on May 2,
2002 (No. 02-70986), and a timely petition challenging
the validity of the Certification Rule on May 14, 2002
(No. 02-71249). Both petitions, alleging violations of the
procedural requirements of NEPA and the CAA, were
brought pursuant to the judicial review provision of the
Administrative Procedures Act, 5 U.S.C. 88 701-706
(“APA”). We have jurisdiction to review the petitions
under 28 U.S.C. § 2342(3)(A), which provides for direct
review in the court of appeals of certain administrative
actions. We consolidated the petitions by an order
dated May 22, 2002. On June 14, 2002, we permitted the
Natural Resources Defense Council and the Planning
and Conservation League to intervene on behalf of
Petitioners.
The DOT Inspector General filed a report regarding
his “comprehensive review of border operations” on
June 25, 2002, and the Secretary of Transportation
issued his written certification on November 20, 2002.
As promised, following DOT’s certification of its read-
iness to issue the regulations, President Bush modified
the trucking moratorium (subsequent to oral argument)
to permit Mexico-domiciled motor carriers to provide
l4a
cross-border services.“ See Memorandum of November
27, 2002, 67 Fed. Reg. 71,795 (2002). The moratorium
remains in place now only as to Mexico-domiciled motor
carrier services between points in the United States.
Id.
III. STANDING
We must first address Petitioners’ standing to sue.
Even though standing was not an issue in the admini-
strative proceedings, “federal courts are under an
independent obligation to examine their own juris-
diction, and standing’ is perhaps the most important of
the jurisdictional] doctrines.’” FW/PBS, Inc. v. City of
Dallas, 493 U.S. 215, 231, 110 S. Ct. 596, 107 L. Ed.2d
603 (1990) (quoting Allen v. Wright, 468 U.S. 737, 750,
104 S. Ct. 3315, 82 L. Ed.2d 556 (1984)) (alteration in
original). We need only find that one petitioner has
standing to allow a case to proceed. See, e.g., Chief
Probation Officers v. Shalala, 118 F.3d 1327, 1331 (9th
Cir. 1997) (White, Justice, by designation) (evaluation of
the standing of a second plaintiff is “unnecessary to
resolution of the case”); see also Watt v. Energy Action
Educ. Found., 454 U.S. 151, 160, 102 S. Ct. 205, 70
L.Ed.2d 309 (1981) (“There are three groups of
plaintiffs in this litigation. . . . Because we find [that
We ordered the parties to submit supplemental briefing ad-
dressing the effect of the President’s order modifying the Mexican-
domiciled motor carrier moratorium on the issues presented in this
case. Simultaneous supplemental briefs were filed on December
13, 2002.
* President Bush had previously modified the moratorium, in a
manner not affecting this case, by permitting United States-
domiciled Mexican-owned or -controlled motor carriers to provide
services within the United States. See Memorandum, 66 Fed. Reg.
30,799 (2001).
15a
one of the groups] has standing, we do not consider the
standing of the other plaintiffs.”). Thus, at Petitioners
suggestion, we consider only the standing of Public
Citizen.
We look first to Public Citizen’s ability to satisfy the
constitutional requirements for standing, then turn to
the requirements for organizational and statutory
standing under the APA.
[Tjo satisfy Article III’s standing requirements, a
plaintiff must show (1) it has suffered an “injury in
fact” that is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical;
(2) the injury is fairly traceable to the challenged
action of the defendant; and (3) it is likely, as Op-
posed to merely speculative, that the injury will be
redressed by a favorable decision.
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.
(TOC), Ad 528 U.S. 167, 180-81, 120 S. Ct. 693, 145
L.Ed.2d 610 (2000) (quoting Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61, 112 S. Ct. 2130, 119 L.
Ed.2d 351 (1992)). We address these constitutional
minima in turn.
A. Injury in Fact
“To satisfy the injury in fact requirement, a plaintiff
asserting a procedural injury must show that ‘the
procedures in question are designed to protect some
threatened concrete interest of his that is the ultimate
basis of his standing. Cantrell v. City of Long Beach,
241 F.3d 674, 679 (9th Cir. 2001) (quoting Defenders of
Wildlife, 504 U.S. at 573 n. 8, 112 S. Ct. 2130). The
“procedures in question” here require federal agencies
to perform certain types of environmental analysis
16a
before promulgating regulations. Publie Citizen has
adequately alleged that DOT failed to properly follow
these procedures. “In NEPA cases, we have described
[the] ‘concrete interest’ test as requiring a ‘geographic
nexus’ between the individual asserting the claim and
the location suffering an environmental impact.” Id.
(quoting Douglas County v. Babbitt, 48 F.3d 1495, 1500
n. 5 (9th Cir. 1995)). The same inquiry is appropriate in
a CAA case, such as this, where a federal agency has
allegedly failed to conduct a conformity determination.
That is, environmental petitioners must allege that
they will suffer harm by virtue of their geographic
proximity to the situs of the claimed pollution.
Public Citizen describes itself as an organization
whose “members include residents who reside along the
Mexican border area in the United States and will be
negatively affected by increases in emissions” from
Mexico-domiciled trucks if they are allowed into this
country. This includes “2,567 . . members [who] live
in greater Los Angeles, 1,205 [who] live in the San
Diego area, . . . [and] 1,094 [who] live in the greater
Houston area.” These are the geographic areas most
likely to be affected by increased truck traffic from
Mexico.
Public Citizen further alleges that its “members
[who] live and work in [these] areas . . . that will be
most affected by increased emissions from Mexico-
domiciled trucks . . . will be exposed to such
emissions, and as a result may suffer adverse health
effects.” An individual member of Public Citizen from
Houstonꝰ has submitted a declaration informing us that
We note that, according to the U.S. Geological Survey’s Na-
tional Biological Information Infrastructure, Houston has sur-
17a
he monitors smog levels due to diesel truck traffic via e-
mail alerts and that he limits his family’s outdoor
recreational activity when such alerts occur out of
concern for their health.
We have held that “evidence of a credible threat to
the plaintiff's physical well-being from airborne pollu-
tants falls well within the range of injuries to cognizable
interests that may confer standing.” Hall v. Norton,
266 F.3d 969, 976 (9th Cir. 2001); cf. Natural Res. De-
fense Council v. Southwest Marine, Inc., 236 F. 3d 985,
994 (9th Cir. 2000) (Plaintiffs alleged sufficient injury in
fact when they testified that “they have derived
recreational and aesthetic benefit from their use of the
(affected area] . „ but that their use has been
curtailed because of their concerns about pollution,
contaminated fish, and the like.”). Cognizable “credible
threat[s]” include “ ‘increased traffic, pollution, and
noise, Hall, 266 F.3d at 976 n. 6 (quoting Soc Hill
Towers Owners’ Ass n v. Rendell, 210 F.3d 168, 176 (3d
Cir. 2000)), and “increased auto emissions,” id. (citing
Sierra Club v. EPA, 129 F.3d 137, 139 (D.C. Cir. 1997)).
This jurisprudence is consistent with the Supreme
Court’s rule that “environmental plaintiffs adequately
allege injury in fact when they aver that they use the
affected area and are persons ‘for whom the aesthetic
and recreational values of the area will be lessened’ by
the challenged activity.” Laidlaw, 528 U.S. at 183, 120
S. Ct. 693 (quoting Sierra Club v. Morton, 405 US. 727,
735, 92 S. Ct. 1361, 31 L.Ed.2d 636 (1972)). Accordingly,
Public Citizen’s allegations and supporting evidence fall
squarely within our rule, and satisfy the injury-in-fact
requirement.
passed Los Angeles as the most air-polluted city in the United
States. See http://eswgcin.nbii.gov/urban/urban.html.
18a
B. Causation
“Once a plaintiff has established an injury in fact
under NEPA, the causation and redressability require-
ments are relaxed.” Cantrell, 241 F.3d at 682; accord
Hall, 266 F.3d at 975 (Petitioners “ seeking to enforce a
procedural requirement the disregard of which could
impair a separate concrete interest of theirs,’ . .
establish standing ‘without meeting all the normal
standards for redressability and immediacy.’” (quoting
Defenders of Wildlife, 504 U.S. at 572 & n. 7, 112 S. Ct.
2130)). Unlike in an ordinary causation analysis, a peti-
tioner asserting a procedural injury “need only
establish ‘the reasonable probability of the challenged
action’s threat to{his] concrete interest“ Hall, 266
F.3d at 977 (quoting Churchill County v. Babbitt, 150
F.3d 1072, 1078 (9th Cir. 1998)) (emphasis added) (al-
teration in original).
Both in its briefing and at argument, DOT asserted
that Public Citizen had not sufficiently established
causation because the challenged regulations would not
have permitted cross-border Mexican truck traffic
unless the President of the United States lifted the
moratorium. The President’s November 27, 2002 order
modifying the moratorium rendered this assertion
moot. Even before the President acted, however,
Public Citizen’s asserted injury could reasonably be
linked to DOT’s action. Thus, constitutionally adequate
causation existed at the time the petitions were filed.
See Arizonans for Official English v. Arizona, 520 U.S.
43, 67, 117 S. Ct. 1055, 137 L.Ed.2d 170 (1997) (“To
qualify as a case fit for federal-court adjudication, an
actual controversy must be extant at all stages of
review... .”).
19a
DOT’s argument hinged on the fact that the
President, an independent actor not before this Court,
had the ability to stop Mexican trucks at the border
even if DOT’s regulations were implemented. See
Ecological Rights Found. v. Pac. Lumber Co., 230 F.3d
1141, 1152 (9th Cir.2000) (“(T]he causal connection put
forward for standing purposes cannot be too specu-
lative, or rely on conjecture about the behavior of other
parties . . . .” (emphasis added)); cf. Bennett v. Spear,
520 U.S. 154, 167, 117 S. Ct. 1154, 137 L.Ed.2d 281
(1997) (“(T]he injury must . . not [be] the result of
the independent action of some third party not before
the court.”).
Thus, two parties had to act before the effect com-
plained of would have come about: the President, who
had already indicated his intention to comply with
NAFTA by lifting the trucking moratorium, and DOT,
which had been obligated by Congress, on penalty of
budgetary restrictions, to promulgate safety and in-
spection regulations governing Mexican trucks. Peti-
tioners and DOT engaged extensively over what would
be the appropriate metaphor for such an unusual situa-
tion, in which two independent parties had the ability to
stop an event from occurring, but both had to take
action for the event to occur. Public Citizen suggested
that the situation was like a door with two locks, where
two independent parties each had to use their keys to
open the door, or it would have remained shut. DOT
asserted that although it had used its key on one of the
locks, the President had the more critical key because
its use was entirely within his discretion, and not de-
pendent upon a temporary appropriations rider.
These metaphorical approaches did not help to clarify
the situation. The existence of constitutionally suffi-
20a
cient causation does not hinge on keys, doors, or locks.
We do not adjudicate imagined hypotheticals or magical
metaphors—we must decide the case presented to us.
The only relevant question is whether there was a
“reasonable probability” that DOT’s promulgation of
the regulations would result in increased pollution and
adverse health effects to Public Citizen and its
members.
Even before the recent presidential action, we would
have had to conclude that it was reasonably likely that
after these regulations became effective, the President
would lift the moratorium. “{WJhen standing hinges on
choices made by a third party, [a] plaintiff must ‘adduce
facts showing that those choices have been or will be
made in such manner as to produce causation and per-
mit redressibility of injury.“ Yesler Terrace Cmty.
Council v. Cisneros, 37 F.3d 442, 447 (9th Cir. 1994)
(quoting Defenders of Wildlife, 504 U.S. at 562, 112 S.
Ct. 2130). Public Citizen pointed to the introductory
text of the regulations, in which DOT stated that it was
issuing the regulations “in anticipation of a presidential
order lifting the current statutory moratorium on
authorizing such operations.” Application Rule, 67 Fed.
Reg. at 12,702. Public Citizen also pointed to the
finding of the NAFTA arbitral panel that the United
States’ consistent refusal to allow entry to Mexican
trucks violated the treaty, and the President’s conse-
quent announced intent to modify the moratorium once
the regulations were issued.
The argument the other way, however, had some
force. “[{I}t usually is difficult to establish causation and
redressibility when a plaintiff's alleged injury depends
on the actions of a third party not before the court.”
Yesler Terrace, 37 F.3d at 446. The Supreme Court
21a
tells us that an acceptable causation analysis cannot
rely on “the independent action of some third party not
before the court.” Bennett, 520 U.S. at 167, 117 S. Ct.
1154. Certainly the President is an independent actor.
Nevertheless, we find dispositive the lower threshold
for causation in procedural injury cases, which often
involve third parties whose independent actions are
necessary for constitutional injury to occur.
For instance, to use the Supreme Court’s example, a
person
living adjacent to the site for a proposed construc-
tion of a federally licensed dam has standing to
challenge mental impact statement, even though he
cannot establish with any certainty that the
statement will cause the license to be withheld or
altered, and even though the dam will not be
completed for many years,
Defenders of Wildlife, 504 U.S. at 572 n. 7, 112 S. Ct.
2130, and, perhaps more importantly, even though
there can be no certainty that the company will ever
build the dam even were the license granted. Certainly
the fact that the dam construction company applied for
a license is an indication that it wishes to build the dam,
but a myriad of circumstances—financial, political, or
meteorological—could intervene to prevent it from
actually following through with its plans. Nevertheless,
the Supreme Court considers such a case to contain the
requisite level of causation, because it is a procedural
injury case, requiring only a “reasonable probability” of
causation.
Here, the President of the United States had com-
mitted himself to a course of action to which the United
States was obligated under an important international
22a
treaty, passage of which was hard-fought and not
without controversy, and as to which it was then in
default. There were, of course, a number of develop-
ments that could have changed the President’s mind on
this issue - political, diplomatic, military, or economic—
but that cannot detract from his announced intent to
comply with the treaty (at least as far as this standing
analysis is concerned). President Bush’s public state-
ment that he would lift the moratorium is sufficient for
these purposes. Thus, it is no metaphysical exercise to
conclude that it was reasonably probable, even before
the action actually occurred, that the President would
rescind the moratorium.
We must next look at the likelihood of harm to Public
Citizen if it does not prevail in this action. If Public
Citizen’s petition is denied, then there is nothing to
keep the regulations from going into effect. Once this
occurs, Mexico-domiciled truck companies will apply for
licenses to operate in the United States beyond the
border zone, Application Rule, 67 Fed. Reg. at 12,714
(creating 49 C. F. R. § 365.503), and DOT will issue per-
mits to those companies that satisfy the requirements
of the challenged regulations, id. at 12,715 (creating 49
C.F.R. § 365.507). Those companies will then begin to
operate their trucks in the United States, emitting
pollutants that contaminate the air Public Citizen’s
members breathe and that could potentially cause them
myriad adverse health effects. Although DOT and
Public Citizen dispute the number of Mexican trucks
that will in fact be granted entry, and the quantity of
consequent pollutant emissions, both agree that at least
some Mexico-domiciled trucks will enter the United
States if the regulations are put into effect, and at least
some pollutants will be emitted. This is a sufficient
23a
causal link between DOT’s acts and Public Citizen’s
alleged injury.
C. Redressability
The third prong of the constitutional standing inquiry
requires us to determine whether we possess the ability
to remedy the harm that a petitioner alleges. In most
procedural injury cases involving environmental analy-
sis, a petitioner “who asserts inadequacy of a govern-
ment agency’s environmental studies. need not
show that further analysis by the government would
result in a different conclusion. It suffices that
the [agency’s] decision could be influenced by the en-
vironmental considerations that [the relevant statute]
requires an agency to study.” Hall, 266 F.3d at 977
(emphasis added). Thus, Public Citizen bears a rela-
tively easy burden. If DOT conducted the type of
environmental analysis that Public Citizen suggests, its
decision could be influenced. Indeed, DOT is required
by statute to “insure that . . environmental
amenities and values . . be given appropriate con-
sideration in [administrative] decisionmaking.” 42
U.S.C. § 4332(2)(B).
As the case now stands, if we grant Public Citizen’s
petitions, no Mexico-domiciled trucks will be permitted
into the United States beyond the border zones until
DOT conducts the required analyses; and if we deny the
petitions, Mexico-domiciled trucks will be permitted
into the United States as soon as they complete the
registration and certification process provided in the
challenged regulations. Thus, the case presents the
very paradigm of constitutional redressability: Public
Citizen will suffer harm if we deny its petitions, but the
harm will be avoided entirely if we grant the petitions.
24a
D. Organizational Standing
A further necessary standing inquiry is whether
Public Citizen is entitled to bring suit on behalf of its
members. “An association has standing to bring suit on
behalf of its members when its members would other-
wise have standing to sue in their own right, the
interests at stake are germane to the organization’s
purpose, and neither the elaim asserted nor the relief
requested requires the participation of individual
members in the lawsuit.” Laidlaw, 528 U.S. at 181, 120
S. Ct. 693 (citing Hunt v. Wash. State Apple Adver.
Comm’n, 432 U.S. 333, 343, 97 S. Ct. 2434, 53 L.Ed.2d
383 (1977)). We conclude that Public Citizen has organi-
zational standing. It has adequately alleged injury to
its members. The interests at stake—potential adverse
health consequences due to increased pollution from
diesel truck exhaust—are pertinent to the interests of
environmental organizations and other organizations
concerned with the physical well-being of their mem-
bership. Finally, there is no indication that resolving
this case would require, or even be assisted by the
participation of individual members of Public Citizen.
E. Statutory Standing Under the APA
In addition to constitutional standing, a petitioner
who:
brings a statutory enforcement action under the
[APA] must meet its statutory requirements for
standing. [A petitioner] must establish (1) that
there has been final agency action adversely affect-
ing lit], and (2) that, as a result, it suffers legal
wrong or that its injury falls within the “zone of
interests” of the statutory provision the [petitioner]
claims was violated.
25a
Churchill County, 150 F.3d at 1078 (quoting Lujan v.
Nat'l Wildlife Fed’n, 497 U.S. 871, 882-83, 110 S. Ct.
3177, 111 L.Ed.2d 695 (1990)) (internal citations
omitted), as amended, 158 F.3d 491 (9th Cir. 1998).
Public Citizen satisfies the first requirement. Though
the regulations at issue are styled as “Interim Final
Rulels],“ see, e.g., Application Rule, 67 Fed. Reg. at
12,702, the term “interim” refers “only to the Rule’s
intended duration—not its-tentative nature,” Career
Coll. Ass’n v. Riley, 74 F.3d 1265, 1268-69 (D. C. Cir.
1996) (“Any other construction would suggest that the
publication [of the rule] was without legal
significance at all (a senseless repetition of the notice of
proposed rulemaking).”).
As for the second prong, we have held that the APA
“require[s] that the ‘interest sought to be protected by
the complainant is arguably within the zone of interests
to be protected or regulated by the statute or consti-
tutional guarantee in question.’” Presidio Golf Club v.
Nat! Park Serv., 155 F.3d 1153, 1158 (9th Cir. 1998)
(quoting Ass’n of Data Processing Serv. Orgs., Inc. v.
Camp, 397 U.S. 150, 153, 90 S. Ct. 827, 25 L.Ed.2d 184
(1970)). As might be expected, NEPA's purpose is to
protect the environment, not the economic interests of
those adversely affected by agency decisions.“ Id.
(quoting W. Radio Servs. Co. v. Espy, 79 F.3d 896, 902-
03 (9th Cir. 1996)). Here, Public Citizen is attempting
to protect the environment. indeed, many of the
Petitioners and Petitioners-Intervenors in this case are
environmental organizations, or general public interest
organizations like Public Citizen that fight] for a
broad range of public interest issues[,][mJany of [which]
relate directly or indirectly to environmental concerns.”
DOT claims that some of the other Petitioners, labor
26a
and trucking organizations—whose standing is irrele-
vant in any instance—are alleging impermissible
economic injuries, but this does not eliminate standing
as long as they also assert economic/ health concerns.
See id. at 1158-59.
* * *
In response to our post- argument request for
briefing on the significance of the President's modifi-
cation of the moratorium, DOT makes two additional
arguments, neither of which has merit. It first suggests
that were we to grant Public Citizen the relief it seeks,
that would be tantamount to enjoining Presidential
action. We disagree. The President of the United
States is not a party to this action, and the issues before
us do not touch on his clear, unreviewable discretionary
authority to modify the moratorium pursuant to 49
U.S.C. § 13902(c). We similarly reject DOT’s assertion
that the relief Public Citizen seeks will somehow affect
NAFTA’s viability. Again, neither the validity of nor
the United States’ compliance with NAFTA is before
us. Our task here is relatively narrow: we are asked
only to review the adequacy of the environmental
analyses conducted by DOT before promulgating the
three regulations.
Thus, we conclude that Public Citizen has standing to
bring these petitions.
IV. STANDARD OF REVIEW
Review of agency action to determine its conformity
with NEPA and the CAA provisions at issue is
governed by the judicial review provisions of the APA,
5 U.S.C. §§ 701-706. See Hells Canyon Alliance v.
United States Forest Serv., 227 F.3d 1170, 1176-77 (9th
27a
Cir.2000) (NEPA); City of Olmsted Falls v. FAA, 292
F.3d 261, 269 (D. C. Cir. 2002) (CAA); see also City of S.
Pasadena v. Slater, 56 F. Supp.2d 1106, 1134-35 (C. D.
Cal. 1999) (CAA review uses same standard as NEPA
review). The reviewing court must determine that
agency actions are not “arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with the
law.” 5 U.S.C. § 706(2)(A). In considering whether an
agency acted in an arbitrary and capricious manner, a
court “must determine whether the agency articulated
a rational connection between the facts found and the
choice made.” Ariz. Cattle Growers’ Ass’n v. United
States Fish & Wildlife, 273 F.3d 1229, 1236 (9th Cir.
2001). Furthermore, courts must “carefully review the
record to ‘ensure that agency decisions are founded on a
reasoned evaluation of the relevant factors,’” id. (quot-
ing Marsh v. Or. Natural Res. Council, 490 U.S. 360,
378, 109 S. Ct. 1851, 104 L. Ed. 2d 377 (1989)), and may
not “‘rubber-stamp . . . administrative decisions that
they deem inconsistent with a statutory mandate or
that frustrate the congressional policy underlying a
statute,’” id. (quoting NLRB v. Brown, 380 U.S. 278,
291-92, 85 S. Ct. 980, 13 L.Ed.2d 839 (1965)) (omission in
original).
In the context of the procedural environmental re-
quirements imposed by NEPA and CAA, “(t]he arbi-
trary and capricious standard requires a court to ensure
that an agency has taken the requisite hard look at the
environmental consequences of its proposed action,
carefully reviewing the record to ascertain whether the
agency decision is founded on a reasoned evaluation of
the relevant factors.” Wetlands Action Network v.
United States Army Corps of Eng’rs, 222 F.3d 1105,
1114 (9th Cir. 2000) (internal quotation marks omitted),
28a
cert. denied, 534 U.S. 815, 122 S. Ct. 41, 151 L.Ed.2d 14
(2001). A reviewing court is not permitted to substitute
its judgment for that of the agency, but rather must
simply. . . ensure that({the agency] has adequately
considered and disclosed the environmental impact of
its actions.’” Am. Rivers v. FERC, 201 F.3d 1186, 1194-
95 (9th Cir. 1999) (quoting Ass’n of Pub. Agency
Customers, Inc. v. Bonneville Power Admin., 126 F.3d
1158, 1183 (9th Cir. 1997)). This means that we “must
defer to an agency’s decision that is fully informed and
well-considered,” Blue Mountains Biodiversity Project
v. Blackwood, 161 F.3d 1208, 1211 (9th Cir. 1998) (in-
ternal quotation marks omitted), but “need not forgive
a ‘clear error of judgment,’” id. (citing Marsh, 490 U.S.
at 378, 109-S. Ct. 1851), or credit “conclusions that do
not have a basis in fact,” Ariz. Cattle, 273 F.3d at 1236.
V. ENVIRONMENTAL ANALYSIS UNDER NEPA
A. DOT’s Decision Not to Prepare an EIS
We next determine whether DOT acted in an
arbitrary and capricious manner when it failed to
prepare an Environmental Impact Statement on the
basis of its Environmental Assessment. By its own
terms, NEPA intended to reorganize the priorities of
the federal government, to integrate “environmental
amenities and values” alongside more traditional “eco-
nomic and technical considerations.” 42 U.S.C.
§ 4332(2)(B). Congress directed that the statute and its
implementing regulations be used toward this end in
government decisionmaking “to the fullest extent
possible.” Id. § 4332.
To achieve its goal of including environmental con-
cerns in government decisionmaking, NEPA requires
that an EIS be prepared for all “major Federal actions
29a
significantly affecting the . . . human environment.”
Id. § 4332(2)(C). In certain circumstances, agencies
may first prepare an EA to make a preliminary deter-
mination whether the proposed action will have a
significant environmental effect. See Nat! Parks &
Conservation Ass'n v. Babbitt, 241 F.3d 722, 730 (9th
Cir. 2001) (citing 40 C.F.R. § 1501.4), cert. denied, 534
U.S. 1104, 122 S. Ct. 903, 151 L.Ed.2d 872 (2002). “If
the EA establishes that the agency’s action ‘may have a
significant effect upon the . . . environment, an EIS
must be prepared.“ Id. (quoting Found. for N. Am.
Wild Sheep v. United States Dep’t of Agric., 681 F.2d
1172, 1178 (9th Cir. 1982)) (emphasis and alteration in
original). “If not, the agency must issue a Finding of
No Significant Impact (FONSI), accompanied by ‘a
convincing statement of reasons to explain why a pro-
ject’s impacts are insignificant.’” Id. (quoting Blue
Mountains, 161 F.3d at 1212) (internal citations and
quotation marks omitted).
Thus, to decide whether an EIS is required, we must
determine: (1) whether the challenged rules constitute
“major” federal actions; and (2) whether they may
significantly affect the environment. We find that
DOT’s rules are major federal actions that may
significantly affect the environment, and thus we hold
that DOT acted in an arbitrary and capricious manner
in failing to prepare an EIS for the challenged regu-
lations.
1. “Major Federal Action”
The Council on Environmental Quality (“CEQ”), a
body established by NEPA, 42 U.S.C. §§ 4342- 4347,
has issued regulations implementing NEPA. We rely
on these regulations to “guide our review of an agency’s
30a
compliance with NEPA,” Native Ecosystems Council v.
Dombeck, 304 F.3d 886, 894 n. 1 (9th Cir. 2002), and the
Supreme Court has held that they are entitled to
substantial deference, Marsh, 490 U.S. at 372, 109 S. Ct.
1851. The relevant CEQ regulations implementing
NEPA define “major Federal action{s]” as “actions
with effects that may be major and which are po-
tentially subject to Federal control and responsibility,”
including “{a]doption of official policy, such as rules,
regulations, and interpretations.” 40 C.F.R. § 1508.18.
DOT, of course, does not dispute that its actions are
“federal,” but does dispute Petitioners’ allegations
regarding the regulations’ “effects.” DOT alleges that
the effects of the Application and Safety Rules are
limited to the increased diesel emissions of Mexican
trucks during the road-side inspections and safety
monitoring mandated by the regulations. It thus pre-
dicts that there will be no increase in Mexican truck
traffic resulting from the regulations. DOT’s analysis
goes on to suggest that even if such an increase might
occur, its effects would not require consideration
because it would be a result of presidential rescission of
the moratorium, not the regulations themselves. This
novel parsing of the regulations’ effects fails to meet
NEPA standards.
DOT’s argument here echoes its earlier causation
argument in the standing context. It is equally un-
availing here for a similar reason. The CEQ regulations
make clear that the “effects” of fed2ral actions include
“{ilndirect effects, which are caused by the action and
are later in time . . . but are still reasonably
foreseeable,” id. § 1508.8(b), as well as “[cjumulative
impact . . which results from the incremental impact
of the action when added to other . . . reasonably fore-
3la
seeable future actions regardless of what agency
(Federal or non-Federal) or person undertakes such
other actions,” id. § 1508.7.
We have already concluded that the President’s
rescission of the moratorium was “reasonably foresee-
able” at the time the EA was prepared and the decision
not to prepare an EIS was made. Cf. Native Eco-
systems, 304 F.3d at 896 (holding that a memorandum
that “evidences a decision to consider . . . seriously”
taking certain actions renders those actions “reasonably
foreseeable”). To restrict consideration of the regu-
lations’ “effects” in the way DOT proposes would con-
travene not only the plain language of the CEQ
regulations, but also the statutory command of NEPA,
that environmental effects of government action be
— “to the fullest extent possible.” 42 U.S.C.
As for the requirement that the federal action be
“major,” the CEQ regulations tell us that “[mJajor rein-
forces 734 but does not have a meaning independent of
significantly,” 40 C.F.R. § 1508.18, meaning that a
federal action is “major” whenever it has “significant”
environmental effects. See City of Davis v. Coleman,
521 F.2d 661, 673 n. 15 (9th Cir. 1975).
2. “Significantly Affecting the Human Environment”
The CEQ regulations also define the crucial term
“significantly,” to clarify the situations in which an
agency must prepare an EIS:
“Significantly” as used in NEPA requires considera-
tions of both context and intensity:
(a) Context. This means that the significance of an
action must be analyzed in several contexts such as
32a
society as a whole (human, national), the affected
region, the affected interests, and the locality.
Significance varies with the setting of the proposed
action. For instance, in the case of a site-specific
action, significance would usually depend upon the
effects in the locale rather than in the world as a
whole. Both short-and long-term effects are rele-
vant.
(b) Intensity. This refers to the severity of
impact. . . . The following should be considered in
evaluating intensity:
(2) The degree to which the proposed action
affects public health or safety.
(4) The degree to which the effects on the quality
of the human environment are likely to be highly
controversial.
(5) The degree to which the possible effects on the
human environment are highly uncertain or involve
unique or unknown risks.
(10) Whether the action threatens a violation of
Federal, State, or local law or requirements imposed
for the protection of the environment.
40 C.F.R. § 1508.27. If DOT’s action is environmentally
“significant” according to any of these criteria, then
DOT erred in failing to prepare an EIS. See Nat'l
Parks, 241 F.3d at 731. An examination of these
criteria reveal that the challenged regulations are
33a
environmentally “significant,” and an EIS should have
been prepared.
(a) Context
The CEQ regulations explain that the proposed
federal action must be analyzed with regard to several
contexts—national, regional, and local—as well as by
looking at the short- and long-term effects of the
proposed action. Measured against this standard,
DOT’s EA is woefully inadequate. The EA calculates
likely emissions increases if the Application and Safety
Rules are implemented. It dismisses those increases as
insignificant, however, because they are “very small
relative to national levels of emissions.” It does not
conduct any analysis regarding whether these increases
may be localized in certain areas near the Mexican
border, including such likely destinations as Southern
California or Texas.
Amicus ATA considers it “unreasonable” that DOT
should have to “make a determination of the expected
routes of 34,000 hypothetical [Mexican trucks].”
Regardless of the law’s “reasonableness” (a question
properly addressed by Congress—not us), this is pre-
cisely what NEPA and the CEQ regulations require.
The law requires DOT to consider the most likely locali-
ties to be affected by increased Mexican truck traffic
and to perform more localized analyses for these areas.
Indeed, comments submitted to FMCSA during the
notice-and-comment period analyzed publicly available
government data to predict, not surprisingly, that
major cities near the Mexican border would likely
suffer the greatest environmental impact as a result of
the regulations. The fact that commenters performed
such an analysis does not indicate that their analysis
34a
was correct, but rather that it was possible to conduct
such an analysis. DOT’s failure to do so indicates that it
did not take a sufficiently “hard look” at the environ-
mental effects of its actions or at the public comments it
received.
Furthermore, DOT failed to address adequately the
long-term effects of its actions. In conducting its EA,
DOT limited its analysis to the environmental impact of
Mexican trucks in the year 2002. This is anomalous in
itself, considering that the regulations were scheduled
to become effective only as of May 3, 2002. More signi-
ficantly, the EA offered no projections of the increase
(or decrease) in Mexican truck traffic after 2002, though
the regulations were certainly expected to continue in
effect beyond the end of last year; indeed they would be
in effect now absent this action.
ATA contends that increases in Mexican truck traffic
in years subsequent to 2002 would be attributable to
the “success of NAFTA,” rather than to the regulations
themselves. This argument is beside the point, as it is
impossible to separate increases in truck traffic due to
the opening of the border from increases in truck traffic
due to successful international trade; it is precisely this
desired increase in international trade that prompted
DOT to issue regulations facilitating cross-border truck
traffic in the first place.
Once again, DOT received this very criticism in pub-
lic comments during its rulemaking process. The com-
menters used available government data to estimate
future increases in Mexican truck traffic after 2002.
This alone should have prompted DOT to conduct a
long-term analysis, as required by the CEQ regulations,
or at the very least, to convineinglly . . . explain” its
absence. Nat! Parks, 241 F.3d at 730.
(b) Intensity
(i) Effect on Public Health and Safety
Petitioners contend that DOT must prepare an EIS,
in part due to the potential effect of the challenged
regulations on public health and safety. Although we
have never discussed this requirement in the context of
air pollution, other courts have considered “even [the]
marginal degradation of drinking water” to be environ-
mentally significant for purposes of this regulation. See
United States v. 27.09 Acres of Land, 760 F.Supp. 345,
353 (S. D. N. Y. 1991). The same could easily be said of
a “marginal degradation” of the quality of the air we
breathe.
The pollutants at issue are oxides of nitrogen
(“NOx”) and airborne particulate matter (“PM-10”).
These compounds are emitted into the air as part of the
exhaust fumes of diesel trucks, such as those that are
the subject of the challenged regulations. Petitioners-
Intervenors have pointed to a wealth of government
and private studies showing that diesel exhaust and its
components constitute a major threat to the health of
children, contribute to respiratory illnesses such as
asthma and bronchitis, and are likely carcinogenic.
While these studies were not placed in the admini-
strative record, that does not excuse DOT’s failure even
to consider whether any negative health effects could
be associated with increased diesel exhaust emissions.
(ii) Uncertainty
If the environmental effects of a proposed agency
action are uncertain, the agency must usually prepare
an EIS:
36a
Preparation of an EIS is mandated where uncer-
tainty may be resolved by further collection of data,
or where the collection of such data may prevent
“speculation on potential . . . effects. The purpose
of an EIS is to obviate the need for speculation by
insuring that available data are gathered and
analyzed prior to the implementation of the pro-
posed action.”
Nat'l Parks, 241 F.3d at 732 (quoting Sierra Club v.
United States Forest Serv., 843 F.2d 1190, 1195 (9th Cir.
1988)) (internal citation omitted) (omission in original).
There are a number of areas of uncertainty regarding
DOT’s EA that merit additional investigation. The
most significant of these is whether, and to what
extent, cross-border Mexican truck traffic will increase
if DOT implements the regulations. A related question
is whether, and to what extent, such increased Mexican
truck traffic will consist of trucks producing more
dangerous emissions than their United States counter-
parts.
DOT acknowledges that “there are reasons to believe
that [increased traffic and pollution] might occur,” but
it contends that these increases will be smaller than
Petitioners suggest. Strangely, despite DOT’s “reasons
to believe” that such increases will occur, its EA does
not address them. In fact, the EA specifically assumed
for the purposes of its study that “the implementation
of [the regulations) would not affect the trade volume
between the United States [and] Mexico.” It contends
instead that any increases “would be the result of the
modification of the moratorium and not the imple-
mentation of the [regulations].” Indeed, the EA asserts
that the number of Mexican trucks in the United States
will likely decrease as a result of the new regulations
37a
alone, because not all existing Mexican trucks currently
operating in the border zone could or will comply with
them. This illogical parsing of the cause of increased
pollution, i.e., that decreases in truck traffic are
credited to DOT’s action, but the potentially much
larger expected increases in the same traffic are attri-
buted to the President’s modification of the morato-
rium, dictates the EA’s overall conclusions.
The EA goes on to evaluate the environmental
effects of the regulations—attempting to segregate
them from those attributable to the rescission of the
moratorium—and concludes that the regulations will
actually slightly reduce emissions by Mexican trucks
within the border zone, and have no significant effect on
air quality beyond the border zone, when evaluated on
a national scale. This emissions analysis, in turn, is
based on the EA’s further assumptions regarding the
quality and age of the Mexican truck fleet.
The EA assumes, without stating any basis there-
fore, that it “considered” approximately one-third of
Mexican trucks to be identical to United States trucks
manufactured after 1994, while considering the re-
maining trucks identical to United States trucks manu-
factured in 1986. (More precisely, the EA “considered”
130,000 of 400,000 Mexican trucks to be manufactured
after 1994, and the rest in 1986, and then lamented the
“significant confounding variable” in its study, that the
analysis programs it used “were based on United States
vehicles.”) These years are significant because 1994 is
the year after which Mexican emissions standards be-
came equivalent to United States standards. The year
1986 was selected, according to DOT, because it was the
last year when neither Mexico nor the United States
had any relevant emissions regulations in place.
38a
There are two problems with this analysis. First, the
EA provides no basis whatsoever for its selection of
one-third as the proportion of Mexican trucks manu-
factured after 1994. Other studies, though not part of
the administrative record, have concluded that this per-
centage is closer to 20% (study by the General Account-
ing Office) or even 10% (private study commissioned by
the California Attorney General). While we do not
consider such studies to be conclusive, they are at least
founded on some analysis of raw data, and based on
some ascertainable methodology. The EA, on the other
hand, seems to have randomly selected one-third as its
preferred proportion, citing no authority or study for
that number.
The second analytical defect echoes our concern re-
garding the EA’s failure to consider long-term effects.
The United States has already adopted much stricter
emissions regulations that will become effective in 2004
and 2007. See 40 C. F. R. § 86.004-11 (2004); id. § 86.007-
11 (2007). In addition, six major United States diesel
truck engine manufacturers have entered into consent
decrees in the District Court for the District of
Columbia in settlement of CAA violations, in which
they have agreed to abide by certain of the 2004
emissions regulations as of October 1, 2002. See, e. g.,
Consent Decree, United States v. Caterpillar, Inc., No.
98-02544(HHK) (D.D.C. 1999). Neither the EA nor
DOT cite to any known plans of the Mexican govern-
ment to tighten its emissions standards beyond those
currently in place. Indeed, the EA never even con-
sidered this issue because, as discussed above, it limited
its analysis to the year 2002. The existence of regu-
lations and consent decrees that will significantly alter
the relative environmental impact of Mexican truck
39a
traffic in the near future would further strengthen the
need for the EA to have considered future implications
of its actions.
Thus, the EA—assuming no increase in Mexican
truck traffic, making an arbitrary assumption about the
percentage of newer, “cleaner” Mexican trucks on the
roads, and failing to take account of future increasing
discrepancies in emissions rules—conducted an
environmental analysis that found no increase in emis-
sions due to the regulations’ implementation. Our law
mandates that an agency complete an EIS “where
uncertainty may be resolved by further collection of
data, or where the collection of such data may prevent
‘speculation on potential . . effects“ Nat'l Parks,
241 F.3d at 732 (quoting Sierra Club, 843 F.2d at 1195)
(internal citation omitted) (omission in original). Peti-
tioners raise many uncertainties about the EA, as does
amicus the Attorney General of the State of California,
see infra, and there is no suggestion that these uncer-
tainties do not lend themselves to quantification.
(Indeed, Petitioners have submitted a number of
studies attempting precisely what DOT should have
done.)
Once again, we do not wish to dictate the outcome of
the analysis that DOT must perform. Perhaps DOT will
determine that the new regulations will have only a
minor impact—one which will be negligible in light of
other factors. In the absence of such analysis, however,
we cannot defer to the agency’s assessment.
(iii) Threat of Illegality
The California Attorney General asserts that DOT
failed to take account of California’s emissions regula-
tions, which are “more stringent than the federal
40a
standards.” In its determination of whether its pro-
posed action is significant, an agency must consider
“(wJhether the action threatens a violation of Federal,
State, or local law or requirements imposed for
the protection of the environment.“ 40 C. F. R.
§ 1508.27 b)(10) accord Sierra Club, 843 F. 2d at 1195.
In Sierra Club, we faulted the Forest Service’s EA for
its failure to consider, or even mention, California’s
water quality standards, which might have been
threatened by proposed timber sales. See Sierra Club,
843 F.2d at 1195. The same fault is present here.
California has mandated the adoption of airborne
pollutant standards for the state, Cal. Health & Safety
Code § 39606 (West 2002), and has adopted rules setting
specific limits for airborne pollutants, including NOx
and PM-10, Cal. Code Regs., tit. 17, §§ 70100-200 (2002).
Regardless of whether the influx of Mexican trucks will
cause the levels of these pollutants to rise beyond
California’s air quality limits—an issue on which the
record before us is insufficient—DOT had an obligation
to consider whether its regulations might violate these
rules.
The California Attorney General also points out that
DOT’s actions could violate the CAA, thus further trig-
gering the illegality prong of the significance analysis.
Because we find that DOT violated the CAA, see infra,
this further strengthens our conclusion that DOT’s
actions are environmentally significant for NEPA
purposes.
(iv) Controversy
“Controversy” sufficient to require preparation of an
EIS occurs “when substantial questions are raised as to
whether a project . . . may cause significant degrada-
4la
tion of some human environmental factor, or there is a
substantial dispute [about] the size, nature, or effect of
the major Federal action.” Nat’l Parks, 241 F.3d at 736
(internal citations omitted and alterations in original).
The evidence establishing such a controversy must be
brought to the agency’s attention while the agency is
conducting its deliberations, not post hoc. See id. Thus,
the controversy requirement is two-fold: Petitioners
must show that there was a “substantial dispute” about
DOT’s actions and that this dispute raised “substantial
questions” about their validity. The burden then shifts
to DOT to provide a “convincing” explanation why no
controversy exists. See id.
Petitioners’ claim satisfies the first requirement. We
have held that an “‘outpouring of public protest’”
—where, for example, 85% of public comments opposed
the proposed agency action—constitutes a substantial
dispute. Jd. (quoting Greenpeace Action v. Franklin, 14
F.3d 1324, 1334 (9th Cir. 1992)). Here, “[o]ver 90 per-
cent of the comments opposed” DOT’s regulations.
Application Rule, 67 Fed. Reg. at 12,704. DOT timely
received these comments, and duly noted their exis-
tence in the comments accompanying the final regula-
tions. See id.
Petitioners’ claim also satisfies the second require-
ment. A substantial portion of the negative comments
offered real criticism of DOT’s action and its failure to
adequately assess its 743 environmental impact. These
comments, several of which were made by the future
litigants here, as well as by other national environ-
mental organizations, describe many of the defects
discussed above. Because many of these criticisms
have merit, and DOT failed to adequately account for
its failure to act on them, its action is “controversial”
42a
under the CEQ regulations and requires preparation of
an EIS.
(e) Convincing Statement of Reasons
In sum, Petitioners have successfully demonstrated
that DOT’s proposed regulations may have a “signifi-
cant” environmental impact, mandating the preparation
of an EIS. DOT has failed to demonstrate that its EA
contains anything close to the statutorily required “con-
vincing statement of reasons” sufficient to support a
decision not to prepare an EIS. We are similarly
unpersuaded by DOT’s last-ditch argument that, as an
agency with no jurisdiction over environmental mat-
ters, it need not consider the environmental conse-
quences of its actions. This argument flies in the face of
the text of NEPA, which requires that “all agencies of
the Federal Government shall. . include in every
. . . major Federal action{ ] significantly affecting the
quality of the human environment, a detailed statement
by the responsible official on . . . the environmental
impact of the proposed action.” 42 U.S.C. § 4332(2)
(emphasis added).
One final point regarding the shortcomings of DOT’s
EA is that its analysis is limited to comparing the
status quo (the “Baseline Scenario”) to the situation in
which the regulations had been implemented (the “Pro-
posed-Action Scenario”). By not considering additional
alternatives (such as, for example, proposing more
stringent controls on incoming Mexican trucks), DOT
further failed to abide by NEPA’s statutory command
to prepare a “detailed statement on...
alternatives to the proposed action.” 42 U.S.C.
§ 4332(2)(C); see also 40 C. F. R. § 1508.25(b)(2) (defining
Aallternatives“ to include “({o]ther reasonable courses
43a
of actions [sic]”). Indeed, the CEQ regulations state
that consideration of alternatives “is the heart of the
environmental impact statement.” 40 C.F.R. § 1502.14.
“The rule of reason guides ‘both the choice of alterna-
tives as well as the extent to which the Environmental
Impact Statement must discuss each alternative.’”
Am. Rivers, 201 F.3d at 1200 (quoting City of Carmel-
by-the Sea v. United States Dep’t of Transp., 123 F.3d
1142, 1155 (9th Cir. 1997)). “(Flor alternatives which
were eliminated from detailed study, [an agency must]
briefly discuss the reasons for their having been
eliminated.’” Jd. (quoting 40 C.F.R. § 1502.14(a)) (emp-
hasis omitted). Thus, in preparing its EIS, DOT should
explore a wider range of alternatives.
B. Categorical Exclusion of the Certification Rule
We next must determine whether DOT acted
arbitrarily and capriciously in failing to conduct any
NEPA environmental analysis at all for the Certifi-
cation Rule. DOT contends that this rule falls within an
exception to the generally applicable requirements of
NEPA. The CEQ regulations allow categorical ex-
clusion of actions “which do not individually or cumu-
latively have a significant effect on the human environ-
ment and which have been found to have no such effect
in procedures adopted by a Federal agency in imple-
mentation of these regulations.” 40 C.F.R. § 1508.4
(citing 40 C.F.R. § 1507.3) (emphasis added). For such
actions, “neither an environmental assessment nor an
environmental impact statement is required.” Id.
Agencies are required to develop guidelines as to
which of their actions do or do not require the pre-
paration of an EA or an EIS. See id. § 1507.3. FMCSA,
as a constituent agency, is subject to DOT’s guidelines.
44a
See Dep’t of Transp., Order 5610.1C, at J 20(a)(2) (Sept.
18, 1979), as amended (July 13, 1982 and July 30, 1985),
available at http://isdde.dot.gov [hereinafter “DOT
Order 5610.1C”]. Individual agencies within DOT are
permitted to issue their own guidelines, id. 1 20(a)(1),
but FMCSA has not done so.
Therefore, we must examine DOT’s Order to
determine whether the Certification Rule falls within
those categories of actions that it has “found to have no
environmental] effect.” 40 C.F.R. § 1508.4. Paragraph
4(c) of the order specifies the categorical exclusions
DOT employs. See DOT Order 5610.1C, at
1 4(c). The list includes such actions as Jaldministra-
tive procurements,” Iplersonnel actions,” and “[p]ro-
ject amendments (e.g. increases in costs) which do not
significantly alter the environmental impact of the
action.” Jd. There is no categorical exclusion that
seems even plausibly capable of encompassing the
Certification Rule.’ In effect, DOT is arguing that,
6 The “categorical exclusions” paragraph of DOT Order 5610.1C
reads as follows:
c. Categorical Exclusions. The following actions are not
Federal actions with a significant impact on the environment,
and do not require either an environmental assessment or an
environmental impact statement:
(1) Administrative procurements (e.g. general supplies) and
contracts for personal services;
(2) Personnel actions (e.g. promotions, hirings),
(3) Project amendments (e.g. increases in costs) which do not
significantly alter the environmental impact of the action;
(4) Operating or maintenance subsidies when the subsidy will
not result in a change in the effect on the environment; and
45a
even though the Certification Rule is not subject to any
of DOT’s categorical exclusions, it should be categori-
cally excluded from the EA/EIS requirement because it
has no significant environmental impact. This cannot
be the case. ä
We review an agency’s determination that a parti-
cular action falls within one of its categorical exclusions
under the arbitrary and capricious standard. Alaska
Ctr. for Env’t v. United States Forest Serv., 189 F.3d
851, 857 (9th Cir. 1999); see also California v. Norton,
311 F.3d 1162, 1176 (9th Cir. 2002). [An agency’s
interpretation of the meaning of its own categorical
exclusion should be given controlling weight unless
plainly erroneous or inconsistent with the terms used in
the regulation.” Alaska Ctr., 189 F.3d at 857. DOT has
failed to identify any particular categorical exclusion
applicable to the Certification Rule and may not do so
post hoc. Norton, 311 F.3d at 1175. Even if it could,
any claim that one of these exclusions applied would be
contrary to the plain text of the DOT Order, and thus
“inconsistent with the terms used in the regulation,”
and not entitled to our deference. Thus, DOT acted in
an arbitrary and capricious manner by failing to
prepare an EIS, or at least in failing to prepare an EA
for the Certification Rule and then determining on that
basis whether to prepare an EIS.
(5) Other actions identified by [individual] administrations as
categorical exclusions pursuant to paragraph 20.
(6) The following actions relating to economic regulation of
DOT Order 5610.1C, at J 4(c). As noted above, FMCSA has not
promulgated its own supplemental rules pursuant to J 4(c)(5).
46a
VI. CONFORMITY DETERMINATION UNDER
THE CAA
Petitioners also contend that DOT acted arbitrarily
and capriciously in failing to conduct a conformity
determination under the CAA. The CAA requires
EPA to establish air quality standards for certain pollu-
tants, 42 U.S.C. § 7409, and it has done so with respect
to NOx and PM-10, the pollutants most at issue here, 40
C. F. R. § 50.6, .7,.11. Each state, in turn, is required to
adopt and submit for EPA approval a State Imple-
mentation Plan (“SIP”) for each pollutant. 42 U.S.C.
§ 7410(a)(1). Each state is divided into “air quality
control regions,” which are classified as “attainment” or
“nonattainment” with respect to each pollutant for
which there exists an air quality standard. Id. § 7407.
SIPs must contain emissions limitations and other
measures designed to bring “nonattainment” regions
into attainment. Id. § 7410(a)(2).
To ensure compliance with these plans, the CAA
contains a “conformity” requirement, mandating that
Injo department, agency, or instrumentality of the
Federal Government shall engage in, support in any
way or provide financial assistance for, license or
permit, or approve, any activity which does not conform
to [a SIP].” Id. § 7506(c)(1). Most federal actions
affecting levels of pollutants in nonattainment regions
require that the responsible agency conduct a “con-
formity determination.” 40 C.F.R. § 93.150-.160. How-
ever, two categories of federal action are exempted
from this requirement: (1) Jaletions where the total of
direct and indirect emissions are below the emissions
level specified in [the regulations],” id. § 93.153(c)(1);
and (2) “[ajetions which would result in no emissions
increase or an increase in emissions that is clearly de
47a
minimis,” including “[rjulemaking and policy develop-
ment and issuance,” id. § 93.153(c)(2). DOT argues that
its regulations fall within both of the above-listed ex-
ceptions: that the total emissions caused by the regu-
lations fall below the specified amount, and that the
regulations are categorically excluded from the statu-
tory requirements because they are “rulemaking.” We
review under the arbitrary and capricious standard an
agency's decisions regarding SIP conformity deter-
minations, as well as its decisions that certain projects
do not require conformity determinations. Olmsted
Falls, 292 F. 3d at 270.
DOT’s assessment that its regulations will cause
emissions below the amounts specified in 40 C.F.R.
§ 93.153(b)(1), thus excusing it from making a con-
formity dete. mination, is based on the predicted emis-
sions in its EA. As we have already determined, how-
ever, DOT failed to conduct a reliable environmental
analysis. Because of its illusory distinction between the
effects of the regulations themselves and the effects of
the presidential rescission of the moratorium on
Mexican truck entry, DOT systematically underesti-
mated the emissions that would result from its regu-
lations. Furthermore, there were a number of metho-
dological flaws in DOT’s EA, including, most relevantly
for CAA purposes, the failure to consider its regula-
tions’ environmental impact on a local or regional basis.
The CAA mandates that each state be divided into
“air quality control regions,” which are evaluated
individually as to their compliance with air quality
standards. 42 U.S.C. § 7407. Thus, proper CAA
analysis must be conducted at the local and regional
levels. The national emissions analysis in DOT’s EA is
inadequate to comply with the CAA. Because DOT is
48a
required to perform a new, more thorough region-by-
region environmental analysis to achieve compliance
with NEPA, it should also determine, as a result of its
new analysis, whether the emissions resulting from its
actions will truly fall below the levels established in
§ 93.153(b)(1). Cf. Olmsted Falls, 292 F.3d at 270-73
(holding that petitioners did not meet their burden of
proof on whether a conformity determination was re-
quired by simply suggesting that it was an “open
question” whether the emissions limits would be
exceeded).
Second, DOT claims that by listing “[rJulemaking” as
a type of “[a)ction [] which would result in no emissions
increase or an increase in emissions that is clearly de
minimis,” 40 C. F. R. § 93.153(c)(2), the EPA intended to
exempt all federal regulations from the requirements
of the CAA. Petitioners respond that the exception
encompasses only the process of rulemaking itself, but
not the agency’s implementation and execution of
validly promulgated regulations. A careful reading of
the EPA regulations, keeping the statutory purpose in
mind, dispenses with DOT’s erroneous, albeit novel,
assertion.
The first striking element is that “rulemaking” is
listed as a type of “[a)ction[ ] which would result in no
emissions increase or an increase in emissions that is
clearly de minimis.” Jd. If the EPA drafters truly
intended to exempt all federal regulations from the con-
formity determination requirement, they certainly
would have been aware that some federal regulations
do in fact result in an increase in emissions (or an in-
crease that is not merely de minimis). Indeed, the EPA
regulations specify that there are two kinds of
49a
emissions, “direct emissions” and “indirect emissions.”
Id. § 93.152.
Indirect emissions are defined as:
those emissions . . . that . . . [aJre caused by the
Federal action, but may occur later in tine
from the action itself but are still reasonably
foreseeable; and . . . [t]he Federal agency can
practicably control and will maintain control over
due to a continuing program responsibility of the
Federal agency.
Id. “Caused by” was used to refer to a that
would not otherwise occur in the absence of the Federal
action.” Jd.
Using the but-for analysis suggested by the EPA
regulations, a substantial number of federal regulations
would result in emissions above de minimis levels. If
the EPA had wished to exclude all federal regulations
from the scope of this requirement, it easily could have
made a bolder statement exempting all federal regu-
lations, regardless of whether they cause direct or
indirect emissions.
Another clue as to the proper interpretation of the de
minimis exception is the fact that the exception is for
“rulemaking and policy development and issuance.” Id.
§ 93.153(c)(2)(iii). This juxtaposition strongly suggests
that Petitioners are correct in arguing that the “rule-
making” exception should apply only to the process of
developing and issuing federal regulations, as opposed
to the substantive result produced by the actual
implementation of the final rules.
Finally, it is relatively easy to imagine federal
regulations or “policies” that could have drastic effects
50a
on emissions of regulated substances. Even assuming
that it is possible the EPA intended these regulations
to exclude such actions from the ambit of the CAA’s
statutory requirements, such a reading would conflict
with the basic command of the statute: “No depart-
ment, agency, or instrumentality of the Federal
Government shall engage in, support in any way or
provide financial assistance for, license or permit, or
approve, any activity which does not conform to [a
SIP].” 42 U.S.C. S 7506(c)(1). “A federal regulation in
conflict with a federal statute is invalid as a matter of
law.” Watson v. Proctor (In re Watson), 161 F.3d 593,
598 (9th Cir. 1998) (citing Chem. Mfrs. Ass n v. Natural
Res. Defense Council, Inc., 470 U.S. 116, 126, 105 S. Ct.
1102, 84 L. Ed. 2d 90 (1985)) (emphasis in original). Con-
sequently, the Supreme Court has held that an agency’s
interpretation of a regulation that conflicts with the
plain language of the statute is entitled to “no de-
ference.” Pub. Employees Ret. Sys. v. Betts, 492 US.
158, 171, 109 S. Ct. 2854, 106 L.Ed.2d 134 (1989). Thus,
we read the EPA regulation, to preserve its validity, so
that the categorical exception encompasses only the
“development and issuance” of federal regulations, not
the substantive results of their promulgation and imple-
mentation.
This conclusion does not conflict with Environmental
Defense Fund, Inc. v. EPA, 82 F.3d 451 (D. C. Cir.) (per
curiam), as amended, 92 F.3d 1209 (D. C. Cir. 1996). In
Environmental Defense Fund, the D.C. Circuit ex-
amined the validity of EPA regulations nearly identical
to those here, and specifically concluded that the “de
1 The Environmental Defense decision analyzed 40 C.F.R.
§ 51.850-.860, which concerned CAA conformity determinations of
SIPs with DOT programs under Title 23 of the United States Code
5la
minimis” exceptions were “an appropriate exercise of
the EPA’s authority, inherent in the statutory scheme.”
Id. at 467. In examining the regulations, the court con-
sidered the conclusion “that the categorical exemptions
are de minimis [to be] entirely self-evident; the EPA
has concluded that these activities ‘would result in no
emissions increase or an increase in emissions that is
clearly de minimis,’ and we neither see nor would ex-
pect to find any evidence to the contrary.” Jd. (quoting
40 CF. R. § 51.853(c)(2)). Had the D. C. Circuit been
reading the EPA regulations in the manner DOT sug-
gests, it certainly “would expect to find” at least some
evidence tending to contradict such a premise. Though
it did not discuss the “rulemaking” exception specifi-
cally, the D.C. Circuit suggests that it would have
invalidated the EPA regulation as conflicting with the
CAA had the language or context suggested such a
broad reading of the regulation. Thus. we decline
DOT’s suggestion to read the EPA regulation in a way
that would tend to under-mine its validity.
Vil. CONCLUSION
We have jurisdiction over the petitions for review.
We emphasize that we draw no conclusions about the
actions of the President of the United States nor the
validity of NAFTA, neither of which is before us. The
only question before us is whether a federal agency
failed to comply with our nation’s long-established en-
vironmental laws. We hold that the Department of
Transportation acted arbitrarily and capriciously in
failing to prepare a full Environmental Impact State-
ment under the National Environmental Protection
or the Urban Mass Transportation Act, 49 U.S.C. §§ 5301-5338,
neither of which are implicated in this case.
52a
Act, as well as a conformity determination under the
Clean Air Act. Therefore, we grant the petitions, and
remand this matter to the Department of Transporta-
tion so that it may prepare a full Environmental Impact
Statement and Clean Air Act conformity determination
for all three regulations.
GRANTED AND REMANDED.
53a
APPENDIX B
RULES and REGULATIONS
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 365
[Docket No. FMCSA-98-3298]
RIN 2126-AA34
Application by Certain Mexico-Domiciled Motor
Carriers To Operate Beyond United States
Municipalities and Commercial Zones on the
United States-Mexico Border
Tuesday, March 19, 2002
AGENCY: Federal Motor Carrier Safety Administra-
tion (FMCSA), DOT.
ACTION: Interim final rule; request for comments.
SUMMARY: The FMCSA revises its regulations and
form, OP-1(MX), governing applications by Mexico-
domiciled carriers who want to operate within the
United States beyond the municipalities adjacent to
Mexico in Texas, New Mexico, Arizona and California
and beyond the commercial zones of such municipalities
(“border zones”). This interim rule includes require-
ments that were not proposed in the NPRM, but which
are necessary to comply with the Fiscal Year 2002 DOT
54a
Appropriations Act enacted into law in December 2001.
This action is taken in anticipation of a presidential
order lifting the current statutory moratorium on
authorizing such operations. The form requires addi-
tional information about the applicant’s business and
operating practices to help the FMCSA to determine if
the applicant will be able to meet the safety standards
established for operating in interstate commerce in the
United States. Carriers that previously submitted an
application to operate beyond the border zones must
submit the updated form. Any Mexico-domiciled motor
carrier (of property) that wants to operate within the
United States solely within the border zones must
apply under separate FMCSA regulations that we are
issuing elsewhere in today’s Federal Register. The
revisions in this action are part of FMCSA’s efforts to
ensure the safe operation of Mexico-domiciled motor
carriers in the United States and implement the 2002
DOT Appropriations Act. This action will ensure that
FMCSA receives adequate information to assess an
applicant’s ability to comply with U.S. safety standards.
It requires that all Mexico-domiciled carriers subject to
this rule undergo a safety audit before receiving pro-
visional authority to operate in the United States.
Therefore, the FMCSA is publishing this action as an
interim final rule and is delaying the effective date in
order to consider additional public comments regarding
pre-authorization safety audits before grants of pro-
visional authority. These changes will result in the
FMCSA being able to better maintain an accurate
census of Mexico-domiciled carriers operating beyond
the border zones.
DATES: This interim final rule is effective May 3, 2002.
We must receive comments by April 18, 2002.
55a
ADDRESSES: You can mail, fax, hand deliver or elec-
tronically submit written comments to the Docket
Management Facility, United States Department of
Transportation, Dockets Management Facility, Room
PL-401, 400 Seventh Street, SW., Washington, DC
20590-0001 FAX (202) 493-2251, on-line at http://
dmses.dot.gov/submit. You must include the docket
number that appears in the heading of this document in
your comment. You can examine and copy all com-
ments at the above address from 9 a.m. to 5 p.m., e.t.,
Monday through Friday, except Federal holidays. You
can also view all comments or download an elec-
tronic copy of this document from the DOT Docket
Management System (DMS) at http://dms.dot.gov/
search.htm and typing the last four digits of the docket
number appearing at the heading of this document.
The DMS is available 24 hours each day, 365 days each
year. You can get electronic submission and retrieval
help and guidelines under the “help” section of the web
site. If you want us to notify you that we received your
comments, please include a self-addressed, stamped
envelope or postcard or print the acknowledgement
page that appears after submitting comments on-line.
Comments received after the comment closing date
will be included in the docket and we will consider late
comments to the extent practicable. FMCSA may,
however, issue a finai rule at any time after the close of
the comment period.
FOR FURTHER INFORMATION CONTACT: Joanne
Cisneros, (909) 653-2299, Transborder Office, FMCSA,
P.O. Box 530870, San Diego, CA 92153-0870. Office
hours are from 7:45 a.m. to 4:15 p.m., p.t., Monday
through Friday, except Federal holidays.
56a
SUPPLEMENTARY INFORMATION:
Background
Before 1982, Mexico-domiciled motor carriers could
apply for authority to operate within the United States
by filing an application for such authority with the
former Interstate Commerce Commission (ICC).
Under the Bus Regulatory Reform Act of 1982 (the
Act), Congress imposed a 2-year moratorium on the
issuance of new grants of U.S. operating authority
to motor carriers domiciled in a contiguous foreign
country, or owned or controlled by persons of a
contiguous foreign country. The legislation authorized
the President to remove or modify the moratorium
upon a determination that such action was in the
national interest. The Act was developed in response to
complaints that neither Mexico nor Canada were per-
mitting U.S. motor carriers the same access to their
markets as Mexican and Canadian motor carriers had to
U.S. markets. While the trade issues with Canada were
resolved quickly, resulting in the moratorium being
lifted for Canada-domiciled motor carriers, the trade
issues with Mexico were not addressed until the North
American Free Trade Agreement (NAFTA) was nego-
tiated in the early 1990s. Legislative and executive
extensions have maintained the moratorium for Mexico-
domiciled motor carriers since 1982.
A number of Mexico-domiciled motor carriers have
been permitted to operate in the United States because
they are not covered by the moratorium. The mora-
torium only applies to new grants of operating author-
ity. Thus, the operations of Mexico-domiciled motor
carriers that had obtained unrestricted operating
authority before the moratorium was enacted were
57a
unaffected by the moratorium. Additionally, access has
been allowed for certain motor carriers whose opera-
tions fell outside the ICC’s licensing jurisdiction. These
carriers receive Certificates of Registration by filing
Form OP-2 under the provisions of what is now 49 CFR
part 368. These carriers include those that operate
solely within the border zones. Also included among
these are certain types of carriers whose operations are
not restricted to the border zones: U.S.-owned, Mexico-
domiciled private carriers; U.S.-owned, Mexico-domi-
ciled carriers of exempt goods; and Mexico-domiciled
carriers that only traverse the United States to deliver
or pick up cargo or passengers in Canada.
The terms of NAFTA, Annex I, provide that the
United States would incrementally lift the moratorium
on licensing Mexico-domiciled motor carriers to operate
beyond the border zones. Pursuant to the first phase of
NAFTA, on January 1, 1994, the President modified the
moratorium and the ICC began accepting applications
from Mexico-domiciled passenger carriers to conduct
international charter and tour bus operations in the
United States. In December 1995, ICC promulgated a
rule and a revised application form for the processing of
Mexico-domiciled property carrier applications. These
rules anticipated the implementation of the second
phase of NAFTA, providing Mexico-domiciled property
carriers with access to the four U.S. States bordering
Mexico, and the third phase, providing access
throughout the United States. The ICC designated the
revised application form OP-1(MX).
Through the ICC Termination Act of 1995 (ICCTA),
Congress authorized the President to remove or modify
the moratorium upon the President’s determination
that such action is consistent with United States obliga-
58a
tions under a trade agreement or with United States
transportation policy. The ICCTA also dissolved the
ICC and transferred the authority to issue new grants
of U.S. operating authority for motor carriers and some
other of its regulatory functions to the Secretary of
Transportation, who delegated this authority to the
Office of Motor Carriers (OMC) of the Federal Highway
Administration (FHWA).
On December 15, 1995, the International Brother-
hood of Teamsters (Teamsters) sought an emergency
stay of the ICC rule in the United States Court of
Appeals for the District of Columbia. The Teamsters
contended that the ICC rule was arbitrary and capri-
cious because it failed to address concerns regarding
the safe operation of Mexico-domiciled motor carriers.
In their comments on the ICC rule, the Teamsters had
requested the ICC to add additional safety questions to
the applications filed by Mexico-domiciled carriers to
ensure that the applicants were willing and able to
comply with applicable safety regulations.
On December 18, 1995, the Secretary of Transporta-
tion announced an indefinite delay in implementing the
NAFTA motor carrier access provisions. The Court of
Appeals subsequently denied the Teamsters’ request
for an emergency stay of the ICC rule, which became
an FHWA regulation upon the termination of the ICC,
and set the case for briefing and argument. After the
Teamsters’ case was briefed and argued, the court
ordered the case held in abeyance until the Department
decided to commence processing applications of Mexico-
domiciled motor carriers seeking authority to operate
beyond the border zones. Approximately 190 Mexico-
domiciled carriers have filed OP-1(MX) applications
with the Department.
59a
Mexico filed complaints against the United States
under NAFTA’s dispute resolution provisions, chal-
enging the United States’ decision to deny further
trucking, investment, and bus access. An arbitration
panel comprised of five individuals with international
trade expertise chosen by the United States and
Mexico met in May 2000 to hear the trucking and in-
vestment case. The parties engaged in extensive pre-
and post-hearing briefing on safety and legal issues.
The panel issued a final report on February 6, 2001,
that unanimously concluded that the blanket refusal to
process applications of Mexico-domiciled motor carriers
seeking U.S. operating authority out of concerns over
the carriers’ safety was in breach of NAFTA obliga-
tions of the United States, specifically NAFTA’s pro-
visions ensuring national treatment and most-favored-
nation treatment for cross-border services. The panel
also unanimously decided that the United States’ re-
fusal to permit Mexican nationals to invest in U.S.
enterprises that provide transportation of international
cargo within the United States violated the United
States’ NAFTA obligations. In June 2001, the Pre-
sident lifted this part of the moratorium.
With respect to its decision on the U.S. refusal to
implement NAFTA’s truck access provisions, the panel
stated that it did not disagree that truck safety is a
legitimate regulatory objective and that it was not
limiting U.S. application of its truck safety standards to
Mexican carriers operating in the United States pro-
vided that they are applied in a manner that is con-
sistent with the United States’ NAFTA obligations.
The panel noted that compliance with NAFTA obliga-
tions did not require the granting of operating author-
ity to Mexican trucking companies that might be unable
60a
to comply with U.S. safety regulations. The panel
observed that the United States might not be required
to treat applications for operating authority from
Mexican trucking firms in exactly the same manner as
applications from U.S. or Canadian firms, as long as the
applications are reviewed on a case-by-case basis. The
panel stated that to the extent that Mexican licensing
and inspection requirements might not be like U.S.
requirements, the United States might be justified in
using methods to ensure Mexican carrier compliance
with the U.S. regulatory regime that differ from those
used for U.S. and Canadian carriers, provided that such
different methods are used in good faith to address
legitimate safety concerns and fully conform with all
relevant NAFTA provisions.
It is important to note that this interim final rule and
the two related rules published elsewhere in today’s
Federal Register represent only part of the FMCSA’s
effort to ensure the safe operation of Mexico-domiciled
motor carriers in the United States. For example,
Mexico-domiciled motor carriers, their vehicles, and
their drivers operating in the United States have been
and will continue to be subject to all of FMCSA’s safety
requirements, inspection procedures, enforcement
mechanisms, and fines and out-of-service orders. In
addition to being subject to the various safety audits
and compliance reviews contained in these rules, these
carriers and their vehicles and drivers will continue to
be subject to roadside vehicle inspections performed at
the border and throughout the United States by
FMCSA inspectors and their State partners. FMCSA
has received additional funding from Congress to
enhance its inspection capabilities at the border. The
FMCSA is also conducting seminars in Spanish for
6la
Mexican carriers to help ensure that they understand
U.S. safety requirements. FMCSA personnel also ex-
pect to continue their cooperative efforts with their
Mexican Government counterparts toward enhancing
Mexico’s motor carrier regulatory regime.
The DOT’s Research and Special Programs Admini-
stration (RSPA) has made considerable progress in
harmonizing the hazardous materials standards of the
United States and Mexico. Though Mexican hazardous
materials standards are not as comprehensive as U.S.
standards, those in place are compatible with U.S.
standards.
RSPA has also made significant strides in educating
Mexico-domiciled hazardous materials shippers and
carriers in hazardous materials safety. In 1993, it
translated the U.S. Emergency Response Guide into
Spanish. Since then, Mexican emergency response
information requirements have been harmonized with
existing U.S. emergency response information require-
ments. The U.S., Mexican and Canadian Governments
now jointly issue an Emergency Response Guide.
RSPA has also translated various hazardous materials
brochures and pamphlets into Spanish as well as
identified free hazardous materials industry resources
to assist the Mexican Government’s Secretaria de
Comunicaciones y Transportes (SCT) in providing haz-
ardous materials and emergency response training for
its inspectors.
Section 350 of the 2002 DOT Appropriations Act,
Public Law 107-87 (Act), prohibits the Secretary of
Transportation from obligating or expending funds
for reviewing or processing applications of Mexico-
domiciled motor carriers for authority to operate
beyond the United States municipalities and com-
62a
mercial zones on the United States-Mexico inter-
national border until the FMCSA and DOT complete
several enumerated actions. Many of the requirements
of the Act have been incorporated into this interim final
rule and the two companion rules published elsewhere
in today’s Federal Register. Under this interim final
rule FMCSA will: (1) Conduct safety examinations or
audits on Mexico-domiciled carriers seeking author-
ity to ope. ate beyond the border zones encompassing
the nine areas of inquiry required by section
350(a)(1)(B); (2) assign a distinctive U.S. DOT number
to each Mexico-domiciled motor carrier operating
beyond the border zones, in accordance with section
350(a)(4); (3) require Mexico-domiciled motor carriers
operating beyond the border zones to certify that they
will have their vehicles inspected by Commercial Ve-
hicle Safety Alliance (CVSA)-certified inspectors every
three months, in accordance with section 350(a)(5); and
(4) require Mexico-domiciled carriers to provide proof
of valid insurance issued by an insurance company
licensed in the United States before granting them
authority to operate beyond the border zones, in
accordance with section 350(a)(8).
FMCSA invites comments about how the interim
final rule incorporates these new section 350 provisions
into the application and approval process.
Summary of Notice of Proposed Rulemaking (NPRM)
The FMCSA proposed changes to its regulations and
application procedures for Mexico-domiciled motor
63a
cants wanting to conduct transportation servi ithi
the United States beyond the border zones ao
mit a redesigned Form OP-1(MX). The proposed appli-
cation solicited information to indicate the nature of the
— demonstrate the applicant’s knowledge of
je requirements of the Federal Motor Carrier
— Regulations (FMC SRS) and describe how it
— to comply with these regulations. Further-
>, we proposed to require each applicant to make
specific certifications of compliance, such as requirin
= applicant to submit verification from the —
vernment that it is a registered Mexico-domiciled
carrier authorized to conduct motor carrier operations
oP .. the United States-Mexico border and that all
— = operate in the United States have a valid
— neia Federal de Conductor (LF C) issued by the
— —— of Mexico. The applications would also be
— — ayy gory set forth in part 365 for
publication in the FMCSA Register). —-
Discussion of Comments to the NPRM
. In response to the three NPRMs relati
implementation, the FMCSA ene pn hy 900 come
—— Over 90 percent of the comments opposed the
— — monitoring system or the border opening. Most
— e comments focused on the proposed safety moni-
— system (66 FR 22415) and will be fully discussed
elsewhere in today’s Federal Register. A large
— of the commenters addressed all three —
22 in a single submission that may have been
— in one or all three public dockets. We have care-
y considered them and have revised the Form
64a
OP-1(MX) application form and the regulations govern-
ing the application process as noted in the preamble
sections titled “Discussion of the Interim Final Rule”
and “Final Revisions to Form OP-1(MXA).” In this
section, FMCSA responds to the comments on Form
OP-1(MX) (and common elements to Form OP-2) and
part 365.
The Friends of the Earth, Natural Resources
Defense Council, Sierra Club, and Center for Inter-
national Law (Friends of the Earth et al.) jointly com-
mented that FMCSA is required to perform additional
analysis to meet the requirements of the National
Environmental Policy Act (NEPA) and Executive
Order 13045, concerning the protection of children from
environmental and health and safety risks. The Inter-
national Brotherhood of Teamsters (Teamsters) also
expressed this viewpoint. The Friends of the Earth et
al. believe that 40 CFR 1501.3(b) requires that if DOT is
not certain that an environmental impact statement is
required, then it must first prepare an environmental
assessment. Regarding compliance with Executive
Order 13045, the Friends of the Earth et al. believe that
this action presents increased pollution and safety
concerns that pose a disproportionate risk to children.
The FMCSA is preparing an agency order to meet
the requirements of DOT Order 5610.1C (that estab-
lishes the Department of Transportation’s policy for
compliance with NEPA by the Department’s admini-
strations). The FMCSA has conducted a programmatic
environmental assessment (PEA) of the three rule-
makings in accordance with the DOT Order and the
regulations of the Council on Environmental Quality. A
discussion of the PEA and its findings and the
FMCSA’s responsibilities under E. O. 13045 is pre-
65a
sented later in the preamble under “Regulatory
Analyses and Notices.” A copy of the PEA is in the
docket to this rulemaking.
The Attorney General for the State of California
submitted a comment in which he asserted that the
FMCSA would be required to perform a “conformity
determination” pursuant to the Clean Air Act (CAA),
before finalizing these rulemakings. Under the CAA,
Federal agencies are prohibited from supporting in any
way, any activity that does not conform to an approved
State Implementation Plan (SIP), (42 U.S.C. 7006).
EPA regulations implementing this provision require
Federal agencies to determine whether an action would
conform with the SIP (a “conformity determination”),
before taking the action (40 CFR 93.150). The
Attorney General asserts that the FMCSA must make
a conformity determination before taking final action to
implement regulations that would allow Mexican trucks
to operate beyond the border. The Attorney General
provided technical information to support his assertion
that allowing Mexican trucks to operate beyond the
border would likely not be in conformity with Cali-
fornia’s SIP.
We have reviewed our obligations under the CAA,
and believe that we are in compliance with the general
conformity requirements as implemented by the U.S.
Environmental Protection Agency (EPA). EPA's im-
plementing regulations exempt certain actions from
the general conformity determination requirements.
Actions which would result in no increase in emissions
or clearly a de minimis increase, such as rulemaking (40
CFR 93.153(c)(iii)), are exempt from requiring a con-
formity determination. In addition, actions which do not
exceed certain threshold emissions rates set forth in 40
66a
CFR 93.153(b) are also exempt from the conformity
determination requirements. The FMCSA rulemakings
meet both of these exemption standards. First, as
noted elsewhere in this preamble to this rule, the
actions being taken by the FMCSA are rulemaking
actions to improve FMCSA’s regulatory oversight, not
an action to modify the moratorium and allow Mexican
trucks to operate beyond the border. Second, the air
quality impacts from each of the FMCSA’s rules neither
individually nor collectively exceed the threshold
emissions rates established by EPA (see Appendix C of
the Environmental Assessment accompanying these
rulemakings for a more detailed discussion of air quality
impacts). As a result, we believe that FMCSA’s
rulemaking actions comply with the CAA require-
ments, and that no conformity determination is re-
quired.
The American Insurance Association (AIA) com-
mented that the OP-1(MX) form does not make clear
the fact that layered insurance filings (primary and
excess securities) are acceptable. The AIA suggested
modifying the form to make it clear. The FMCSA does
not find this modification to be necessary because the
acceptability of layered insurance filings is clearly
explained in 49 CFR part 387, subpart C.
The International Brotherhood of Teamsters (Team-
sters) commented that the financial responsibility
section of the form should be modified to make clear
that we would not grant provisional operating authority
until we receive the appropriate filings for financial
responsibility and service of process agents from the
applicant and its financial responsibility agent(s). The
AFL-CIO’s Transportation Trades Department (TTD)
commented that various statements and certifications
67a
could be made more understandable. The FMCSA will
verify that a carrier has the necessary financial respon-
sibility as part of the pre-authorization safety audit.
However, there will be no DOT number issued at that
time under which a filing may be made. Therefore, we
will permit insurance companies to file evidence of
insurance with FMCSA after provisional authority is
granted. However, provisional operating authority will
not be valid, and the carrier may not operate under that
authority, until an insurance filing is made with, and
accepted by, the agency. This is consistent with the
procedure applicable to U.S. and Canadian carriers
required to obtain operating authority under 49 U.S.C.
13901. In a similar vein, we are giving applicants the
option of including with the application a notification
that a process agent service will electronically file the
necessary process agent information within 90 days. As
is the case with U.S. and Canadian carriers subject to
49 U.S.C. 13901, a Mexico-domiciled carrier may not
operate in the United States until the process agent
filing is made with, and accepted by, the agency.
United Parcel Service (UPS) commented that the
application and regulations for Mexico-domiciled car-
riers requesting operating authority should identify
express delivery as a separate kind of carrier operation.
UPS explains that this distinction would enable the
United States to accelerate the timeline for lifting the
moratorium for express delivery services, without
awaiting action on general trucking.
We do not see the need at this time for the rules to
distinguish between express delivery services and
general trucking services. We do not expect that the
moratorium will be lifted for express delivery services
before the lifting of the moratorium on general truck-
68a
ing. In addition, the United States maintains a reserva-
tion under the NAFTA on the transportation of goods
other than international cargo between points in the
United States, and the reservation covers both express
delivery services and other motor carrier services.
The Owner-Operator Independent Drivers Associa-
tion, Inc. (OOIDA) and the California Trucking Associa-
tion (CTA) recommended that the form specify the
additional U.S. laws to which Mexico-domiciled carriers
would be subject. The OOIDA commented that since
NAFTA requires Mexico-domiciled carriers to comply
with U.S. laws and all applicable State laws when
operating within the United States, the FMCSA should
set forth the particular U.S. laws to which applicants
are subject. They believe form references to other laws
are too vague and should be more fully enumerated.
The CTA recommends modifying the form to require an
applicant to certify that it will comply with the laws of
other U.S. agencies.
The FMCSA believes that it is beyond the scope of
this rulemaking to provide an exhaustive listing and
explanation on the OP-1(MX) form of all Federal and
State laws to which carriers are subject when operating
within the United States. However, we are conducting
information sessions for potential applicants where,
among other things, we discuss additional information
provided by other Federal agencies and State registra-
tion requirements. This information will also be on the
FMCSA web site.
We have worked closely with other Federal agencies,
including the U.S. Department of Labor (DOL), U.S.
Environmental Protection Agency (EPA) and others, in
drafting and clarifying the statement that appears after
the signature line of Section VIII—Compliance Certifi-
69a
cations. This statement underscores the importance of
complying with all pertinent Federal, State, local and
tribal statutory and regulatory requirements, including
labor, environmental, and immigration laws. Such
compliance includes producing requested records for
review and inspection. It also includes compliance by
drivers who must meet the requirements under the
Immigration and Nationality Act, 8 U.S.C. 1101 et seq.,
and pass inspection by inspectors of the Immigration
and Naturalization Service at the port of entry.
The American Trucking Associations, Inc. (ATA)
OOIDA, the Teamsters, and the TTD expressed con-
_ cern that the hazardous materials requirements listed
in the safety certification statements were incomplete,
suggesting a more comprehensive listing of require-
ments, including the hazardous material registration
requirement. They suggested additional hazardous
materials documentation to be submitted with the
application. The Transportation Lawyers Association
(TLA) believes that the current and proposed applica-
tion procedures have a loophole regarding identification
of hazardous materials carriers. It contends that the
check the block” system, and the fact that none of the
information described in the hazardous materials
certification statements must be submitted with the ap-
plication, enable the hazardous materials transporter to
escape detection. Neither the form nor application
procedures require a carrier who later decides to
transport hazardous materials to notify the FMCSA or
provide evidence of knowledge of hazardous materials
standards—only to increase the amount of insurance
carried.
We have corrected and modified the h
material certifications in response to these —
70a
The hazardous materials certification statements have
been revised to more thoroughly reference applicable
hazardous materials requirements and request the
supplemental information required by the Hazardous
Materials Regulations. Please reference the section
“Final Revisions to the Form OP-1(MX)” for a detailed
discussion of revisions to the certification statements.
Information regarding hazardous materials operations
will be verified during the pre-authorization safety
audit established in this interim final rule pursuant to
section 350 of the DOT Appropriations Act.
Section 350 of the Act prohibits Mexico-domiciled
motor carriers from transporting hazardous materials
in a placardable quantity beyond the border zones until
the United States has completed an agreement with the
Government of Mexico ensuring that drivers of such
placardable quantities of hazardous materials
meet substantially the same requirements as U.S.
drivers carrying such materials. Section 1012(b) of the
“Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001” (USA PATRIOT Act) [Pub. L.
107-56, October 26, 2001] amended the Hazardous
Materials Transportation Act (49 U.S.C. 5101-5127) and
the Commercial Motor Vehicle Safety Act of 1986 (49
U.S.C. 31301-31317) by placing limitations on the
issuance or renewal of hazardous materials licenses.
(The DOT interprets the term “hazardous materials
licenses” to mean a hazardous materials endorsement
for a commercial driver’s license because of the refer-
ence to section 31305 in section 1012(b).) The OP-1(MX)
form will require additional information regarding
cargo tank certification, hazardous materials training,
71a
and persons responsible for ensuring compliance with
the Hazardous Materials Regulations.
The CTA commented that the FMCSA should distri-
bute an applicant’s Single State Registration System
(SSRS) filing to the appropriate SSRS members. The
FMCSA does not have the resources to coordinate the
SSRS filings for Mexico-domiciled carriers. We have
also removed specific references to the SSRS from the
form instructions (although the requirement still re-
mains), because it is one of many State requirements.
We do not wish to imply that the SSRS requirement is
the sole State requirement for Mexico-domiciled car-
riers or that it has greater importance than other laws
or regulations.
The TLA commented that the definition of private
carrier in the instructions to the application form
includes a phrase that has historically described a for-
hire carrier and suggests that the form be modified. In
Section III of the instructions, a motor private carrier
is defined as an entity that is “transporting its own
good, including an entity that is performing such
operations under an agreement or contract with a U.S.
shipper or other business.”
This definition is an attempt to rephrase, in plain
language, the text of 49 U.S.C. 13102(7). Section
13102(7) defines foreign motor private carrier to include
persons (except motor carriers of property or motor
private carriers) that provide interstate transportation
of property by motor vehicle under agreements or
contracts with persons who are not motor carriers of
property or motor private carriers. The form instruc-
tions may be confusing because they do not reference
the for-hire motor carrier exclusion in defining a
72a
private carrier. Therefore, we have modified the form
to provide clarity.
Camara Nacional del Autotransporte de Cargo
(CANACAR) commented that we must more fully
explain the need for a process agent in the United
States and link this requiremei. directly to safety and
NAFTA. CANACAR believes we should require only
one process agent in the United States. It commented
that requiring more than one would violate NAFTA.
Contrary to CANACAR’s suggestion, nothing in the
NAFTA limits the rights of the United States to
require firms to designate more than one process agent.
Requiring Mexico-domiciled carriers to comply with 49
CFR part 366 would not violate NAFTA because the
same requirement applies to U.S. and Canadian motor
carriers. A process agent service may be used to
maintain service of process agents in multiple States,
thus eliminating the need for carriers themselves to
retain agents in each State. A process agent service is
an association or corporation that files with the FMCSA
a list of process agents for each State in which the
carrier intends to operate.
CANACAR believes that FMCSA must remove
registration requirements for agricultural, private, and
exempt carriers, because we do not require U.S. and
Canadian agricultural, private, and exempt carriers to
register under 49 U.S.C. chapter 139.
The Motor Carrier Safety Act of 1984, Public Law
98-554, 98 Stat. 2832, required Mexican motor carriers
conducting operations otherwise exempt from the
economic regulation requirements (i.e., for-hire carriers
of exempt commodities, agricultural and private car-
riers) to register with the Interstate Commerce Com-
73a
mission to conduct operations in the United States.
These requirements are an important element of
FMCSA’s effort to ensure the safe operation of Mexican
motor carriers on U.S. highways. From a safety stand-
point, there is no distinction between agricultural, pri-
vate, and exempt carriers and the Mexican carriers that
would otherwise be required to register.
CANACAR also believes that the OP-1(MX) and
OP-2 form questions about affiliates will violate section
219 of the Motor Carrier Safety Improvement Act
(MCSIA), which it interprets to mean that “once
NAFTA is implemented” questions about affiliates
would no longer be needed. CANACAR commented
that section 219 of MCSIA only applies to “carriers”
and not “nationals.”
The FMCSA will continue to require OP-1(MX) ap-
plicants to submit information on affiliations because it
is useful in deterring operations by disqualified car-
riers. Section 219 of MCSIA authorizes FMCSA to
penalize and disqualify foreign motor carriers for
operating beyond the border zones before the imple-
mentation of NAFTA, but it does not prohibit enforce-
ment after NAFTA’s implementation (nor the collec-
tion of information on a foreign carrier’s affiliations).
FMCSA requires similar information from U.S. and
Canadian applicants to ensure that unsafe carriers do
not evade out-of-service orders or registration suspen-
sions by continuing operations under a different
identity.
The Free Trade Alliance San Antonio recom-
mends that we provide a sample completed OP-1(MX)
form, including attachments, as a guide to applicants.
The FMCSA will address this comment in training
materials and in our workshops for potential applicants.
74a
The TLA commented that the proposed forms re-
quire a carrier operating small vehicles (GVWR under
10,000 pounds)” to certify that “it is exempt from the
U.S. DOT Federal Motor Carrier Safety Regulations
* * * The TLA believes that the certification does
not accurately reflect the accompanying instructions
stating that an “exempt” carrier “must certify that [it
is] familiar with and will observe general operational
safety fitness guidelines and applicable State and local
laws relating to the safe operation of commercial motor
vehicles.” The TLA further commented that the safety
certification mentioned in the instructions was origi-
nally authored by the ICC in response to comments
filed by it in Ex Parte No. 55 (Sub-No. 94), Reviston of
Application Procedures and Corresponding Regulation,
10 ICC 2d 386, 398-399 (1994). The TLA commented
that certification that a carrier who is exempt from the
FMCSRs, “will observe” applicable Texas State Law is
meaningless. The TLA believes that local law has no
ability to influence a carrier’s adherence to good high-
way safety practices beyond its extremely limited
reach.
Carriers that are exempt from direct DOT oversight-
because they operate smaller vehicles which generally
operate only locally and do not pose a significant
enough public threat to warrant Federal involvement-
are nonetheless subject to State safety oversight.
Many MCSAP States have not fully exempted smaller
vehicles from their safety oversight and are not re-
quired to exempt them under MCSAP. Consistent with
the Congressional mandate that safety is our highest
priority, the FMCSA will require that OP-1(MX) appli-
eants certify their willingness to inform themselves
75a
concerning any State, local and tribal safety laws to
which they are subject and to pledge to abide by them.
The Teamsters commented that instead of the check
boxes on the form, we should require narratives de-
scribing systems and procedures that the applicant now
uses or intends to use in the future. They contend that
all applicants should be required to submit accident
records with the applications and that “* * * (A)ny
responsible carrier would have the information re-
quired to compile such a record at the time the appli-
cation is prepared” even if it had not been maintaining
an accident record as such. The TLA recommends that
we require a narrative response about the content of an
applicant’s household goods arbitration program.
The FMCSA will evaluate information provided in
the OP-1(MX) form and will conduct a safety audit of
each carrier before deciding to grant provisional
operating authority and allowing it to commence opera-
tions in the United States. Requests for additional
narrative descriptions have been restricted to informa-
tion necessary to evaluate an applicant’s willingness
and ability to comply with our safety standards and are
not meant to be overly burdensome. The FMCSA will
not burden Mexico-domiciled carriers with a require-
ment to provide a narrative description of their house-
hold goods arbitration programs because it is not
critical to the safety mission of the agency and can be
evaluated during the pre-authorization safety audit.
The Teamsters and Public Citizen commented that
applicants should complete a proficiency exam testing
their knowledge of the FMCSRs as a part of the
application procedure, as allowed by MCSIA. The
FMCSA does not find it necessary to require a pro-
ficiency exam at this time given the detailed require-
76a
ments of this interim final rule. These detailed require-
ments include the application, including safety certifi-
cations, the pre-authorization safety audit, and the
requirement in the Act that Mexico-domiciled com-
mercial vehicles be inspected at each border crossing
during the time they hold provisional authority and
until they hold permanent authority for three consecu-
tive years, unless the vehicles have a current CVSA
inspection sticker affixed to the vehicle. Identifying the
appropriate company individual to take the proficiency
test would be problematic as well. In addition, it is not
clear that a proficiency exam requirement would mean-
ingfully enhance safety because it would only test the
“proficiency” of a single carrier employee.
The Teamsters also commented that we should re-
quire financial reporting based on the Mexico-domiciled
applicant’s prior year revenue. Since the nature of a
Mexico-domiciled carrier’s business within Mexico may
be unrelated to planned operations within the United
States, that information might not be valid for the
purpose of evaluating its fitness to operate within the
United States. FMCSA also believes this suggestion is
outside of the scope of this rulemaking and FMCSA
jurisdiction.
Public Citizen believes the proposed application pro-
cess for Mexico-domiciled trucks will not ensure com-
pliance for several reasons. First, the SCT database to
be used in evaluating a Mexico-domiciled carrier’s
safety fitness is “unpopulated” and “currently lacks the
basic information necessary to process applications or
to perform a safety review.” It proposes as a pre-
condition for granting operating authority that FMCSA
set minimum levels of inspection, crash, and other per-
formance and enforcement data to be amassed for an
77
applicant. For example, there must be sufficient data
to calculate a score in Safestat(tm), the information
system used to determine a domestic carrier’s safety
fitness. Public Citizen also believes that information re-
ported on the form may be distorted through error or
fraud, and the driver’s safety records may not be avail-
able. It commented that insurance and proof of
insurance requirements are dangerously inadequate to
protect other drivers on public highways.
The SCT database inquiry is but one component of
the planned safety evaluation of OP-1(MX) applicants.
The FMCSA will use information in its own databases
and will conduct a pre-authorization safety audit to
validate an applicant’s responses and assess its safety
fitness. Furthermore, the insurance requirements for
Mexico-domiciled carriers are identical to those appli-
cable to domestic and Canadian carriers. Minimum
levels of financial responsibility are set forth in 49 CFR
part 387. The FMCSA will verify proof of financial
responsibility during the pre-authorization safety audit.
Furthermore, a Mexico-domiciled carrier will be unable
to operate in the United States beyond the border
zones unless evidence of adequate financial responsi-
bility is filed with the FMCSA by an insurance com-
pany licensed in the United States. Evidence of
insurance must also be maintained on the motor vehicle
when operating within the United States and border
inspectors will verify proof of financial responsibility
electronically by checking the FMCSA’s insurance
The CTA commented that applicants should file proof
of insurance with the application, rather than after
FMCSA grants the applicant operating authority. Cur-
rent 49 CFR part 387 requires the insurer, not the
78a
applicant, to make insurance filings with the FMCSA.
This requirement allows insurance companies to retain
control of the insurance certification documents, there-
by significantly decreasing opportunities for fraudulent
activity. Section 350(a)(8) of the Act, however, requires
the FMCSA to verify proof of financial responsibility
with a financial responsibility provider licensed in the
United States during the pre-authorization safety
audit. Although FMCSA will independently verify a
Mexico-domiciled motor carrier applicant’s proof of
financial responsibility during the pre-authorization
audit, the carrier will not have been issued a DOT
number under which a filing may be made. Therefore,
we will not require actual filing of the insurance at the
time of the audit. However, once the carrier is granted
provisional operating authority, it must have evidence
of acceptable insurance on file with the FMCSA before
it may operate within the United States.
A number of parties, including OOIDA, Public
Citizen, and the Teamsters, urged that Mexico-domi-
ciled motor carriers should not be allowed to operate
beyond the border zones at this time, citing what they
view as an inadequate Mexican Government motor
carrier safety infrastructure, inadequate inspection
facilities at border crossings, and other factors. The
Teamsters, for example, note that for these reasons full
implementation of NAFTA’s motor carrier access pro-
visions is premature and urge FMCSA to “postpone the
border opening.”
FMCSA believes that the regulations being pub-
lished today, and the other safety measures the agency
is taking with respect to Mexico-domiciled motor car-
riers operating outside the border zone, will give the
agency sufficient assurance that these carriers are
79a
capable of complying with U.S. safety standards, not-
withstanding any shortcomings in the Mexican Govern-
ment’s motor carrier safety infrastructure. FMCSA
also believes that, in conjunction with its State part-
ners, it will be able to maintain an adequate safety
inspection program at the border. It should be noted
however, that these and other comments urging a delay
in the implementation of NAFTA assume that the
regulations published today “open the border” or lift
the current moratorium on the granting of operating
authority. The regulations do neither. The President
not the FMCSA, has that authority pursuant to 49
U.S.C. 13902. The President has announced that the
United States will comply with its NAFTA obligations
regarding Mexico-domiciled motor carrier access in a
manner that will not weaken motor carrier safety. The
regulations help ensure motor carrier safety in antici-
pation of presidential action lifting the moratorium.
In addition, section 350(c)(1) of the Act requires t
DOT Inspector General (OIG) to — —
hensive review of FMC SA border operations before the
FMCSA may spend any Federal funds to review or act
on OP-1(MX) applications. The OIG must assess
whether the statutory requirements have been met to
ensure the opening of the border does not pose an
unacceptable safety risk to the American public. Sec-
tion 350(c)(2) also requires the Secretary of Transporta-
tion to certify in writing in a manner addressing the
Inspector General’s findings that the opening of the
border does not pose an unacceptable safety risk to the
American public before the FMCSA may spend any
Federal funds to review or act on OP-1(MX) applica-
tions.
80a
ABA and Greyhound urge that we not implement our
motor carrier-related NAFTA obligations until Mexico
reciprocates by implementing its motor carrier-related
NAFTA obligations. Again, none of the regulations
published today “open the border” or lift the current
moratorium on the grant of operating authority. In any
event, NAFTA itself provides procedures to ensure
that each party fulfills its obligations under the Agree-
ment.
In response to comments about the need for ensuring
that vehicles operated by Mexico-domiciled motor car-
riers comply with the applicable Federal Motor Vehicle
Safety Standards (FMVSS), we note that enforcement
of these safety standards by FMCSA and its State
partners will be accomplished through roadside inspec-
tions, including inspections at the border. Roadside
inspections provide a means of ensuring that vehicles
meet the applicable FMVSSs in effect on the date the
vehicle was manufactured.
Title 49 CFR part 393 of the FMCSRs currently
includes cross-references to most of the FMVSSs appli-
cable to heavy trucks and buses. The rules require that
motor carriers operating in the United States, including
Mexico-domiciled carriers, must maintain the specified
safety equipment and features that the National High-
way Traffic Safety Administration (NHTSA) requires
vehicle manufacturers to install. Failure to maintain
these safety devices or features is a violation of the
FMCSRs. If the violations are discovered during a
roadside inspection, and they are serious enough to
meet the current out-of-service criteria used in road-
side inspections (i.e., the condition of the vehicle is
likely to cause an accident or cause a mechanical break-
down), the vehicle would be placed out of service until
81a
the necessary repairs are made. The FMCSA also has
the option of imposing civil penalties for violations of 49
CFR part 393. Any FMVSS violations that involve
noncompliance with the standards presently incor-
porated into part 393 could subject motor carriers to a
maximum civil penalty of $10,000 per violation. If the
FMCSA determines that Mexico-domiciled carriers are
operating vehicles that do not comply with the appli-
cable FMVSSs, this information could be used to take
appropriate enforcement action for making a false
certification on the application for operating authority.
The FMCSA and NHTSA are initiating several regu-
latory actions (published elsewhere in today’s Federal
Register) to ensure that labeling requirements of the
FMVSSs are enforced against motor vehicles entering
the United States. The FMCSA is proposing to amend
the FMCSRs to require that all motor carriers ensure
that their CMVs have a certification label that meets
the requirements of 49 CFR part 567, applied by the
vehicle manufacturer or by a registered importer.
United States motor carriers typically would only have
access to vehicles that meet the applicable FMVSSs
and have a certification label that meets the require-
ments of 49 CFR part 567, but Mexico-domiciled and
Canada-domiciled carriers purchasing vehicles for
operation within their respective countries may be
using vehicles which have not been certified as
FMVSS-compliant.
The FMCSA is proposing that U.S. motor carriers
comply with the certification label proposal on the
effective date of the FMVSS certification rule. The
agency is also proposing that foreign motor carriers
that begin operations in the United States on or after
the effective date of the certification label rule, or
82a
expand their operations to go beyond the border zones
for the first time, ensure that all CMVs used in the new
or expanded operations have the necessary certification
label before entering the United States. All other
Canada and Mexico-domiciled motor carriers operating
in the United States prior to the effective date of the
interim final rule would be allowed 24 months to bring
their vehicles into compliance with the certification
requirements.
NHTSA is taking three separate actions relating to
the certification label. The first action is publication of
a policy statement that addresses commercial motor
vehicles that were not originally manufactured for sale
in the United States, and thus were not required at the
time of manufacture to be certified as complying with
the FMVSSs, but are subsequently sought to be
imported into the United States. The statement pro-
vides that a vehicle manufacturer may, if it has suffi-
cient basis for doing so, retroactively apply a label to a
commercial motor vehicle certifying that the vehicle
complied with all applicable FMVSSs in effect at the
time it was originally manufactured.
NHTSA recognizes that there are many commercial
motor vehicles used by motor carriers in Mexico and
Canada that were manufactured in accordance with the
FMVSSs, but were not certified as complying with
those standards because the vehicles were manu-
factured for sale in Canada or Mexico. NHTSA is pro-
posing two additional actions related to the FMVSS
and foreign-domiciled motor carriers. The first would
establish recordkeeping requirements for foreign
manufacturers that retroactively certify vehicles. The
second would codify, in 49 CFR Part 591, its long-
standing interpretation of the term “import,” as used in
83a
the National Traffic and Motor Vehicle Safety Act of
1966, Public Law 89-563, to include bringing a com-
mercial motor vehicle into the United States for the
purpose of transporting cargo or passengers.
Discussion of the Interim Final Rule
The FMCSA has made changes in this interim final
rule to the proposed revisions to part 365, based on the
comments, section 350 of the 2002 DOT Appropriations
Act, and our own review of the proposal.
Section 365.503 has been revised to allow both hard
copy and electronic submission of required information
on designation of process agents (Form BOC- 3) as part
of the application process. The FMCSA currently
allows only process agent services to electronically file
the Form BOC-3. If a carrier elects to use a process
agent service, it must include a letter to that effect with
the Form OP-1(MX) and ensure that the service elec-
tronically files the Form BOC-3 with the FMCSA.
Otherwise, the hard copy Form BOC-3 must accompany
the application. The carrier may not begin operations
until the Form BOC-3 has been filed with the FMCSA.
Section 365.505 has been revised to extend to 18
months the deadline for filing Form OP-1(MX) by
carriers holding a Certificate of Registration issued
before April 18, 2002, authorizing operations beyond
the municipalities along the U.S.-Mexico border and
beyond the commercial zones of such municipalities.
These carriers, as well as those carriers who filed the
previous version of the OP-1(MX) application form, do
not need to submit another fee when filing a new
OP-1(MX) application. The FMCSA may suspend or
84a
revoke the Certificate of Registration of any carrier
that fails to comply with this re-registration
requirement and 18-month deadline. Certificates of
Registration issued before April 18, 2002, will remain
valid until the FMCSA acts on the newly submitted
OP-1(MX) application.
The FMCSA has revised the heading of § 365.507 in
both the table of sections and the regulatory text to
“FMCSA action on the application” to accurately reflect
how the FMCSA will consider and act on each appli-
cation. The section now provides that the FMCSA will
validate all data and certifications in an application with
information in its own databases, in the appropriate
databases of the Mexican Government to which it has
access as part of the NAFTA implementation process,
and with information discovered during a pre-authori-
zation safety audit. The FMCSA will grant provisional
operating authority if it determines that the application
and the results of the safety audit are consistent with
the FMCSA’s safety fitness policy. The safety fitness
criteria published in new Appendix A to part 365 for
the pre-authorization safety audit is similar to the
safety fitness criteria for post-operational safety audits
for Mexico-domiciled carriers in new Appendix A to
part 385 that is being published elsewhere in today’s
Federal Register. We will also assign a distinctive
USDOT Number that distinguishes the carrier as a
Mexico-domiciled carrier authorized to operate beyond
the border zones.
In the companion rule establishing a safety moni-
toring system for new entrant Mexico-domiciled car-
riers (published elsewhere in today’s Federal Register),
FMCSA will require commercial motor vehicles to have
a valid CVSA inspection decal denoting a successful
85a
inspection of the commercial motor vehicle at all times
while operating under provisional operating authority
in the United States beyond the border zones. Pro-
visional authority to operate beyond the border zones
cannot become permanent for at least 18 months, until
the carrier has successfully completed an 18-month
safety monitoring program, including a compliance re-
view resulting in the assignment of a Satisfactory
safety rating as required by § 350(a)(2) of the 2002 DOT
Appropriations Act.
Section 365.511 has been added in response to the
2002 DOT Appropriations Act. This — will require
that a Mexico-domiciled carrier must continue to seek
out and have CVSA inspectors perform CVSA Level I
inspections for the first three consecutive years after
being granted permanent operating authority.
We have made conforming amendments to
$§ 365.101(h) and 365.105(a). We revised § 365.101(h) to
reflect the expanded scope of operations authorized by
the Form OP-1(MX)—from Mexico to all points in the
United States. The previous reference to the four
border States was originally designed to register appli-
cants to operate from Mexico to points only within the
— States of California, Texas, Arizona and New
exico.
There are three revisions to § 365.105(a). First. w
have specified that household goods — and —
passenger carriers are required to submit the OP-
1(MX) when applying to operate within the United
States beyond the border zones. The previous regula-
tions generally required motor property carriers to use
the form. Next, we removed an obsclete reference to
Form OP-1(W) because we do not have authority to
register water carriers. Finally, we updated the cross-
86a
reference to filing fee requirements to reflect the
recodification of these requirements in 49 CFR part
360.
Revisions to Form OP-1(MX)
The interim final rule reflects numerous typographi-
eal corrections and adjustments to the OP-1(MX)
application form to make it consistent with the OP-2
form. All requests for supplemental information that
must accompany the application are in bold typeface so
that they are conspicuous to the applicant. The sub-
stantive revisions are discussed below.
The OP-1(MX) application instructions have been
revised to discontinue the requirement that applicants
submit Internal Revenue Service (IRS) Form 2290,
Schedule 1 (Schedule of Heavy Highway Vehicles) with
the OP-1(MX) application. Unlike the OP-1(MX) appli-
cation procedure, taxes imposed by 26 U.S.C. 4481 are
assessed annually. The IRS Form 2290 would only
provide evidence of compliance for the current year.
However, the applicant must still certify compliance
with 26 U.S.C. 4481 under Section VIII of the
application.
The instructions clarify the definition of “applicant”
for purposes of determining who must sign the various
certifications and the Section [X—Application Oath.
Next, applicants are cautioned to enter only the city
code and telephone numbers when listing Mexican tele-
phone numbers on the form because previous applicants
often submitted invalid or incomplete telephone
numbers.
87a
Under the Insurance Instructions, we emphasize that
although evidence of coverage is not required at the
time the application is submitted, a carrier has up 90
days after filing an OP-1(MX) application to submit
proof of financial responsibility.
The information on how to receive additional assist-
ance in completing the Forms OP-1(MX) and MCS-150
was revised to list a toll-free telephone number acces-
sible from Mexico. We also updated the information for
obtaining assistance with hazardous materials
registration procedures and regulations.
The instructions also state that applicants that use a
process agent service to designate multiple agents for
service of process must attach a letter to the application
informing the FMCSA of this option. The applicant
must also ensure that the service electronically files the
Form BOC-3 with the FMCSA within 90 days after
submitting the application. The applicant is also
notified that it may not begin operations in the United
—— — the Form BOC-3 has been filed with
The FMCSA has modified Section IA to add a ques-
tion asking applicants whether they previously held
provisional operating authority that was revoked. If
that is the case, the applicant must show how it has
corrected the deficiencies that resulted in the revoca-
tion, explain what effectively functioning basic safety
management systems it now has in place, and provide
any — and documents that support its argu-
ments.
The FMCSA has corrected references in Section IA,
and in the corresponding instructions, to an “SCT
registration number.” An applicant must be registered
88a
with SCT to be issued operating authority. However,
the SCT does not issue an SCT registration number. It
uses the RFC number, a Mexican Federal Taxpayer
Registration identifier issued by a separate Govern-
ment agency, to track the carrier’s information in the
SCT database. A company is issued a Registro Federal
de Contribuyente; individuals are issued a Registro
Federal de Causante. The applicant must complete
Question 5a under Section IA based upon the appli-
eant's form of business: (1) if the applicant is a sole
proprietorship, enter the Registro Federal de Caus-
ante; (2) all other business forms should complete
Question 5a using the Registro Federal de Contri-
buyente.
We have deleted a redundant question regarding the
applicant’s domicile from Section IA and Ownership
and Control information from Section II. This informa-
tion was used to substantiate claims that a carrier was
U.S.-owned or controlled and therefore eligible to
operate beyond the border zones under a Certificate of
Registration. With the implementation of NAFTA 8
access provisions, Mexico-domiciled carriers applying to
operate beyond the border zones will no longer file the
OP-2 form. They must file an OP-1(MX), and owner-
ship and control information will not be the basis for
granting authority
Several safety certifications have been modified or
added to Section V. The safety certification for appli-
eants that are exempt from the Federal Motor Carrier
Safety Regulations because of the weight of their
vehieles and because they will not transport hazardous
materials (as was discussed in the proposed form
instruetions but inadvertently omitted from the pro-
posed form) has been restored. These applieants must
89a
certify that they will observe safe operating practices
and comply with applicable State, local and tribal safety
laws.
Under Driver Qualifications, applicants must certify,
consistent with 49 CFR 391.23, that they will investi-
gate their drivers’ 3-year employment and driving
histories. The certification statement concerning the
need for carriers to establish a system and instructions
for drivers to report criminal convictions has been re-
moved. Current regulations only require domestic
drivers to report violations of motor vehicle traffic laws
and ordinances. The certification statement relating to
the use of properly licensed drivers has been modified
to require that the driver’s Licencia Federal de
Conductor be registered in the SCT database.
The four certification statements proposed under
certification section V.8, pertaining to requirements
that must be in place once operations within the United
States have begun, have been modified to emphasize
that they are post-operational requirements and have
been integrated into the Hours of Service, Driver
Qualifications, and Vehicle Condition certification sec-
tions, as appropriate.
In response to comments from the ATA, Teamsters,
OOIDA, and the TTD, we have extensively revised the
Hazardous Materials (HM) and Cargo Tank certifica-
tion statements. The HM training certification was
modified to cite the relevant HM training regulations
(49 CFR part 172, subpart H and 49 CFR 177.816) and
the specific hazardous materials safety compliance
information that must accompany the application.
We reworded the certification statement regarding
the establishment of a system and procedures for
90a
inspecting, repairing and maintaining “vehicles for HM
transportation in a safe condition.” The Hazardous
Materials Regulations (HMR) require a system and
procedures for inspection, repair and maintenance of
reusable hazardous materials packages in a safe condi-
tion. The vehicle inspection, repair and maintenance
requirement is covered in the Vehicle Condition certifi-
cation statements.
We added a new certification statement requiring
carriers to ensure that all HM vehicles are marked and
placarded in compliance with 49 CFR part 172, sub-
parts D and F.
The HM registration certification statement, which is
not restricted to Cargo Tank carriers, has been cor-
rected and moved to the Hazardous Materials section.
The Section VIII—Compliance Certification state-
ment concerning process agent(s) has been modified to
replace the phrase “judicial filings and notices” with
“filings and notices.” Two new Compliance Certifica-
tion statements have been added. In the first, respon-
sive to section 350(a)(5) of the DOT Appropriations Act,
the applicant must certify it is willing and able to have
all vehicles operated in the United States inspected at
least every 90 days by a certified CVSA inspector and
have decals affixed attesting to satisfactory compliance
with Level I CVSA Inspection criteria. This provision
will require a Mexico-domiciled motor carrier to seek
out a qualified CVSA inspector to conduct a CVSA
inspection at least every 90 days until it has operated
under permanent authority for at least 3 consecutive
years. Mexico-domiciled carriers should seek out and
have Mexico-domiciled CVSA inspectors perform such
inspections in Mexico before the carrier sends its
vehicles to United States ports of entry. This will help
9la
the carriers to minimize disrupti
1 ptions to the efficient
of their vehicles, minimize time in the U.S. —
entry, and provide a more efficient border crossing
enroute to its U.S. and Canadian destinations.
The second compliance certification added i
VIII is designed to ensure that — en
riers whose registration has been suspended or revoked
are not reapplying for operating authority while under
suspension or sooner than 30 days after the date of
revocation, as prohibited in part 385 subpart B. A
signature line also has been placed beneath the Com-
— Certification statements, consistent with
— V- Safety Certifications and Section
I Household Goods Arbitration Certifications.
Certain other changes were made to the Secti
( tio
* sa Certifications after discussions with
e U.S. Department of Labor and the U.S. Environ-
mental Protection Agency. The proposed Form
OP-1(MX) included a certification that the applicant is
willing and able to comply with U.S. labor laws
Although the certification is included in a section that is
prefaced by the direction “All applicants must certify as
follows: , the instructions for the form, after first
stating that FMCSA considered compliance with labor
laws to be extremely important,” then indicated that
2 will not be withheld based solely on the
ailure by an applicant to certify that it is willing and
able to comply with such [DOL and OSHA] require-
ments . * *.” The FMCSA has removed those
certification statements and the accompanying instruc-
og We have added new language that compliance
— all pertinent Federal, State, local and tribal statu-
g ry and regulatory requirements, including labor and
nvironmental laws, is mandatory. Such compliance
92a
d
es producing requested records for review an
— and that inspectors of the — ant
Naturalization Service at the port of entry mus —
mine the driver of the vehiele meets the —
under the Immigration and Nationality ct. 4
statements do not require — — ——
mational in nature and thus have been place
the signature line.
iling Fee Policy and Computation Box that
22 ate in the form instructions have —
moved to the back of the form because a carrier — —
provide filing fee information until * —
III Types of Registration. The fee Po 7” hyo
discloses that the FMCSA will place a 30 lay “io te
the application if the filing fee payment is m
personal check.
form and instruc-
Finally, FMCSA will translate the
tions into Spanish to help applicants understand =
each question asks and what types of answers y
need to provide.
Rulemaking Analyses and Notices
Planning and
Executive Order 12866 (Regulatory
2 and Department of Transportation Regulatory
Policies and Procedures | 3
The FMCSA has determined that this action is a
significant regulatory action within the meaning of ,
} is signi t within the
tive Order 12866, and is significan
— of Department of r
icies and procedures (44 F ' "
ray ten ober public interest. It has been reviewed
by the Office of Management and Budget under me
tive Order 12866. However, it is anticipated that the
93a
economic impact of the revisions in this rulemaking will
be minimal. The new or revised Form OP-1(MX) is
intended to foster and contribute to safety of opera-
tions, adherence to U.S. law and regulations, and com-
pliance with U.S. insurance and tax payment require-
ments on the part of Mexico-domiciled carriers.
Nevertheless, the subject of safe operations by
Mexico-domiciled carriers in the United States has
generated considerable public interest within the
meaning of Executive Order 12866. The manner in
which the FMCSA carries out its safety oversight
responsibilities with respect to this international motor
carrier transportation has been of substantial interest
to the domestic motor carrier industry, the Congress,
and the public at large. The 2002 DOT Appropriations
Act includes specific requirements FMCSA must
complete to begin reviewing and processing the appli-
cation Form OP-1(MX) under this interim final rule.
The Regulatory Evaluation analyzes the costs and
benefits of this rule and the two companion NAFTA-
related rules published elsewhere in today’s Federal
Register. Pursuant to Executive Order 12866, because
these rules are so closely interrelated, we did not
attempt to prepare separate analyses for each rule.
The evaluation estimated costs and benefits based on
three different scenarios, with a high, low and medium
number of Mexico-domiciled carriers assumed covered
by the rules. The costs of these rules are minimal under
all three scenarios. Over 10 years, the costs range from
$53 million for the low scenario to approximately $76
million for the high scenario. Forty percent of these
costs are borne by the FMCSA, while the remaining
costs are paid by Mexico-domiciled carriers. The
largest costs are those associated with conducting pre-
94a
izati liance reviews within
thorization safety audits, comp 2
18-months of a carrier’s recelving provisional —
authority, and the loss of a earrier’s ability to opera
the United States. | 8
FMCSA used the cost effectiveness a
1 rm the benefits of these rules. This —
involves estimating the number of crashes t —
have to be deterred in * * — —
effective. Over 10 years, the low — —
640 forecast erashes to be cos t
— — scenario would have to deter 838, = — —
scenario would have to deter 929. While t — — —
number of erashes to be under — — —
igh scenario is fairly high, t e number
— the 10-year analysis period and — oe —
year deterrence rate is one-quarter to one-s
of the first year’s rate. .
A copy of the Regulatory Evaluation is in the docket
for this rulemaking.
Regulatory Flexibility Aet
The Regulatory Flexibility Act (RFA) yer 4 —
354, 5 U.S.C. 601-612), as amended by the S rege
ness Regulatory Enforcement and — —
L. 104-121), requires Federal agencies to — —
impact of rulemakings on small entities, unles be
Agency certifies that the rule will not have a 71 —
economic impact on a substantial number of s
tities. |
i ]
United States did not have in place a —
m1 to ensure the safety of prong tae gr a —
riers operating in the United States. Mexi
95a
carriers will be subject to all the same safety regula-
tions as domestic carriers. However, FMCSA’s
enforcement of the FMCSRs has become increasingly
data dependent in the last several years. Several pro-
grams have been put in place to continually analyze
crash rates, out-of-service rates, compliance review
records, and other data sources to allow the agency to
focus on high- risk carriers. This strategy is only
effective if the FMCSA has adequate data on carriers’
size, operations, and history. Thus, a key component of
this rule and the companion application rule for border-
zone carriers is the requirement that Mexico-domiciled
carriers operating in the United States must complete a
Form MCS-150-Motor Carrier Identification Report,
and must update their Form OP-1(MX)—Application to
Register Mexican Carriers for Motor Carrier Authority
To Operate Beyond
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