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California’s recent action against two brokers set a new enforcement precedent

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The recent actions taken against Roadrunner Transportation Systems and Marten Logistics by the state of California were not just lessons in how truckers and their support companies need to abide by rules in California that are stricter in many areas. They were precedent-setting.

The dual actions were the first taken by the California Air Resources Board against out-of-state brokers, according to two communications representatives from CARB.   

“Brokers dispatching trucks in California have always been subject to the rule,” Stanley Young, a CARB communications director, said in an email to Freightwaves. Asked what had spurred the state to take a different type of action, Young replied, “These were simply the first two cases involving California-based brokers headquartered outside of California.”

The definition of “out of state” can get tricky. Because while Roadrunner and Martens are both “out of state,” in the sense that Roadrunner is in Illinois, and Marten is in Wisconsin, Young said that the law doesn’t distinguish about location. “The regulation requires any California based broker to meet regulatory requirements,” Young said. “Brokers are California based when they broker loads in California, regardless of where the broker is physically located.” But despite that definition, which seemed to imply at first glance that this was no big deal, Young did concede that they were different than other actions taken in the past given the out-of-state headquarters of the companies.

Although these are precedent-setting enforcement actions, Young appeared to not want to give too much weight to the idea that they were “firsts.” “Brokers dispatching trucks in California have always been subject to the rule,” he wrote.

The violations cited by CARB against Roadrunner and Marten were not that they sent trucks into the state that violated any safety or maintenance laws. Rather, it was that they failed to verify that the trucks in question met California’s regulations.

As another CARB spokeswoman, Heather Quiros, said: “It is a violation if a broker hires a vehicle or fleet without checking compliance first, regardless of whether or not the hired fleet or vehicle is compliant.”

Marten was tagged with a $100,000 fine; Roadrunner was levied a penalty of $52,250.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.