Multistar Industries, Inc. v. U.S. Department of Transportation , 707 F.3d 1045 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MULTISTAR INDUSTRIES, INC., DBA No. 12-73138
Multifrost, Inc.,
Petitioner, TRAN No.
461410
v.
U.S. DEPARTMENT OF
TRANSPORTATION ; FEDERAL MOTOR
CARRIER SAFETY ADMINISTRATION ,
Respondents.
MULTISTAR INDUSTRIES, INC., DBA No. 12-73485
Multifrost, Inc.,
Petitioner,
OPINION
v.
U.S. DEPARTMENT OF
TRANSPORTATION ; FEDERAL MOTOR
CARRIER SAFETY ADMINISTRATION ,
Respondents.
On Petition for Review of an Order of the
Department of Transportation,
National Transportation Safety Board
2 MULTISTAR INDUSTRIES, INC. V . USDOT
Argued and Submitted
December 5, 2012—Pasadena, California
Filed February 7, 2013
Before: Marsha S. Berzon and Sandra S. Ikuta, Circuit
Judges, and Jennifer G. Zipps, District Judge.*
Opinion by Judge Berzon
SUMMARY**
Transportation
The panel dismissed in part, and denied in part,
consolidated petitions for review challenging a compliance
review of a for-hire motor carrier conducted by the U.S.
Department of Transportation Federal Motor Carrier Safety
Administration.
As to petitioner’s substantive challenge, the panel held
that it could not reach the merits of petitioner’s substantive
claims because there was no final decision by the agency as
to certain violations, and dismissed the petition for review as
to the merits of those violations. As to petitioner’s procedural
due process challenge, the panel denied the petition for
*
The Honorable Jennifer G. Zipps, District Judge for the U.S. District
Court for the District of Arizona, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
MULTISTAR INDUSTRIES, INC. V . USDOT 3
review because petitioner received all of the process it was
due with regard to the contested violations, and the agency’s
denial of petitioner’s petition for review was not arbitrary or
capricious.
COUNSEL
Timothy W. Wiseman (argued) and Christopher C. McNatt,
Jr., Scopelitis, Garvin, Light, Hanson & Feary, P.C.,
Indianapolis, Indiana, for Petitioner.
Jonathan H. Levy (argued) and Matthew Collette, United
States Department of Justice, Civil Division; Stuart F. Delery,
Principal Deputy Assistant Attorney General; Robert S.
Rivkin, General Counsel; Paul M. Geier, Assistant General
Counsel for Litigation; Timothy H. Goodman, United States
Department of Transportation; T.F. Scott Darling, III, Chief
Counsel; Fred K. Ford, Assistant Chief Counsel; Jedd
Miloud, Federal Motor Carrier Safety Administration,
Washington, D.C., for Respondents.
OPINION
BERZON, Circuit Judge:
Petitioner Multistar Industries, Inc. (“Multistar”) is a for-
hire motor carrier engaged in the business of transporting
hazardous materials. As a result of a recent compliance
review of Multistar’s operations, conducted by the U.S.
Department of Transportation Federal Motor Carrier Safety
Administration (“FMCSA” or “the agency”), Multistar was
assigned an “unsatisfactory” safety rating and, as a
4 MULTISTAR INDUSTRIES, INC. V . USDOT
consequence, ordered to cease operations. The agency denied
Multistar’s subsequent administrative appeal, which
challenged certain violations discovered during the
compliance review.
Multistar now petitions for review of FMCSA’s order,
and, in a separate petition for review, challenges the agency’s
denial of Multistar’s petition for administrative review. We
dismiss in part and deny in part the consolidated petitions.
I. Statutory and Regulatory Background
Congress has directed the Secretary of Transportation to
“determine whether an owner or operator is fit to operate
safely commercial motor vehicles, utilizing among other
things . . . [the] safety inspection record of such owner or
operator.” 49 U.S.C. § 31144(a)(1). To do so, the Secretary
is directed to “maintain by regulation a procedure for
determining the safety fitness of an owner or operator.” Id.§ 31144(b); see also id. § 31136. With regard to the
transportation of hazardous materials, Congress has declared
that “an owner or operator who the Secretary determines is
not fit may not operate in interstate commerce beginning on
the 46th day after the date of such fitness determination and
until the Secretary determines that such owner or operator is
fit.” Id. § 31144(c)(3).
The Secretary’s authority to regulate the procedures of
such fitness determinations has been delegated to the
FMCSA. See 49 U.S.C. § 113(f); 49 C.F.R. § 1.87(f).
FMCSA has established a fitness determination procedure as
directed by Congress. See 49 C.F.R. Pt. 385. Under this
regulatory framework, a motor carrier is either “unrated” or
is assigned one of three possible safety ratings: “satisfactory,”
MULTISTAR INDUSTRIES, INC. V . USDOT 5
“conditional,” or “unsatisfactory.” See id. § 385.3. A motor
carrier receives a “satisfactory” safety rating if it has in place
“adequate safety management controls” to meet the safety
fitness standard prescribed in § 385.5.1 Id. A motor carrier
is assigned a “conditional” safety rating if it “does not have
adequate safety management controls in place to ensure
compliance with the safety fitness standard that could result
in” violation of safety regulations. Id. § 385.3.
An “unsatisfactory” safety rating means that the carrier
“does not have adequate safety management controls in place
to ensure compliance with the safety fitness standard,” and
that, as a result, violation of the safety regulations has
occurred. Id. Pursuant to FMCSA’s safety ratings
procedures, a hazardous materials carrier that receives an
“unsatisfactory” safety rating is prohibited from operating a
commercial motor vehicle in interstate or intrastate
commerce. Id. § 385.13(a)(1); see also 49 U.S.C.
§ 31144(c)(3). FMCSA may also revoke the operating
registration of a motor carrier rated “unsatisfactory.”
49 C.F.R. § 385.13(e).
The factors considered in determining a carrier’s safety
rating include information collected during “on-site
examination[s] of motor carrier operations,” termed
“compliance reviews.” Id. §§ 385.3, 385.7. During a
compliance review, FMCSA evaluates the motor carrier’s
compliance with the Federal Motor Carrier Safety
Regulations2 (“FMCSRs”) and Hazardous Materials
1
All citations are to Title 49 of the Code of Federal Regulations unless
otherwise noted.
2
See 49 C.F.R. parts 350–399.
6 MULTISTAR INDUSTRIES, INC. V . USDOT
Regulations3 (“HMRs”). See id. Pt. 385, App. B § (d). Based
on the information collected from the compliance review,
FMCSA assigns the carrier a proposed safety rating based on
any regulatory violations found. Id. § 385.9(a).
The methodology for determining the proposed safety
rating is contained in Appendix B to Part 385. Section VII of
Appendix B categorizes certain regulations (i.e., certain
FMCSRs and HMRs) as “acute” or “critical.” The ratings
methodology provides that each violation of an acute
regulation is considered one “point.” Each pattern of
violations of a critical regulation (meaning more than one
violation of the same critical regulation) is considered one or
two points, depending on which critical regulation is violated.
Id. Pt. 385, App. B, § II(g), VII. All regulatory violations
(acute, critical, or otherwise) are grouped into six Factors,
which are associated with particular parts of the FMCSRs or
HMRs:
• Factor 1 - General (Parts 387 and 390)
• Factor 2 - Driver (Parts 382, 383, and 391)
• Factor 3 - Operational (Parts 392 and 395)
• Factor 4 - Vehicle (Parts 393 and 396)
• Factor 5 - Hazardous Materials (Parts 397, 171, 177
and 180)
• Factor 6 - Accident Factor
3
See 49 C.F.R. parts 171–180.
MULTISTAR INDUSTRIES, INC. V . USDOT 7
Id. § II(C). Based on data gathered during the compliance
review, each Factor is assigned a rating of “satisfactory” if no
points have been assigned, “conditional” if one point has been
assigned, and “unsatisfactory” if two or more points have
been assigned. Id. § III(A). Finally, the ratings for the six
Factors are combined into a single “overall” rating for the
carrier according to a “Rating Table.” Id. If two or more
Factors are rated “unsatisfactory,” the carrier’s proposed
overall rating is “unsatisfactory.” Id. § III(B).
A proposed overall “unsatisfactory” safety rating is
provisional and does not become final until 45 days after the
carrier receives written notice of the proposed rating. Id.
§ 385.11(c)(1). Pursuant to 49 C.F.R. § 385.15, a carrier may
seek administrative review of a proposed or final safety rating
within 90 days of its issuance. Id. § 385.15(a), (c)(2).
Carriers assigned an “unsatisfactory” rating, however, are
encouraged to file such requests within 15 days to allow the
agency to issue a “final decision” before the prohibition on
operating accompanying such a rating takes effect. Id.
§ 385.15(c)(1).
In addition to, or instead of, seeking administrative review
under § 385.15, a carrier may request an upgrade of its safety
rating under § 385.17 based on steps the carrier has taken to
correct violations found during the compliance review. Such
“upgrade requests” are separate from petitions for
administrative review under § 385.15, and may be filed at any
time, including after the proposed safety rating becomes final
and operating authority is revoked. See id. § 385.17(a).
Upon receipt of an upgrade request, the agency must
determine whether “the motor carrier has taken the corrective
actions required and [whether] its operations currently meet
the safety standard and factors specified in [49 C.F.R.]
8 MULTISTAR INDUSTRIES, INC. V . USDOT
§§ 385.5 and 385.7.” Id. § 385.17(h), (i). If the agency
denies the upgrade request, the carrier may seek
administrative review of that denial under § 385.15(c)(2).
II. Factual and Procedural Background
A. Multistar’s Compliance Review and Safety Rating
On August 13, 2012, FMCSA conducted a compliance
review of Multistar’s operations. That review found 26 total
sets of violations of various regulations, resulting in
unsatisfactory Factor 2 and Factor 5 ratings and, therefore, an
overall “unsatisfactory” rating. Multistar’s Factor 2 rating
was based on discovered violations of two acute regulations.4
Its unsatisfactory Factor 5 rating was based on violations of
two acute and five critical regulations.5 Pursuant to the
4
Specifically, FM CSA discovered violations of 49 C.F.R. § 383.37(a)
(knowingly allowing, requiring, permitting, or authorizing an employee
with a suspended, revoked, or canceled commercial driver’s license to
operate a commercial motor vehicle), identified in the compliance report
as Violation 17, and of 49 C.F.R. § 391.11(b)(4) (using a physically
unqualified driver), identified in the compliance report as Violation 20.
5
The agency found violations of 49 C.F.R. § 172.800(b) (offering or
transporting hazardous materials without a security plan), identified as
Violation 3 in the compliance report; 49 C.F.R. § 177.800(c) (failing to
train hazardous materials employee), identified as Violation 4 in the
compliance report; 49 C.F.R. § 177.801 (transporting or accepting a
shipment of hazardous materials not in proper condition for transportation
or not certified as to proper packaging, marking, and description),
identified as Violation 5 in the compliance report; 49 C.F.R. § 177.817(a)
(transporting a shipment of hazardous materials not accompanied by a
properly prepared shipping paper), identified as Violation 7 in the
compliance report; 49 C.F.R. § 180.407(a) (transporting a hazardous
material in a DOT specification cargo tank for which a test or inspection
specified in this section has become due), identified as Violation 9 in the
MULTISTAR INDUSTRIES, INC. V . USDOT 9
agency’s ratings methodology, Multistar was assigned two
points for Factor 2 and seven points for Factor 5, which in
turn resulted in a proposed overall safety rating of
“unsatisfactory.” See 49 C.F.R. Pt. 385, App. B, § III.
Four days later, on August 17, FMCSA sent Multistar an
official notice stating that the proposed “unsatisfactory”
rating would become final and Multistar would be prohibited
from operating commercial motor vehicles in 45 days—that
is, on October 2, 2012—unless it took the steps necessary to
improve its rating before that date. The notice also provided
information regarding how to request a safety rating upgrade
under § 385.17 and how to file an administrative appeal under
§ 385.15. With respect to the latter, the notice pointed out
that although Multistar had 90 days in which to file an appeal,
it was encouraged to do so within 15 days if it wanted the
agency to rule before the “unsatisfactory” rating became
final.
B. Administrative Proceedings
1. Multistar’s Administrative Appeal under § 385.15
On August 31, 2012—fourteen days after FMCSA sent
the official notice—Multistar filed a petition for
administrative review of the proposed “unsatisfactory” safety
rating under § 385.15 (“petition for administrative review”).
That petition challenged five of the regulatory violations
compliance report; 49 C.F.R. § 180.407(c) (failing to periodically test and
inspect a cargo tank), identified as Violation 11 in the compliance report;
and 49 C.F.R. § 180.417(a)(1) (failing to retain a cargo tank
manufacturer’s data report, certificate, and related documentation),
identified as Violation 15 in the compliance report.
10 MULTISTAR INDUSTRIES, INC. V . USDOT
FMCSA discovered during the August 13 compliance
review—specifically, violations numbers 5, 8, 11, 14, and 17.
Pursuant to § 385.15, FMCSA was obligated to issue a
written response to the petition within 30 days. 49 C.F.R.
§ 385.15(e)(1).
On September 25, 2012, FMCSA issued a letter to
Multistar ordering it to cease all transportation operations by
October 2, 2012, as required under 49 U.S.C.
§§ 13905(f)(1)(B) and 31144(c)(3), and 49 C.F.R.
§ 385.13(a)(1) and (d)(1) (the “order”). The order also
revoked Multistar’s motor carrier registration as of October
2. See 49 C.F.R. § 385.13(e).
The following week, on October 1, FMCSA issued its
decision denying Multistar’s petition for administrative
review. In doing so, FMCSA noted that violations 8 and 14
were neither acute nor critical, and therefore were irrelevant
to Multistar’s overall safety rating under the ratings
methodology.6 As to violation 17, the agency observed that
Multistar denied merely “that it knowingly committed the
violation,” with no further explanation or argument; FMCSA
explained that “[g]eneral denials are insufficient to
demonstrate that the Agency erred in assigning [Multistar]’s
safety rating.” Finally, with respect to violations 5 and 11,
the agency noted that those violations comprised only two of
the seven total violations of acute or critical regulations
falling within Factor 5, and, therefore, “removal of th[o]se
violations would not change [Multistar’s] overall
Unsatisfactory safety rating.” The agency thereby affirmed
6
Violation 8 related to Multistar’s failure to have proper emergency
discharge controls on its cargo tanks; Violation 14 arose from
shortcomings in M ultistar’s inspection of delivery hose assemblies.
MULTISTAR INDUSTRIES, INC. V . USDOT 11
Multistar’s overall “unsatisfactory” rating and the order to
cease operations.
2. Multistar’s Upgrade Requests under § 385.17
At the same time Multistar was pursuing its appeal with
the agency, on September 7, 2012 it also requested a safety
rating upgrade pursuant to § 385.17. FMSCA denied that
request in a letter dated October 5, 2012, holding that
Multistar had not taken steps adequate to correct the
violations found during the August 13 compliance review.
Multistar accepted FMCSA’s invitation to submit another
upgrade request, which it did on October 25. FMCSA denied
that second request on November 21, 2012. Multistar has
ninety days from that date to seek an administrative appeal of
the second upgrade request denial.7 See 49 C.F.R.
§§ 385.15(c)(2), 385.17(j).
C. Judicial Proceedings
On October 1, 2012, the same day FMCSA denied
Multistar’s petition for administrative review and one day
before the order to cease operations was to take effect,
Multistar filed a petition for judicial review of the order and
an emergency motion to stay the requirement that it cease
operations. We granted Multistar’s emergency motion and
stayed the order pending resolution of Multistar’s petition for
review. On October 25, 2012, Multistar filed a second
petition for judicial review challenging the agency’s denial of
its petition for administrative review. We consolidated the
two petitions for review.
7
So far, Multistar has not sought administrative review of the agency’s
denials of the upgrade requests.
12 MULTISTAR INDUSTRIES, INC. V . USDOT
III. Analysis
We have jurisdiction to review specified final orders of
the Secretary of Transportation under the Hobbs Act,
28 U.S.C. § 2342(3)(A). “Generally, administrative orders
are final and appealable if they impose an obligation, deny a
right, or fix some legal relationship as a consummation of the
administrative process.” Sierra Club v. U.S. Nuclear
Regulatory Comm’n, 862 F.2d 222, 225 (9th Cir. 1988). We
review orders of the FMCSA under the Administrative
Procedure Act (“APA”) and “may set aside an agency action
only if it is ‘arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.’” Barnes v. U.S. Dep’t
of Transp., 655 F.3d 1124, 1132 (9th Cir. 2011) (quoting
5 U.S.C. § 706(2)(A)); see Darrell Andrews Trucking, Inc. v.
FMCSA, 296 F.3d 1120, 1124 (D.C. Cir. 2002).
Multistar asserts two principal challenges on appeal, one
substantive and the other procedural. First, it argues that the
agency abused its discretion in issuing the order to cease
operations, because the “unsatisfactory” safety rating on
which it was based was itself premised on the misapplication
of certain safety regulations. Second, Multistar contends that
the agency acted arbitrarily or capriciously and violated its
due process rights by denying Multistar’s petition for
administrative review without providing a substantive
response to some of the carrier’s challenges. We address
each challenge in turn.
A. Multistar’s Challenge to FMCSA’s “Unsatisfactory”
Rating and Order to Cease Operations
According to Multistar, the order to cease operations and
the “unsatisfactory” rating should be set aside as an abuse of
MULTISTAR INDUSTRIES, INC. V . USDOT 13
discretion premised on a misapplication of certain safety
regulations. Specifically, Multistar challenges violations 5
and 11 listed in the compliance review,8 arguing that they
were based on the agency’s erroneous findings that some of
Multistar’s container tanks violated specified safety
regulations, but, according to Multistar, the regulations relied
upon did not apply to those types of tanks.
Under the Hobbs Act and the APA, we are limited to
reviewing only the “final” action taken by the agency.
28 U.S.C. § 2342(3)(A); 5 U.S.C. § 704. Here, FMCSA’s
denial of Multistar’s petition for administrative review of the
“unsatisfactory” rating is a final agency action, permitting
judicial review of FMCSA’s unsatisfactory safety rating. 49
C.F.R. § 385.15(f). Multistar’s “unsatisfactory” safety rating
became final agency action once the agency denied
Multistar’s petition for administrative review of that rating.
See id. § 385.423(a) (“After a motor carrier has had an
opportunity for administrative review of, or change to, a
proposed safety rating, FMCSA’s issuance of a final safety
rating constitutes final agency action . . . .”); see also Idaho
Watersheds Project v. Hahn, 307 F.3d 815, 829 (9th Cir.
2002), abrogated on other grounds by Winter v. Natural Res.
Def. Council, Inc., 555 U.S. 7 (2008) (noting that once an
optional administrative appeal or rehearing concludes, the
original decision is final for purposes of judicial review).
FMCSA’s denial of Multistar’s petition for administrative
8
Unlike in its administrative appeal, M ultistar does not contest violation
17. In its opening brief, M ultistar also challenged violations 8 and 14. As
noted, FM CSA did not consider these two violations when calculating
Multistar’s safety rating in the first place, as those violations were neither
acute nor critical. Moreover, Multistar did not make any attempt to
explain why the agency’s findings as to violations 8 and 14 were
erroneous.
14 MULTISTAR INDUSTRIES, INC. V . USDOT
review upheld the “unsatisfactory” rating, and therefore
represented the “consummation of the agency’s
decisionmaking process” on the rating matter. Hells Canyon
Pres. Council v. U.S. Forest Serv., 593 F.3d 923, 930 (9th
Cir. 2010).
Absent our stay, the order to cease operations would have
taken effect the day after the unsatisfactory rating became
final. 49 C.F.R. § 385.13(a)(1). Because the validity of that
order depends entirely on the unsatisfactory rating, see id.§§ 385.13(a)(1), 385.15(c), which the denial of administrative
review effectively upheld, we concentrate our analysis on the
final rating.
Significantly, Multistar’s final safety rating did not rely
on or otherwise incorporate violations 5 and 11. Indeed,
although these contested violations made up two of the seven
Factor 5 violations that, combined with Multistar’s Factor 2
violations, first resulted in the agency’s proposed
“unsatisfactory” safety rating, the agency expressly
disclaimed any reliance on them in denying Multistar’s
petition for administrative review. As the agency explained,
the August 13 compliance review revealed a total of seven
violations of acute or critical regulations falling within Factor
5. Because a finding of just two violations of acute or critical
regulations yields an “unsatisfactory” factor rating, see 49
C.F.R. Pt. 385 App. B, § III, removing violations 5 and 11
would not affect Multistar’s Factor 5 rating; there would still
remain five uncontested violations of acute or critical
regulations mandating an “unsatisfactory” Factor 5 rating.
That rating, combined with Multistar’s uncontested
“unsatisfactory” Factor 2 rating, still added up to an overall
“unsatisfactory” safety rating.
MULTISTAR INDUSTRIES, INC. V . USDOT 15
Thus, violations 5 and 11 did not factor into Multistar’s
final “unsatisfactory” safety rating, and so did not underlie
the order to cease operations. In other words, there was no
final agency action that found violations 5 and 11 or
depended on such findings. Multistar cannot substantively
challenge in this judicial, APA proceeding the propriety of
those nonfinal determinations. Multistar does not contend
that the “unsatisfactory” rating is invalid on the grounds on
which it was upheld. We therefore must dismiss the petitions
insofar as they challenge the “unsatisfactory” rating and the
order to cease operations.
Multistar’s assertion that its substantive challenges to
violations 5 and 11 “work in tandem” with its upgrade
requests does not change this conclusion. According to
Multistar, if the agency were to grant the upgrade request,
then the removal of violations 5 and 11 from the compliance
review could become relevant to its overall safety rating. As
noted, however, Multistar has yet to seek administrative
review of either of the agency’s denials of its upgrade
requests. Unless and until Multistar does so, the currently
operative “unsatisfactory” safety rating and order to cease
operations stand firmly on the uncontested violations, and not
on violations 5 and 11. Without a final decision by the
agency as to those violations, we may not reach the merits of
Multistar’s substantive claims, and so dismiss the petition for
review as to the merits of violations 5 and 11.
B. Multistar’s Due Process Challenge to the Denial of its
Petition for Administrative Review
Multistar also challenges FMCSA’s denial of its request
for administrative review, on the grounds that the agency’s
refusal to address the merits of Multistar’s challenges to
16 MULTISTAR INDUSTRIES, INC. V . USDOT
violations 5 and 11 was arbitrary and capricious and violated
the carrier’s due process rights.
As noted, FMCSA denied the request for review because
removing violations 5 and 11 would not alter Multistar’s
overall safety rating. That response, Multistar asserts,
deprived Multistar of a substantive answer to its claims and
foreclosed its only means to contest those violations.9
1
As an initial matter, we note that, notwithstanding our
dismissal of Multistar’s substantive claims, Multistar has
standing to raise this procedural challenge. To satisfy Article
III standing, a plaintiff must show (1) it “ha[s] suffered an
‘injury in fact’” that is “concrete and particularized” and
“actual or imminent, not conjectural or hypothetical”; (2) a
“causal connection between the injury” and the challenged
action of the defendant; and (3) that it is “likely, as opposed
to merely speculative, that the injury will be redressed by a
favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S.
555, 560–61 (1992) (internal quotation marks omitted).
Our analysis of the first, injury in fact, aspect of standing
is “not fundamentally changed by the fact that a petitioner
asserts a procedural, rather than a substantive injury.”
Nuclear Info. & Res. Serv. v. NRC, 457 F.3d 941, 949 (9th
Cir. 2006) (internal quotation marks omitted). Where, as
here, a plaintiff alleges injury based on the government’s
failure to abide by a procedural requirement, it must show
9
N otably, since filing this appeal Multistar has received a proposed
substantive decision, subject to administrative review, as to its challenges
to violations 5 and 11.
MULTISTAR INDUSTRIES, INC. V . USDOT 17
that the procedures “protect[] a concrete threatened interest.”
Salmon Spawning & Recovery Alliance v. Gutierrez, 545 F.3d
1220, 1229 (9th Cir. 2008) (internal quotation marks
omitted); Lujan, 504 U.S. at 573 & n.8. Once a plaintiff
establishes such an interest, however, its burden to establish
the other two standing elements—causation and
redressability—is lessened. Salmon Spawning & Recovery
Alliance, 545 F.3d at 1224. Notably, for standing purposes,
a plaintiff alleging a procedural due process violation need
not demonstrate that it would prevail had it been accorded
adequate process. See Carey v. Piphus, 435 U.S. 247, 266
(1978) (holding that “[t]he right to procedural due process . . .
does not depend upon the merits of a claimant’s substantive
assertions”).
According to Multistar, the order to cease operations is
invalid because the procedures for administrative review set
forth in § 385.15 obligated FMCSA to provide a substantive
response to Multistar’s challenges to violations 5 and 11.
Without a substantive ruling on the contested violations,
Multistar argues, it may be forced to expend resources on
remedying those violations should it seek a ratings upgrade
in the future, even though it could turn out that the violations
were not accurately assessed against it in the first place. In
that sense, the allegedly inadequate procedural protections
afforded Multistar by FMCSA threaten Multistar’s economic
interests. See Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658,
664 (D.C. Cir. 1996) (en banc) (holding that a plaintiff may
establish injury in fact when asserting procedural injury by
“show[ing] that the government act performed without the
procedure in question will cause a distinct risk to a
particularized interest of the plaintiff”). As a remedy,
Multistar seeks a remand to the agency for a substantive
decision as to the contested violations.
18 MULTISTAR INDUSTRIES, INC. V . USDOT
We hold that the asserted injury is sufficient for standing
purposes and that, as the claim asserted is procedural, the
possibility that the claim could result in a final, judicially
reviewable decision as to the validity of the two challenged
violations meets the causation and redressability factors
applicable to such procedural claims. In so ruling, of course,
we assume, rather than decide, that Multistar’s procedural
claim might result in some relief. See Scott v. Rosenberg,
702 F.2d 1263, 1268 (9th Cir. 1983).
2
Reaching the merits of Multistar’s procedural claim
accordingly, we conclude that FMCSA was not obligated in
response to the request for review to provide a substantive
response to Multistar’s challenges concerning violations 5
and 11. Because those challenges, even if correct, could not
have affected FMCSA’s final action, the agency was not
obligated to reach their merits. Cf. Simpson v. Young,
854 F.2d 1429, 1433–35 (D.C. Cir. 1988) (noting that
agencies generally are not obligated “to address every
argument advanced [by a petitioner]. . . no matter how minor
or inconsequential the argument may be”).
Multistar argues that 49 C.F.R. § 385.15 “contemplates a
process by which a motor carrier can challenge any errors it
believes the FMCSA committed in issuing its safety rating,”
thus “serv[ing] as a guarantee of due process, ensuring that
erroneous decisions made by FMCSA field agents do not go
unchecked.” We disagree. Nothing in that regulation, nor,
derivatively, in the APA, obligates FMCSA to address the
merits of every contested agency finding when the agency did
not rely on those findings in its final action. To the contrary,
§ 385.15 merely gives motor carriers the option to “request
MULTISTAR INDUSTRIES, INC. V . USDOT 19
FMCSA to conduct an administrative review if it believes
FMCSA has committed an error in assigning its proposed or
final safety rating.” 49 C.F.R. § 385.15(a) (emphasis added).
As FMCSA has previously explained, “[t]he purpose of an
administrative appeal under [§ 385.15] is to determine
whether FMCSA committed error in assigning a safety rating
. . . not [] to provide motor carriers with an opportunity to
seek ‘removal’ of violations that do not affect the safety
rating.” In the Matter of West Marine Prods., Inc., FMCSA-
2009-0138, 2009 WL 1581078, at *2 (June 4, 2009).
Multistar relies on Darrell Andrews, 296 F.3d 1120, to
argue that the agency in its review decision was obligated
substantively to determine the challenges to violations 5 and
11 raised in Multistar’s petition. In Darrell Andrews, a motor
carrier petitioned for administrative review of FMCSA’s
decision assigning the carrier a “conditional” safety rating
pursuant to the ratings methodology contained in Appendix
B to § 385. 296 F.3d at 1122–23. That rating was based on
the motor carrier’s failure to maintain certain toll receipts for
its drivers in violation of § 395.8(k)(1). Id. at 1123–24.
FMCSA denied the carrier’s petition for administrative
review but did not address the carrier’s claim that toll receipts
provided unreliable evidence of driving history. Id. at 1134.
The D.C. Circuit held that the agency was obligated to
address the carrier’s toll receipts assertion, noting that if the
carrier were correct, then the agency might have to assign it
a “satisfactory” safety rating. Id. at 1134–35; see 49 C.F.R.
Pt. 385 App. B, § III.
By contrast, FMCSA’s assignment of an “unsatisfactory”
safety rating to Multistar was not based on the violations
challenged in Multistar’s petition for administrative review.
Multistar provides no basis—and we can conceive of
20 MULTISTAR INDUSTRIES, INC. V . USDOT
none—for concluding that there is a regulatory or statutory
requirement that FMCSA address the merits of an allegation
that, even if valid, could not have affected the agency’s final
action.
Transforming the same argument into a constitutional one
grounded in a denial of due process does not assist Multistar.
The Due Process Clauses of the Fifth and Fourteenth
Amendments protect against “depriv[ations] of life, liberty,
or property.” Any procedural due process analysis must be
preceded by a showing that such a deprivation has occurred.
See, e.g., Guatay Christian Fellowship v. County of San
Diego, 670 F.3d 957, 984 (9th Cir. 2011); Kildare v. Saenz,
325 F.3d 1078, 1085–86 (9th Cir. 2003).
As FMCSA concedes, its order requiring Multistar to
cease operations constitutes a deprivation of Multistar’s
property interests. But, as noted, that final agency action did
not rest on violations 5 and 11.10 Whether the agency reached
the merits of Multistar’s substantive challenges, therefore,
had no bearing on the deprivation Multistar suffered.
The Supreme Court’s decision in Codd v. Velger,
429 U.S. 624 (1977) (per curiam), is instructive in this regard.
Codd involved the termination of a non-tenured police officer
who asserted that information about an attempted suicide that
was placed by the City Police Department in his personnel
file was sufficiently stigmatizing to warrant a hearing under
procedural due process principles. Id. at 625–26. The Court
declined to reach the merits of the officer’s due process
claim, however, because “[n]owhere in his pleadings or
elsewhere ha[d] [the officer] affirmatively asserted that the
10
See supra Part III.A.
MULTISTAR INDUSTRIES, INC. V . USDOT 21
report of the apparent suicide attempt was substantially
false.” Id. at 627. Because the officer did not challenge the
validity of any underlying deprivation, the Court explained,
“no hearing would afford a promise of achieving th[e] result
[sought by] him,” i.e., the “opportunity to clear his name.”
Id. at 627–28. Here too, the procedural protection that
Multistar seeks—a decision by the agency on the merits of its
substantive challenges to violations 5 and 11—would not
affect “the legitimacy of the underlying deprivation,” i.e., the
requirement to cease operations. Rector v. City & Cnty. of
Denver, 348 F.3d 935, 944 (10th Cir. 2003) (discussing
Codd).
Beyond the order to cease operations, Multistar has made
no attempt to identify the property interest at stake, or to
explain how it was deprived of any property right.11 It has
therefore not raised a cognizable claim of deprivation of due
process.
Finally, the agency’s denial of administrative review did
not, as Multistar alleges, deprive the carrier of a forum to
contest violations 5 and 11 if and when they become the basis
for an adverse order.12 Under 49 C.F.R. § 385.17(a), a motor
carrier may seek an upgrade of its safety rating “at any time.”
Along with its upgrade request, a carrier may submit any
“other documentation the carrier wishes the FMCSA to
consider,” including challenges to agency findings that the
11
W e are assuming that the due process concerns Multistar raises in
passing would have to be rooted in a property right, as no impact on
“liberty” or “life” has been suggested.
12
Multistar does not argue it has any other protectible interest in
receiving a decision on the merits of its challenges to violations 5 and 11.
22 MULTISTAR INDUSTRIES, INC. V . USDOT
carrier has not “taken action to correct.” Id. § 385.17(a)–(c).
As noted, in evaluating an upgrade request, FMCSA is
required to “determine[] [whether] the motor carrier has taken
the corrective actions required and [whether] its operations
currently meet the safety standard and factors specified in
§§ 385.5 and 385.7.” Id. § 385.17(h) (emphasis added).
Since filing its briefs in this case, Multistar has availed
itself of this process, and has received a first-level substantive
decision from the agency as to its challenges to violations 5
and 11. Multistar may, within 90 days of the agency’s denial
of its latest upgrade request, seek further administrative
review pursuant to §§ 385.15(a). See also id.
§§ 385.15(c)(2), 385.17(j). That review may result in a final
agency decision as to the challenged violations, a decision
that has not heretofore occurred.
In short, Multistar has received all of the process it was
due with regard to the contested violations, and FMCSA’s
denial of Multistar’s petition for review was not arbitrary or
capricious. Accordingly, we deny Multistar’s petition for
review as to the due process issue.
DISMISSED in part and DENIED in part.