State Wins Trucking Case

June 22, 2005
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WASHINGTON, D.C. — The U.S. Supreme Court let Michigan’s truckers know how regulated they are on Monday, and how much that regulation is worth — $100 — unanimously upholding Michigan’s flat $100-per-truck annual intrastate and interstate decal fees that, according to the state, are used to fund the regulation of the trucking industry.

Representatives of the industry had pointed out that trucking was deregulated years ago, and by definition, isn’t regulated.

“You’re not paying for the privilege of being regulated,” Walt Heinritzi, executive director of the Michigan Trucking Association, told the Business Journal before the case was heard this spring.

Heinritzi said that when Congress enacted the Single State Registration System (SSRS) in 1995 — eliminating Michigan’s economic regulatory scheme — the $100 fee required of trucks registered in Michigan and those registered elsewhere but transporting loads in Michigan should have gone with it.

Believing this to be a violation of the U.S. Constitution’s Commerce Clause by creating a barrier for out-of-state motor carriers to enter into the market, the trucking industry brought three separate cases against the state.

In 2003, an appeals court ruled in favor of the state in all three cases, citing the state’s interest in regulating highway safety.

In December, the U.S. Supreme Court agreed to hear the appeal of two of those cases: American Trucking Associations Inc. and USF Holland Inc. vs. Michigan Public Service Commission and Mid-Con Freight Systems vs. Michigan Public Service Commission.

These cases concern, respectively, interstate businesses based in Michigan and out-of-state carriers involved in Michigan intrastate hauling.

The court decided 9-0 against USF Holland and American Trucking Associations, stating that the flat fee is imposed only on in-state transactions and does not discriminate against interstate or out-of-state activities.

The regulation applies evenhandedly to all carriers making domestic journeys and does not reflect an effort to tax activity taking place outside the state, the court said.

Because the costs the fee seeks to defray — regulating vehicular size and weight — would seem more likely to vary per truck or per carrier than per mile traveled, a per-truck assessment is likely fair, the court said.

The court ruled 7-2 in Mid-Con Freight Systems vs. Michigan Public Service Commission that the $100 flat fee did not violate federal laws governing federal truck permits.

The third case, Michigan Public Service Commission vs. Troy Cab Inc., involved Michigan-based carriers and intrastate shipping. It was not granted a high court appeal.

Mike Fielek, director of the MPS Motor Carrier Division, argued that to some degree, the industry is still regulated.

“The substantial amount of this revenue goes to the Michigan State Police for enforcement which, I think we all agree, is an important aspect of what we do, as well as the administrative and safety programs we have here.”

“The trucking industry benefits from this,” added MPSC Commissioner Bob Nelson. “There are some players out there not operating under our requirements, and these programs make a safer environment for the trucking industry.”    

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