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New federal regulation cracks down on “chameleon carriers”

It is not uncommon for a carrier with a bad safety record to shut down one corporate entity and open a new company involving the same individuals. By changing corporate entities and getting a new DOT number the company could effectively hide the bad safety record. When an existing motor carrier seeks to register as a new carrier to get a new DOT number, it is known as a “chameleon carrier.”

Now, however, the adoption of 49 CFR 385.306 seeks an end to this shell game. If a company provides false or misleading information in the application process any new applicant registration is subject to revocation. The application requires disclosure of related companies and individuals, and these are to be scrutinized for outstanding orders to cease operations. The new entrant registration will be linked to the history of any related old motor carrier in the FMCSA database.

When we have cases against companies with new DOT numbers, we normally conduct discovery about the relationship of the owners to former companies with bad safety records.

And when we have had cases against unsafe motor carriers with minimum insurance coverage, thinking we can seize their assets to collect a judgment in excess of policy limits, we have been alert to the possibility that the owners would shut down their corporation and open up the next day under a new name and DOT number.

The new regulation is a step in the right direction to protect the safety of the traveling public.

Ken Shigley is an interstate trucking trial attorney in Atlanta, Georgia who is a Certified Civil Trial Advocate of the National Board of Trial Advocacy. He has been listed as a “Super Lawyer” (Atlanta Magazine), among the “Legal Elite” (Georgia Trend Magazine), and in the Bar Register of Preeminent Lawyers (Martindale). He served as chair of the Southeastern Motor Carrier Litigation Institute, is on the National Advisory Board for the Association of Interstate Trucking Lawyers of America, and is a frequent speaker at continuing legal education programs for the Interstate Trucking Litigation Group of the American Association for Justice. Mr. Shigley has extensive experience representing parties in trucking and bus accidents, products liability, catastrophic personal injury, wrongful death, spinal cord injury, brain injury and burn injury cases. Currently he is Secretary of the 40,000 member State Bar of Georgia.This post is subject to our ethical disclaimer.