Brokers lose court bid to stop Dec. 1 bond increase

Updated Dec 3, 2013

A federal court has denied a broker trade association’s motion to halt an increase in the surety bond from $10,000 to $75,000.

A three-judge panel of the U.S. Court of Appeals for the 11th Circuit rejected the Association of Independent Property Brokers & Agents’ motion for a temporary stay of the hike.

The 2012 surface transportation act stipulated brokers must obtain the increased amount by Oct 1. Last September, the Federal Motor Carrier Safety Administration published notice it will revoke the operating authority of brokers who are not compliant by Dec. 1.

The association of small-and mid-sized independent property brokers argued the FMCSA failed to conduct proper rulemaking and fact-finding before issuing the rule, which it says will put thousands of brokers out of business.

The agency countered that since Congress set the amount, it does not have the discretion to change it. Additionally, federal law does not require a notice-and-comment period when an agency is responding to a statutory change and the rulemaking procedure would be impractical or unnecessary.

The Transportation Intermediaries Association, the American Trucking Associations and the Owner-Operator Independent Drivers Association supported the increased bond requirement.

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