Federal Appeals Court Denies Request To Postpone Bond Enforcement

A federal appeals court denied a request to postpone enforcement of a Federal Motor Carrier Safety Administration rules that would increase to $75,000 from $10,000 the minimum amount of a surety bond the business must carry.

The brokers’ motion filed with the 11th Circuit based in Atlanta was denied by three judges on November 26. It was part of an ongoing legal action between the Association of Property Brokers and Agents and FMCSA over a rule that took effect Oct 1. According to one source, notices were sent to approximately 9,000 brokers starting Nov 1 and continuing from Nov 4 through Nov 8.

Brokers were supposed to demonstrate to the FMCSA that they increased their bond levels by the deadline of Oct 31. Firms that failed to do so were to be notified by the agency in November and given 30 days to fix the problem. Once the 30 day period ends in December, the brokerage companies can lose their licenses.

Supporters of the higher bond levels have argued that the increase was reasonable because the $10,000 threshold had remained in force for 30 years. They also maintained that the brokerage segment would be well populated by ethical, well-run, and well-capitalized firms. AIPBA argued that the rule creates “substantial threat of irreparable injury” to association members. FMCSA was represented by Department of Justice lawyers.

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