Schneider takes on California registration fees

Avatar photo

Schneider National is taking on the California Department of Motor Vehicles over what it calls “unconstitutional” interstate truck registration fees.

Schneider National filed a complaint for declaratory relief in U.S. District Court, Eastern District of California, against Steven Gourley, director of the California Department of Motor Vehicles, charging that his department’s repeated assessments against Schneider are unconstitutional, and a “punitive” action against Schneider.

The complaint alleges that legitimate authorities in Schneider’s home state of Wisconsin have already ruled that California’s assessment against Schneider violates the International Registration Plan (IRP), the interstate commercial vehicle licensing arrangement that provides a fair and equitable system for collecting and distributing truck registration fees nationwide.

“By publicly challenging the IRP’s authority, California risks losing its membership status. If California ceases to participate in IRP, it loses, under federal law, the ability to require vehicle registration of any out of state carriers along with annual fees estimated at $125 million collected by other states and apportioned to California,” Schneider notes in its complaint.

“The California Department of Motor Vehicles must stop issuing invalid assessments against trucking companies or risk losing upwards of $125 million annually in interstate truck registration fees, and may be liable for refunds of over $50 million in trailer fees already collected by it,” according to the lawsuit.

The complaint stems from an assessment by Gourley’s office against Schneider in excess of $6 million. Schneider says it fought the assessment via the appropriate venues for IRP disputes. California argued that the IRP does not govern it despite the fact that California voluntarily joined the agreement in 1985 and continues to claim membership in it. California’s claim was rejected and Schneider won. Shortly thereafter, Gourley’s office issued a second assessment on the same trucks for the same time period, this time for more than $10 million. The complaint alleges that the $10 million assessment constitutes a “punitive” action against Schneider in direct response to the state’s loss at the IRP hearing for the $6 million assessment.

Virtually all interstate trucking companies have paid California certain trailer fees which were collected by California without authority under the IRP, Schneider claims.

“This case is really about preserving the integrity of the IRP,” said Thomas E. Vandenberg, General Counsel of Schneider National. “California, after having accepted the benefits of claiming IRP membership, is now attempting to disclaim its responsibilities under the IRP. California tried to amend the IRP to its liking. When its amendment failed to pass, California simply ignored the IRP provisions it didn’t like. It has already collected tens if not hundreds of millions of dollars in fees from trucking companies across the country without legal authority under the IRP. California has also initiated a series of audits, and has ignored the IRP’s provisions for resolving audit disputes. If California is allowed to unilaterally disregard whatever IRP obligations it finds inconvenient and ignore the IRP’s mechanisms for resolving issues, the IRP’s purpose of promoting uniformity in commercial motor vehicle registration is lost.”

Avatar photo

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.

Have your say

This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.