The Government’s Appalling Campaign Against Small Bus Companies

“They took a man’s livelihood and threw it in the dirt.”

Jeff and Judy Rodgers, owners of Southeastern Tours, 1994. |||

Jeff and Judy Rodgers, who met in high school and have three grown children together, started a charter bus company called Southeastern Tours 20 years ago in their hometown of Greenville, North Carolina. Jeff had been working as a bus driver for Greyhound and dreamed of running his own company. In 1994, in partnership with Judy’s mother, the couple took out a loan, built a garage, and launched their business. They struggled for a few years, but gradually built a loyal clientele. As recently as eight months ago, the company was thriving with seven buses and gross annual revenues of about a million dollars, including a contract with Amtrak worth $48,000 a month to transport passengers between train stations in North Carolina.

Today Southeastern Tours is on the verge of bankruptcy. In December, Amtrak canceled its contract with the company, transferring its business to a different carrier. Unable to make their monthly payments, the Rodgers returned six of their seven buses. They may lose their home of 22 years, which served as collateral on a business loan. “I don’t have anything to fall back on,” says Jeff. "This company was my livelihood. It’s how I pay for my food and everything.” 

What led to the rapid downfall of Southeastern Tours? On October 14, 2013, the Federal Motor Carrier Safety Administration (FMCSA), a federal agency, ordered the company to cease operations on the grounds that it was a hazard to public safety. Southeastern Tours had never been involved in a serious accident, but during a three-day audit in August, FMCSA inspectors found, among other things, that its drivers filled out their logs incorrectly, that the Rodgers failed to provide their employees with educational materials, and that they allowed a former driver to get back behind the wheel before waiting for the results of his alcohol and drug tests. (They came back negative.) 

When their troubles with the FMCSA began in early August, the Rodgers committed themselves to doing whatever it took to get back in the government’s good graces. They hired a consulting firm that was personally recommended by an FMCSA investigator; they installed new devices on their buses for wirelessly submitting drivers’ logs as a way to eliminate bookkeeping errors; and they retained a respected maintenance company to conduct regular vehicle inspections. But after a tumultuous six months of dealings with the FMCSA, the Rodgers are still forbidden to run their buses and they’re beginning to make plans to dissolve the company.

The case of Southeastern Tours is typical of the FMCSA’s new tough-on-crime approach to regulating the bus industry. The 2012 federal highway bill gave the agency new powers to force bus companies to halt their operations without a standard review. In 2013, the FMCSA launched a new safety initiative called “Operation Quick Strike” that forced 52 companies off the road last year, including Southeastern Tours. The agency routinely touts its heightened vigilance in the press, depicting itself as the valiant protector of the riding public.

As is often the case when the government cracks down on an industry, small carriers lacking political connections and the right attorneys have received the brunt of the punishment, while the large corporate bus companies benefit from seeing their more nimble rivals driven out. By emphasizing that its efforts are a matter of saving lives, the government has gotten away with denying owners like Jeff and Judy Rodgers their constitutional right to due process.

Jeff Rodgers with drivers Bennett Wooten and Billy Layton, 1994. |||The government’s power is almost unchecked in this arena. The rules that govern how bus companies run their operations are complex enough that FMCSA inspectors looking to take out even well-managed outfits like Southeastern Tours can almost always dig up enough violations to accomplish their goals. Once companies are forced out of service and starved of their operating revenues, they have to apply to regain their operating authority twice: once with their local FMCSA field office and then again with the agency's headquarters in Washington, D.C. Both process can take several months because FMCSA field offices and headquarters often don't communicate with each other, and companies aren't allowed to begin one application process before the other is complete. To successfully navigate this process, companies need help from experienced lawyers and consultants.

“The FMCSA has become much more interested in the publicity that goes with enforcement than with trying to improve the situation,” says Paul Sullivan, a retired Massachusetts State Police lieutenant and former president of the Commercial Vehicle Safety Alliance, the organization that determines official safety standards for commercial vehicles. “The agency is stretching the intent of the regulation to make critical examples,” says Sullivan, who now works as an independent consultant for bus companies that have gotten into trouble with the FMCSA.

In an emailed statement, FMCSA Director of Communications Marissa Padilla wrote: “We make no apologies for highlighting the results of our investigations to send a strong message to the motor carrier industry that unsafe operations will not be tolerated.”

In some instances, FMCSA agents have been guilty of misrepresenting facts to build a case against a company. In November in The Daily Beast, I wrote about the government’s shutdown of Lucky Star, a Boston-based carrier with an impeccable safety record. The forced closure of that company was based almost entirely on violations that turned out to be unfounded. Fearful of reprisal and wary of getting mired in an interminable appeals process, the owners didn’t publicly dispute the FMCSA’s flawed assessment of their company. Ultimately, Lucky Star hired a team of ex-government officials to plead their case behind closed doors, spending upwards of a million dollars to get back on the road after being grounded for seven months.Jeff and Judy Rodgers, at the ribbon cutting for their new garage, 1995. |||

The consulting fees aside, most bus companies can’t afford to stay afloat for an extended period of time without earning any revenues. “It’s OK to scrutinize compliance,” says Dru Carey, a New York City-based criminal defense attorney, who represents numerous small and medium-sized bus companies. “But if you’re going to take away someone’s right to run a business in this country,” she says, “you better have some due process.” 

Carey, who represents several companies that have had their operating authority taken away by the FMCSA, says it can take several months for the agency to consider objections to its actions and that it’s a struggle to get FMCSA administrators to answer their phones or return her emails. “It’s sad they need to hire a litigator to conduct business,” says Carey, who began representing bus companies about two years ago. “My clients aren’t criminals."

Jeff and Judy Rodgers’ nightmare began in early August 2013, when FMCSA Inspector Mark Halter conducted a three-day investigation of the company’s records and maintenance program. When he first showed up on August 6—and before he had a chance to examine the company’s books or buses—Halter told Rodgers that he would likely end up forcing his company to halt its service. “I’m going to warn you right now that we have done five audits like this and we’ve put four out of business,” Halter announced, according to Rodgers. (The FMCSA declined my request to speak with Halter.)

At the end of his three-day audit, Halter gave the company a conditional rating of “unsatisfactory.” One of Southeastern’s more serious violations was that its drivers’ logbooks didn’t accurately reflect their hours of service, which Jeff Rodgers attributes to clerical errors. Halter also found that the company failed to conduct drug and alcohol tests on a driver named Albert Dixon after his bus was hit by another car on the road. (Dixon was not at fault in the accident.)

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • John||

    Which part of "crony capitalism" did these folks not understand. If they don't want the feds shutting them down, I suggest they write Obama for America a sizable check or go out and get a Union to protect them. They didn't build that bus company. And if they want to keep it in Obama's America, they better pay up to the people who did.

    And also, they should be thanking Obama for ruining their livelihood.

  • Doctor Whom||

    Thank you, President Barack H. Perón.

  • Andrew S.||

    Maybe a bit more over the top and sarcastic than I would have been, but well said.

  • RJ The Terrible||

    I think it was not sarcastic enough. This is criminal behavior on the part of the government couched in the language of the nanny state.

  • timbo||

    Bureaucrats are scum.

    Also, this guy: "Paul Sullivan, a retired Massachusetts State Police lieutenant and former president of the Commercial Vehicle Safety Alliance, the organization that determines official safety standards for commercial vehicles" becoming a consultant is an all too often occurrence.

    These dirt bag bureaucrats spend 30 years screwing tax payers and then collect a tax payer funded pension to then take more money form private enterprise by advising clients how to not get screwed by their former employer.
    Always lawyer up immediately, no matter who you are dealing with.
    Remember that private enterprise is the enemy to your average brain dead bureaucrat zombie.

  • Mokers||

    It's funny how many of these articles about business shutting down don't have any mention of the business failing their customers. It is the business failing the regulator.

  • ||

    I hope you're being sarcastic.

  • Doctor Whom||

    This is how government promotes transit.

  • RJ The Terrible||

    This is how the government promotes competition!

  • PS||

    This is how the government creates jobs...oh wait...

  • Jordan||

    Absolutely infuriating. But I have it on good authority that the regulatory state doesn't kill jobs or protect large entrenched businesses from competition.

  • Doctor Whom||

    Those were bad jobs that people shouldn't have wanted.

  • ||

    +1 false consciousness

  • Scarecrow Repair||

    If you like your bus company, you can keep it off the road.

  • OldMexican||

    What led to the rapid downfall of Southeastern Tours? On October 14, 2013, the Federal Motor Carrier Safety Administration (FMCSA), a federal agency, ordered the company to cease operations on the grounds that it was a hazard to public safety.


    "And then the Romans came into the city, and they captured the men and rounded them up and crucified them all, and they also took the women and the young boys and young girls as slaves, as punishment for their defiance."

  • anglinajuliee199||

    my roomate's sister makes $64 hourly on the laptop . She has been without work for six months but last month her payment was $21522 just working on the laptop for a few hours. original site.......
    http://www.Works23.us

  • gimmeasammich||

    84 hours a week is more than "just a few hours." Isn't there anyone that can write a better random number generator for these spambots?

  • ||

    On Yahoo News they referred to a site which claimed that there are a 1,000 wallets stolen in the US in every two minutes.

  • RustyHashbrown||

    Haven't you ever been to Detroit?

  • Loki||

    FMCSA inspectors found, among other things, that its drivers filled out their logs incorrectly

    Oh noez!!! Not improperly filled out logs! Someone help me to my fainting couch! /sarc

    As is often the case when the government cracks down on an industry, small carriers lacking political connections and the right attorneys have received the brunt of the punishment

    Kind of wonder how much money and how many lobbyists Greyhound used to get the government to shut down their competitors?

    The rules that govern how bus companies run their operations are complex enough that FMCSA inspectors looking to take out even well-managed outfits like Southeastern Tours can almost always dig up enough violations to accomplish their goals.

    To the scum that inhabit the bowels of the Federal bureaucracy, this is a feature, not a bug. They can pretty much shut down anyone, anytime, for any reason. Like not showing the proper respect to the King's Men's authoritay. Seriously, fuck these assclowns.

  • Scarecrow Repair||

    Some friends were pumping their septic tank when the pumper saw a hole in the tank. They hired someone to dig a new hole next to it, same size, and ordered a replacement tank; the plan was to install the new one, then disconnect the lines to switch tank so the plumbing wouldn't be out of commission for long.

    But some damned county inspector, on a Saturday outing with his family, saw the new tank being hauled up the road and knew he hadn't written any permits. So he diverted his travel plans to follow the truck and issue citations and stop work until they had groveled and scraped sufficiently. meanwhile they still had to use the old septic tank with its hole.

    How can someone like that even look himself in the mirror each morning? I hope his family was embarrassed to pieces and made the rest of his weekend a living hell.

  • NOTASITSEEMSUC||

    yeah...not to mention some of these other bogus ones like.... Violation: 393.205(b) Stud/bolt holes elongated on wheels, Tire — other tread depth less than 2/32 of inch,) Axle positioning parts defective/missing, Inadequate brakes for safe stopping,Tire — ply or belt material exposed....shame on the government for shutting them down...../sarc

  • Hash Brown||

    Eight months ago, Jeff and Judy Rodgers of Greenville, North Carolina ran a thriving charter bus company ....

    The Rodgers have returned six of their seven buses,....

    FFS, Mr. & Mrs. Rodgers are the RODGERSES! You're supposed to be good writers. Act like it.

  • Plàya Manhattan.||

    the Federal Motor Carrier Safety Administration (FMCSA)

    Huh. Commerce Clause?

  • Virginian||

    Well this makes me furious.

  • Christophe||

    I know. It just seems like the most arbitrary way for a small business to end.

    Work hard, make your consumers happy, and who knows? Maybe one day you'll make it big you'll get shut down on a regulator's whim without recourse or appeal.

  • RustyHashbrown||

    "...they came and took a man’s livelihood and threw it in the dirt."

    This story angers me enough that I'll refrain from an "under the bus" reference.

  • Copernicus||

    At least they weren't told to ride in the back.

    (ducks and runs for cover in Northern Idaho)

  • Super Hans||

    Reason, PLEASE fix the comments for mobile. For quite a while now, it's been impossible to comment on Android/Chrome, not sure about other OS/browsers.

  • Pompey||

    Switch to Desktop Version at the top of your page. It works, just not with the mobile version.

  • RishJoMo||

    Well now that is a stupid idea. Wow.

    www.EliteVPN.tk

  • Anvil||

    LET THIS BE A LESSON LEARNED TO NOT RELY UPON A GOVT. BACKED BUSINESS.

  • John Thacker||

    Are you talking about their Amtrak contact? I'm pretty certain that if they had a contract with any private business, that contract would get canceled (perhaps apologetically) once the Feds had made it so they could not operate their buses at all, which is what happened here.

    If you're talking about "don't operate in a business subject to government regulation," well, good luck with that. Though that is the lesson being taught.

  • Pulseguy||

    In Canada the only business I know of that has absolutely no rules is the abortion business. Everything else, regulated up the yin-yang. But, public safety and people's lives aren't at stake with abortions so maybe it is not unreasonable.

  • Vampire||

    This makes me furious. But I've seen it many times before. A business pays 60,000 per year in property tax, only to be told that they can't store certain vehicles on the property. Some sheisser hole county inspector instead wrote up tickets, and acted like some sort of ass spouting things "oh yeah", if its here by next week, I'm going to sit here and write tickets all day.

    Grrrr. That dude had such an attitude, and did the things he did because he wouldn't have to face any consequences for his blatant threats of continued extortion. Eff these bureaucrats.

  • RJ The Terrible||

    In the old days, before we were wussified, the bureaucrat would have been tarred, feathered and run out of town on a rail.

  • Libertymike||

    When were such "old days" of which you write?

  • Pulseguy||

    When I was a young adult if you wanted to do a subdivision, for example, you met with the mayor, laid out your plans, he said 'good luck', and that was that. I know people who got approvals for large products by writing out the plans on a napkin over lunch.

  • Pulseguy||

    "....large projects...."

  • abbynormal||

    I wonder how many of these bus companies are minority owned...the government is racist!

  • Devil's Advocate||

    Is "hazard to public safety" the new "uppity?"

  • Pulseguy||

    I wonder if he votes Dem or Republican? I wonder if that was the issue?

  • NOTASITSEEMSUC||

    in what way?.....The secretary of Transportation appointed by Obama is Anthony Fox

  • NOTASITSEEMSUC||

    go to https://safer.fmcsa.dot.gov/CompanySnapshot.aspx type in their name Southeastern Tours..search (top left) next page click on their name you will enter their Company snapshot page.....then click on the top right "SMS Results"....click on link (middle left) that is titled "Vehicle Maintenance"....you will be able to see the cited violations that each bus is faced with and the dates....and you tell me if a routine maintenance program was enforced at this company...these very dangerous conditions could be caught and handled before the motor coach makes a trip...please go and read them (EACH ONE) and you can visit the other categories ...Unsafe Driving, etc.... it is a process that this company has to go through... the steps to regain their operating authority...but it's the price you pay when we are dealing with human beings...SMH...if these companies want to continue to coach the public from destination A to B....then these motor coaches HAVE TO BE in compliance don't you think?. These Investigators that come in are not there to teach you the rules they are there to make sure you execute and follow the rules....there are TOO MANY resources out there these days not to be up to date on the rules and regulations, besides it does not take current technology to know that (tread depth less than 2/32 of inch) is unsafe or (Stud/bolt holes elongated on wheels)or ( Inadequate brakes for safe stopping)....these are some of the violations they were cited for....

  • BeltwayBurt||

    Yes please read each one and then I will walk in any motorcoach, train yard, cruise ship doc or an airline on any given day and find you thousands of the same types of infractions. In fact, search for a large motor coarch carrier with "the dog" on the side and you will see major accidents/fatalities. THE FACT is this company does maintain their fleet, but any vehicle, YES even the one you are driving now, can have items that need adjustment at any second. Another FACT is that this small family business had safe operations for nearly 20 years. This is another example of government overreach, no matter your political persuasion.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement