The Association of Independent Property Brokers & Agents has filed a federal lawsuit against the $75,000 bond provision of the Moving Ahead for Progress in the 21st Century Act, commonly referred to as MAP-21.
Part of MAP-21, which was signed into law on July 6 and will take effect on Oct. 1, was amended to require each broker to have “minimum financial security” of $75,000, versus the currently required $10,000, and to enable the Department of Transportation’s Federal Motor Carrier Safety Administration, which regulates property brokers, to set the actual amount of the bond through rulemaking.
As a result, AIPBA, which represents small to mid-sized property brokers, is arguing that the $75,000 bond amount required is unconstitutional.
“Today we made good on our promise to AIPBA members and supporters to follow through and legally challenge the anti-competitive $75,000 broker bond,” said James Lamb, AIPBA’s president, when he announced the lawsuit. “Simply stated, we believe this is a matter of collusion by other trade groups who effected this law under the guise of ‘fighting fraud,’ who pulled a sham on the United States government.”
Lamb said the new bond is “not related to any legitimate government purpose”; is at odds with the National Transportation Policy (49 U.S.C., section 13101); and violates AIPBA’s due process rights under the Fifth Amendment, and that the FMCSA violated the Administrative Procedure Act by not engaging in “bona fide rulemaking” to set the new bond amount.
“We are seeking justice through the federal court system for the various small business players in the trucking industry that would otherwise be adversely affected by the impact of the arbitrary new bond,” Lamb explained. “We are confident the U.S. District Court will determine this section of MAP-21 is, in fact, unconstitutional, and will issue an injunction shortly, preventing the Oct. 1 implementation by FMCSA.”