Processing Agents [BOC-3]

Welcome to the Lafayette Process Servers LLC podcast. I’m your host Scott Frank, and today we are going to talk about Process Agents and delve into various details pertaining to questions like who they are, what their job entails, why they are important when you would need one, how they differ from your usual process server and the various other nuances of their job.

Previously, we have gone over and covered what it is that a process server does. So, what exactly is it that sets Process Agents apart from Process Servers?

A process server’s main job is to deliver legal documents to an individual or party named in the action. The purpose of process service is to place the party on notice that an action has begun or that a relevant document has been filed in the case.

A process agent, on the other hand, is similar to a process server, except for the fact that they are a representative that legal service of process is served in the case of any lawsuit brought against a motor carrier, freight forwarder, or broker.  The Federal Motor Carrier Safety Administration (F.M.C.S.A.) requires all motor carriers to have a designated process agent in each state it is authorized to operate and for each state, they travel through.

In a cross-border transaction, parties to the agreement must negotiate a choice of law clause specifying that any disputes under the agreement will be determined in accordance with the law of a particular jurisdiction. And when parties agree on a choice of law in a jurisdiction where they don’t have a physical presence (i.e. an address), a process agent from that jurisdiction is appointed.

The question arises though, who exactly requires a process agent? Property and passenger for-hire carriers make a designation for each state in which it is authorized to operate and for each state traversed on behalf of the operation. Private carriers operating in the United States transporting between points in a foreign country also need to file a designation for each state traversed. Lastly, brokers designate process agents for each state in which their offices are located and in states where agreements will be written.

On the flip side, it is also important to recognize who does not require a process agent as well. And the answer to that is, if you are not doing business in other states (interstate operations), then you would not need a process agent. Also, if you are a private motor carrier (not “for hire”), do not have “authority,” then you also would not need a process agent.

Moving on, let us talk about how these process agents are designated. The Federal Motor Carrier Safety Administration or FMCSA requires all trucking companies, freight broker companies, and freight forwarders to have a process agent within each of the 50 states. The filing is done by a form called a BOC-3. Persons designated as process agents must reside in or maintain an office in the state of designation. The form used to designate process agents is a BOC-3.

All motor carriers are required to appoint a process agent for each state in which they operate, including any states they pass through. Brokers and freight forwarders are required to appoint a process agent in each state in which they have an office and in which they write contracts.

Process agents that provide nationwide coverage are typically referred to as blanket companies. Many trucking companies choose a blanket company to save time and eliminate the need to find individual agents for multiple states.

Each person or company that is designated for a specific state must reside in that state. A carrier, broker, or freight forwarder may designate themselves for the state in which they reside. It is important to note that a post office box is not acceptable as an agent’s address.

Once an application for motor carrier and U.S. DOT numbers is posted by the FMCSA, the company’s contact information becomes public. It is important to make sure an individual or company acting as a process agent is in fact authorized to file BOC-3 forms and can provide coverage in every state needed.

We have mentioned a Form BOC-3 form multiple times, but we still haven’t delved into what it consists of. So, let’s do so right now.

Form BOC-3 (Designation of Agents for Service of Process) gives motor carriers, brokers, and freight forwarders a legal presence in any state where they do business. This means that the individual or company in question has a designated contact in each of the 50 states and the District of Columbia that is licensed to handle legal documents on behalf of the involved party. The FMCSA and other agencies in the United States require the form in order to grant operating authority.

By filing the BOC-3, which stands for blanket of coverage, a trucking company designates the process agents that represent them in every state their trucks haul freight. The designated process agent will accept court papers from the state on behalf of the trucking company should there ever be a legal issue.

For example, let’s say Topher’s Trucking is a company based out of Missouri. One of their trucks is involved in an accident while hauling goods in Oklahoma. Another driver involved in the crash decides to take legal action. The BOC-3 form for Topher’s Trucking authorizes a process agent in Oklahoma to physically receive court documents related to that lawsuit.

So, what exactly does this process agent do? The role of the process agent is to act as a representative upon whom court papers may be served, on behalf of the appointing parties, and to deliver those court papers per the instructions of the appointing parties.

They serve as your statutory agent in each state where you have interstate operating authority. Process agents act receive any formal notices and any legal documents on any legal action that has been filed against you in the states you transport to, from, or via. To put it simply, the process agent’s basic function is to act as a channel between you and the legal system and enable court actions to be served when needed.

But why does someone require a process agent? The reason for having a processing agent is if there was ever filed a claim against your company for legal matters, the processing agent will have the responsibility of notifying your freight broker company and forwarding the legal documents to your business address. Hence, every company must designate a process agent in each state where it hauls or does business.

Now, there are also other options. Companies can also select a blanket company to represent them as their process agent across every state. If someone crosses a number of state lines on a regular basis, then it makes sense to get this type of blanket of coverage agent. Blanket process agents simplify the process of filing Form BOC-3 and gaining operating authority.

Blanket process agents file an independent listing statement with the FMCSA. On the listing statement, the agent provides its company name and address where service of process can be received in each state. Blanket agents are able to easily inform the FMCSA of changes to its information. When using a blanket agent, the motor carrier or freight broker only has to list the blanket agent’s name on Form BOC-3. This results in fewer clerical errors that may lead to missed document deliveries.

Because blanket process agents provide representation to many companies nationwide, they provide infrastructure to ensure your company reliably receives service of process, whether you’re in the office or on the road.

With offices in each state, blanket agents allow your company to meet requirements nationally as you grow. This results in significant time savings in maintaining individual agents and filing forms to maintain current information with the FMCSA.

Now that we have covered all the ground regarding how a process agent is, what they do and who requires them, let us now talk about how one can hire a process agent.

The first step would be to have the applicant (motor carrier, freight forwarder, or broker) if required to contact a process agent. Then, the process agent files a singular form BOC-3 – the designation of process agents with the federal motor carrier safety administration (F.M.C.S.A.), which should take into account all the states of operation for the applicant. Finally, depending on the type of authorization the applicant has applied for, the federal motor carrier safety administration (F.M.C.S.A.) will have specific insurance requirements, and this proof of insurance must be provided before being approved.

Trucking companies especially are required by law to have a process agent. For anyone starting a trucking company, the first step is to obtain a motor carrier authority by completing an OP-1 application form with the federal motor carrier safety administration (F.M.C.S.A.). Once approved., they will get a docket number which is published in the federal motor carrier safety administration (F.M.C.S.A.) register. The second step would be to receive a USDOT number. The applicant will be required to fill the MCS-150(motor carrier identification report) together with the MCS-150A (safety certification application). These forms are easily available on the federal motor carrier safety administration (F.M.C.S.A.) site. And the final step would be to deal with the designation of process agent.

But, what exactly are the benefits of hiring a professional process agent though?

From flexibility and responsiveness to trust and confidentiality, a professional process agent is knowledgeable about the various types of legal proceedings and understands the urgency and steps that must be taken upon receipt of such proceedings.

  • Experience and Flexibility

A professional process agent understands what is required to establish and accept a process agent appointment in cross-border financing deals and understands their role not only at the time of appointment but throughout the term of financing. They have the experience to provide flexible and customized services (e.g. in an appointment agreement or invoicing instructions) to meet the particular needs of a transaction.

  • Responsiveness

When choosing a process agent, it’s essential to engage with a company that responds quickly to requests. A professional process agent understands the importance of delivering their acceptance in advance of a closing date, as the cost for not closing or funding on time can be significant. During the term of the appointment, a process agent provides immediate notice of receipt of any legal proceeding in accordance with the terms of the agreements. They also maintain an accurate database of their appointments and current contact information.

  • Trust and Confidentiality

Professional process agents understand the exact legal processes or notices they are required to receive on behalf of their client company. As such, a process agent instills confidence in all parties in the transaction that there won’t be a missed or mishandled legal proceeding resulting in a default judgment.

For instance, the process agent is required to receive legal papers (i.e., summons and complaint) on behalf of each appointing party in a transaction for any action related to that specific financing transaction. If a process agent were to receive and send legal papers to their client from the wrong transaction or matter where they weren’t the appointed process agent, getting the matter dismissed can be costly and a burden for the client.

A professional process agent maintains confidentiality and won’t disclose any information related to its appointment or the underlying transaction without seeking the express permission of the appointing party.

So, remember, if you are ever in need of experienced process agents, then Lafayette is your answer! Contact us at 1-866-237-2853 or send us an email inquiry at [email protected]

And that wraps up our episode for today. Thank you for listening and we’ll see you next time!

The foregoing podcast has simply been presented for informational purposes only. He or those at Lafayette Process Servers LLC, are not attorneys. If you seek further information about this topic, please make sure to contact an attorney in your local area.

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