Volume 18, Edition 7
I am writing to you from the great state of Florida, enjoying a little bit of down time during these hot summer months. Hope you are too. But as you can see from the CABs LABs we have been busy continuing to improve our website offerings.
But first, a huge thank you to everyone who participated in our annual survey. We are gratified by the tremendous amount of positive feedback we received and are thankful to those of you who offered great suggestions and comments to help us improve. Please keep the feedback coming throughout the year. It is really important to us to ensure all of you are familiar and comfortable with all of the tools and information that is available as a part of your subscription to CAB. For this reason we offer live training sessions every month, one a basic training session and one a focus session that covers one topic more in depth. Previous sessions are available to view in the About CAB – Webinars section of our subscriber website. If you have suggestions for topics you’d like covered, or if you have questions about anything on the site, in the reports, or what we can offer please do not hesitate to contact us.
CABs LABs – At CAB, we are more than just the data but the data is still our lifeblood. We are committed to bringing the power of the data to all of our users. We are excited to announce the launch of Analysis Central™, our newest feature. Analysis Central™ gives you instant access to reports and analysis giving you a deeper and more insightful review of a motor carrier and its operations. The best part about Analysis Central™ is that we are just getting started. There are already a bunch of new reports available on the Analysis Central™ tab in the CAB report and there are many more that will be added. You can also request your own customized reports and we will try to accommodate every request we can. We will be offering a live training session on Thursday August 20th to introduce you to Analysis Central™ and how you can play a key role in ensuring you get access to the analyses you need.
This month we report:
CSA ATTACK – We continue to watch the attacks on CSA on various fronts and the FMCSA’s reaction.
In the Senate an amendment was added to the proposed six year surface transportation bill which would requires FMCSA to bring in third parties to oversee the CSA program. It would also require that the scores be removed from the public website. The bill calls for the National Research Council to conduct a correlation study and for the Department of Transportation’s Office of Inspector General to oversee FMCSA’s corrective action plan.
However, The FMCSA continues to move forward efforts to correlate carrier safety fitness determinations with CSA. The FMCSA has submitted a notice of proposed rulemaking that will modify how the agency assigns carrier safety fitness determinations to motor carriers. Under the proposed rulemaking motor carriers would have their carrier safety fitness rating assigned based on: Safety rankings within the CSA program; An investigation; Or a combination of on-road safety data and investigation information.
While the official scores may ultimately be removed from the public website, rest assured that CAB will continue to gather all of the underlying data, provide analytics and assist the insurance industry to successfully evaluate risk.
INSURANCE LIMITS – The quest to increase insurance limits continue. We have conflicting bills this month, one which protects the current limits and another which seeks to double limits. Various trucking organizations have started to marshal support to defeat any increase. We will continue to keep you advised as this moves through the system.
THE TRUCK SAFETY ACT – The newly introduced proposed bill, which seeks to increase the insurance limits, also seems to requires a rulemaking for commercial motor vehicles to have crash avoidance systems, requires the Secretary of Transportation to finalize regulations requiring commercial motor vehicles to have speed limiting devices to prevent speeding; requires the Secretary of Transportation to mandate that employers compensate truck drivers for hours worked (standard industry practice currently is for truck drivers to be paid based on miles driven and not hours worked) and finally would require a study on the effects of excessive commuting.
DRIVER TURNOVER – The ATA has advised that truck driver turnover rates fell to a four-year low in the first quarter among larger fleets and declined 12 percentage points at larger and smaller fleets. The decline among fleets with $30 million or more in revenue to 84% from 96% puts those fleets’ annualized churn rate at its lowest point since the second quarter of 2011. Smaller fleets’ turnover was 83%, sliding from 95%. This is the sharpest decline in nine quarters.
ROAD AND BRIDGE CONDITIONS – The U.S. Department of Transportation has compiled a table revealing road and bridge conditions for each state. You can view the chart and see your state here. It is bit scary to see that 65% of our roads are not in good condition and 1 in 4 bridges are in disrepair.
SAFETY ON BUSES AND MOTOR COACHES – The NTSB has voted to urge the federal regulatory bodies to improve emergency exits on buses, including a second escape door; to add fire-resistant materials; and to conduct regular passenger safety briefings to make it easier for passengers to survive crashes.
BUREAU OF TRANSPORTATION STATISTICS – The U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) has updated National Transportation Statistics (NTS) – a web-only reference guide to national-level transportation data. NTS, updated quarterly, includes a wide range of national transportation information. NTS consists of more than 260 tables of national data on the transportation system, safety, the economy and energy and the environment, of which 35 were updated this quarter. A copy of the 465 page report can be viewed here.
When the defendant is not a named insured on a policy the MCS-90 endorsement will not provide any recourse for the plaintiff seeking to recover a judgement it received for a personal injury action. This long accepted rule was followed by the NY Supreme Court, Appellate Division. (Carlson v AIG, 2015 WL 403401)
The Northern District of Indiana addressed the admissibility of testimony from 3 experts in a personal injury suit against a trucker. The Court excluded the expert testimony of accident reconstructionist James Cassari, and allowed, in part, Anita Kerezman’s testimony on safety issues and Mike Dilich’s testimony on the responsibility of the trucker to safely operate the vehicle. (Fuentes v Miller, 2015 WL 3936321)
The Court transferred an action brought against a trucker in the Northern District of Illinois when the only connection to the state was that one defendant was formerly a corporation in that jurisdiction. Off the case went to the Northern District of West Virginia where the accident occurred. (Holman v AMU Trans, LLC, 2015 WL 3918488)
The District Court in New Mexico held that a motor carrier’s rejection of UM/UIM coverage was insufficient where the insurer failed to properly explain the costs of the coverage. Simply providing the insured with the tools to calculate the anticipated cost was insufficient to meet the state requirements. UM/UIM coverage was held applicable up to the policy limit. (Sinclair v Zurich American Ins. Co., 2015 WL 3830361)
The Southern District of Ohio concluded that a BOC-3 filing, required by the FMCSA, confers jurisdiction over a defendant in the state. After reaching that decision the Court held that Virginia law applied to an accident that occurred in Virginia and that there could be no other claim for negligence if there was a claim for vicarious liability. (Grubb v. Day To Day Logistics, 2015 U.S. Dist LEXIS 86543)
An acknowledgment of the vicarious liability of a motor carrier for the actions of a driver will allow the Court to dismiss independent causes of action for negligent hiring, training, etc. The Western District of Oklahoma dismissed all of the additional causes of action against the motor carrier despite plaintiff’s assertion that there was a constitutional right to assert additional causes of action. (Isso v. Western Express, 2015 WL4392851)
The economic loss rule, which would govern the claim against a motor carrier, was inapplicable to the claim against a pilot escort service which contributed to a cargo loss. The 5th Circuit Court of Appeals ruled that the doctrine did not extend when the only contract was between the shipper and the motor carrier. (In re Wheeler, 2015 WL 3824777)
The items which can be discoverable in a coverage and bad faith dispute was discussed in the District Court in Arizona. The Court held that an insurer waived the attorney client privilege and was compelled to release information concerning information used to make coverage decisions. In addition the insurer was required to release the adjuster’s performance reviews and its contractual agreement with the independent adjuster to determine whether there was a decision to aggressive address worker’s compensation claims. (Ingram v. Great American Insurance Co., 2015 U.S. Dist LEXIS 88783)
Does an ocean bill of lading apply when the cargo has been delivered to the warehouse and is stolen thereafter? The Southern District of Florida remanded a case removed under COGSA when it was unclear whether it would extend to operations after delivery. There was an insufficient basis for jurisdiction. (Blinc, Inc. v. AZ Miami Corp., 2015 WL 3988991)
The District Court in Massachusetts held that a declaratory judgment seeking to determine whether the spoilage exclusion in a warehouse legal liability policy applied was premature when the underlying cargo loss was still being litigated. The Court held that the reason for the loss and whether the warehouseman was negligent had to be determined before the coverage action could proceed. (National Union Fire Insurance Co. v Maritime Terminal, 2015 U.S. Dist Lexis 83954)
A small trucking company was successful in avoiding summary judgment in its action against its insurance broker. The insured contended that it requested full cargo coverage and was unaware that it was sold a policy of insurance which did not provide a defense obligation. The Court of Appeals in Georgina held that there was a question of fact as to whether the agent undertook to provide expert advice on the coverage procured. (Cottingham & Butler v Belu, 2015 GA App LEXIS 3832.)
The principal of a trucking company found himself personally liable for a cargo loss when he failed to properly maintain his corporate status. The Northern District of Illinois found that once the plaintiff had established a prima facie for recovery under the Carmack Amendment it would allow the judgment to be entered against the carrier and his principle. (The Custom Companies, Inc. v. Azera , 2015 U.S. Dist. LEXIS 94904)
The Middle District of Florida dismissed an action by truck brokers seeking to roll back the increase in the broker bond to $75,000. The Court concluded that the plaintiff’s had failed to establish that there was no rational basis for the increase. (Association of Independent Property Brokers & Agents v. Foxx, 2015 WL 4393729)