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Bits & Pieces

Volume 19, Edition 4

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Looking forward to meeting up with many of you at the IMUA annual meeting.  Please stop by and visit with Tiana and me and learn what’s new at CAB.

This month we report;

SAFE FOOD TRANSPORT REGULATIONS – The FDA has released the new regulations related to the safe transport of food product.  These new regulations will have a serious impact on the transport of certain food products and need to be considered by underwriters of food haulers.  I have been addressing this issue with many different groups over the last few weeks and have a recent article in the Spring Edition of Claims Litigation Management that you might want to check out if you are a member. We would like to know if this would be an interesting topic for our next quarterly session.  Let us know!

The FDA Food Safety Modernization Act establishes requirements for shippers, loaders, carriers by motor or rail vehicle and receivers involved in transporting human and animal food to use sanitary practices to ensure the safety of that food.

Specifically, the rule establishes requirements for:

Vehicles and transportation equipment: The design and maintenance of vehicles and transportation equipment to ensure that it does not cause the food it transports to become unsafe. For example, they must be suitable and adequately cleanable for their intended use and capable of maintaining temperatures necessary for the safe transport of food.

Transportation operations: The measures taken during transportation to ensure food safety, such as adequate temperature controls, preventing contamination of ready to eat food from touching raw food, protection of food from contamination by non-food items in the same load or previous load and protection of food from cross-contact.

Training: Training of carrier personnel in sanitary transportation practices and documentation of the training. This training is required when the carrier and shipper agree the carrier is responsible for sanitary conditions during transport.

Records: Maintenance of records of written procedures, agreements and training (required of carriers). The required retention time for these records depends upon the type of record and when the covered activity occurred but does not exceed 12 months.

You can review the FDA regulations at a glance here.

TRUCK SIZE AND WEIGHT LIMIT – The DOT released the results of its mandated Comprehensive Truck Size and Weight Limits Study. They concluded that they don’t have enough data to recommend a change in the requirements.  You can read the report here.

The study analyzed five technical areas:

Highway safety and truck crash rates, vehicle performance (stability and control), and inspection and violation patterns;

Shifts in goods movements among truck types and between modes;

Pavement service life;

Highway bridge performance;

Truck size and weight enforcement programs.

The results suggest that increasing size and weight will decrease costs and increase safety hazards but with results insufficient for full conclusions.

LARGE TRUCK FATALITIES – The FMCSA also released a report on large truck involved fatal crashes, showing a decrease in 2014 of 5% down to 3,744 total crashes. The decline in number of fatalities involving large trucks and buses declined 2% to 4,161, all with an increase in miles traveled.  The FMCSA reports the following trends:

In 2014, 3,978 large trucks and buses were involved in fatal crashes, a 5-percent decrease from 2013. From 2013 to 2014, large truck and bus fatalities per 100 million vehicle miles traveled by all motor vehicles decreased by 4 percent, from 0.143 to 0.138. There was a 33-percent decrease in the number of fatal crashes involving large trucks or buses between 2004 and 2009, followed by an increase of 20 percent between 2009 and 2013. From 2013 to 2014, the number of fatal crashes involving large trucks or buses decreased by 4.5 percent. The number of injury crashes involving large trucks or buses decreased steadily from 95,000 in 2004 to 60,000 in 2009 (a decline of 37 percent). This decline was followed by an increase of 55 percent from 2009 to 2014. On average, from 2004 to 2014, intercity buses accounted for 13 percent, and school buses and transit buses accounted for 41 percent and 33 percent, respectively, of all buses involved in fatal crashes. Over the past year (from 2013 to 2014): The number of large trucks involved in fatal crashes decreased by 5 percent, from 3,921 to 3,744, and the large truck involvement rate (large trucks involved in fatal crashes per 100 million miles traveled by large trucks) declined by 6 percent, from 1.43 to 1.34. The number of large trucks involved in injury crashes increased by 21 percent, from 73,000 to 88,000, and the large truck involvement rate in injury crashes increased by 21 percent. The number of large trucks involved in property damage only crashes increased by 31 percent, from 265,000 to 346,000, and the large truck involvement rate in property damage only crashes increased by 29 percent. The number of buses involved in fatal crashes decreased from 282 to 234, a decrease of 17 percent, and the bus involvement rate in fatal crashes decreased by 21 percent. Vehicle miles traveled (VMT) by large trucks increased by 1.5 percent, and bus VMT increased by 5.5 percent.

You can read the 120 page report at your leisure here

TRUCKING FAILURES – Avondale Partners reports that truck failures rose in the first quarter, due in part to reduced demand and stagnant freight rates.  1,025 carriers failed this quarter, which stalled 3,585 trucks. This was the highest number of failures since 2014.

ELECTRONIC IN-CAB CREDENTIALS? – 5 states are undertaking a pilot testing system that will allows drivers to use their cellphones, tablets and laptops to electronically present in-cab motor carrier credentials during road side inspections. The 2016 Motor Carrier Electronic Credential Pilot Program will allow drivers in Wisconsin, Michigan, Iowa, Illinois and Minnesota to produce IRPcards, trailer registration, for hire documents, IFTA licences, leases, COI and hazmat registration and non-hazmat bills of lading electronically . CDL, medical cards and regulation handbooks will still have to be produced in person.

BEYOND COMPLIANCE – The Federal Motor Carrier Safety Administration is proposing a new safety scoring category to reward trucking companies for safety programs which voluntarily exceed regulatory requirements and is requesting public comments on its proposal for a possible Beyond Compliance BASIC.  The FAST Act prescribes the eligibility for the Beyond Compliance program. As a result, this program is available to a motor carrier that:

  1. installs advanced safety equipment;
  2. uses enhanced driver fitness measures;
  3. adopts fleet safety management tools, technologies, and programs; or
  4. satisfies other standards determined appropriate by the Administrator

A copy of the notice can be viewed here.

CASES

AUTO

A trucking company’s pursuit of its insurance agent failed in the Eastern District of Kentucky. The Court held that the agent bore no responsibility when the trucker provided the agent with incorrect mileage which resulted in a higher premium which the trucker failed to pay. The Court also held that outside evidence that the agent was paid increased premium to advise the insured during the policy period the agent bore no liability for making sure that the trucker paid its premium.  (Hammond Transportation, Inc. v. Cottingham & Butler Ins. Services, 2016 WL 1255718)

While the fact that a driver had no liability insurance was evidence of negligent hiring, it was not the proximate cause of a truck accident and was therefore inadmissible.  The Court of Appeals in Maryland reversed a verdict against the truck driver and his employee, remanding the case back for a new trial.  (Perry v. Asphalt & Concrete Services, Inc. 2016 WL 1178073)

When is there a direct action against a truck insurer in Oklahoma?  The issue was addressed twice this month.  The Easter District of Oklahoma held that there was no direction against the insurer of one trucker who was not registered as an Oklahoma carrier. The fact that it was registered under UCR did not create a basis for a direct action under the Oklahoma statute which permits those actions.  (Mason v Dunn, 2016 WL 1178058) In another case the Court remanded an action in which the insurer was joined as a defendant. The Court held that the insurer was not fraudulently joined where the motor carrier was licensed in Oklahoma and therefore a direct action was permitted under Oklahoma law.  (Miller v. Jackson, 2016 WL 1464558)

The District Court in Kansas dismissed a claim of negligent hiring and attorney’s fees against a trucker.  The Court also held that plaintiff failed to provide a legal or factual basis for violations of Federal Motor Carrier Act and the Safety regulations.  The Court held that there was no private right of action under the MCA or FMCSA.  (Drake v Old Dominion Freight Lines, 2016 WL  1328941)

A plaintiff sought sanctions against a trucker who permitted the loss of driver records when the plaintiff was attempting to show that the driver was suffering from dementia and should not have been driving. The Middle District of Pennsylvania held that while the evidence was unavailable the remedy was simply to preclude the motor carrier from relying on the destroyed records or other evidence to show their contents to support defeating plaintiff’s claims.  (Botey v. Green, 2016 WL 1337665)

There would be no punitive damage or attorney’s fees claim against a trucking company when the plaintiff hit the defendant in the rear. The plaintiff claimed that the trucker negligently entered the roadway with a flat tire which ultimately caused the loss. The Court in Middle District of Georgia also held that the trucker’s motion to exclude plaintiff’s expert, Jeffrey Kidd, was denied. (Vannes v. Smith, 2016 WL 1260703)

The Court of Appeals in Texas upheld a jury verdict against a trucker owner for improper maintenance of the vehicle. The Court held that the fact that there may have been some unnamed other company involved in the maintenance did not preclude the finding against the trucking company.  The Court also held that defendant waived any venue arguments by waiting 18 months to seek a hearing on the issue and agreeing to a scheduling order.  (CMH Set & Finish, Inc. v. Taylor, 2016 WL 1254063)

Be careful of delaying the discovery process. The Western District in Pennsylvania held that a trucker’s failure to pursue proper discovery responses in a timely manner, waiting until discovery ended, precluded any right to get more discovery or depositions.  (Courtney v Ivanov, 2016 WL 1367755)

We don’t often see insurers trying to collect back payments made under the MCS-90. The District Court in Kansas held that an insurer’s claim was not subject to dismissal under the abstention doctrine when there was a related state case pending. The state case sought to obtain recovery for a large judgment against the motor carrier which was denied for breach of policy conditions while the federal action sought recovery for payments already made under the endorsement.  (Star Insurance Co. v. TLC Trucking, 2016 WL 1435250)

An insurer facing a claim for unfair claims and settlement practices jumped the gun in removing an action to Federal Court once the plaintiff settled with all of the state law defendants, creating diversity jurisdiction.  The Court held that when the removal was filed before the settlement with the state defendants was finalized the insurer could not assert diversity jurisdiction.  (Newsome v. Frederick & May Lumber Co, 2016 WL 1337299)

The former employer of an injured truck driver was not entitled to recover for losses suffered by the loss of the driver. The Court of Appeals in Ohio held that there was no evidence that the defendant had specific intent or inferred intent to harm the employer necessary elements for a claim for economic damages based upon defendant’s intentional conduct, (Wheeler Consulting v. Lavalley, 2016 WL 1180327.

CARGO

State law claims for indemnity under contract by a broker against a motor carrier were not preempted under the Carmack Amendment says the Northern District of Illinois. The Court did conclude that the broker had no claim under the Carmack Amendment as it was a broker and not a shipper and also that the breach of the cargo claim regulations did not provide for a private right of action.  (Traffic Tech v. Arts Transportation, 2016 WL 1270496)

If the bill of lading has one limitation and the contract another which one applies?  The District Court in Jersey held that there was a question of fact on which document trumped the other, deciding that a jury needed to decide if liability was limited to $15,000 or $1 million. (Indemnity Insurance Co v. UPS Ground Freight, 2016 WL 1261266)

You can plead alternatively against a broker in the Eastern District of Illinois. The Court held that as brokers are not liable under the Carmack Amendment they are not entitled to preemption for breach of duties that they might have under state law. Alternatively the claim against the broker as a carrier can also continue to be asserted.  (Sompo Japan Insurance Co. v. B&H Freight, 2016 WL 1392339)

 

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