I am not sure anyone is out there in these waning days of summer. There were few newsworthy events this month as focus seems to be on getting in that last bit of summer. For those of you who are just waiting for the Labor Day Holiday to begin we bring you the most update information on the transportation industry to send you on your way. For those of you who are viewing this report this after the break – welcome back. This month we report:
CAB LABS – This month we rolled out two new features, one into the Carrier Search section and one into the Submission Report™ section, of our subscriber site. For those of you who use our Carrier Search page, you are undoubtedly familiar with the critical information that accompanies the search results to help quickly identify potential issues with the entities you are viewing without having to load up a complete report. In addition to the Shared Address, Shared Phone, Inactive and Chameleon™ icons that can be found adjacent to any entity in the results, we’ve now added in an Out of Service icon that will alert you instantly to the fact that the FMCSA has taken this carrier out of service. Hovering over the icon will tell you when this OOS order was issued and why. We’ve seen numerous instances of carrier’s being taken out of service and then reincarnating as a ‘new’ Chameleon Carrier™ which is why it’s critical to pay attention to any entities that are related to an out of service carrier.
In addition to this, for those of you that are taking advantage of our Hot Zone alerts which allow a company to flag specific states and counties and receive an alert if the carrier has traveled in any of those locations, we’ve added in to the Radius tab of the Submission Report™ a chart displaying a breakdown of the inspections that have taken place in flagged zones. For further information on any of these features please contact us and we’d be happy to personally walk you through a demo of these new features.
COMING CSA CHANGES – The FMCSA has announced proposed coming changes to CSA this December. According to the organization the changes will include modifications to Cargo-Related BASIC (Behavior Analysis and Safety Improvement Category) to the Hazardous Materials (HM) Compliance BASIC, as well changing the Fatigued Driving BASIC to the hours-of-service (HOS) compliance BASIC which is designed to weigh HOS paper and electronic logbook violations equally. In addition, they will incorporate cargo and load securement violations into the Vehicle Maintenance BASIC, include intermodal equipment violations that should be found during drivers’ pre-trip inspections, removing 1 to 5 mph speeding violations; and better record violations accurately to reflect the proper inspection type. There is also the possibility of the formulation of a CSA subcommittee, which will include shippers, carriers, and safety groups, as well as other interested groups to discuss proposals and recommendations regarding future alterations to the CSA program. The FMCSA reports that there was a 5% reduction in crashes in the past year and they point to the success of CSA in reducing those numbers.
ATA U.S. FREIGHT TRANSPORTATION FORECAST – The ATA has released its U.S. Freight Transportation Forecast to 2023 and the forecast is positive! Freight tonnage is expected to increase 21% by 2023, with revenue up 59%. Of those numbers trucking will have 69.6% of the tonnage and 81.7% of the freight revenue. Rail carrier’s overall share of tonnage will fall to 15% in 2023 from the 15.7% in the baseline year of 2011 but intermodal tonnage will rise. Domestic waterborne transit is also expected to see some modest growth.
HAZMAT VIOLATIONS – Under the new Federal Highway Reauthorization law, motor carriers and shippers who are cited for hazardous materials violations face the potential of fines of up to $75,000 per day per violation, up from $50,000. In cases of death, severe injury, serious illness or substantial property damage fines can increase to $175,000 per day per violation.
CVSA REPORT – CVSA has released its report of its most recent inspection blitz. 95.4% of all truck and bus drivers passed inspections, with only 4.6% placed out of service. The overall out-of-service rate for all vehicle inspections was 20.9%, slightly above the record low of 19.3% from last year. They also report that the out-of-service rate for Level 1 inspections, the most comprehensive, declined to 22.4%, from 22.8% last year.
FREIGHT POLICY COUNCIL -The DOT has announced a Freight Policy Council to focus on improving the condition and performance of the national freight network to better ensure the ability of the U.S. to compete in today’s global economy. The council is to formulate a national, intermodal plan for improving the efficiency of freight The Council will be chaired by Deputy Transportation Secretary John Porcari, and will include DOT leadership from highways, rail, ports and airports and economic and policy experts from across the administration.
SAFETY PILOT PROJECT – The DOT now has 3,000 cars, trucks and buses equipped with “connected” Wi-Fi technology to enable vehicles and infrastructure to “talk” to each other in real time to help avoid crashes and improve traffic. This is part of a safety pilot project which includes the largest road test to date of connected vehicle crash avoidance technology. The road test, or model deployment, is a first-of-its-kind test of connected vehicle technology in the real world. The test cars, trucks and buses, most of which have been supplied by volunteer participants, are equipped with vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication devices that will gather extensive data about system operability and its effectiveness at reducing crashes. According to DOT’s National Highway Traffic Safety Administration (NHTSA), V2V safety technology could help drivers avoid or reduce the severity of four out of five unimpaired vehicle crashes.
EOBR STUDY – A study is now underway at Virginia Tech Transportation Institute to analyze the impact electronic on-board recorders have on safety within the commercial vehicle industry and whether EOBRs are an effective tool to increase compliance with Hours of Service regulations. The DOT is currently promulgating a new rule that would mandate EOBRs for all commercial trucks which was mandated in the new surface transportation bill.
FACEBOOK – The DOT has launched its own Facebook page CAB had one first. Please check us out and “like” us on Facebook so we feel good about having set it up!
CASES
CARGO
The Southern District in Ohio ruled that when a carrier asserts a defense that it was acting as a broker and not acting as a carrier, the carrier is no longer subject to the preemption of the Camack Amendment. A breach of contract claim can then be alleged. (Schneider Electric v. Landstar Inway, 2012 WL 3234244)
An ocean marine policy which allows a shipper to file a claim for non-delivery after a 15 day delay does not automatically provide coverage when the cargo is ultimately delivered. The Southern District in New York addressed the applicability of the delay exclusion and what constituted physical damage under a cargo policy. (Channel Fabrics v. Hartford Fire Insurance Co., 2012 WL 3283484)
A plaintiff’s efforts to find other parties liable for a cargo loss, in addition to the trucker, failed in the Eastern District of Virginia. The plaintiff actually brought suit against the state technician who prepared the permit for the transport, contending it was done improperly. The Court held that the tech was entitled to sovereign immunity and in the absence of gross negligence bore no liability for the loss. (Certain Underwriters v. J&J Trucking, 2012 WL 3265098)
The Southern District of New York once again held that the provisions of COGSA would apply to the domestic portion of the transport, when the loss occurred after the ocean transport. The action was dismissed against the motor carrier as time barred and subject to a foreign forum selection clause as set forth in the through ocean bill of lading. (Siaci Saint Honore v Ironbound Express, 2012 WL 3229179)
A transportation broker seeking a declaration that it bore no liability as a carrier for damage to a shipment of rugs was successful in keeping its action in its home state of Arizona. The cargo owner had filed a separate suit in California seeking recovery against the transportation companies. As the broker had been the first one to the court house, its action in Arizona was permitted to proceed, with the Central District of California transferring its case to Arizona. (AGCS Marine Ins. Co. v, Kreiger American Transportation Co., 2012 WL 3238278)
The Southern District in Ohio held that a broker’s claim for indemnity against a carrier, which arose under the terms of a transportation contract, was not preempted by the Carmack Amendment. (Exel, Inc. v. Southern Refrigerated Transport, 2012 WL 3064106)
Is he or isn’t he a carrier? That is the question, once again. The Eastern District of Pennsylvania held that there was a question of fact as to whether CH Robinson was acting as a broker or a carrier and denied summary judgment to the defendant. The Court did hold that the actual motor carrier would not be liable for consequential damages which were not reasonably conveyed to the carrier prior to shipment. Whether there were any other limitations of liability remained to be seen. (Pelletron Corp. v. C.H. Robinson, 2012 WL 3104845)
Identity theft has been impacting the transportation significantly this past year. The Eastern District of New York held that a motor carrier was not liable for the delivery of goods to a scam artist who has diverted the shipment. The Court held that the Carmack Amendment preempted all other claims of the plaintiff and the plaintiff’s failure to assert anything other than fraud and breach of contract claims was fatal. (Gura Kripa Foods, Inc. v. Inter, Inc., 2012 WL 3306520)
AUTO
As long as the plaintiff can assert sufficient facts to support a punitive damages claim the plaintiff can also assert a claim for negligent entrustment against the motor carrier. Simply accepting that it is vicariously liable for the actions of the driver will not allow the motor carrier to avoid potential exposure for negligent entrustment and punitive damages in the Eastern District of Arkansas. (McLane v. Rich Transport, 2010 WL 3257658)
Technicalities can cause series problems and delay the resolution of any case. The Supreme Court of Mississippi considered the impact of the failure of a plaintiff to properly amend its complaint after it learned the correct identity of the trucking company which he claimed caused his personal injury. The Court allowed plaintiff to correct its errors, and properly amend its complaint, denying the trucker’s request for dismissal of the complaint for failure to comply with the requirements to amend suit. (D.P. Holmes v. Butler, 2012 WL 3124522)
In the Northern District of California an insurer who sought indemnity from the California Automobile Assigned Risk Plan was barred from amending the complaint to assert a cause of action for breach of contract contending that that CAARP had failed to implement procedures for handling serious cases. The Court held that the insurer could not proceed where it failed to establish that it had acted with due diligence in learning the information during the discovery period. (Liberty Mutual Insurance Co. v. CAARP 2012 WL 3277213)
An injured plaintiff was not permitted to bring a bad faith claim against a motor carrier’s insurer. The District Court on South Carolina held that there is no third party bad faith claim against the insurer and that the injured party had no standing under the policy. The Court also held that the SCUPTA was inapplicable to insurers, who were separately regulated under the Insurance Trade Practices Act. (Hill v. Canal Ins. Co., 2012 3135402)
The never ending battle between tow companies and truckers continued this month in the Eastern District of Pennsylvania. The court allowed a claim of conversion and replevin to proceed against a tow company which had removed the trailer and the vehicle following an accident and held it pending a criminal investigation, but dismissed the trucker’s efforts to assert a RICO claim. While the Court indicated that while there was a statute which allowed for a right to compensation from the trucking company it would not consider whether that right to compensation included a right to a possessory lien over the goods. (Central Transport v. Atlas Towing, 2012 WL 3135511)
Under Delaware statutes an insurer is obligated to advise a potential claimant of any applicable statute of limitations. The Superior Court in Delaware held that the statute was inapplicable when the suit was between the trucker and the injured party. The court also ruled that the statute, where applicable, only to Delaware issued policies. (Lafayette v. Christian, 2012 WL 3608690)
A driver who was killed because of the improper loading of a shipment of steel was not entitled to recover from the shipper. The Court of Appeals in Kentucky held that as the shipper did not have exclusive control over the loading process it would bear no obligation to protect the driver. (Musial v. PTC Alliance, 2012 WL 3629012)
This is one that I don’t think I have ever seen in the past. A plaintiff had its action dismissed by the Court when it determined that a fraud had been committed on the Court. The plaintiff, who was living as a woman at the time of an accident failed to disclose that he was biologically a man, had been previously married and had a number of children. The failure to disclose all of this information in discovery responses was fraud. (Duffer v. Keystops LLC, 2012 WL 3104903)
The Middle District in Florida kept the pressure on an insurer and an insured, denying summary judgment to both parties on the issue of the intent of UM coverage under a policy. The insurer had denied coverage under the business use exclusion for a claim which arose while the driver was using the truck for business purposes. The Court held that the issues of whether the broker was acting as the agent of the insurer, and whether there was grounds for estoppel or reformation should be addressed by the jury. (Great American Ins Co. v. Sanchuk, 2012 WL 3112004)
A prose plaintiff’s efforts to re-litigate his case in the Federal Court, after losing in the State Court, failed. Where the State Court had already ruled that the plaintiff was not entitled to UIM coverage from the trucking company and its insurer, he would not be permitted to by-pass that ruling by alleging various complaints against the prior court ruling. (Bedard v. National Casualty Insurance Co., 2012 WL 3038572)
The 7th Circuit Court of Appeals held that a shipper was not entitled to Additional Insured status under the trucker’s auto policy for a loss caused by its own negligence. The Court held the applicable endorsement to limit coverage only for the vicarious liability of the Additional Insured for the actions of the trucker. (American Trucking & Transportation Ins Co. v. Allied Tube & Conduit Corp., 2012 WL 3198523)
See you next month.
