Welcome to Spring. First and foremost, to our friends and subscribers in Oklahoma and surrounding areas our thoughts and prayers are with you.
It was a pleasure seeing so many of you at the IMUA this month. It is great to get together and talk about the new issues facing the industry. The intro to inland marine program provided by the IMUA was well received and clearly helped those new to the inland marine world. For those of you who are interested the IMUA will be hosting a webinar on truck broker liability, with yours truly as one of the instructors. Details will follow and the webinar will be in July. You can always check out the website www.imua.org for more information on this and other webinars.
CAB LABS – We are excited to announce the launch of our new Search App for Leads (SALEs) search engine. Bringing the power of the CAB system to the search for leads, the SALEs portal offers agents and market analysts easy access to targeted motor carrier leads. With a modern interface, geographic based searching, up to date lists and the most comprehensive filter controls available, the SALEs system offers an unparalleled approach to identifying the carriers that best suit your book. As a core service, the SALEs page has been added as a new tab to our main search pages. Any user with access to CAB is welcome to try out this new tool. To find out more about our pricing options or to demo the system, please contact us.
This month we report:
OUT OF SERVICE REPORTS – The FMCSA list of out of service carriers and drivers continues to grow. The FMCSA continues to focus on buses, shutting down a number of them this month. Toledo, Ohio-based Destiny Tours was ordered to immediately cease all interstate passenger transportation service for failing to obtain proper federal operating authority. Similarly Niagara Falls, N.Y.-based passenger carrier Coach USA Tour, Inc., Kearns, Utah-based passenger carrier Salt Lake Shuttles, LLC, Mexico-based passenger carrier Autobuses Zacatecanos, LLC, and Champaign, Ill.-based passenger carrier Illini Tours, Inc. and Oxford, Miss.-based Carbo Limo of Oxford, LLC were all ordered to immediately cease all operation when the FMCSA declared them an imminent hazard to public safety.
Atlanta-based Greene Classic Limousines had five vehicles placed immediately out of service. FMCSA investigators found that the vehicles had such significant structural and mechanical defects that the vehicles pose an imminent hazard to public safety.
Truck and car Colorado based carrier GD Cars, Inc., was also pulled out of operation as an imminent hazard.
Drivers were not ignored either with New Mexico-licensed truck driver Bobby C. Cleveland, Texas-licensed truck driver Ruben Galindo and South Carolina-licensed truck driver Arnold Bradford Williams declared imminent hazards to public safety.
QUARTERLY FINANCIAL REPORTING TO BE ELIMINATED – The FMCSA has proposed a new rule that would eliminate a quarterly financial data reporting requirement for some interstate motor carriers as the information is no longer used by the FMCSA. We remind you that CAB will evaluate any submitted financials and provide you with a detailed analysis of the carrier’s operation so that you may more deeply know your insured. This should be a critical part of any underwriting process as financial stability generally equates to strong safety operations.
CARGO THEFT LEGISLATION – New Jersey has now moved to stiffen punishment for cargo thefts. Effective immediately, truck theft is now a criminal offense with jail time. Reports indicate that cargo thieves steal as much as $1 billion worth of cargo annually. The new law specifies that anyone who leads or organizes a cargo theft network could face $500,000 in fines, or five times the retail value of the property seized at the time of arrest. Criminal offenses already carry the possibility of five to 10 years in prison. In addition, the new rule specifies criminal charges for operating facilities used for storage or resale of stolen cargo.
MOTOR COACH SAFETY INFORMATION REQUEST – The FMCSA has released a notice that it plans to submit an Information Collection Request regarding motorcoach safety to the Office of Management and Budget (OMB) for approval. According to the notice, the agency would like to “assess the current levels of voluntary compliance by motorcoach operators to provide pre-trip safety awareness and emergency preparedness information to passengers and to obtain passenger opinions of the implementation of the pre-trip program and any recommended improvements”. The agency would then use the information gathered to inform future initiatives, policies, and rules.
MEDICAL EXAMINERS – FMCSA has issued a proposed rulemaking to make adjustments to the new certified medical examiner program. In the proposal, FMCSA seeks to require that medical examiners who are conducting CMV driver exams to use mandated forms. In addition, medical examiners would be required to report results of all completed CMV drivers’ physicals to FMCSA by close of business on the day of the examination, using the new online National Registry. The rule also proposes to transmit driver identification, examination results, and restriction information from the National Registry system to the State Driver Licensing Agencies which is anticipated to provide States and enforcement officials with more up-to-date and accurate information regarding a driver’s medical qualification status.
FMCSA PROPOSED GCWR DEFINITION CHANGE – The FMCSA has proposed a change in the definition of the term “gross combination weight rating’’ (GCWR). The revised definition would clarify that GCWR is: “the greater of: the GCWR specified by the manufacturer of the power unit, if displayed on the Federal Motor Vehicle Safety Standard (FMVSS) certification label required by the National Highway Traffic Safety Administration (NHTSA), or the sum of the gross vehicle weight ratings (GVWRs) or gross vehicle weights (GVWs) of the power unit and towed unit(s), or any combination thereof, that produces the highest value.”
TRUCK FATALITIES – The National Highway Traffic Safety Administration reports that the number of people killed on U.S. highways rose in 2012 following six years of consecutive declines. Crash fatalities rose 5.3% last year compared with 2011 to an estimated 34,080 deaths. The fatality rate. or the number of people killed for every 100 million vehicle miles traveled, also increased, to 1.16 from 1.1.
CSA ATTACKED – The Owner-Operator Independent Drivers Association has filed a second complaint with the U.S. District Court of Appeals for the District of Columbia Circuit regarding CSA safety records and the DataQ appeal process. The suit arises from a claim that a driver, who had a violation dismissed in the Court was unable to get the violation removed from CSA records. The OOIDA is seeking to prevent the FMCSA from reporting that the truck driver violated the law and asking that the information be purged from his records.
JOB REPORTS – The Labor Department revised its estimate of job gains in February and March by a combined 114,000, with trucking being a large part of the job increase. The report indicates that trucking added 11,700 jobs in April, the largest month-to-month increase since trucking added 12,700 jobs in February 2012. Trucking payroll employment in April totaled 1.386 million jobs — up 45,300 jobs, or 3.4%, from April 2012 and is up by 151,600 jobs, or 12.3%, from the bottom in March 2010, but it remains 67,800 jobs, or 4.7%, below the peak in January 2007. According to Bureau of Labor Statistics, trucking is one of two categories that have shown the biggest year-over-year increases in total compensation.
CASES
AUTO
Experts are not always needed to prove a nexus between an accident and an injury. The 4th Circuit, applying Maryland law, concluded that a plaintiff was not required to introduce expert testimony that his back injury was caused by a truck accident when the evidence showed he had no prior injury, he was struck in the rear by a truck and a reasonable jury could find that it was caused by the accident without the need for experts. The case was remanded for a trial of damages with all of the plaintiff’s medicals to be admitted. (Galloway v Horne Concrete Construction, 2013 WL 1811875)
Another diversity case was remanded to state court. This time the Eastern District of Pennsylvania held that when plaintiff, who was injured unloading a truck, amended the complaint to add a predecessor company who employed the driver at the time of the accident and who was not diverse to the plaintiff, the action would be transferred back to state court. While defendant argued that the successor company bore liability for the accident, the court determined that the plaintiff still had asserted a viable course of action against the local defendant and sent it on its way. (Quinn v. Contract Transportation System, 2013 WL 1702640)
The Northern District of West Virginia also booted a case which was removed by the defendant insurers on the grounds that the action raised a federal question. The Court concluded that simply because the plaintiff mentioned the MCS-90 in its declaratory judgment was insufficient to allow the case to stay in federal court. The Court noted that the application of the MCS-90 to any particular loss was routinely decided by state courts and therefore would not generally raise a substantial federal question. (McCloy v. Larew, 2013 WL 1962314)
The Appellate Division in New York upheld a grant of summary judgment to various trucking companies when plaintiff was unable to establish which trucking company was involved in his hit and run accident. (Mora v. Kane Is Able, Inc., 105 A.D3d 1022)
A petition to dismiss was granted by the Supreme Court of Alabama. The Court held that a truck accident which arose in Mississippi belonged there, and not in Alabama. The court concluded that after analyzing the factors to be considered under the doctrine of forum non convenience the action could not stay in Mississippi. The fact that the truck owner entrusted the truck to a driver in Alabama was not enough to keep it there. (In re Transportation Leasing Corp., 2013 WL 1858774)
Truckers tried to get causes of action dismissed for punitive damages to no avail this month. In the Middle District of Pennsylvania the court held that there was sufficient evidence to support a finding of punitive damages against a truck driver and the company. The court held that there was sufficient evidence of reckless action by the trucking company to warrant the action going forward. (Gula v. Advanced Cargo Transportation, 2013 WL 1899900) The same result was reached in Connecticut where the court held that a trucking company’s failure to ensure that the driver was able to operate the vehicle, and its failure to check drug and alcohol violations was enough to justify the potential for punitive damages against the trucking company. (Liquore v. Whitney Trucking, 2013 WL 1914417)
The Northern District in West Virginia remanded a personal injury action against a trucking company when the trucking company failed to establish that the damages for which plaintiff sought recovery exceeded the jurisdiction minimum of $75,000. (LaFollett v. Gunderson, 2013 WL 1910380)
In an action between two insurers over the primacy of coverage the District Court in New Jersey concluded that the policy of the truck driver’s employer would be primary over the policy for the broker/carrier who had the shipping agreement with the customer. That policy provided that it was “primary for any covered ‘auto’ while hired or borrowed by you and used exclusively in your business as a ‘ trucker’”. The court concluded that the contract terms required exclusive use by the trucker, and that the carrier/broker did not use the vehicle exclusively. (National Interstate Ins. Co. v. Champion Truck Lines, Inc., 2013 WL 1952198)
The Northern District of Alabama, construing Alabama law, held that an exclusion in a policy for uninsured motorist coverage which excluded coverage when the principle state of garaging allowed rejection of UM was permissible. The Court also allowed an election by the insured, which was executed years before and for a different but affiliated insurer, to have followed to the new policy. (Roberts v. New Hampshire Ins Co. 2013 WL 1767797)
Is a leasing company obligated to indemnify a trucking company for the trucking company’s liability to a leased employee injured while on the job? The 8th Circuit Court of Appeals held that the indemnification agreement between the parties in fact obligated the leasing company to indemnify the trucker. The court also held that the leasing company’s general liability policy covered the settlement made by the trucker, who was an additional insured under the policy to extent that the loss was caused in whole or in part by the named insured. (Harleysville Ins. Co. v. Physical Distribution Services, 2013 WL1831048)
It is so critical to think through the extent of indemnity agreements. In the Western District of Kentucky the court rejected a motor carrier’s claim for indemnity against UPS. While the contract required UPS to indemnify the trucker for injuries arising from UPS services, as set forth in the contract, it did not extend to claims by the trucking company for injuries which it suffered as a result of the negligence of UPS which did not stem from services provided under the contract. (United Parcel Service, Inc. v. Air Transport Intern. LLC, 2013 WL 2180788)
One trucker’s sigh of relief at the minimal damages given by a jury was premature according to the Court of Appeals in Florida. The Appellate Court upheld the District Court’s grant of a new trial on damages when the evidence showed that there was clear misunderstanding of the damages by the jury. The court did, however, limit that new trial to the disputed damages, and did not give the plaintiff a complete new bite at the apple. (Rolon v. Burke, 2013 WL 1810760)
The Supreme Court of Iowa considered whether a worker’s comp lien was extinguished after the wife of a deceased truck driver entered into settlement agreement with an uninsured motorist insurer of driver’s employer and the automobile insurer of driver. The Supreme Court held that that the local law of the state under whose workers’ compensation statute an employee received an award for injury determined what interest the insurer has in any recovery for tort or wrongful death that the employee may have obtained against a third person on account of the same injury. The Court adopted the Restatement rules on the issue and remanded the case for an analysis of the claim under the provisions of the rules. (Moad v. Dakota Truck Underwriters, 2013 WL 2127571)
The Court of Appeals in California considered the obligations of a shipper for improperly loading a trailer which was determined to be a factor in an accident which injured, one fatally, the plaintiffs. The Court held that the shipper owed a duty to properly load and secure the cargo. The Court also held that use of marijuana by the driver did not supersede that responsibility. However the court remanded the case because the erroneous admission of the toxicologist’s opinion that driver was a “chronic” user who was unlikely to be impaired at the time of the accident was prejudicial to the shipper’s defense. (Pedeferri v. Seidner Enterprises, 2013 WL 2144769)
A plaintiff who was not satisfied with getting the entire judgment (which exceeded the policy limit), including post judgment interest, paid in full by the trucker’s insurer was unsuccessful in attempting to then obtain attorney’s fees from the insurer. The Court of Appeals in Texas held that plaintiff had no additional right or damages and could not see any more money from the insurer. The Court rejected the argument that the insurer was somehow responsible for greater fees when it failed to pay the judgment as soon as it was final despite the fact that there was an appeal filed. (Bisland v. Financial Indemnity Company, 2013 WL 1876509)
In another remand case, the Western District in North Carolina remanded an action where the defendant could not establish that the injuries to either of the plaintiffs’ exceeded the $75,000 jurisdictional requirement. The Court determined that where damages are not pled in the complaint it can look outside the pleadings and consider the nature and extent of the damages and accept an affidavit from the plaintiffs that each party’s damages are below the jurisdictional limit. (Cargo Logistics v. Xtra Lease, LLC, 2013 WL 1798344)
The admissibility of expert testimony based upon information downloaded from an electronic control unit was brought into question in the District Court in Nebraska. The court found that the data was sufficiently unreliable to warrant allowing an expert to testify on the issue of when delivery was complete using that data. The Court also considered the admissibility of various other issues in case which may be of interest to the viewer, including issues on delivery and tariff/bill of lading consent. (Union Pacific Railroad v. Beemac Trucking, 2013 WL 1821020)
CARGO
In a rare case, the Supreme Court of the United States actually considered a case involving transportation. The Court held that a vehicle owner was not from preempted under the FAAAA from bringing state law claims for damages stemming from the storage and disposal of a towed vehicle, including consumer fraud claims. The Court held that the cause of action did not arise from the transportation, but rather from the action which arose after the transportation concluded. The Court concluded that in order for FAAAA to preempt the suit the state law must address not only the price, route or service of the motor carrier but must also address the motor carrier’s transportation. (Dan’s City Used Cars, Inc. v. Pelkey, 2013 WL 1942398)
As we have seen over the past few years, claims against brokers are on the rise. The Northern District of Texas held that a plaintiff can pursue a broker under alternative theories of liability- as both a broker and a carrier. The Court also held that if the defendant was found to be a carrier then all other causes of action were preempted by Carmack. If the defendant was found to be a broker, all claims but a breach of contract claim would be preempted by the FAAAA, although the breach of contract claim could include attorney’s fees. (Wise Recycling v. M2 Logistics, 2013 WL 18704)
On the issue of broker liability, the District Court in Kansas also held that a claim against a broker was not subject to Carmack and plaintiff could assert a breach of contract action against the broker for damages caused by the trucking company. The court also refused to dismiss the plaintiff’s claim for lost profits against the trucker and the broker, concluding that such damages could be recoverable against either party if the right elements were proven in the case. (Atlas Aerospace LLC v. Advanced Transportation, 2013 WL 1767943)
The Southern District of New York denied a motion for reconsideration of its decision that a defendant was liable, but that the liability was limited to an amount set forth in a pricing agreement (see last month’s Bits and Pieces for the initial decision). The Court had held that a different, and lower limitation, was inapplicable as there was no evidence of a contractual agreement for the services which triggered the lower limitation. The Court agreed that the standard contract principles of offer and acceptance were relevant to any determination of a claim under the Carmack Amendment and the absence of an agreement as to the services was fatal to the defendant. (Great American Ins. Co v. USF Holland, 2013 WL 1832185.)
On the other side of New York, in the Western District, the court held that a shipper was not responsible for a theft which occurs when an imposter picks up a shipment. As the terms of sale transferred the risk to the consignee while in transit, and the consignee arranged for the transport, there was no duty on the part of the shipper to confirm the identity of the trucker. (Stampede Presentation Products, Inc. v. Productive Transp., Inc., 2013 WL 2245064 (W.D.N.Y.))
See you next month.
