Hello Everyone! 

Summer sure seems to be moving along quickly! Sooner than expected, the kiddos will be headed back to school. Readers driving to work on a regular basis will need to remember to plan accordingly for the school buses slowing your commute down in the weeks ahead. It’s always a reminder of, “Oh darn, I’m on the bus route.” National School Bus Safety Week isn’t until the end of October but it’s a good refresher to think about as the new school year kicks off.

Have a safe and enjoyable rest of your summer!

Chad Krueger and Pam Jones

CAB Webinars

Tuesday, August 13^th | 12p EST

Diving into Analysis Central & New Segment Leader Intro | Mike Sevret and J Slaughter

Join us as we introduce our new Insurance Brokerage portfolio Senior Director, J Slaughter. Our main topic will focus on our Analysis Central section of the CAB platform. We’ll dive into our various reports and historical data.

Tuesday, August 20^th | 12p EST

MC Advantage Safety Module | Pam Jones and Jay Weinberg

Motor carriers requested an enhanced, motor carrier specific tool with similar CAB data our insurance clients find so valuable. In typical CAB fashion, we responded. Learn more about our motor carrier focused platform and recent enhancements that fleets will benefit from.

To register for the webinars, click the button below to sign into your CAB account. Then click live training at the top of the page to access the webinar registration.

Register Now

Explore all of our previously recorded live webinar sessions in our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks

CAB’s platform has a feature, Chameleon Carrier^® detector, that identities interrelationships of motor carriers. Understanding this is imperative to ensuring the fleet is being evaluated accurately. FMCSA pays attention to interrelations between fleets. Sometimes we see this type of activity make headlines as FMCSA identifies a fleet as reincarnated. It’s not every day to hear about these but it does come up. Plus, it is not always nefarious.

Listen to Chad Krueger’s webinars when he talks about the Chameleon Carrier^® feature and you will hear about a family operation that swap trucks across their multiple fleets. There is a webinar archive from 6/13/2022 on this topic.

Utilizing roadside activity and motor carrier data, CAB’s Chameleon Carrier^® Detector allows the user to see relationships across fleets. If multiple fleets both have the same VIN and share another company detail data point (address, phone, etc.), CAB flags this as a Chameleon Carrier^®.

Pay attention to these notices for enhanced motor carrier reviews.

THIS MONTH WE REPORT

New Jersey’s $1.5 Million Truck Insurance Hike Goes into Effect July 1 Starting July 1, 2024, New Jersey requires heavy-duty trucks to carry a minimum of $1.5 million in liability insurance. This increase, signed into law by Governor Phil Murphy, applies to commercial vehicles weighing 26,001 pounds or more. Read more…

Hard Market Conditions Expected to Ease in 2025 as Claims Inflation Softens: Swiss Re Swiss Re forecasts that the global non-life insurance sector will see an easing of hard market conditions in 2025 due to moderating general and claims inflation. Profitability is on the rise, with improved underwriting results and higher investment returns. However, insurers must stay vigilant against new inflation shocks from geopolitical conflicts. Read more…

NTSB Raises Concerns Over Marijuana Rescheduling Proposal The National Transportation Safety Board (NTSB) warned that moving marijuana from Schedule I to Schedule III could jeopardize drug testing for truck drivers, pilots, and others in safety-sensitive roles. The NTSB emphasized the need to maintain marijuana testing within DOT and HHS protocols to avoid safety risks. Read more…

Transportation a Top 10 Target of Cyberattackers, Cases Nearly Triple Last Year A study by SOAX found the transportation industry experienced a 181% increase in data breaches in 2023, with 101 cases compared to 2022. This matches the total breaches from 2020-2022 combined. The surge highlights the urgent need for better cybersecurity measures, as cyberattacks in transportation can significantly impact daily life. Read more…

FMCSA Pleads with Congress for More Power to Punish Brokered-Freight Fraudsters The Federal Motor Carrier Safety Administration (FMCSA) reported to Congress that it lacks the authority to effectively combat brokered-freight fraud. The agency cited the 2019 Riojas decision, which limits its ability to assess civil penalties. FMCSA seeks enhanced legislative authority to address unlawful brokerage activities, emphasizing the need for timely enforcement. Read more…

Trailer Orders Plummet, but Truck Pre-Buy Taking Shape U.S. trailer orders fell 19% year-over-year in June, with 6,300 units ordered, though slightly higher than the previous month. The decline reflects weak fundamentals and high dealer inventories. FTR Intelligence reported a 17% drop from May and a 44% rise from June 2023. Read more…

Senators Look to Empower FMCSA, Other Agencies After Landmark Supreme Court Decision Following the Supreme Court’s decision to overturn the Chevron doctrine, Senators introduced the Stop Corporate Capture Act to maintain agency deference and reform the regulatory process. The bill, led by Sen. Elizabeth Warren, aims to enhance transparency, streamline rulemaking, and increase public participation. Read more…

August 2024 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinak Law Group LLP.

AUTO

Pun v. Jones, 2024 WL 3504553, C.A. No. 3:24-CV-1059-D (N.D. Tex. July 22, 2024).  In this personal injury and property damage lawsuit arising from a MVA involving a CMV, the driver of the CMV moved to dismiss various causes of action alleged against him.  First, the court held that the driver lacked standing to seek dismissal of the direct liability claims of negligent hiring, training, supervision, retention, and negligent entrustment alleged by plaintiff against the driver’s alleged employer, the motor carrier.  As such, the motion to dismiss was denied for the direct liability claims.  Turning to the negligence per se claim, for which the driver did have standing to challenge, the court agreed that plaintiff’s complaint failed to allege the necessary elements supporting such a claim and dismissed that claim as against the driver. 

Todd v. Capella Logistics, Inc., 2024 WL 3445006, C.A. No. 1:22-cv-108 (N.D. Ga. July 17, 2024).  In this personal injury action arising from a chain-reaction MVA, the defendant motor carrier was successful in obtaining summary judgment on claims for negligent hiring, entrustment, training, and supervision, and a claim for punitive damages.  However, the court denied summary judgment on plaintiff’s claim for attorneys’ fees under O.C.G.A. § 13-6-11.  This case arose from an automobile accident between the parties.  Defendant Bula was driving a tractor-trailer on behalf of Defendant Capella Logistics, a motor carrier, when he rear-ended a tractor driven by former Defendant Rodney Chappelle that then spun across the interstate, collided with the Plaintiffs’ vehicle, and ultimately caused injuries to the Plaintiffs.  Capella Logistics moved for summary judgment on the direct liability, punitive damages, and attorneys’ fees claim.  On the direct negligence claims, the court found that the Plaintiffs failed to present affirmative evidence showing a genuine issue of material fact on any of their negligent hiring, training, or supervision claims. Rather, the evidence suggests that Bula had no driving history indicating a propensity to drive negligently.  Instead, Bula’s record shows that prior to his employment with Capella, he had a 2016 citation for driving beyond an eight-hour time limit, a 2016 citation for lacking a current record of duty status, and a 2017 citation for faulty brake hose and tubing.  In the court’s view, “none of these citations suggest that Capella knew or should have known that Bula had a propensity to engage in negligent driving. Nor does [Capella’s owner/president’s] alleged lack of knowledge of the motor carrier safety regulations indicate that Bula was improperly trained, much less that such training or lack thereof could have caused the Plaintiffs’ injuries.”  The court pointed to law from a sister court holding that when a driver holds a CDL, like Bula did, “[t]he Federal Motor Carrier Safety Regulations generally do not require trucking companies to train their drivers.” Finally, the court found Plaintiffs presented no evidence supporting their negligent supervision claim, nor does Bula’s driving record substantiate any instances of negligent driving similar to that alleged in the Third Amended Complaint. Therefore, it granted summary judgment in favor of the motor carrier on the negligent hiring, training, supervision, and entrustment claims.  In light of the dismissal of the direct negligence claims against the motor carrier, the court found the Plaintiffs could not sustain their burden to show “willful or wanton misconduct” on the part of the motor carrier necessary to sustain a punitive damages award.  As such, it granted summary judgment in favor of the motor carrier and dismissed the punitive damages claim against it.  Last, with respect to the claim for attorneys’ fees under O.C.G.A. § 13-6-11, the court noted “questions concerning bad faith, stubborn litigiousness, and unnecessary trouble and expense under [the statute] are generally questions for the jury to decide.”  It therefore denied summary judgment to the motor carrier on the attorneys’ fees claim. 

NFI Interactive Logistics, LLC v. Bruski, 2024 WL 3169160, C.A. No. 23A-CT-1969 (Ind. Ct. App. June 26, 2024).  In this interlocutory appeal of a trial court’s denial of a motion to dismiss, the Indiana Court of Appeals affirmed the trial court’s ruling, finding that the plaintiff’s complaint alleged sufficient facts to survive a 12(b)(6) motion.  The lawsuit arose out of chain-reaction accident.  According to the complaint, around 2:50 a.m., an eastbound driver on I-94 lost control of a Mercury vehicle (“the Mercury”) and struck a concrete barrier wall, causing the Mercury to become disabled on a dark, unlit portion of I-94.  Terry, a driver under the motor carrier authority of NFI and that was operating a CMV on behalf of NFI, was also driving eastbound on I-94.  Terry struck the Mercury around 2:50 a.m. and came to a controlled stop on the right shoulder of I-94.  The complaint further alleged that, “from approximately 2:50 a.m. through approximately 3:00 a.m., [Terry] did not activate the hazard warning signal flashers on, nor place any hazard warning triangles … or flares behind, the [CMV] to alert approaching motorists of the hazards in the travel lane and [the] shoulder of [I-94].”  Around 3:00 a.m., Plaintiffs who were the driver and passenger in a separate tractor-trailer, struck the Mercury before striking the concrete barrier wall.  In their complaint, Plaintiffs alleged Terry and NFI were liable for “failure to warn.”  They alleged Defendants were subject to FMCSRs, incorporated by reference into Indiana’s Code, which were violated when Terry did not activate his flashers or place a warning device.  The appellate court rejected Defendants’ argument that Terry had no common law duty to warn since he did not create the original danger—the disabled Mercury.  The court found it was plausible from the complaint that Terry “increased the hazard” and therefore had a common law duty to warn.  Similarly, the court found an alleged violation of the FMCSRs, as incorporated into Indiana’s Code, could be sufficient to support a negligence per se claim.  Since the Plaintiffs were found to be within “the class of persons protected” by the FMCSRs and the regulations were designed to protect against the type of collision involved in this instance, the appellate court found the trial court properly denied Defendants’ motion to dismiss the negligence per se cause of action. 

Asbie v. Padilla, 2024 WL 3295600, C.A. No. 24-1637 (E.D. Pa. July 3, 2024).  In this negligence action arising from a multi-vehicle motor vehicle accident, the motor carrier and its driver successfully moved to dismiss plaintiff’s negligence claim against them.  The complaint alleged plaintiff was driving eastbound in the right lane of Interstate 80 when her car “was pushed into the shoulder lane by another vehicle.” Defendant Padilla, who was driving a tractor-trailer for YP Transport, had pulled over into the highway’s shoulder “directly adjacent to the lane” that Plaintiff was driving in after “she heard noises coming from her truck” and had stopped to “inspect for any issues.” Padilla had failed to activate her hazard lights or put out warning triangles or flares.  Plaintiff’s car struck Padilla’s tractor-trailer, and Plaintiff alleged she suffered “severe and permanent injuries.” Plaintiff sued Padilla and YP Transport for negligence and negligent entrustment.  With respect to the negligence per se claim, premised upon alleged violation of a state regulation prohibiting a vehicle from being stationary adjacent to a roadway, the court noted the regulation provided for an emergency/safety exception.  It pointed to the allegations of Plaintiff’s complaint alleging Padilla only pulled over after hearing noises coming from the tractor as necessarily implicating the emergency exception.  As such, it dismissed with prejudice the negligence per se cause of action.  With respect to the negligence claim, the court agreed with Defendants that the other driver’s action in forcing Plaintiff’s vehicle off the roadway, ultimately leading to the collision with the tractor-trailer, was a superseding cause of Plaintiff’s alleged injuries.  As such it dismissed the negligence cause of action with prejudice.  Insofar as the other negligence-based causes of action were dismissed, the negligent entrustment cause of action failed as a matter of law and Defendants were granted a dismissal with prejudice as to that cause of action as well. 

BROKER

Gauthier v. Hard to Stop, LLC, 2024 WL 3338944, C.A. No. 22-10774 (11^th Cir. July 9, 2024).  In this appeal from a trial court’s ruling that a tort plaintiff’s negligent selection claim against a freight broker was preempted by FAAAA, the Eleventh Circuit Court of Appeals affirmed the trial court’s ruling.  The court applied its reasoning from Aspen American Insurance Company v. Landstar Ranger, Inc., 65 F.4^th 1261 (11^th Cir. 2023), finding while common law claims such as negligent retention are “generally applicable,” the specific claims of plaintiff were not because “[m]embers of the public do not arrange for the motor transportation of property; brokers do.”  The court reasoned that “[b]y regulating that specific activity, [plaintiff’s] common law claim is aimed solely at the performance of brokers’ core transportation-related services[,]” and as such, is preempted by FAAAA.  Last, the court rejected the plaintiff’s attempt to distinguish the holding of Aspen from cases involving traffic accidents.  The court stressed “[a]ny claim that a broker negligently selected a driver to haul a load of property clearly falls within Section 14501(c)(1) because . . . that claim seeks to regulate the broker’s performance of its core transportation-related services.  And such claims do not arise from an exercise of the safety regulatory authority of a State with respect to motor vehicles, 49 U.S.C. § 14501(c)(2)(A), which requires that the relevant state law have a direct relationship to motor vehicles.”  As in Aspen, the court stressed that negligent-selection-of-broker claims “necessarily lack a direct relationship because the services a broker provides have no direct connection to motor vehicles.”  For each of these reasons, the court affirmed the trial court’s dismissal of the negligent selection claim against the broker. 

CARGO

Evergreen Shipping Agency (America) Corp. v. Federal Maritime Commission, 2024 WL 3308236, C.A. No. 23-1052 (D.C. Cir. July 5, 2024).  This matter presents an appeal from a ruling by the Federal Maritime Commission that an ocean carrier’s assessment of detention charges against a motor carrier for the late return of an ocean container and vehicle chassis were “unjust and unreasonable.”  The appellate court first set forth the basis of its review, noting that a federal agency’s action is arbitrary and capricious if the agency has: “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”  The appellate court agreed with the ocean carrier that the FMC decision failed to adequately address various arguments raised by the ocean carrier and it failed to explain why those arguments were not relevant to the “just and reasonable” analysis or were outweighed by countervailing considerations.  The appellate court further rejected the FMC’s reasoning that “a detention charge necessarily lacks any incentivizing effect because it is levied for a day on which a container cannot be returned to a marine terminal.”  In fact, the appellate court found the opposite, noting “on the contrary, being charged for detention during a port closing announced before the carrier picks up the equipment heightens the incentive to return equipment on time.”  The appellate court further criticized the FMC decision for being internally inconsistent on the importance of returning equipment on time as it impacts the overall supply chain.  Ultimately finding that the FMC decision lacked “a logical explanation” to support its finding, the appellate court vacated the FMC Order and remanded the matter to the FMC for further handling consistent with the written opinion. 

Triax, Inc. v. TForce Freight, Inc., 2024 WL 3487892, C.A. No. 1:22-cv-01693 (D. Md. July 19, 2024).  In this case involving an alleged lost shipment, the court enforced the motor carrier’s limitation of liability.  Triax retained FreightCenter, who brokered the shipment to TForce.  FreightCenter generated a bill of lading in connection with the shipment, which identified TForce as the carrier and Triax as the “ship to” location (the “Bill of Lading”). On the Bill of Lading, FreightCenter included a class designation of 77.5 and a shipment weight of 375 pounds.  TForce’s representative signed the Bill of Lading the day after it was issued by FreightCenter.  The Bill of Lading included a warning that “Liability Limitation for loss or damage in this shipment may be applicable,” cited to the Carmack Amendment, 49 U.S.C. § 14706(c)(1), and advised that the shipment was “RECEIVED, subject to individually determined rates…that have been agreed upon in writing between the carrier and shipper, if applicable, otherwise to the rates, classifications[,] and rules that have been established by the carrier and are available to the shipper, on request.” The signed Bill of Lading included a sticker stating: “LIMITATIONS OF LIABILITY APPLY, SUBJECT TO LIMITS OF LIABILITY OF THE CARRIER’S RULE TARIFF.” TForce maintained a “Rules Tariff” at the time of the shipment in this case (the “TForce Tariff”).  The TForce Tariff provides:

In an effort to provide its customers with quality service at competitive rates, certain commodities may be offered to be shipped at less than full value and TForce Freight encourages shippers to review this publication, as some Items may be subject to limitations of liability, released values or other options specific to a shipment or a commodity.

The TForce Tariff was made available to shippers upon request.  It included Item 166 that identified its maximum liability per pound according to class designation.  According to the TForce Tariff, the maximum liability for a class designation of 77.5 is $8.00 per pound.  It further provided that TForce, as the carrier, “will not be liable for any damages in excess of the limitations within Item 166,” and that TForce would not “be liable for any indirect, incidental, consequential, loss of profit, loss of income, special, exemplary, or punitive damages.”  Triax’s designated corporate representative testified it never requested a copy of the TForce Tariff, he knew based on the Bill of Lading the transportation was subject to the motor carrier tariff, and that Triax provided the weight to FreightCenter that was listed on the Bill of Lading. 

Following non-delivery of the cargo, Triax filed suit against TForce seeking (i) monetary damages in the amount of $1,007,254.32, presumably (although ambiguously) consisting of the cost of the cargo and the cost of purchase orders that it was set to process upon receiving the cargo; (ii) pre-judgment interest and costs; and (iii) “such other, further and different relief as may be just on the premises.”  TForce filed a motion seeking to limit available damages to a maximum of $3,000 in accordance with the Bill of Lading and TForce Tariff liability limitations referenced therein.

In addressing the issue, the court set forth the four-part test adopted by the Fourth Circuit to determine whether a motor carrier has properly limited its liability, which holds carriers must: (1) provide the shipper, upon request, a copy of its rate schedule; (2) give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper’s agreement as to his choice of carrier liability limit; and (4) issue a bill of lading prior to moving the shipment that reflects any such agreement.  The court further explained that the foregoing applied irrespective of whether the carrier or shipper prepared the bill of lading.  Further, “consistent with Supreme Court precedent, when an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.” 

Applying the four-part test, the court first found there was no material dispute that Triax had not requested a copy of the TForce Tariff prior to the shipment, despite knowledge that the shipment would be subject to the TForce Tariff.  As for the “reasonable opportunity” to choose between different levels of liability, the court explained “[a] reasonable opportunity to choose between different levels of coverage means that the shipper had both reasonable notice of the liability limitation and the opportunity to obtain information necessary to making a deliberate and well-informed choice.”  Insofar as Triax provided the weight and class code to FreightCenter to include on the Bill of Lading; FreightCenter, as agent of Triax, issued the Bill of Lading; Triax knew the Bill of Lading was subject to the TForce Tariff; and the TForce Tariff included multiple class designations with corresponding maximum liability limits, the court found the “reasonable opportunity” element was met.  As for the “shipper’s agreement” requirement, Triax agreed the Bill of Lading governed the terms of the shipment and that the Bill of Lading was subject to the TForce Tariff.  However, the court found, even barring the foregoing admissions by Triax, the face of the Bill of Lading clearly and unambiguously identified that the shipment was subject to limitations of liability.  As such, the agreement component was met.  Last, insofar as FreightCenter issued the Bill of Lading and a TForce representative signed the Bill of Lading the day of the shipment, there was no material dispute the fourth requirement was met.  As such, the court found the limitation of liability to $8.00 per pound was fully enforceable and capped TForce’s liability at $3,000 (based upon stated 375 pound shipment weight). 

McCarthy v. Krupp Moving and Storage II, LLC, 2024 WL 3413255, C.A. No. 1:24-cv-79 (S.D. Ohio July 15, 2024).  In this lawsuit arising from a household goods movement from Ohio to Massachusetts allegedly gone wrong, the court granted in part and denied in part the household goods carrier’s motion to dismiss.  According to the allegations of the Complaint, Plaintiff signed an Estimate on November 4, 2022 and then a Contract on November 15, 2022 with the HHG carrier for the HHG carrier to provide two trucks and five movers to pack and move Plaintiff’s family’s belongings from Ohio to Massachusetts.  The Contract included listed charges for payment amounting to $19,044.48. The HHG carrier allegedly promised Plaintiff it would provide two 26-foot trucks for the move.  The HHG carrier’s movers did not follow Plaintiff’s organizational system when it packed up his Ohio residence.  Further the HHG carrier provided one 26-foot truck, but the second truck was only 16-feet long, meaning the trucks did not have enough storage space to move all Plaintiff’s belongings.  The movers placed Plaintiff’s belongings in the truck without wrapping or protecting them, resulting in multiple items becoming damaged or stained. Last, the HHG carrier charged Plaintiff more than $2,000 in excess of the Contract price.  Plaintiff filed suit against the HHG carrier alleging ten causes of action: (1) violation of the Carmack Amendment; (2) Breach of Contract; (3) Unjust Enrichment—In the Alternative; (4) Conversion; (5) Fraud; (6) Negligent Misrepresentation–In the Alternative; (7) Violation of the Ohio Consumer Sales Practices Act (“OCSPA”); (8) Violation of the Ohio Deceptive Trade Practices Act (“ODTPA”); (9) Negligence; and (10) Intentional Infliction of Emotional Distress.  The HHG moved to dismiss all but the Carmack cause of action.  The court found all but the claim for negligence were preempted by the Carmack Amendment.  However, with respect to the negligence cause of action, the court found that the damage alleged was separate and distinct from the alleged loss or damage to the goods.  Specifically, Plaintiff alleged that in connection with the move, the HHG carrier’s movers backed a truck into a centuries old tree at his new residence in Massachusetts resulting in damages.  Insofar as the alleged damages were wholly unrelated to the goods shipped in interstate commerce, the court found the negligence claim escaped Carmack’s preemptive scope, but only with respect to the damages to the tree.  As such, all causes of action but the Carmack and negligence claims were dismissed with prejudice. 

Cell Deal, Inc. v. FedEx Freight, Inc., 2024 WL 3401198, C.A. No. 21-cv-00788 (E.D.N.Y. July 12, 2024).  The district court overrode a magistrate court’s recommendation against summary judgment in favor of a motor carrier on a limitation of liability.  In so holding, the court agreed the motor carrier had validly limited its liability with respect to the at-issue shipment.  The issue was whether a freight broker, operating as an agent for the plaintiff shipper, could bind the shipper to a limitation of liability.  Citing Kirby, the court explained “[w]hen an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.”  The court found there was no genuine issue of material fact that the intermediary freight broker agreed to the motor carrier’s limitation of liability.  The contract between the freight broker and motor carrier specifically included a “Liability Notice” referencing the specific Item of the motor carrier’s tariff limiting liability if the consignor or consignee does not declare a higher value.  Further, the Bill of Lading for the disputed shipment likewise did not declare the value of the shipment.  Based upon this, the court found there was no dispute of material fact that the intermediary had agreed to the carrier’s limitation of liability, which under Kirby, was binding upon the shipper.  As such, plaintiff’s damages were limited to $153.00. 

Mendenhall v. FedEx Ground Package System, Inc., 2024 WL 3226580, C.A. No. 23-cv-11025 (N.D. Ill. June 28, 2024).  In this lawsuit arising out of an alleged non-delivery of freight, the court denied plaintiff’s motion to remand and granted carrier’s motion to dismiss.  Plaintiff alleged he purchased a laptop through an online seller, who contracted with FedEx for the delivery to Plaintiff’s residence.  Plaintiff claimed the laptop was never delivered and sought a refund from the online retailer.  When the online retailer contacted FedEx, Plaintiff alleged FedEx notified the online retailer that the laptop had, in fact, been delivered.  Plaintiff contended that FedEx alleged Plaintiff was “knowingly attempting to obtain by deception insurance reimbursement for the package.”  Plaintiff filed a complaint in Illinois state court that included claims for breach of contract and libel.  FedEx removed the case to federal court and then moved to dismiss the complaint in its entirety.  In response, Plaintiff moved to remand.  In first addressing the motion to remand, the court found the shipment was subject to the Carmack Amendment because it was transported in interstate commerce and Plaintiff was a “person entitled to recover under the receipt or bill of lading.”  As such, the court had appropriate subject matter jurisdiction and therefore denied the motion to remand.  Turning to the motion to dismiss, the court found the breach of contract claim was clearly preempted by the Carmack Amendment since it dealt directly with the alleged failure to deliver the laptop and dismissed that claim with prejudice.  As for the libel claim, the court found that it did escape preemption because it alleged “harm separate and distinct from the loss of goods.”  Nevertheless, without a “federal anchor claim,” the Court found it lacked supplemental jurisdiction to hear such a claim.  As such, it dismissed the libel claim without prejudice. 

SLT Imports, Inc. v. SAR Transport Systems Pvt. Ltd., 2024 WL 3289649, C.A. No. 23-cv-184484 (D. N.J. July 3, 2024).  In this admiralty action, the ocean carrier successfully moved for judgment on the pleadings and had the operative complaint against it dismissed with prejudice.  Plaintiff entered into an agreement whereby it would provide financing to non-party Krishna Food Corp. to allow Krishna to purchase food products from an Indian supplier to be shipped to Krishna in New Jersey.  Defendant SAR Transport Systems was the shipping carrier for the cargo.  Plaintiff alleged SAR Transport Systems “intentionally delivered” the cargo to Krishna without the required proof of payment by Krishna to SLT in the form of endorsed bills of lading.  Plaintiff brought an action against SAR Transport Systems alleging: (1) fraud in the execution of a maritime contract; or (2) alternatively, breach of maritime contract under COGSA and general maritime law.  The court found COGSA applied to the first count.  It further found Plaintiff did not state a claim for fraud in the execution under the “heightened pleading requirements,” and accordingly, the bills of lading, to which COGSA applied, were not void ab initio.  In the court’s view, at most, the complaint alleged a misdelivery of the goods, which would be subject to COGSA’s one year statute of limitation.  Since the suit was not brought within that timeframe, the cause of action was time-barred.  Further, the court found the entirety of Count II was subject to COGSA’s one year statute of limitation, and accordingly, was likewise time-barred. 

COVERAGE

Hudson Ins. Co. v. Townsell, 2024 WL 3186649, C.A. No. 23-CV-316-MTS (N.D. Okla. June 26, 2024).  In this insurance coverage declaratory judgment action arising from a MVA involving a CMV, the court granted in part and denied in part the insurer’s motion for summary judgment.  Waller, an employee of Arkk Trucking, agreed to drive a “boom truck” owned by Kirby-Smith Machinery, Inc. from Oklahoma to Utah on Kirby-Smith’s behalf.  While en route, in Wanship, Utah, Waller, while operating the boom truck, was involved in a single vehicle accident.  Townsell was a passenger in the boom truck at the time of the Accident and alleged personal injuries resulting therefrom.  Hudson insured Arkk Trucking under a commercial auto liability insurance policy that contained a MCS 90 endorsement.  Subsequent to the Accident, Townsell filed suit against Waller and Arkk Trucking in Utah state court.  Hudson thereafter filed the instant DJ action against Arkk and Townsell seeking a declaration as to its obligations under the auto liability policy and/or MCS 90 endorsement in response to the underlying tort suit.  The court quickly dispatched with potential defense and indemnity obligations under the Hudson Policy, finding the Accident did not involve a “covered auto” as defined under the Hudson Policy insofar as the boom truck was not specifically described on the declarations page to the Hudson Policy at the time of the Accident.  As for the MCS 90 endorsement, Hudson argued it had no obligation thereunder because: (1) the boom truck does not fall within the requirements of the Motor Carrier Act because it was not transporting property and Arkk was not a “for-hire” motor carrier; and (2) there is other insurance available within the required federal limits to cover the boom truck and any judgment against Arkk in the Underlying Suit.  However, the court refused to consider Hudson’s arguments with respect to the MCS 90, finding those were not yet “ripe” insofar as there was not yet a “final judgment” against Arkk Trucking—the motor carrier named in the MCS 90 endorsement. 

Misner v. Tecumseh, 2024 WL 3458084, C.A. No. 1:22-cv-01600 (D. Co. July 18, 2024).  This insurance coverage declaratory judgment action focuses upon whether the responsibility to procure an auto liability policy satisfying the requirements of the Motor Carrier Act of 1980 (the “Act”) lies with the insurer or the insured motor carrier.  A driver for Asa Griego Deliveries LLC (“Griego”) was making deliveries on behalf of Greigo when he was involved in an accident resulting in fatalities to two of the occupants of the other vehicle.  It is undisputed that the Griego delivery truck (the “Subject Vehicle”) was being used in interstate commerce and weighed more than 10,001 pounds. Thus, the Subject Vehicle falls under the purview of the Act.  At the time of the Accident, Alpha Property & Casualty Insurance Company (“Alpha”) insured the Subject Vehicle under a commercial vehicle policy with liability limits of $100,000 per person and $300,000 per accident. It is further undisputed that Griego did not seek to purchase a policy from Alpha for more than these amounts.  Representatives of the Estates of the decedents settled the underlying tort suit for $100,000 each and an assignment of the right to seek reformation of the Alpha insurance policy against Alpha. Thereafter, the Estates filed the instant declaratory judgment action, arguing the Act requires the Court to reform the Alpha insurance policy and increase the liability limits to $750,000. Alpha thereafter moved for summary judgment.

Alpha contended it was entitled to summary judgment because it had no reason to know the delivery truck was subject to the Act and even if it did, the Act does not provide the remedy the Estates seek.  The court agreed with the second contention, and accordingly, did not address the first.  While the Estates cited several cases for the proposition that insurance policies must conform to statutory mandatory minimums, and where they do not, Colorado law permits reformation, the court found the statutory schemes in Plaintiffs’ cited cases place the burden directly on the insurance companies to provide certain types or amounts of coverage.  In contrast, “[a] plain reading of the Act and its regulations indicates that they place the burden of compliance on the motor carrier not on the insurer.”  According to the court, [b]oth state and federal courts are in consensus, and this Court agrees that the Act does not create a duty of compliance for insurance companies.”  Additionally, the court found “it would be a perverse outcome to require an insurance company to bear the additional financial responsibility for an accident when it was the insured who was derelict in its duty to maintain proper coverage.”  The court stressed “Colorado law recognizes that absent a special relationship between the insured and the insurer’s agent, an insurance company has no affirmative “duty to advise, guide, or direct a client to obtain additional coverage.”  Acknowledging the tragic nature of the case, the court nevertheless granted summary judgment in favor of Alpha, holding the Alpha Policy was not subject to reformation to higher limits under the Act.

WORKERS COMPENSATION

No cases of note to report this month. 

Hello and Happy Summer Everyone! 

Enjoy summer while it’s here. Hopefully you got a nice reset and recharge over the Independence Day holiday! 

Busy times in your firms and here in our space too! You may have heard about our new company Fusable that CAB, Price Digest, CCJ and other sister brands are now a part of through the strategic separation Randall Reilly did earlier this year. This transition includes responsibility adjustments on our end. Chad is leading our Underwriting segment and Pam is point on the motor carrier portfolio. Our team you know are still here and we’ve added to it again.  

We are thrilled to announce that Jasmine Slaughter will be leading our Insurance Brokerage portfolio as Senior Director. With extensive experience in both consulting and the insurance industries, Jasmine brings a wealth of knowledge and expertise to our team. Her strategic insights are set to drive innovation for our Agents and Brokers.  

Learn more about Jasmine and connect with her here: Linkedin.

CAB Webinars

Like many of you, summer is busy with the holiday and time off. We will be taking the month of July off from our live training sessions. Keep in mind, all our great training content is still available via our webinars page.  

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks

The FMCSA’s transition from motor carrier login utilizing DOT # & PIN to Login.gov has been than a less smooth process. The FMCSA’s modernization listening session at the end of May included numerous attendees referencing the struggle with this new procedure. Last month’s Bits & Pieces included the login screens from the CAB platform to Login.gov’s site for the motor carrier credential connection to CAB.

This month let’s cover a related frequently asked question. Perhaps this will help your motor carrier(s) with this government program. In FMCSA’s terminology there are “Company Officer(s)” listed on the MCS-150 shown in the Company Information section under Officials. Specially, these can be seen in the FMCSA Portal Home section in the middle of the screen in the Company Information section.  

Separately, the fleet’s FMCSA Portal Official (portal user approver) is listed under Account Management section Account Request as shown here. If there isn’t a company official named you can identify one here. If you need to change it, use this “Submit a Challenge” option. In order for CAB to be connected to a fleet’s FMCSA Portal, the motor carrier must grant CAB access.

Note: Pam Jones had been an FMCSA Portal user for years. While the FMCSA Portal instructions mention and allow an alternate company official to be identified, Pam has never had success in fleets utilizing the alternate company official for user approval.

THIS MONTH WE REPORT

New ATRI Research Identifies Strategies for Mitigating Women Truck Driver Challenges The American Transportation Research Institute (ATRI) released a study to develop approaches for increasing the number of women truck drivers. It highlights six major challenges, including industry perception, training, parking, and harassment. Input from thousands of drivers and carriers was used to develop strategies for addressing these issues. Read more…

ATRI, American Transportation Research Institute, always a great resource to the industry, recently released another report on annual operational costs report and their work delving into female driver challenges, now available for download direct from their website. Read More…

Commercial Auto Insurance Market Outlook for 2024 The commercial auto insurance market is facing ongoing challenges with underwriting losses, increasing rates, and declining profitability. Factors such as driver shortages, nuclear verdicts, inflation, and distracted driving are contributing to these issues. Rate hikes averaged 8% in early 2023 and are expected to continue rising into 2024, particularly for large fleets or those with poor loss history. Read more…

FMCSA Approves 25% Fee Increase for Carriers, Brokers The Federal Motor Carrier Safety Administration (FMCSA) has approved a 25% increase in Unified Carrier Registration (UCR) fees for motor carriers, brokers, and leasing companies starting in 2025. This adjustment, the first significant increase since 2010, raises fees by $9 to $9,000 depending on fleet size. Read more…

Is Cyber Security Insurance Trucking’s Next Big Premium? Candace Marley, an Iowa owner-operator, sees cybersecurity as a low priority despite the increasing digitalization of trucks. However, NMFTA COO Joe Ohr highlights the benefits of cybersecurity insurance, especially for small fleets, citing the risk of office-based hacks over in-cab vulnerabilities. Read more…

Congress Eyes Creation of Anti-Fraud/Cargo Theft Task Force The U.S. House Appropriations Committee approved a funding bill for the Department of Homeland Security, including $2 million for a Supply Chain Fraud and Theft Task Force (SCFTTF). This task force aims to combat rising supply chain fraud and cargo theft in interstate commerce. Read more…

Chicago-Area Freight Thief Steals $9.5M in Goods: Courts Aivaras Zigmantas, 39, a Lithuanian national, has been indicted for stealing over $9.5 million in goods using fake names, carrier entities, and broker entities. His scheme involved diverting freight shipments, including liquor and copper, through false representations and fake identities. Read more…

ATA Tonnage Rises in May The American Trucking Associations reported a 1.5% year-over-year increase in the For-Hire Truck Tonnage Index for May, reaching 115.9. This marks the first year-over-year gain since February 2023 and a 3.6% rise from April. While this increase hints at a potential recovery in the truck freight market, experts urge caution, noting mixed economic indicators and ongoing challenges. Read more…

Vinn White Named FMCSA Deputy Administrator Vinn White has been appointed as the Deputy Administrator of the Federal Motor Carrier Safety Administration (FMCSA) and will also serve as the acting administrator. White replaces former Administrator Robin Hutchinson and brings extensive experience in transportation policy. He has been a member of the Biden-Harris Administration since 2021, working on emerging transportation technologies. Read more…

How New Jersey State Government Created Chaos with New $1.5 Million Liability Insurance Requirement New Jersey’s new law requires commercial vehicles to carry $1.5 million in liability insurance, surpassing federal minimums. This affects all vehicles registered in the state, including those under the International Registration Plan (IRP). Read more…

July 2024 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinak Law Group LLP.

AUTO

Rodriguez v. Vaniperen, 2024 U.S. Dist. LEXIS 101901, 2024 WL 2831837, C.A. No. 4:23-CV-4006-KES (D.S.D. June 4, 2024).  This case arises out of a motor vehicle accident near Brookings, South Dakota, when defendant CMV driver crashed into the rear of plaintiff’s decedent’s car, which was stationary in the right most lane of the highway.  Based on evidence gathered from calls Kelly made to AAA prior to the collision, plaintiff’s decedent ran out of gas while driving on the interstate in a rental vehicle and was not able to make it to the shoulder of the highway, and instead stopped in the lane of travel. As she was stopped on the interstate, she was struck by the CMV, whose driver, in the moments before the crash had been using his phone to make online purchases and scroll TikTok. Defendants moved for summary judgment on the grounds that plaintiff’s decedent was contributorily negligent and assumed the risk, and thus barred from recovery, and alternately moved for summary judgment on plaintiff’s survival claim and partial summary judgment as to plaintiff’s punitive damages claim. The court held that there was a genuine issue of material fact as to whether plaintiff’s decedent was contributorily negligent and assumed the risk of accident, and denied Defendants’ motion for summary judgment on those issues.

Plaintiff also argued that the court should delay its summary judgment determination as to plaintiff’s survival claim, and filed an affidavit pursuant to Fed. R. Civ. P. 56(d) to show that more time was necessary in discovery to obtain evidence in support of its survival claim. However, the court ruled that plaintiff’s Fed. R. Civ. P. 56(d) Affidavit fell short of the requirement necessary to avoid summary judgment on the issue of plaintiff’s survival claim, noting that there was no additional evidence available to prove that plaintiff’s decedent survived the initial impact to experience pain and suffering as a result of this collision, and that defendants presented enough evidence in the form of plaintiff’s decedent’s death certificate and evidence of the car’s condition to show that she died instantly.

Additionally, the Court rejected defendant’s argument that punitive damages were not available in this case because South Dakota statutory law excludes punitive damages from wrongful death claims. The Court disagreed, holding that punitive damages are available in any action for the breach of an obligation not arising from contract.

Salas v. VRP Transportation, Inc., 2024 U.S. Dist. LEXIS 99219, 2024 WL 2794964, C.A. No. EP-24-CV-82-KC(W.D. Tex., May 31, 2024).  In this action arising from a motor vehicle accident, the court remanded the action to state court, finding  there was not complete diversity between Plaintiff Salas and Defendant VRP Transportation, as both were citizens of Texas. This case was originally filed in County Court at Law Number 3 for El Paso County, Texas by Salas against defendant driver Torres, VRP Transportation Mexico, and VRP Transportation USA. VRP Mexico moved to remove the case to Federal Court citing diversity jurisdiction and improper joinder of VRP USA as defendant driver Torres was only operating as an employee of VRP Mexico at the time of the accident. To establish a claim for improper joinder, the removing defendant must establish either “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the nondiverse party in state court.” VRP USA did not argue that Plaintiff’s joinder of VRP USA was actually fraudulent and could not establish that plaintiff did not have a cause of action against VRP USA and VRP Mexico because both entities owned the vehicle Torres was driving at the time of the accident and Torres was operating within the scope of his employment. Therefore, the court found VRP USA was not improperly joined, that there was not complete diversity of the parties, and remanded the case back to County Court in El Paso County, Texas.

Sandifer v. Doe, 2024 U.S. Dist. LEXIS 95897, 2024 WL 2784742, C.A. No. 23-280-M (E.D. Louisiana, May 30, 2024).  This case arose out of a motor vehicle accident wherein a Pilot Travel Centers employee, Sandifer, was delivering fuel to the Walmart Distribution Center in Robert, Louisiana, and was struck while outside of his truck by a tractor-trailer owned by U.S. Xpress. Sandifer filed suit against the unknown driver, Walmart and U.S. Xpress, alleging negligence claims and seeking recovery for the personal injuries he sustained. Sandifer then filed an amended complaint, alleging Walmart had a duty to “regulate the movement of 18-wheelers on its property” and devise policies and procedures to protect pedestrians on its premises and make sure those operating tractor-trailers and other dangerous machinery are sufficiently trained on those policies and procedures. Walmart moved for summary judgment, alleging that Sandifer failed to identify any rule of law establishing that they had a duty to train individuals making deliveries on a third-party’s behalf. US Xpress argued that Walmart’s motion should be denied due to disputed issues of material facts regarding the condition of Walmart’s premises that contributed to the accident. However, the court found that Walmart successfully showed that Sandifer was in a well-lit and well-marked area of its premises when the incident occurred, and Sandifer confirmed as much. The court held that there was no evidence that Walmart breached a duty it owed to Sandifer and granted Walmart’s motion for summary judgment.

Mendez v. Summit Hous. Transp., LLC, 2024 U.S. Dist. LEXIS 94312, C.A. No. 1:22-cv-00125-MPM-DAS (N.D. Miss. May 28, 2024).  In this personal injury case, the court granted defendants’ motions for summary judgment in part as to punitive damages.  Factually, the accident occurred when a vehicle in which plaintiff was a passenger veered from its lane and ran into the back of a newly manufactured mobile home stopped alongside the highway.  Defendants were the manufacturer, transportation company, and truck driver.  The truck was stopped alongside the highway due to a failure of the tow hitch used to connect the mobil home to the truck.  The defendant truck driver was not able to pull as far onto the shoulder as he normally would due to rainy weather, which made the driver concerned of getting stuck in the mud.  Plaintiffs argued that the driver’s decision not to pull the truck over as far as he could placed his concern of getting stuck over concerns for the public’s safety.  However, the court found that while that decision may have been negligent it did not rise to the necessary standard for an award for punitive damage—i.e., the decision was not sufficiently reckless or outrageous.  Accordingly, the court granted defendants’ motion for summary judgment as to punitive damages.    

Manson v. B&S Trucking of Jackson, LLC, 2024 U.S. Dist. LEXIS 94790, C.A. No. SA-21-CV-01181-XR (W.D. Tex. May 28, 2024).  In this personal injury action, the court denied the plaintiff’s motion to reconsider the court’s grant of summary judgment for a claim of gross negligence against the defendant trucking company.  Plaintiff was struck by the defendant truck driver driving for the defendant truck company, B&S Trucking, around 3:00 AM.  The court granted the defendant truck company’s motion for summary judgment as to gross negligence, and plaintiff filed a motion to reconsider after obtaining driver logs that allegedly showed a pattern of the defendant driver falsifying her drivers’ logs in order to drive over her legal hours of service.  Plaintiff alleged that the defendant truck company approved, authorized, and ratified the driver’s conduct.  Plaintiff’s expert testified that the defendant truck company had a legal obligation to ensure drivers complied with the hours-of-service requirements.  The defendants’ expert testified that the drivers’ logs evidenced that a second driver was driving the vehicle, which accounted for the hours-of-service record discrepancies.  Further, the defendants’ expert testified that the applicable data logging system would have triggered a warning if there was a violation of the hours-of-service requirements.  Defendants contended that the system warnings negated the need for manual drivers’ log audits.  Ultimately, the court noted in denying the plaintiff’s motion to reconsider that there was no evidence in the record that the defendant trucking company had any knowledge of the defendant driver’s hours-of-service violations. 

Bubba’s Towing & Recovery, LLC v. Big Eagle Transp., Inc., 2024 U.S. Dist. LEXIS 94826, 2024 WL 2748472, C.A. No. 3:23 CV 2025(N.D. Ohio May 29, 2024).  The court granted defendant Vista Food Exchange, Inc’s (“Vista”) Motion to Dismiss all claims against it for lack of personal jurisdiction in this breach of contract/unjust enrichment matter without leave for plaintiff to amend its complaint.  Plaintiff is a vehicle towing service and sued a motor carrier and defendant Vista, a food distribution corporation.  Factually, the defendant motor carrier, a Michigan motor carrier, had a tractor trailer involved in an accident in Ohio, resulting in the cargo being strewn around the accident scene.  Vista, a New York corporation, owned the cargo.  Plaintiff provided towing and recovery services after the accident.  Plaintiff moved the cargo and tractor trailer to its storage facility.  Plaintiff filed the lawsuit to collect on unpaid services and storage fees.  Vista filed the motion to dismiss thereafter, arguing that plaintiff could not establish personal jurisdiction over it.  The court agreed, finding that under the Sixth Circuit’s three-part test to determine the proper exercise of specific personal jurisdiction, Vista did not purposefully avail itself of the privilege of operating in Ohio, but rather, merely placed its product in the stream of commerce.  It did not own the tractor or trailer.  Further, the court found plaintiff’s contention that Vista had a national and world-wide reach along with prior legal activity in Ohio were unavailing as it did not constitute an act by Vista purposefully directed toward Ohio such as advertising or designing a product to market in Ohio.  Further, the plaintiff’s claim against Vista did not arise out of any Vista activity in Ohio.  Finally, the court found that the third prong of the test was not met as there was not a connection between Vista and Ohio substantial enough for the court to exercise personal jurisdiction. 

Lidstrom v. Scotlynn Commodities Inc., 2024 U.S. Dist. LEXIS 101988, 2024 WL 2886570, C.A. No. 4:23-CV-05144-MKD (E.D. Wash. June 6, 2024).  In this personal injury case, the court granted in part Defendant Scotlynn’s motion for summary judgment.  Under applicable Washington state law, a plaintiff cannot recover under both a theory of vicarious liability and negligent hiring, training, supervising, etc. because allowing such recovery would be “redundant.”  Thus, if there is no evidence that an employee acted outside of the scope of his/her employment, then a plaintiff cannot maintain such direct liability causes of action against an employer.  In this case, defendant Scotlynn was the employer of the defendant driver and owned the subject truck.  The court found there was no evidence establishing the driver acted outside the scope of his employment during the time in question.  As such, the court granted summary judgment in favor of Scotlynn on the negligent training cause of action.  Likewise, the court granted summary judgment on plaintiff’s negligent entrustment claim for factual insufficiency.  Plaintiff alleged that the driver may have been distracted or tired while operating the truck but failed to allege facts that Scotlynn knew or should have known that the driver was reckless or incompetent.  The court also granted summary judgment on plaintiff’s negligent maintenance claim, noting plaintiff failed to support its claim with any factual allegations regarding maintenance. 

Galovich v. Morrissette, 2024 U.S. Dist. LEXIS 104646, 2024 WL 2962843, C.A.No. 3:21-CV-1532 (M.D. Pa. June 12, 2024).  In Galovich, the court granted Defendants’ motion for partial summary judgment. The defendants included: (1) two truck drivers; and(2) defendant company (“FAF”) for whom the drivers ran a dedicated route.  The action arose out of a motor vehicle accident whereby plaintiffs’ vehicle rearended FAF’s tractor trailer, which was stopped on the shoulder of a highway around 4:00 AM.  One of the defendant drivers was driving on an unfamiliar stretch of highway when a brake warning light illuminated.  The driver pulled the tractor trailer fully off the road onto the shoulder to check the brake issue.  The other driver was in the sleeper berth at the time.  Defendants moved for summary judgment on plaintiffs’ claims for punitive damages as to all defendants and corporate liability and negligence as to FAF.  Defendants argued that plaintiffs failed to proffer sufficient evidence through discovery to show that defendants acted in an outrageous manner or in reckless indifference to plaintiffs’ rights.  Plaintiffs countered, arguing that the defendant driver could have stopped at multiple exits instead of pulling off the road onto the shoulder.  The court held that Plaintiffs failed to show any evidence that pointed to the drivers having a culpable state of mind as to why the drivers pulled to the side of the road when they did.  The court dismissed the punitive damages claim as to FAF on the basis of vicarious liability because the defendant drivers’ actions did not give rise to an award of punitive damages.  The court also granted summary judgment on plaintiffs’ negligence and corporate liability claims because defendants admitted an agency relationship and punitive damages were not warranted.  Further, the court found plaintiffs did not provide sufficient evidence for their claim of negligence and corporate liability as to FAF beyond mere conclusory allegations.

Leyman v. Amazon Logistics, Inc., 2024 U.S. Dist. LEXIS 104466, 2024 WL 2962784, C.A. No. 1:23-cv-828, (S.D. Ohio June 12, 2024).  In this personal injury action arising from a motor vehicle accident, the Amazon Defendants prevailed on their Motion to Dismiss Complaint for Lack of Personal Jurisdiction and/or Forum Non Conveniens. Plaintiff Jurnee Scott Leyman filed this suit for personal injury and wrongful death on behalf of herself and as the administratrix of the estate of her deceased husband, Noah M. Leyman, against the Amazon Defendants, Defendant Timur Trucking, LLC (“Timur Trucking”), and Defendants Firdavs Kubaev, Ergash Annakukov, and Kamiloddin Adilov (collectively, “the Timur Agents”). Ms. Leyman alleges that her husband died when a tractor-trailer operated by Kubaev and Annakukov and under the direction and control of Timur Trucking and the Amazon Defendants, struck their vehicle on a divided highway in Texas. The Amazon Defendants are each incorporated in Delaware with a principal place of business in Washington. Two of the Amazon Defendants are registered to do business in Ohio and have a registered agent in Ohio. All Amazon Defendants engage in business in Ohio through the warehousing of goods and products, the delivery and transportation of goods and products, and “solicitation activities . . . to promote the sale, consumption, and uses of its services. Timur Trucking is incorporated in Ohio and has its principal place of business in Warren County, Ohio. The Amazon Defendants use the “Amazon Delivery Partner” website to solicit and contract with delivery partners to transport Amazon goods. At some point before the collision that took Mr. Leyman’s life, Timur Trucking contracted with the Amazon Defendants through the Amazon Relay application or similar Amazon program to deliver Amazon products. The Amazon Defendants had engaged Timur Trucking to deliver goods interstate and on Ohio roadways. On an unspecified date, Amazon Logistics, Inc. provided a 2021 blue Hyundai Ttranslead trailer, with Amazon labeling on the exterior, to Timur Trucking to deliver Amazon products. On June 4, 2023, Kubaev and Annakukov, acting in the scope of their agency and employment with the Amazon Defendants and with Timur Trucking, and driving a Freightliner Cascadia with the 2021 blue Hyundai Translead trailer, drove down the wrong side of a divided highway on U.S. 287 in Potter County, Texas. They struck a motor vehicle in which Mr. Leyman was the driver and Ms. Leyman was a passenger, killing Mr. Leyman and causing injury to Ms. Leyman. Neither party disputed the jurisdictional facts asserted by Ms. Leyman in the Complaint nor by Ryan Sandefur in his sworn Declaration on behalf of the Amazon Defendants. The Court reviewed whether the exercise of personal jurisdiction over the Amazon Defendants comported with Ohio’s long-arm statute and was consistent with due process. The court found that the Ohio long-arm statute requires a proximate cause relationship between the defendant’s act and the plaintiff’s cause of action.  It further found that Amazon Defendants’ conduct in Ohio did not proximately cause the collision in Texas. Ultimately the Court determined that the Plaintiff’s claim did not arise out of Amazon Defendant’s conduct in Ohio and that no strong relationship exists among the Amazon Defendants, the Ohio forum, and the litigation. Thus, exercising personal jurisdiction over the Amazon Defendants would be unreasonable. On that basis the Court granted the Amazon Defendants’ Motion to Dismiss Complaint for Lack of Personal Jurisdiction and/or Forum Non Conveniens.  However, in lieu of dismissal, the Court transferred the case to the Northern District of Texas.

BROKER

Ritchey v. Tanager Logistics, LLC, 2024 U.S. Dist. LEXIS 101504, C.A. No. 5:24-CV-23 (S.D. Tex., June 6, 2024).  In this personal injury action arising out of a motor vehicle accident, the freight broker sued under a negligent brokering theory of liability removed the case to federal court based upon federal question jurisdiction.  Plaintiffs thereafter moved to remand the case to state court, contending FAAAA preemption, as argued by the defendant broker, did not confer federal question jurisdiction.  The court agreed and granted Plaintiffs’ petition for remand after Defendants were unable to show that a federal question arose in this case under the FAAAA.  In so holding, the court pointed to Fifth Circuit cases addressing the scope of preemption under the Airline Deregulation Act.  It rejected the broker’s attempts to distinguish the cases addressing the ADA on the basis that it, as a freight broker, was not in the same position as an airline carrier or motor carrier.  The court further distinguished cases from other Texas federal courts and other jurisdictions.  The court rejected that FAAAA was complete preemption sufficient to sustain federal jurisdiction and the FAAAA defense did not present a federal question sufficient to establish independent federal question jurisdiction.

Cox v. Total Quality Logistics, Inc., 2024 U.S. Dist. LEXIS 104456, 2024 WL 2962783, C.A. No. 1:22-cv-00026 (S.D. Ohio, June 12, 2024).  In this personal injury action against a freight broker arising out of a fatal motor vehicle accident involving the motor carrier to whom the broker brokered the load, the court granted the broker’s motion to dismiss plaintiff’s complaint, holding the negligent hiring and supervision claims were preempted by FAAAA.  In so holding, the court rejected that FAAAA’s safety exception precluded preemption. 

CARGO

Arnold v. Allied Van Lines, 2024 WL 3063113, 2024 U.S. Dist. LEXIS 106701, C.A. No. SA-21-CV-438 (W.D. Tex., June 14, 2024).  In this case arising from damage to household goods in the care of Allied Van Lines during Plaintiffs’ interstate move, Plaintiffs rejected Allied’s offer of judgment for $32,500 and elected to proceed to trial, where they were awarded $31,909 in damages. As a result, Plaintiffs filed an application for attorney’s fees under 49 USC § 14708 and Allied filed a motion to award costs based on Plaintiffs’ alleged failure to obtain a judgment more favorable than the unaccepted offer. The court held Plaintiffs’ ability to recover attorney’s fees hinged on two questions: (1) whether the transaction between Plaintiffs and Allied was a collect-on-delivery (“COD”) transaction and (2) whether Plaintiffs’ were the prevailing party.  The court found that the transaction was not COD. Despite the fact that both the Bill of Lading and Freight bill signed by both parties were clearly marked as payment type “COD,” Plaintiffs paid Allied a deposit prior to shipment and their remaining bill balance the day before their goods were delivered. Accordingly, since Plaintiffs paid Allied before delivery, the move was not a COD transaction. Because Plaintiffs failed the first prong, the Court did not rule on whether Plaintiffs were the prevailing party. The Court then ruled that Allied was entitled to costs under Fed. R. Civ. P. 68 because Plaintiffs failed to obtain a judgment at trial greater than the rejected offer of judgment. The court then assessed the reasonableness of each of the requested costs by Allied, ultimately granting some and denying some. 

PCS Wireless LLC v. Rxo Capacity Sols., LLC, 2024 U.S. Dist. LEXIS 105480, 2024 WL 2981188, C.A. No. 3:23-CV-00572-KDB-SCR,(W.D.N.C. June 13, 2024).  In this action, plaintiff purchased approximately 54,000 wireless devices and hired RXO to transport the shipment from Texas to Florida by truck.  RXO subcontracted the shipment to Wizard Equipment Corp.  The shipment was ultimately stolen from a truck yard in Florida while en route to its final destination.  Plaintiff sued defendants to recoup uninsured losses in state court and Defendant RXO removed the case and filed a motion to dismiss, which was referred to a federal magistrate judge, who recommended granting RXO’smotion to dismiss.  The plaintiff only objected to the federal magistrate’s recommendation to dismiss the negligent brokering claim.  The district court ultimately adopted the magistrate’s recommendation, dismissing the broker negligence claim.  RXO argued that the Federal Aviation Administration Authorization Act (“FAAAA”) preempted the claim.  Plaintiffs argued that a negligence claim against a freight broker does not regulate or affect the prices, routes, or services of motor carrier and should not be preempted.  Plaintiffs argued that RXO had a duty to properly select any third party it hired to transport the shipment and breached that duty when it hired Wizard.  The court noted that the selection of a motor vehicle is a broker’s core service, and plaintiffs’ state law negligence claim was attempting to impermissibly regulate brokers in the performance of their core services and was thus, was preempted. 

COVERAGE

Clark v. Progressive Cnty. Mut. Ins. Co., 2024 U.S. Dist. LEXIS 96604, C.A. No. 6:23-CV-625 (W.D. La. May 30, 2024).  In this personal injury action arising from a motor vehicle accident involving a CMV, the plaintiff included direct-action claims against the commercial auto liability insurer, as is permitted under Louisiana law.  Nevertheless, the court granted defendant Progressive’s motion for summary judgment on all claims alleged against it on the ground that the defendant trucking company’s policy was cancelled prior to the subject motor vehicle accident.  The court found that the defendant trucking company was not an insured under defendant Progressive’s policy at the time of the accident and therefore did not have a duty to defend the defendant trucking company or driver.  The defendant trucking company applied for an insurance policy with Progressive before the accident and listed a Texas address.  Progressive issued a Texas commercial auto insurance policy, that contained a Form MCS-90 endorsement.  Progressive issued a new Policy Declarations page two months later, including a new Texas address for the trucking company.  Progressive mailed a Notice of Cancellation to the new Texas address with an effective date of July 13, 2022, for nonpayment of the premium.  The accident occurred the next day.  Progressive contended the policy was cancelled before the accident, and accordingly it owed no duty to defend or indemnify, and had no obligation to pay for plaintiff’s damages, except to the extent Plaintiff proved the MCS-90 endorsement was in effect and triggered by the accident.  Plaintiff argued that summary judgment could not be granted due to two questions of fact: 1) Progressive offered no evidence that it sent the cancellation letter to the proper address; and 2) the cancellation documentation with the Texas DMV and FMCSA showed an effective date after the accident.  The court disagreed, finding that Progressive satisfied any burden upon it as it related to the mailing of the Notice of Cancellation when it presented evidence showing that it sent the cancellation letter to the last known address or the motor carrier based on the new Policy Declarations page mailed two months after the issuance of the policy.  The court also held that the effective date of a cancellation of a policy is not based on when confirmations of the cancellations  of motor carrier-specific endorsements (i.e., MCS 90 and/or Form E/F endorsements) are received by the respective state or federal agencies.

United Specialty Ins. Co. v. Alra Logistics, LLC, No. 3:23-cv-00049-TES, 2024 U.S. Dist. LEXIS 94717 (M.D. Ga. May 28, 2024).  In this insurance coverage declaratory judgement action, the Court found that United Specialty Insurance Company (“USIC”) owed a duty to defend its named insured, Alra Logistics, LLC, and Alra’s alleged employee/contractor driver, Xavier Downer, in connection with a personal injury tort action pending in Georgia state court (the “Underlying Action”).  As such, the court denied summary judgment in favor of USIC.

The accident giving rise to the underlying tort action occurred in Georgia when Downer drove an Enterprise-owned, but Alra-leased, box truck into Jamela Smith’s residence. The operative pleading in the underlying tort case alleged Downer was operating on behalf of Alra at the time of the Accident, driving an Alra truck, and was carrying Alra-owned property.  In both the declaratory judgment and underlying tort action, USIC disputed certain of the allegations of the underlying tort complaint, including but not limited to Downer’s permissive use of the box truck and whether he was acting within the course and scope of his employment with Alra at the time of the Accident. 

In the insurance coverage declaratory judgment action, USIC argued the policy’s Unlisted Driver Exclusion and the Radius Exclusion excluded coverage for the claims against Alra and Downer.  USIC also argued Downer did not qualify as an “insured” under the policy and/or that Downer’s failure to cooperate excluded coverage in his favor under the policy.  In addressing each of these arguments, the court conducted an extended analysis of the current state of Georgia insurance coverage law for motor carriers. 

As a first matter, the court addressed choice of law to apply for the interpretation of the insurance policy.  Under Georgia’s choice of law rules, the court explained “[i]f the law to be applied to a contract dispute by a Georgia court or a federal court in Georgia is . . . created by judges, then ‘the common law as expounded by the courts of Georgia’ must govern.”  It then found that while the policy was issued by a Delaware-incorporated insurer with its principal place of business in Texas to a Pennsylvania-based insured, nevertheless “no out-of-state statute governs this case” and accordingly Georgia law applied to the interpretation of the insurance policy because the declaratory judgment action was pending in Georgia federal court.

With respect to the duty to defend, the court explained that under Georgia law, an insurance company’s duty is determined by comparing the allegations of the complaint with the provisions of the policy.  If the allegations of the complaint against the insured are “ambiguous or incomplete with respect to the issue of insurance coverage,” the insurer is bound to afford a defense.  The court further explained, however, “[t]he general rule is that ‘in making a determination of whether to provide a defense, an insurer is entitled to base its decision on the complaint and the facts presented by its insured.’”  “A different rule, however, applies when the complaint on its face shows no coverage, but the insured notifies the insurer of factual contentions that would place the claim within the policy coverage. In such a situation, Georgia law says that ‘the insurer has an obligation to give due consideration to its insured’s factual contentions and to base its decision on ‘true facts.'” 

Turning to the particular facts and arguments of the case before it, the court generally agreed with USIC that Georgia law will typically allow exclusions from coverage from an unlisted driver unless public policy disfavors such.  It confirmed “[i]nsurance companies may reject coverage for an individual expressly excluded from a policy so long as the exclusion is supported by consideration.”  The court, however, distinguished a prior Georgia case enforcing an unlisted driver exclusion because in that instance, the policy at issue was a personal lines auto liability policy, whereas Alra “is an interstate carrier.”  In the court’s assessment, such “is a notable distinction[,]” given the specific federal and Georgia requirements for insurance policies issued to interstate and Georgia intrastate motor carriers, which the court seemingly equates with “public policy, and which it discusses in detail later in its decision. 

As for the “radius of operation” exclusion, while the policy’s language attempted to limit coverage within 300 miles of Pittston, Pennsylvania—the reported primary place of the Named Insured’s operation—the court noted the policy included Additional Insured endorsements for states other than Pennsylvania, including Georgia, and further, listed the principal garaging location of two specifically-described vehicles on the policy in Missouri.  The court surmised from all of this that the insurer knew, or reasonably should have known, the insured required insurance beyond the 300 miles from Pittston, Pennsylvania.  The court then reasoned “[s]ince United Specialty is in the business of offering insurance to motor carriers and because Alra Logistics plainly included states outside of Pennsylvania, that is enough to say that Alra Logistics fulfilled its ‘responsibility to inform its insurer of its need for interstate coverage,’ and put United Specialty on notice of Alra Logistics’ status as a motor carrier.  That would, of course, invoke protections provided by the Motor Carrier Act of 1980, 49 U.S.C. § 10101, et seq., and Georgia’s Motor Carrier Act, O.C.G.A § 46-7-1, et seq.”  In so ruling, the court distinguished a prior Middle District of Georgia case that placed the onus upon the insurer to notify the insurer that it required coverage as an interstate motor carrier.  The court held “[i]n the absence of evidence showing that the insured informed the insurer of its need for interstate coverage, Waters recognized that courts refuse to engraft statutorily required endorsements onto insurance policies as a matter of law.  That’s not at all what happened here.”  The court stressed that Alra’s application listed states other than Pennsylvania; the policy itself mentioned other states; and “more importantly than that, the policy that United Specialty issued contained the very endorsement at issue in Waters.”  In the court’s view, “[t]he simple inclusion of that all-important endorsement in Alra Logistics’ policy along with . . . unrebutted testimony that United Specialty ‘kn[ew] exactly what [Alra was] do[ing]’ when it came to the nature of [Alra’s] business is sufficient to say that United Specialty knew it insured an interstate motor carrier and that the endorsement—if the underlying facts are there—could defeat the purpose of its own Radius Exclusion.” 

The insurer also attempted to avoid the duty to defend the driver, claiming he was an non-permissive user.  However, the court pointed to the insurer’s own Reservation of Rights notification in which it indicated Downer was “at best, a ‘permissive user’ as opposed to an insured.”  The same Reservation of Rights notification also indicated, to the extent Downer was a permissive user, he would only be entitled to state-minimum required coverage.  So, the court reasoned that the insurer itself acknowledged both permissive user status and minimum coverage requirements, which would include the requisite duty to defend. 

As for the non-cooperation of Downer as a basis to deny coverage, the court acknowledged the insurer’s efforts to secure cooperation by Downer, including but not limited to attempting service at three separate addresses and hiring a private investigator to locate him, albeit unsuccessfully.  Turning to the law on the topic, the court summarized the current status of Georgia law as follows: to justifiably deny coverage for an insured’s failure to cooperate an insurance company must show three things: (1) first, the insurance company had to reasonably request the insured’s cooperation in connection with an asserted claim; (2) second, the insured must have willfully and intentionally failed to cooperate; and (3) and third, the insurance company must demonstrate that the insured’s failure to cooperate prejudiced its defense of the claim.  From the court’s recitation of the facts, it appears it took no issue that the insurer satisfied the first two prongs of the test.  However, it found that it was premature to determine what, if any, prejudice might befall the insurer because despite Downer’s prior “absence” from assisting with the underlying tort action to date, Downer might nevertheless be located and/or appear and assist with the defense at trial, which might negate any prejudice to the insurer. 

In conclusion, with respect to the duty to defend, the Court explained “since a claim could potentially come within the policy and since there is so much uncertainty as to whether Downer was permissive user of the Enterprise box truck, United Specialty’s Motion for Summary Judgment regarding its duty to defend Downer is DENIED. Notwithstanding Downer’s lack of appearance in this action, the ambiguous nature of the underlying complaint compels United Specialty to press on in providing him a defense.”

With respect to the insurer’s duty to indemnify under the terms of the policy, the court stressed “[i]f there is no duty to defend, there is no duty to indemnify.”  That said, the court found the insurer’s request for a declaration that it does not have a duty to indemnify was not ripe because there had been no determination on liability in the underlying action.

The Court next turned to address the MCS 90 endorsement on the policy and what impact, if any, the Georgia Motor Carrier Act may have on the foregoing analysis.  With respect to the MCS 90 endorsement, the court acknowledged Georgia adheres to the “trip specific” approach, which holds “that the MCS-90 endorsement is not applicable when an interstate carrier is engaged solely in intrastate commerce of nonhazardous materials during the specific trip it was engaged in at the time of the accident.”  The court therefore reasoned “[i]f Downer was not ‘presently engaged in the transportation of property in interstate commerce,’ then the MCS-90 endorsement will not apply to provide coverage.”  But critically, the court surmised “[i]f an item in the box truck was supposed to go to South Carolina, for example, then that specific trip would be interstate.”  The court found there was a fact question as to whether Downer was even engaged in commerce, much less interstate commerce, at the time of the Accident, but nevertheless held such fact issues should be left to be resolved in the underlying tort action.  As such, the court held it was premature to determine whether USIC might owe any duty to defend or indemnify Alra Logistics under the MCS 90 endorsement. 

Last, with respect to the impact of the Georgia Motor Carrier Act on the outcome of the declaratory judgment action, the court stressed the overarching purpose of the Act was “to protect members of the general public against injuries caused by the negligence of a Georgia motor carrier.”  It went on to explain “motor carrier,” under the Act, is defined as “[e]very person owning, controlling, operating, or managing any motor vehicle, including the lessees, receivers, or trustees of such persons or receivers appointed  by any court, used in the business of transporting for hire persons, household goods, or property or engaged in the activity of nonconsensual towing pursuant to O.C.G.A. § 44-1-13 for hire over any public highway in this state.” Georgia law defines “for hire” to mean “an activity relating to a person engaged in the transportation of goods or passengers for compensation.”  And finally, “carrier” is “a person who undertakes the transporting of goods or passengers for compensation.”  The court then turned to the allegations of the complaint in the underlying tort action, which alleged Downer was working on behalf of his Alra in a truck provided by Alra, carrying goods belonging to Alra, at the time of the Accident.  Finding that the allegations with respect to the “for hire” component were, at best, ambiguous, the court stressed the insurer had an obligation to defend its insured under the obligations of the Act.  In summarizing the impact of the Georgia Motor Carrier Act upon the duty to defend, the court explained as follows:

When Georgia’s Motor Carrier Act applies, as it very well could in this case, the important takeaway from Sapp is a simple one: “any provisions in [an] insurance policy . . . that would serve to reduce or negate [an insurance company’s] obligations to the motoring public . . . are void and of no effect.” 706 S.E.2d at 649 (citing Great Am. Indem. Co. v. Vickers, 183 Ga. 233, 188 S.E. 24, 26 (Ga. 1936) (“any provision in the policy of insurance, in so far as it may conflict with the plain provisions of the [motor carrier] statute, must give way, and is superseded by the statutory provisions”)). The Georgia Supreme Court invalidated a radius-of-use limitation in Sapp and held that it must give way to Georgia’s Motor Carrier Act and its purpose of protecting the motoring public. Id. at 648-49. Consequently, the extremely similar provisions from the policy United Specialty issued to Alra Logistics—the Unlisted Driver Exclusion and the Radius Exclusion—are unenforceable, and because there is an ambiguity presented by allegations from the underlying complaint, the required resolution, or end result, is to find in favor of a duty to defend. Id. Therefore, the Court cannot declare that United Specialty does not have a duty to defend Alra Logistics.

WORKERS COMPENSATION

No cases of note to report this month.