Bits & Pieces

Volume 19, Edition 12

We send you best wishes for the happiest New Year.   As we head off into the sunset of 2016 we are so grateful for our relationship with you all.  It is a pleasure to work with you and learn from you. 2017 should be an interesting year and we look forward to seeing where things lead.  Expect new and exciting changes at CAB as we work at creating more ways to help you analyze motor carrier operations.

This month we report.

VEHICLE TO VEHICLE TECHNOLOGY – The DOT has released a proposed rule  on the development of vehicle-to-vehicle technologies that would provide advance warning of potentially life-threatening crashes for light vehicles.  The V2V technology would share data in a common language for such variables as a vehicle’s speed, direction and position at a rate of 10 times per second. The technologies would provide 360-degree awareness and include such systems as automatic emergency braking for adaptive cruise control to automatically avoid or lessen imminent crashes.  Of course the rule will take five years to be implemented.

DRUG TESTING – The FMCSA is not increasing the number of random drug tests in 2017.  A year ago they reduced the percentage to 25% and they intend to keep it at level. Federal regulations require that if there are two consecutive calendar years in which the rate of positive tests, as estimated by a Management Information System data survey for controlled substances, is less than 1%, the agency has the discretion to lower the annual testing rate to a minimum of 25% of carriers’ driver positions. If the positive test rate is higher than 1%, the testing rate will automatically revert to 50%. FMCSA said the 2014 survey estimated the rate of drug usage at 0.9%. In 2012, the usage rate for drugs was 0.6% and in 2013 was 0.7%. Violation rates for blood alcohol content was 0.08% in 2014, 0.03% in 2012 and 0.09% in 2013.

NEW ENTRANT REQUIREMENTS – The rules have been released for anticipated new entrants.   Effective 2020 proposed drivers will have to complete non wheel driver training before getting a CDL. There will be a proficiency-based approach that will accommodate individuals who learn at different paces. The trainers will be required to check off on a list of skills as each is mastered. Trainers with substandard performance can face removal from the registry and would no longer be permitted to train new drivers.

CARGO THEFT – CargoNet released its list of the top places for cargo thefts.  Los Angeles and Dallas lead the way.  In LA more than 1/3 of the thefts were at warehouse or distribution facilities.   Two other California counties made the Top 10 list, as did two other Texas counties, including Tarrant County, which includes the Arlington/Fort Worth metro area. Chicago’s Cook County, and nearby Will County along with Miami-Dade County, Fla., and Middlesex County, N.J. complete the list.

HOUSEHOLD GOODS CONSUMER PROTECTION – The FMCSA announced the appointment of 15 members to the Household Goods (HHG) Consumer Protection Working Group (HHG Working Group). The group is charged with providing recommendations on how to better educate and protect HHG moving customers (consumers) during interstate HHG moves. This new collection of information is for the National Consumer Complaint Database (NCCDB), which is an online interface allowing consumers, drivers and others to file complaints against unsafe and unscrupulous companies and/or their employees, including shippers, receivers and transportation intermediaries, depending on the type of complaint. These complaints cover a wide range of activities, including but not limited to driver harassment, coercion, movement of household goods, financial responsibility instruments for brokers and freight forwarders, and Americans with Disability Act (ADA) complaints.

HOURS OF SERVICE – A temporary spending bill will keep the 34-hour restart option in place for the time being   The bill includes a provision that provides that the FMCSA cannot enforce two restrictions it had placed on the 34-hour restart option in July 2013 unless the agency can show that those restrictions significantly improve safety and health. The restrictions include a requirement that each restart break include two periods from 1 a.m. to 5 a.m. and be limited to once per week. The restart provision allows truck drivers to reset their weekly accumulation of on-duty time by taking 34 consecutive hours off duty.

URS DELAYED – As you know from our news blast this month The FMCSA has delayed the final implementation of the Unified Registration System (URS) rule.  A new date has still not been announced. The FMCSA indicated that it needs more time in the development of the centralized database and migration of data from multiple platforms.  We will, of course, keep you advised of any developments.

CSA UPDATE – The list of acute and critical violations has been changed under CSA.  The acute and critical violations are those found during an investigation into a motor carrier’s operation that resulted in an alert status in the SMS system. The list was updated to reflect violations currently appearing in “Appendix B to Part 385—Explanation of safety rating process.” Below are the additions to the SMS Methodology list:

Violation Violation Description BASIC Violation Type
395.8(a)(1) Failing to require a driver to prepare a record of duty status using appropriate method HOS Compliance Critical Violation
395.8(a)(2)(ii) Failure to require a driver to submit record of duty status in a timely manner HOS Compliance Critical Violation
395.8(e)(1) Making, or permitting a driver to make, a false report regarding duty status HOS Compliance Critical Violation
395.8(e)(2) Disabling, deactivating, disengaging, jamming, or otherwise blocking or degrading a signal transmission or reception; tampering with an automatic on-board recording device or ELD; or permitting or requiring another person to engage in such activity HOS Compliance Acute Violation
395.11(b) Failing to require a driver to submit supporting documents HOS Compliance Critical Violation
395.11(c) Failing to retain types of supporting documents as required by §395.11(c) HOS Compliance Critical Violation
395.11(e) Failing to retain supporting documents in a manner that permits the effective matching of the documents to the driver’s record of duty status HOS Compliance Critical Violation
395.11(f) Altering, defacing, destroying, mutilating, or obscuring a supporting document HOS Compliance Critical Violation
395.30(f) Failing to retain ELD information HOS Compliance Acute Violation
396.11(a)(3) Failing to correct Out-of-Service defects listed by driver in a driver vehicle inspection report before the vehicle is operated again Vehicle Maintenance Acute Violation


It was a quiet month on the judicial front.


What happens when a motor carrier is put out of service and then the government rescinds the order?  The 7th Circuit held that the motor carrier had no on-going injury since the order was rescinded.  Even though it could happen again, the motor carrier was limited to those legal remedies which can be used to compel the DOT to justify its steps.  This is a good case to read to understand the steps taken to shut down a carrier.  (DND International, Inc. v FMCSA, 2016 WL 7260672)

The Western District of Virginia dismissed a punitive damage action against a driver who drove the wrong way on an entrance ramp to exit a rest area.  The Court held that there was insufficient evidence to find that the driver exhibited reckless disregard for others.  The Court did not, however grant judgment to the vehicle owner who claimed he had only loaned the vehicle to the driver. The Court held that there was a reasonable possibility that a jury could find that that the owner was responsible for and/or controlled the operation of the vehicle.  (Lester v. SMC Transport, 2016 U.S. Dist. LEXIS  177905)  In a related insurance case an insurer sought a declaration that it provided no coverage to the defendants for liability which it may have to the plaintiff.  The insurer provided coverage for a tractor which was being towed by a second tractor at the time of the loss.  The Court held that the named insured was entitled to coverage as the tow of the tractor was reasonable and constituted the use required under the auto policy.  The Court concluded that the operator of a tractor performing the tow was not covered under that same policy, exposing the insurer of that carrier to an MCS-90 exposure as there was no coverage under the policy.   (Falls Lake Insurance Company v Martinez, 2016 WL 7439425)


The Northern District of Illinois held that it would not dismiss a Carmack action against a defendant on the basis that the loss involved a shipment from Mexico to the U.S. and was therefore not subject to the Amendment.  While that rule would be true if there was a single through bill of lading, there remained questions of fact as to whether there was a through bill of lading.  (Hawkeye Engineering v. Perimeter International, 2016 WL 7231611)

Oh what a tangled web we weave….  The Northern District of Illinois held that a third party complaint would withstand a motion to dismiss when there was a question of fact as to whether the third party plaintiff was acting as a broker or a motor carrier.  While a motor carrier has rights against a downstream carrier, and the third party action would have a basis for recovery, a broker may not.  The issue would have to be resolved in the underlying claim.  (Coyote Logistics, LLC. v. All Way Transport, 2016 WL 7212487)

The Third Circuit held that while a motor carrier must offer choices for rates, it could do that by providing subsets of liability, i.e. certain limitations for certain types of loss. So when the motor carrier offered increased liability for negligent losses, but not other types of loss, the limitation was still valid. (Choi v. ABF Freight, 2016 WL 7212154)

Volume 19, Edition 11

Ho Ho Ho.  Welcome to the holiday season.  Thanksgiving is behind us and the holiday rush has begun.  Hopefully it will be quiet for all at work so we can all focus on holiday events!

This month we report:

SECRETARY OF TRANSPORTATION NOMINEE – President-elect Trump has announced that he will nominate Elaine L. Chao to head the Department of Transportation. Ms. Chao had been head of the Department of Labor throughout the administration of George W. Bush.

CARGO THEFT REPORT – Freightwatch has released the third quarter cargo report.  The number of thefts went up but the value of the thefts went down. This quarter there were 193 thefts, a jump up from 169.  The average load value was $120,536. Electronics and Home and Garden products were 1 in 5 of the shipments reported stolen. Food and Beverage loads took up 17 percent of all thefts. California, Texas, Florida, Illinois and Tennessee were the top contenders for the theft locations.   What gets stolen more often? 78 percent were full truckloads, with 75 percent of the thefts in unsecured parking.  Think about those unattended vehicle endorsements.

NTSB REPORT – NTSB has released its 10 Most Wanted List for the next two years, addressing issues related to transportation crashes across all modes of transportation, including aviation, highway, marine and rail. Fatigue, collision avoidance technology, medical fitness and driver distractions lead the pack of concerns.  Technological changes are the main focus of the NTSB wish list, with an expectation that improved technology will minimize crash risk.   You can view the whole wish list here.

ANTI-INDEMNITY STATUTES – New York joined the majority of states which have impacted the ability of shippers to require indemnity from motor carriers. New York now precludes provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make those provisions void and unenforceable.  Affected contracts in New York are defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property for compensation or hire by the motor carrier, entry on property to load, unload, or transport property. The protection does not apply to intermodal chassis, containers or other intermodal equipment. The new law took effect immediately. To date, 45 states forbid unfair provisions from contracts. New Jersey was added to the list on Nov. 1.  The only states yet to adopt protections are Delaware, Mississippi, New Hampshire, Rhode Island and Vermont.

DISTRACTED DRIVING – The NHTSA has issued guidelines to address distracted driving.  The guidelines are designed to encourage portable and aftermarket electronic device developers to create options that reduce driver distraction.  The guidelines encourage manufacturers to implement features such as pairing, where a portable device is linked to a vehicle’s infotainment system, as well as Driver Mode, which is a simplified user interface. Both pairing and Driver Mode will reduce the potential for unsafe driver distraction by limiting the time a driver’s eyes are off the road, while at the same time preserving the full functionality of these devices when they are used at other times.  You can view the guidelines here.

MEXICAN INTERCHANGE – The FMCSA has lifted its prohibition on the leasing of equipment from Mexican domiciled carriers to US motor carriers regardless of the destination of the cargo.  The U.S. carrier must assume complete responsibility for the operation of the equipment.

RELEASE OF DRIVER INFORMATION – Generally cases are reported below, but we thought this was more relevant in the news section.  The 1st Circuit rejected a suit by drivers which sought to prevent the FMCSA from releasing non-serious driver related safety violations to employers.  The Court of Appeals held that the FMCSA’s obtaining consent forms signed by drivers were not illegitimate and not ambiguous or coercive.   The Court held that the interpretation by the FMCSA that it is authorized to release the information should be permitted to stand. (Thomas O. Flock v. US DOT, 2016 WL 6135471)



A reminder to underwriters that motor carriers are liable for loss or damage to cargo even if the loss occurred in the hands of another carrier.  The Northern District of Illinois held that an originating carrier was liable for the actions of a delivering carrier under the Carmack Amendment.  The Court also held that the Carmack Amendment did not preempt a breach of contact claim against a defendant who might also be liable as a broker.  Both causes of action were permitted to proceed.  (Mitsui Sumitomo v. Wheels MSM Canada, Inc., 2016 WL 6395428)

A default judgment was granted against a motor carrier in a broker-carrier case in the Eastern District of California.  The Court held that the broker was entitled to recover the payment made to the shipper and was also permitted to obtain attorney’s fees under the broker-carrier agreement. (Direct Connect Logistics, Inc. v. Road Kings Trucking, Inc., 2016 WL 6608924)

Another broker got a default judgment as to liability against a motor carrier in the District Court in New Jersey but had to go back to Court to determine the amount of damages and prove that a shipment of food was totally damaged following an overturn. (RLS Distribution v. Small, 2016 WL 6634873)

The Western District in Texas dismissed a complaint against a Hawaiian motor carrier for damage to a shipment of household goods transported from Hawaii to Texas.  The Court held that that there was no jurisdiction in Texas over the Hawaiian carrier and that the state law claims which were alleged were preempted by the Carmack Amendment. (Cioppa v. Schultz, 2016 US Dist. LEXIS 156066)

The issue of preemption still comes up every month. The Central District in California once again upheld the doctrine, dismissing all state causes of action in a household goods damage suit. (Crane v Zip2Zip Transfer & Storage ,2016 WL 6839329)

The Middle District of Louisiana also upheld the preemptive effect of the Carmack Amendment, concluding that a motor carrier limited its liability under the Amendment.  The Court held that the shipper’s use of the carrier’s on line tool which noted the limitation was enough to establish notice and opportunity  (Houston Specialty Ins. Co. v. Freitz Transportation, 2016 WL 6897793)


The District Court in Montana did not permit removal of a case a year after it commenced even though the non-diverse party was finally dismissed. The Court held that there was no evidence that the non-diverse party was added in bad faith, enforcing the one year removal rule. The Court also held that the Federal Motor Carrier Safety Act did not give rise to federal question. (Larson v. Fedex Ground Package System, 2016 WL 6602639)

The Western District of Texas held that while one would generally only look at the complaint and the policy to determine a duty to defend, the Court is permitted to consider additional factors which were readily ascertainable, were relevant to coverage and did not determine whether allegations in the complaint were true.  The Court held that it could consider whether a vehicle was leased to another business for the purpose of addressing the business use exclusion.  The insurer was held not to have a duty to defend or indemnify. (Sentry Select Ins. Co. v. Drought Transportation, LLC. 2016 WL 6236375)

Over in the Middle District of Pennsylvania, the Court rejected a motor carrier’s request to dismiss a punitive damage claim as well as claims for negligent qualification, hiring, supervision, monitoring and training.  The Court held that that there was enough evidence that certain parties at the motor carrier may have been aware of problems with the driver and that a reasonable fact finder could find that the motor carrier was aware of the problems and therefore liable to the plaintiff.  (Botey v. Green, 2016 WL 6395900)

An excess insurer lost its bid to reject coverage for a serious bodily injury claim when the motor carrier failed to give prompt notice of the loss to the excess carrier. The 8th Circuit held that while the notice was not timely the insurer had failed to establish prejudice or that it attempted to investigate when it finally got notice and claimed the primary insurer had not adequately investigated. (Century Surety Company v. Jim Hipner, LLC. 2016 WL 6892210)

Whether a courier driver was an employee or an independent contractor of the courier service was held to be a question of fact which precluded summary judgment on the applicability of coverage under the courier services business auto policy for the injuries sustained by plaintiff. The 1st Circuit Court of Appeals in Louisiana held that questions remained as to whether the driver’s use of a vehicle in connection with the delivery service business permitted coverage under the policy.  (Bouquet v. Williams, 2016 WL 6350854)

The District Court in Maryland granted judgment to an insurer concluding that the temporary substitute clause under a commercial auto policy did not create coverage when the insured hired another party to perform a job.  Even though a covered auto was out of service, the whole job was outsourced and therefore the vehicle was not a temporary substitute under the direction and control of the insured.  The Court also held that the MCS-90 was inapplicable when the driver could not be considered an insured under the policy. (Titan Indemnity Co v. Gaitan Enterprises, 2016 WL 6680112)

The Western District of Missouri held that plaintiff could not plead a negligence per se claim against a motor carrier based upon federal safety regulations. The Court also held that the plaintiff had not pled a claim for punitive damages against the driver or the trucking company. (Charger v. Register, 2016 Dist. LEXIS 155414)

A plaintiff tried to bring an action in the District Court in Alabama against a tow company for conversion, emotional distress and negligent or wanton supervision arising from the towing of her vehicle.  Plaintiff claimed that 49 USC §14501 gave rise to a cause of action which preempted any state law claim and permitted jurisdiction in federal court.  The Court held that the claims of the plaintiff were not completely preempted by the statute and that at best the plaintiff had established that she pled a state law cause of action which might be preempted by the statute. The Court rejected jurisdiction in the federal court sending the case back to state court. (Jordan v Blackwell Towing, 2016 US Dist. LEXIS 1499821)

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