United States District Court,

W.D. Oklahoma.

Eric BROWN, Plaintiff,

v.

USA TRUCK, INC. and Jimmy Watkins, Defendants.

 

No. CIV–11–856–D.

Sept. 11, 2013.

 

Curtis J. Thomas, Reid E. Robison, Mcafee & Taft, Oklahoma City, OK, David C. Degreeff, Victor A. Bergman, Shamberg Johnson & Bergman, Kansas City, MO, for Plaintiff.

 

Curtis J. Roberts, F. Jason Goodnight, Jeremy K. Ward, Feldman Franden Woodard & Farris, Tulsa, OK, for Defendants.

 

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND JUDGMENT

TIMOTHY D. DeGIUSTI, District Judge.

I. Background:

*1 Plaintiff Eric Brown (“Brown”) brought this action to recover damages for injuries allegedly sustained in an August 28, 2009 accident in which Brown’s parked tractor-trailer was struck by a tractor-trailer driven by Defendant Jimmy Watkins (“Watkins”). As explained in more detail herein, while attempting to park his tractor-trailer, Watkins backed into Brown’s vehicle. At the time, Watkins was employed by Defendant USA Truck, Inc. (“USA Truck”), and both defendants admit that Watkins was acting within the scope of his employment when the accident occurred. Watkins also admits that he was at fault, and there is no dispute that USA Truck is liable for any damages that may be awarded to Brown. The disputed issues involve the extent to which Brown was injured as a result of the accident and the amount of damages that are properly recoverable.

 

Brown alleges that Watkins’s negligence caused serious injuries, resulting in pain and emotional distress, requiring extensive medical treatment, and rendering him unable to work in any capacity. In addition to claiming damages for past medical expenses, pain and suffering, and lost earnings, he seeks damages for both future medical and psychological care and lost income.

 

Although Defendants agree that Brown may recover reasonable damages for expenses related to injuries caused by the August 28, 2009 accident, they contend his requested damages are excessive. They argue that a substantial portion of his claimed damages are not based on injuries caused by the accident, but result from injuries sustained in a later unrelated incident. They also contend that some of the requested damages are based on alleged current physical impairments which were not sustained in or exacerbated by the accident, but result from the natural consequences of age. Additionally, Defendants argue that Brown’s requested future damages for both medical treatment and lost income are speculative and not supported by a preponderance of the evidence.

 

At the parties’ request, the Court conducted a non jury trial. Prior to trial, the parties submitted stipulations of fact. See Amended Final Pretrial Report [Doc. No. 70], at ¶ 3. Commencing on April 22, 2013, the Court conducted a five-day trial. The Court heard the testimony of numerous witnesses, including expert witnesses, and admitted extensive exhibits. Prior to trial, the parties designated additional testimony to be presented by deposition. Although some deposition testimony was received during trial, with the parties’ consent the Court reviewed some of the transcribed and videotaped depositions after the conclusion of testimony during the trial. Following the trial, the parties submitted amended proposed findings of fact and conclusions of law.

 

Having reviewed the evidence and the parties’ legal arguments, the Court finds and concludes as follows.

 

II. Factual Record Before the Court:

 

A. Stipulated facts:

 

Prior to trial, the parties stipulated to the following facts, which are conclusively found:

 

*2 At all relevant times, Watkins was an employee of USA Truck, and was working within the scope and course of his employment at the time of the August 28, 2009 accident.

 

Brown drove the following truck driving trips for Rush Trucking Company between January 27, 2010 and March 9, 2010:

 

 

DATE

TO

FROM

MILEAGE

01/30/10

Claycomo (Mo.)

Nogales (Az.)

1221 1

 

 

FN1. The parties’ stipulation in the Amended Pretrial Report [Doc. No. 70] lists this mileage as 1211 instead of 1221. The Court assumes the 1211 miles listed for January 30, 2010 contains a typographical error, as all other mileage for the same trip is 1221. The Court has changed that portion of the stipulation accordingly.

 

 

02/01/10

Nogales

Claycomo

1221

02/08/10

Nogales

Claycomo

1221

02/13/10

Claycomo

Nogales

1221

02/16/10

Nogales

Claycomo

1221

02/19/10

Claycomo

Nogales

1221

02/21/10

Nogales

Claycomo

1221

02/26/10

Claycomo

Nogales

1221

03/01/10

Nogales

Claycomo

1221

03/07/10

Claycomo

Nogales

1221

03/09/10

Nogales

Claycomo

1221

 

 

On March 9, 2010, Brown completed his last trip, from Nogales, Arizona to Claycomo, Missouri.

 

Brown filed an occupational accident claim following an incident on March 9, 2010.

 

Brown’s summary of medical expenses accurately reflects the services and the amounts billed for services he has received since August 28, 2009. The amounts of the claimed medical expenses are reasonable for the services provided. However, the defendants do not agree that any of these services were necessary, or that any of the services or charges result from the August 28, 2009 motor vehicle accident.

 

B. Trial evidence and post-trial evidentiary submissions:FN2

 

FN2. Certain deposition testimony and related exhibits were submitted to the Court as directed for consideration following the taking of in-court testimony.

 

The evidence reflects Brown’s background and involvement in the trucking business prior to the August 28, 2009 accident. According to Brown, he has an eighth-grade education; he may have completed a high-school equivalency examination (“GED”), but is uncertain that he did so. After working in various jobs, he decided to pursue a career as a commercial truck driver. Brown trial testimony (hereinafter “Brown tr. test.”). He graduated from truck driving school in 2000, and obtained a commercial driver’s license. Thereafter, he worked as a truck driver for several companies. Id . At the time of the accident at issue, Brown was 41 years old.

 

In January of 2008, Brown and his longtime companion, Diana Webster (“Webster”),FN3 acquired title to a 2005 Freightliner Tractor. Webster paid for the tractor-trailer in part by obtaining a second mortgage on her home and a line of credit. Webster tr. test. The resulting cost, with financing charges, was approximately $82,626. Id. Brown and Webster formed a company, Crosswinds Trucking (“Crosswinds”), for the purpose of working as owner-operators. Initially, both were drivers, but Webster stopped driving when she was diagnosed with diabetes. Brown then became the only driver for Crosswinds. Brown and Webster tr. test. Webster was in charge of maintaining all documents and records for Crosswinds. Brown and Webster lived together in Webster’s home in Plattsburg, Missouri. Id.

 

FN3. Webster was initially also a plaintiff in this lawsuit, and she sought recovery of damages on her own behalf. Prior to trial, however, she dismissed all her claims against the defendants. See Stipulation of Dismissal [Doc. No. 39].

 

In August of 2009, Crosswinds applied to Rush Trucking Corporation (“Rush”) to become an independent contractor for Rush, with Brown acting as an owner-operator/truck driver. Plaintiff’s Ex. 7. Effective August 25, 2009, Brown, doing business as Crosswinds, entered into an Independent Contractor Service Contract. Plaintiff’s Ex. 14. This contract was in effect at the time of the August 28, 2009 accident underlying Brown’s claims in this lawsuit.

 

*3 In the application to Rush, Brown expressed a preference for a regular route between Claycomo, Missouri, which is near his residence, and Nogales, Arizona. Id. According to the testimony of both Brown and Webster, Brown hoped that his contract with Rush would result in three round trips between Claycomo, Missouri and Nogales, Arizona every two weeks, which Brown described as the equivalent of three one-way trips per week, for a total of 3,663 miles per week. There is no evidence that Rush guaranteed this particular route or amount of work. The Rush contract does not specify or guarantee the number of future trips to be completed by Crosswinds, and does not specify a designated route. Plaintiff’s Ex. 14.

 

On August 20, 2009, Brown underwent a required Department of Transportation physical examination to determine his physical condition and fitness to work as a truck driver. No problems or abnormalities were reported. Plaintiff’s Ex. 11.

 

On August 28, 2009, Brown made his first trip for Rush, driving from Claycomo to pick up a load in Frederick, Oklahoma and return it to Claycomo. Brown tr. test. The August 28 accident occurred while Brown was returning to Claycomo from Frederick. Brown and Webster tr. test. He stopped for a rest break, parking his truck in the lot adjacent to Love’s Country Store (“Love’s”) near Medicine Park, Oklahoma. At the time of the accident, Brown was asleep in the sleeping compartment in the rear of the truck’s cab. The compartment was separated from the driver/passenger area by a closed curtain; it contained a bunk-bed type structure, with a metal frame. Brown tr. test.

 

Watkins was driving a semi-tractor truck for USA Truck on August 28, 2009, and he also stopped at the Love’s parking lot for a rest break. Brown’s vehicle was parked when Watkins arrived. While attempting to park by backing into the space adjacent to Brown’s truck, Watkins backed into Brown’s truck, striking the front driver’s side. The accident involved two similarly-sized vehicles. Brown and Watkins tr. test.

 

Watkins admitted he backed into Brown’s parked tractor-trailer and that he is solely responsible for the collision. Watkins tr. test. He recalled that, when he first attempted to back into the parking space, he felt a bump and thought he had backed into the curb. Id. He then pulled forward and again attempted to back into the parking space, and felt another bump. Id. At some point, he exited his vehicle and realized that he had hit another vehicle. Id.

 

There is conflicting testimony regarding the number of times Watkins hit Brown’s truck. According to Brown, Watkins backed his truck into Brown’s truck three times. Brown tr. test. Watkins was uncertain about the number of collisions, but he did not think he hit the truck more than twice. Watkins tr. test. Officer Robert Chavez, the investigating law enforcement officer who interviewed Brown and Watkins separately shortly after the accident, reported that both men told him that Watkins’s vehicle struck Brown’s vehicle three times. Chavez tr. test. via video depo., transcript, p. 28, line 16–p. 31, line 21. Officer Chavez prepared an Oklahoma Traffic Collision Report, and it states that Watkins struck Brown’s vehicle three times. Plaintiff’s Ex. 19, p. 4.

 

*4 Enrique Bonugli, a mechanical engineer who physically inspected Brown’s vehicle after the accident at the request of Defendant’s expert witness, Dr. Charles E. Bain, reported to Bain that the “observed damage pattern was also the result of two or possibly three impacts.” Bain tr. test. Plaintiff’s expert witness, Steven Christoffersen, P.E., testified that photographs of Brown’s vehicle after the accident reflect damage consistent with at least two impacts, but he believes there were three impacts. Christoffersen tr. test.; photographs introduced as Plaintiff’s Exs. 84, 85, 89.

 

There is evidence that Brown later told a medical provider that two impacts occurred, but he later reported to the Social Security Administration that four impacts occurred. Defendants’ Ex. 23A, p. 18. Brown also reported that his tractor was pushed sideways approximately three inches by the impact or impacts of Watkins’s vehicle. Defendants’ Ex. 29E, p. 111. He testified that his tractor was pushed both backwards and sideways. Brown tr. test. The Court finds Officer Chavez’s testimony regarding reports he received from Brown and Watkins at the scene to be fully credible, and the most reliable indication regarding the number of impacts with Brown’s truck.

 

There was also conflicting testimony regarding the likely speed of Watkins’s vehicle at the time of the impacts. Watkins testified that he was proceeding at an extremely slow speed in order to maneuver his truck into the space. The evidence shows that there was minimal physical damage to Brown’s vehicle and no physical damage to Watkins’s vehicle, and Watkins was likely to have been “riding” his clutch while reversing into a tight location. Defendants’ Ex. 7, p. 11; Plaintiff’s Ex. 47; Brown tr. test.; Watkins tr. test.; Dr. Bain tr. test. Plaintiff’s expert witness, Steven Christoffersen, P.E., based his opinions regarding the force of the impacts on an estimated range of speed from 2.45 to 6 miles per hour. Christoffersen tr. test. If Watkins was braking or “riding” the clutch, the speed could be less than 2.45 miles per hour. Christoffersen did not base any opinions regarding the force of impact on a speed less than 2.45 miles per hour.

 

The evidence shows that, upon the initial impact, Brown was awakened from sleep and was disoriented. He testified that he stood up in the sleeping area and then, upon a second and third impact, was thrown against the metal frame of the bunk with significant force. He described the resulting impacts as causing him to be thrown around the interior of the cab in a forward and backward direction as well as side-to-side. He believes the extensive current physical problems he describes were all caused when his body struck objects or structures within the sleeping compartment as a result of these impacts. Brown tr. test.

 

According to Officer Chavez, when he spoke with Brown shortly after the accident, Brown was somewhat disoriented because he had been sleeping, but he was able to comprehend Chavez’s questions and provide clear answers. Chavez tr. test. Brown did not have visible injuries, and did not complain of injury or pain; Chavez thought his main concern was whether his truck was damaged. Id. Emergency medical personnel who were called to the scene described Brown as “badly shaken up from sleeping.” Plaintiff’s Ex. 20, p. 110. Although they offered to transport him to a medical facility for examination, he refused treatment. Id. The only medical treatment provided to him was a bandage on a small cut in the area of his upper right shoulder. Brown tr. test.; Chavez tr. test.

 

*5 Officer Chavez noted the damage to Brown’s vehicle, which included a bent front bumper. Chavez tr. test. He and others assisted Brown in bending the bumper so that it could be safely steered. Id. There was also damage to the casing around a headlight on the driver’s side, but the light was operating. Id. There was no visible damage to Watkins’s vehicle.

 

Brown testified that he telephoned Webster to inform her of the accident. He then went to a nearby restaurant and bar, where he had dinner and drank a beer. Watkins was also at that location, and he offered to buy Brown a beer, but Brown declined. Both Brown and Watkins testified that Watkins repeatedly apologized to Brown for the accident, and Watkins assisted in bending the bumper on Brown’s vehicle. Brown and Watkins tr. test.

 

Brown slept in his vehicle that night and, the following morning, drove to Rush’s location in Claycomo and then to his home in Plattsburg. Brown tr. test. He was extremely sore the morning after the accident, and experienced increasing discomfort after he returned home. He made an appointment for a medical examination with his regular physician, Jane Daffron, M.D., on the following Monday.FN4 Brown tr. test.

 

FN4. The accident occurred on a Friday night, and he returned home on Saturday.

 

Dr. Daffron’s records reflect that Brown told her he was sleeping in his truck when it was hit by another truck; he reported he was thrown backwards and hit his right shoulder and neck. He told her that he had a headache, and pain in his neck, radiating down his right arm. She diagnosed a muscle spasm, and prescribed pain medication and muscle relaxants. She also ordered a cervical spine x-ray. Plaintiff’s Exs. 202 at p. 16 and 49 at p. 1. The x-ray was performed on September 24, 2009, and was negative for cervical spine injury. Plaintiff’s Ex. 202, p. 47. On October 2, 2009, a cervical Magnetic Resonance Scan (“MRI”) was also performed.

 

After Brown complained of continuing pain in his right shoulder and numbness in his right arm, Dr. Daffron recommended physical therapy. She also referred him to Dr. Clifford Gall, a board certified neurosurgeon, for examination. Dr. Gall examined Brown on October 6, 2009. Brown’s only complaints at the time were pain in his neck, shoulder, and arm, with some weakness and numbness in his arm. Dr. Gall tr. test. via videotaped deposition. Dr. Gall reviewed the September 24 x-ray, and agreed it showed no cervical injury. He also evaluated the October 2 cervical MRI, and determined it also reflected no injury. Dr. Gall noted the MRI showed cervical degenerative disc disease, a condition common in individuals in Brown’s age group; cervical disc degeneration is chronic in nature, and Brown’s cervical condition did not result from an acute traumatic injury. Dr. Gall videotaped tr. test., transcript p. 28 lines 18–25, p. 29, lines 1–8; p. 16, lines 2–6, p. 30, line 18 through p. 31, line 16; Plaintiff’s Ex. 202, p. 48.

 

Dr. Gall also determined that Brown should undergo an electromyography (“EMG”) examination, and Brown agreed. On October 15, 2009, an EMG was performed by Dr. Salman Malik, a certified neurologist. The purpose of the EMG is to determine whether nerve or muscle damage exists in the patient. Dr. Malik tr. test. According to Dr. Malik, Brown’s EMG was designed to determine the existence of such damage in the cervical spine and upper extremities. Id. Dr. Malik found no evidence that Brown had any abnormalities reflecting nerve or muscle damage. However, there was evidence of very mild borderline carpal tunnel syndrome in his left hand, and possible mild carpal tunnel syndrome in his right hand. He also found indications of cervical disc degeneration, which he described as a chronic condition. Dr. Malik tr. test. He described cervical disc degeneration as an age-related condition. According to Dr. Malik, the EMG did not show evidence of cervical radiculopathy. Id.

 

*6 Dr. Gall reviewed Dr. Daffron’s records, and noted that the shoulder injection she performed had eased Brown’s pain. On or about October 19, 2009, Dr. Gall recommended that Brown have physical therapy, and Brown did so. He began therapy at Liberty Hospital Outpatient Rehabilitation on November 9, 2009. Plaintiff’s Ex. 202. The therapists reported that Brown was cooperative and compliant with instructions, and Brown reported that the physical therapy was helpful. Id.

 

During a December, 2009 physical therapy session, Brown complained to his therapist about back pain; this was his first report of back pain, as his previous pain complaints were limited to his right shoulder and arm. Plaintiff’s Ex. 202, p. 16; Ex. 203, p. 57; testimony of Dr. Gall, p. 25, lines 3–6, 13–17, 23–25. On January 7, 2010, Brown completed his physical therapy.

 

On January 12, 2010, Brown complained to Dr. Gall that he was having pain in his back, his right leg, and in the right side of his chest. Dr. Gall tr. test., p. 25, lines 3–6, 13–17, and 23–25; Plaintiff’s Ex. 202, p. 77. This was the first report to a physician of pain in the back, and the first complaint of leg or chest pain. Because this was a new complaint, Dr. Gall ordered a lumbar x-ray of Brown, which was completed on January 12, 2010. The x-ray showed no acute thoracic compression fractures or subluxations. Plaintiff’s Ex. 202, pp. 52, 54. Brown also had a lumbar MRI on January 12, and Dr. Gall noted the objective findings indicated degenerative disc disease in his lumbar region, a chronic condition which Dr. Gall described as consistent with what he would expect to see in an individual of Brown’s age. According to Dr. Gall, degenerative disc disease is not caused by trauma. Testimony of Dr. Gall, p. 28, line 11 through p. 29, line 8; Plaintiff’s Ex. 202, p. 53. Defendant’s expert witness, Dr. Bain, agreed with Dr. Gall that degenerative disc disease, a chronic condition, is typical of individuals in Brown’s age group. Dr. Bain tr. test. On February 2, 2010, an x-ray of Brown’s thoracic spine was performed, and the impression was unremarkable. Plaintiff’s Ex. 202, p. 74.

 

Dr. Gall testified that, while degenerative disc disease does not always cause pain, it can do so. It is also “common sense” that one having degenerative disc disease may have a greater risk of developing a herniated disc, which typically causes pain. Dr. Gall tr. test. While trauma may be a cause of disc herniation, it is not the most common cause; in the majority of cases, the cause is unknown. Id.

 

Dr. Gall believed that Brown’s numbness and arm pain was likely caused by carpal tunnel syndrome rather than cervical radiculopathy. When he received the results of the EMG performed by Dr. Malik, he confirmed that those results indicated carpal tunnel syndrome. Dr. Gall agreed with Dr. Malik that the EMG showed no evidence of an acute pinched nerve or radiculopathy. Dr. Gall saw no evidence of acute injury in Brown’s EMG or other tests. Dr. Gall tr. test. According to Dr. Gall, an acute injury or trauma is one which has recently occurred, while a chronic condition has been in existence for months or even years. Dr. Gall testified that the MRI showed a slight disc bulge, and he could not determine from his examination of Brown whether the small disc bulge was caused by trauma or it developed over time. Id. However, the slight disc bulge noted on the MRI would not cause the symptoms described by Brown. Id.

 

*7 When Brown complained of lower back and leg pain on January 12, 2010, Dr. Gall discussed with him the options of epidural steroid injections or surgery; Brown chose the injections. Dr. Gall tr. test. During the January examination, Dr. Gall also noted Brown’s lumbar and thoracic spine x-rays were normal. Id. At Brown’s request, Dr. Gall released him to return to work on January 18, 2010. Dr. Gall tr. test.

 

In addition to prescribing physical therapy, Dr. Gall referred Brown to Dr. Yuri Tsirulnikov, an anesthesiologist who specialized in pain management at the time. According to Dr. Tsirulnikov, he first examined Brown on January 18, 2010, and met with him on six occasions through March 12, 2010. Dr. Tsirulnikov tr. test. via video depo.

 

During the time period from the August 28, 2009 accident until January 27, 2010, Brown did not work. During his initial August 31 examination, Dr. Daffron told him he was not to work for one week. Brown tr. test.; Plaintiff’s Ex. 202, p. 16. That time period expired on September 7, but Brown did not return to work. On or about October 1, 2009, Brown told Rush that he would be off work for six to eight weeks due to the August 28, 2009 accident. Brown tr. test. Although he testified at trial that Dr. Gall instructed him to remain off work during this time period, the evidence shows that Dr. Gall did not examine Brown until October 6, 2009, several days after Brown communicated his work restrictions to Rush Trucking. Dr. Gall tr. test.; Brown tr. test.; Defendants’ Ex. 4C at p. 81. Rush required Brown to provide a medical release to return to work and, at Brown’s request, Dr. Gall provided the release on January 17, 2010, releasing Brown to full active duty with no restrictions as of January 18, 2010. Brown tr. test.; Defendants’ Ex. 4C, pp. 52, 81. Brown returned to work on January 27, 2010. Brown tr. test. Brown did not work for 152 days following the August 28, 2009 accident.

 

The evidence shows that, from August 28, 2009 to his return to work on January 27, 2010, Brown incurred more than $20,000 in medical expenses. Summary of Plaintiff’s medical expenses, Plaintiff’s Ex. 70. As of March 9, 2010, his medical expenses were $28,443.43. Id.

 

On January 30, 2010, Brown completed his first trucking trip for Rush after returning to work. See stipulated facts, supra. He made several trucking trips in February. On March 2, 2010, Brown was examined by Dr. Tsirlunikov, to whom he reported that he was 60% improved overall; Brown rated his pain as a level 3 out of 10, with 10 being the most severe pain. Dr. Tsirlunikov tr. test., transcript at p. 67, lines 6–8, 23–25; p.68, line 1. Dr. Tsirlunikov reviewed reports from Brown’s physical therapist, and these also reflected Brown was improving and had returned to work. Id. at p. 68, lines 15–23. According to Dr. Tsirlunikov, Brown had full range of motion in his right upper extremity as of January 30, 2010. Id., p. 85, line 24 through p. 86, line 3. Brown reported to his physical therapist on March 3 that, measuring his pain on a scale of one to 10, with 10 being the most severe, his pain was a level 1 at both the beginning and conclusion of his therapy session. Plaintiff’s Ex. 203, p. 191.

 

*8 On March 7, 2010, Brown drove from Claycomo, Missouri to Nogales, Arizona. During his return trip to Claycomo on March 9, Brown injured his right shoulder while cranking or “dollying down” the trailer on his vehicle. He reported the incident to Rush and filed a claim with his occupational accident insurance carrier, Great American Insurance (“Great American”), on March 16, 2010. Webster prepared the necessary documents on his behalf, and reported to Great American that, on March 10, 2010 FN5 Brown injured his right shoulder and arm while dollying down the trailer during the course of his work for Rush. Plaintiff’s Ex. 202, p. 158. Shawna Donovan of Great American was assigned to the claim. Donovan tr. test. via video depo., transcript at p. 14, line 23 through p. 15, line 1. Donovan testified that Brown reported only an injury to his right shoulder resulting from this work-related incident, and Great American approved this as a work-related injury. Id. at pp. 19–20; p. 21, lines 19–25; p. 22, lines 1–6.

 

FN5. Although Webster listed the injury date as March 10, the parties agree that it occurred on March 9, 2010. As noted, infra, the date was incorrectly listed as March 10 on some other medical records, and those appear to be based on Webster’s apparent error in listing the date. The error does not impact the findings or conclusions in this case.

 

Phyllis Hunter of Great American testified by video deposition that she processed Brown’s claim for disability based on the March 9, 2010 injury to his shoulder. She testified that she reviewed the medical report from Dr. Haas regarding the injury. At the time, she was not informed by Brown that he believed the March 9 injury was an aggravation of a pre-existing injury, although there was a reference in some medical materials to an August 2009 accident. She reviewed Dr. Haas’s medical records which stated that Brown advised him of the prior injury which was apparently resolved by March 9, 2010. Hunter tr. test. via video depo., transcript, p. 10, lines 9–22; p. 50. If Brown had claimed that the March 9 injury was an aggravation of a pre-existing injury, Great American would have approved the claim for the March 9 medical and disability payments because it did not question that the injury occurred while he was working on March 9. Id. at p. 52, lines 19–25; p. 53, lines 1–9; p. 54, lines 1–6. Whether there had been a pre-existing condition would not have altered that decision. However, Brown did not inform Great American of any preexisting injury when he presented his claim.

 

Following the March 9 shoulder injury, Brown went to the emergency room at Liberty Hospital in Plattsburg, Missouri, where a CT scan was performed on his cervical spine; it reflected no evidence of a fracture. Degenerative disc changes were, however, again noted. Plaintiff’s Ex. 202, p. 55.

 

On March 12, 2010, Brown was examined again by Dr. Tsirlunikov. Brown did not tell him about the March 9 shoulder injury. Dr. Tsirlunikov tr. test., transcript, p. 82, lines 8–11. Dr. Tsirlunikov’s examination revealed a decreased range of motion in Brown’s right upper extremity, which had not been exhibited in his prior examinations of Brown. Id. at p. 84, lines 13–16; p. 85, line 24 through p. 86, line 3. He referred Brown to Dr. Robert Haas, an orthopedist, and also referred Brown to occupational therapy. Id. at p. 86, lines 16–22. Brown had no further contact with Dr. Tsirlunikov.

 

*9 Webster assisted Brown in completing the paperwork associated with his first examination by Dr. Haas on March 17, 2010, and she reported that Brown injured his right shoulder and arm while dollying down the trailer of his truck on March 10, 2010. Plaintiff’s Ex. 202, p. 158. When asked if Brown had received previous treatment for right shoulder and arm pain, Webster reported he had not, and added that he had received treatment for cervical disc damage resulting from an August 28, 2009 accident. Id. Dr. Haas’s treatment notes reflect that Brown told him he had previously had a problem with his right shoulder, but it had resolved prior to the March 9 incident. Plaintiff’s Ex. 202, p. 156. Brown told Dr. Haas that, while dollying down the trailer on March 9, he developed the sudden onset of localized right shoulder pain, describing the pain as made worse by any motion, including reaching, lifting or rotation of the shoulder. Id.

 

After examining Brown, Dr. Haas believed he had an acute sprain or strain of the shoulder muscle, which Dr. Haas described as generalized muscle soreness. Haas tr. test. by depo., p. 25. He also believed Brown had signs of an impingement syndrome, which he explained means some inflammation of the rotator cuff, which is the ligament that raises the arm. Id. Based on Brown’s explanation of the sudden onset of pain in his shoulder, Dr. Haas concluded his muscle inflammation was acute, meaning that it was a sudden new pain resulting from the March 9 incident. Dr. Haas said Brown told him he had previously hurt his shoulder in an accident, but it had “resolved until the day that he was cranking the wheels.” Id. at p. 28. As a result, Dr. Haas concluded the muscle strain and inflammation in Brown’s shoulder were caused by the cranking down of the trailer on March 9. Id. Dr. Haas also testified that Brown’s MRI reflected a genetic impingement in his shoulder bone plate, which can interfere with the shoulder muscles and ligaments and cause rotator cuff inflammation. Dr. Haas deposition, p. 87. According to Dr. Haas, although it is conceivable that a rotator cuff could be torn as a result of blunt trauma, the “great majority” of cases do not occur with acute injury, but are chronic. Id., p. 88, lines 8–18.

 

Brown underwent shoulder injections, physical therapy, and diagnostic testing. Dr. Haas then referred Brown to Dr. Santosh George, an orthopedic surgeon. Ultimately, Dr. George performed surgery on Brown’s right shoulder on August 20, 2010. Dr. George did not believe that Brown’s shoulder condition was caused by trauma; instead, he believed it was caused by a genetic impingement issue. Dr. George’s tr. test. via depo., transcript at p. 33, lines 2 through 21. As Dr. George explained the condition in layman’s terms, Brown had a genetic bone hook inside his shoulder, and it decreased the amount of clearance for the rotator cuff tendon to move back and forth. Id. at p. 92, lines 17 through 20. After the surgery, Dr. George performed a physical exam on Brown, and observed that Brown again had full range of motion in his right upper extremity. Dr. George’s tr. test., transcript, p. 35, lines 22–25. Brown told Dr. George on September 30, 2010 that “he [was] very pleased as far as the outcome of the operation.” Id. at p. 38, lines 4–14. Brown participated in post-surgery physical therapy until October 26, 2010. Plaintiff’s Ex. 202, pp. 156–163, 181–183, 186, and 187.

 

*10 Brown’s last appointment with Dr. George was on November 1, 2010, and Dr. George released Brown to return to work on November 10. Dr. George did not see Brown again after that date, and was not aware that Brown continued to complain of shoulder problems. Dr. George tr. test., transcript, p. 46, lines 3–7.

 

After Dr. George determined Brown had reached maximum medical improvement in relation to his right shoulder and released him to work without restrictions, Great American terminated Brown’s occupational accident benefits. Phyllis Hunter tr. test., transcript at p. 106, lines 7–19. Shortly thereafter, however, Brown asked that his claim with Great American be reopened because he had also injured his neck during the March 9, 2010 incident. Id.; Defendants’ Ex. 2I, pp. 28, 33–35, and 57. Brown did not state that the March 9, 2010 injury to his neck was related to any prior accident. Id.

 

As a result of Brown’s request to reopen the March 9 claim, Great American arranged for an independent medical examination to determine if Brown’s claim should be reopened. He was examined by Dr. Kala Danushkodi, who reviewed his medical records, including the MRIs, the EMG, and the x-rays; she agreed with the previous medical diagnoses of degenerative disc disease and probable carpal tunnel syndrome. Danushkodi tr. test. by depo., pp. 12–14; p. 20, lines 16–25; pp. 22–24. She reviewed the records related to his 2010 shoulder surgery. Id. at p. 26. She concluded that his shoulder injury was the result of the March 9 incident. Id. Based on her examination of Brown and the medical records, she believed that he might have cervical radiculopathy, but she could not determine whether it was the result of degenerative disc disease or a trauma. Dr. Danushkodi concluded that Brown’s continuing shoulder and neck complaint was possibly the result of impingement caused by post-surgery adhesions or scarring of the rotator cuff muscles, that he should be further evaluated, and that he could not at that time return to work as a truck driver. Id., pp. 58–59; 85–86.

 

Based on Dr. Danushkodi’s examination, Great American reopened Brown’s claim for injury resulting from the March 9 incident. Brown was referred to the University of Kansas Medical Center for a right shoulder x-ray, MRI, and arthrogram during the time period between January and March 2012. Great American paid these medical expenses because they were related to the March 9, 2010 work injury. Defendants’ Ex. 2I, pp. 62–63. Great American also provided Brown lost income benefits from March 10, 2010 until when he was released by Dr. George to return to work on November 10. Plaintiff’s Ex. 202 pp. 178–179. The payments representing lost income totaled $13,456.08. Defendants’ Ex. 2I, pp. 63–64. Great American also paid $29,267.57 between April 16, 2010 and April 25, 2012 for Brown’s medical bills associated with his March 2010 shoulder injury. Id. at pp. 62–63.

 

*11 The only medical expenses incurred by Brown which were not paid by Great American during this time period were the December 15, 2010 ambulance and emergency room charges, and July 5, 2011 treatment and diagnostic tests. Defendants’ Ex. 2I, pp. 62–63. The December 15 ambulance and emergency room expenses were incurred when Brown sought emergency treatment, complaining of a headache on his left side, blurred vision in his left eye, and radiating pain across his head to his right side, extending to his leg. He also had chest pain. Plaintiff’s Ex. 202, pp. 338–350. According to the evidence, these specific physical complaints had not been reported to Brown’s physicians during any previous examination or treatment from August 28, 2009 to December 15, 2010. Plaintiff’s Exs. 202–203.

 

Great American also did not pay expenses related to Brown’s July, 2011 treatment at the Plattsburg Medical Clinic, where he was diagnosed with bronchitis. After Brown received medication and additional treatment, the Clinic determined the bronchitis was cleared on August 19, 2010. Plaintiff’s Ex. 202, p. 38–40.

 

The evidence reflects that Brown received no medical treatment from December 15, 2010 through July 5, 2011. Plaintiff’s Exs. 202 and 203.

 

In calculating his damages for medical expenses previously incurred and claimed as caused by the August 28, 2009 accident, Brown seeks a total of $72,758.28 incurred as of February 20, 2012. Plaintiff’s Ex. 70. Approximately $28,443.43 of this amount was incurred between August 28, 2009 and March 10, 2010. Id.

 

The evidence shows that, after the March 9, 2010 incident in which he injured his shoulder and for which surgery was later performed, Brown has never returned to work.

 

During the pendency of this lawsuit, Brown was examined by a new physician, Dr. Steven Simon, at the request of Brown’s attorney. His first examination by Dr. Simon was on February 17, 2012. During the examination, Brown advised Dr. Simon of numerous physical complaints he was experiencing at that time. He said his jaws popped, and he had ringing and congestion in his ears, and fluid in his ears. He also reported that his legs felt rubbery and spongy, and would not always hold him up. He also told Dr. Simon that he dropped things, had severe headaches, and had lost consciousness on two occasions. He reported weakness in his arms and numbness from his shoulder to his hands, in particular his thumb and next two digits. Brown also reported decreased sensation in his neck as well as significant pain, and a burning sensation along the back of his skull and extending down to his ribs. Brown reported low back pain, with sudden sharp pains in his back involving areas of his spine, and he described these as feeling as though someone was hitting him with a board. He also said he was occasionally “foggy headed,” had some problems with his memory, and was experiencing “visual changes.” Plaintiff’s Ex. 129, p. 2; Dr. Simon tr. test. Dr. Simon noted that Brown admitted to smoking, but stated he was trying to quit. Brown denied having any systemic diseases. Id.

 

*12 Dr. Simon reviewed the records of Brown’s treating physicians during the time period of October 2009 through December 15, 2010, including x-rays, MRIs, and CT scans. Plaintiff’s Ex. 128. He performed a physical examination directed at testing Brown’s grip strength and range of motion in his upper and lower extremities. Dr. Simon noted Brown’s jaw misalignment, and also concluded he has altered range of motion in his cervical spine, an abnormal gait, and his medical records indicate carpal tunnel syndrome. He also performed tests designed to show cognitive levels, including memory, and ability to write. Plaintiff’s Ex. 129, p. 3.

 

Based on his review of the medical records and his February 17, 2012 examination, Dr. Simon opined that Brown had sustained a severe concussion in the August 28, 2009 accident, and that it resulted in a shearing injury to his brainstem. Id.

 

Dr. Simon was initially contacted by Brown’s attorney to serve as an expert witness. Dr. Simon tr. test. In May of 2012, Dr. Simon reported to the attorney that Brown asked him to treat Brown for his “continuing, ongoing pain and decreasing emotional control.” Plaintiff’s Ex. 130. Dr. Simon prescribed medications for both pain and depression. Id. He noted that Brown had taken Dr. Simon’s previous advice to obtain a cane to assist with balance and walking. Id.

 

Dr. Simon performed a May 24, 2012 physical examination, which resulted in essentially the same findings as were reflected in his February, 2012 examination. Plaintiff’s Ex. 130. Dr. Simon noted, however, that Brown reported a new problem with dizziness. Dr. Simon prescribed medication for dizziness. Id.

 

Dr. Simon opined that Brown sustained significant injuries to various parts of his body as a result of the August 28, 2009 accident. Opining that Brown suffered a concussion resulting in brain stem shearing, Dr. Simon also believes Brown sustained whole body injuries, including damage to discs in his cervical and thoracic spine, carpal tunnel syndrome, and cervical injury which caused misalignment in his jaw. Dr. Simon believes that, as a result of these injuries, Brown has sustained nerve damage which has adversely affected his gait and caused significant pain throughout his upper and lower extremities. According to Dr. Simon’s opinion, Brown also suffers from chronic pain syndrome, and he believes this is the result of the August 28, 2009 accident. Dr. Simon has concluded that Brown will require medical care, including possible surgery, to treat some of these conditions, and that his physical impairments will continue to require medical care for the remainder of his life. Dr. Simon also believes that Brown’s symptoms of depression are caused by chronic pain and that this, too, is the result of the accident. Dr. Simon concludes that Brown will also require psychiatric or psychological treatment or counseling for an indefinite future time period. Although Dr. Simon concludes that Brown will never be able to work, he believes Brown will require occupational therapy to assist with his physical limitations. Dr. Simon tr. test.

 

*13 Dr. Simon testified that he reached his conclusion that Brown is disabled for the remainder of his life after spending approximately one to one and one-half hours with Brown. Dr. Simon tr. test. He acknowledged that no other physician treating Brown since August 28, 2009 has reached the same conclusion. He concluded that Brown’s current condition was caused by the August 28, 2009 accident because Brown’s medical records prior to that date did not reflect any symptoms or conditions of neck, back, or shoulder problems. When asked about the conflicting testimony of other examining physicians who opined that Brown’s disc deterioration was degenerative rather than caused by trauma and that his shoulder condition was genetic or arthritic and not trauma-related, Dr. Simon disagreed. Id. He testified that he based his opinions regarding the force which resulted from the impacts during the August 28, 2009 accident on Brown’s description. He also based his opinions in part on Brown’s description of the portions of his body which were impacted, and he testified that Brown told him he hit his head during one of the impacts. Id. Dr. Simon agreed, however, that Brown’s carpal tunnel syndrome could cause the numbness that Brown experiences in his extremities, and he also agreed that carpal tunnel syndrome is not related to brain stem shearing which Dr. Simon believes occurred on August 28, 2009, nor is it the result of any other injury sustained in that accident.

 

Dr. Richard Dubinsky, a certified neurologist retained as an expert witness for Defendants, opined that the medical evidence does not support Dr. Simon’s conclusion that Brown suffered brain stem shearing in the August 28, 2009 accident. He testified that he has experience in diagnosing and treating brain stem injuries, and Brown’s medical history does not reflect the symptoms associated with brain stem shearing. Dr. Dubinsky testified that, based on the medical evidence in the time period shortly after the accident, Brown’s symptoms indicated a possible mild concussion. He noted that there is no evidence of a severe concussion that could have caused brain stem shearing. Evidence of brain stem shearing typically includes a coma. Moreover, for such an injury, an examination should, at a minimum, show evidence of severe alterations in brain functioning; symptoms would include spasticity, loss of coordination, lack of control of eye movement, loss of sensation, light sensitivity, and amnesia. Dr. Dubinsky tr. test. According to Dr. Dubinksy, such symptoms would occur immediately after a traumatic injury, and Brown had none of these conditions immediately after August 28, 2009. To the extent that Brown has reported loss of coordination and problems with balance, he did not do so until long after the accident.

 

With respect to Brown’s contention that he incurred cervical spine injuries as a result of the accident, Dr. Dubinsky noted that x-rays and CT examinations of his cervical spine showed essentially the same results in 2009, 2010, and 2011. Dr. Dubinsky tr. test. According to Dr. Dubinsky, these results are significant because there is no real change in his cervical spine condition over this period of time. Had a traumatic injury damaged his cervical spine, there would be evidence of changes over this time period.

 

*14 With respect to Brown’s increasing complaints of shoulder and limb pain over the period of two to three years, Dr. Dubinsky believes the medical evidence reflects that this is the result of a chronic condition rather than an acute condition caused by trauma from an accident.

 

Dr. Dubinsky agrees with the opinions of treating physicians that Brown has carpal tunnel syndrome. He agreed with Dr. Malik’s assessment of the October 2009 EMG test on Brown, which reflected possible carpal tunnel syndrome, a condition that is chronic rather than acute. Other medical records, including those of Dr. Simon, also indicate that Brown has carpal tunnel syndrome. According to Dr. Dubinsky, this condition can be treated with wrist splints, muscle relaxants or, if necessary, surgery. He also finds no evidence of acute cervical radiculopathy, as the EMG results did not evidence this condition. Instead, Dr. Dubinsky agrees with Dr. Malik that the EMG reflects chronic degenerative disc disease, and sees no evidence of acute injury.

 

Dr. Dubinsky also examined Brown, and noted Brown listed at least 14 complaints about pain throughout his body. Dr. Dubinsky tr. test. Dr. Dubinsky explained that he administered a series of tests designed to measure specific physiological conditions which could indicate brain stem injury or injury to the central nervous system. He concluded that Brown lacked symptoms consistent with any neurological injury. For example, he noted that Brown has no complaints of deficits in concentration or attention, no altered vision, no issues with speaking or swallowing, no dermatomal patterns in his skin, and he has not experienced any signs of amnesia. Brown’s sense of smell was not altered, his visual acuity and pupil reaction were normal, as were his optic nerve and retina. Brown’s facial sensations were normal on both sides, there was no weakness or deviation in his mouth and jaw, and no evidence of TMJ. His coordination was normal, although he needs the assistance of a cane for stability and tends to favor his right leg while walking. The normality of these functions indicates there is no brain injury. Id. Dr. Dubinsky’s assessment of Brown’s mental status was based on their conversation and Brown’s responses to questions; all these were normal. Based on Brown’s testimony in his deposition that he had hit his head during the August 28, 2009 accident, Dr. Dubinsky opined that Brown may have suffered a concussion. However, he found no evidence of central nervous system injury or cervical radiculopathy, and no evidence of brain stem shearing or other injury to the brain stem.

 

In connection with his role as expert witness for Brown, Dr. Simon also referred Brown to Tracy Wingate, a board-certified occupational therapist and certified life care planner. According to Ms. Wingate, Brown’s attorneys retained her to develop a life care plan for Brown. She testified that the purpose of the plan is to assist an individual with ongoing medical needs and other forms of supportive care, including but not limited to physical therapy and pain control. She developed such a plan for Brown on June 27, 2012. Plaintiff’s Ex. 142.

 

*15 According to Ms. Wingate, the life care plan she prepared for Brown was based primarily on information she obtained from Dr. Simon regarding Brown’s medical condition and future medical needs, including possible surgery, medications, physical therapy, and other treatments Dr. Simon believed would be necessary. In addition, Ms. Wingate reviewed the medical records of Brown’s providers from August 28, 2009 through his examination by Dr. Simon in 2012. She also reviewed Brown’s deposition in this lawsuit, and she attended Brown’s June 21, 2012 appointment with Dr. Simon. Plaintiff’s Ex. 142, p. 2. Based on Dr. Simon’s diagnosis of chronic pain syndrom caused by a brain stem shear, Ms. Wingate concluded that Brown’s prognosis is “grim.” Id. at p. 5.

 

Based on standard tables of accepted life expectancy estimates, Ms. Wingate determined that Brown’s life expectancy was 34 years beyond his 2012 age of 44 years, and the determination that Brown’s life expectancy is normal was based on Dr. Simon’s opinion. Wingate tr. test. Although she is aware that Brown is a smoker, she testified that the life expectancy tables she utilized did not include any differentiation between smokers and non-smokers. Id. The various treatment procedures, and the number and frequency of procedures, needed by Brown was based on Dr. Simon’s recommendation. Plaintiff’s Ex. 142, pp. 8–10. At her request, Dr. Simon completed a form questionnaire utilized by Ms. Wingate for the purpose of preparing a life care plan. Plaintiff’s Ex. 143. Dr. Simon’s responses were the sole basis for her inclusion in Brown’s life care plan of the current and projected future necessary medical procedures. Wingate tr. test. According to Ms. Wingate, she accepted as true all of Brown’s statements regarding his injuries in the August 28, 2009 accident as well as his description of his physical and mental condition. Id. Because she is not a medical doctor, she does not attempt to independently evaluate a person’s physical condition, and she relies on the person’s medical provider to make that assessment. Id. In this case, she reviewed Brown’s prior medical records and selected those portions which she found important. Wingate tr. test. However, she relied primarily on Dr. Simon’s assessment of Brown’s current condition and future medical needs. Id. She acknowledged that none of Brown’s treating physicians other than Dr. Simon had opined Brown would require jaw surgery, pain management therapy, chiropractic care, or counseling; she also acknowledged that no other treating physician had diagnosed a brain stem injury or post-concussion syndrome. Wingate tr. test. Ms. Wingate testified it is possible that some of the future treatment listed in Brown’s life care plan will not be necessary, but she includes in the plan she develops items that are probable. She relied on Dr. Simon’s opinion to select such items for Brown, and testified that the life care plan for Brown would have to be altered if Dr. Simon’s opinions are incorrect. Id.

 

*16 In addition to medical and psychological care based on Dr. Simon’s assessment of Brown’s current and future needs, Ms. Wingate included in the life care plan costs associated with household services for the remainder of Brown’s life. Plaintiff’s Ex. 142, pp. 17–18. His projected daily needs were based on Ms. Wingate’s interview with Brown and Webster regarding daily activities and his ability to perform certain tasks.

 

Ms. Wingate also prepared a financial analysis of the costs associated with the life care plan she developed for Brown. Plaintiff’s Ex. 142, pp. 11–22. The grand total of all expenses is $837,705.99. Id. at p. 22. This does not include a calculation for loss of earning capacity. Id. Ms. Wingate testified that the amounts reflected for each treatment, procedure, fee for service, and related expenses are based on average costs derived from various accepted sources she utilizes in the course of her standard work as a life care planner. Wingate tr. test.

 

Larry Cox, an economist serving as an expert witness for Brown, prepared an analysis of the economic losses which Brown claims to have incurred as a result of the injuries sustained in the August 28, 2009 accident. Plaintiff’s Ex. 160. Brown’s claimed losses include past lost wages from the date of the accident to the April 22, 2013 trial date, as well as future lost earnings capacity, reduced to present value. Plaintiff’s Ex. 160, p. 8. Cox also included the costs of the life care plan prepared by Ms. Wingate, and he reduced the costs of future expenses to present value. Plaintiff’s Ex. 162. He then combined all past and future economic losses in all categories to calculate the total economic loss which Brown claims resulted from the injuries sustained in the August 28, 2009 accident.

 

With respect to the damages for past lost wages from August 28, 2009 to the date of trial, Cox acknowledged that there is limited information on which to base what Brown would have earned under the Crosswinds contract with Rush during this time period. Cox tr. test. This is because Brown worked for only a few weeks after the contract was executed. According to Cox, he used the records of Rush for the time period when Brown worked during January through March of 2010 to determine Brown’s earnings; those reflect an average of $420 per week, which would result in an annualized amount of $21,000, assuming that Brown had earned that same amount for each week from August 28, 2009. Cox tr. test. Cox calculated, based on that assumption, Brown’s lost earnings for the time period of August 28, 2009 to April 22, 2013 were $76,096.FN6

 

FN6. This amount excludes the earnings of Brown from January 27, 2010 through March 10, 2010, when he was working and earned income from Rush. See Plaintiff’s Ex. 160, p. 3 at n. 1.

 

Cox also reduced to present value the $837,705.99 estimated cost of Brown’s life care plan, as calculated by Ms. Wingate. According to Cox, the present value of the plan is $793,823. Plaintiff’s Ex. 162.

 

To determine Brown’s future economic losses, Cox used the time period of the trial date through the date on which Brown would reach the age of 67 years, which is the earliest date on which he could receive full Social Security retirement under current Social Security regulations. Cox tr. test. Brown will reach age 67 on November 22, 2034. Plaintiff’s Ex. 160 at p. 3. To determine future earnings to that date, Cox performed two calculations, which he labeled “models.” Model # 1 is based on Brown’s actual annualized earnings estimate for 2010 according to the amount he earned with Rush, and Model # 2 is based on the average annual income of heavy truck drivers in the Kansas City, Missouri metropolitan area, which includes Brown’s residence in Plattsburg and Rush Trucking’s office in Claycomo. Cox tr. test. The data for Model # 2 was obtained from the Bureau of Labor statistics. Id.

 

*17 Under Model # 1, Cox calculated Brown’s future earnings loss as $451,903, while Model # 2 resulted in a loss of $871,203. Plaintiff’s Ex. 161. Both amounts are reduced to present value. Id. Adding the $793,823 present value calculation of the life care plan and the past earnings loss of $76,096, Cox calculated a total amount of past and future economic damages as $1,321,822 under Model # 1, and $1,741,122 under Model # 2. Plaintiff’s Ex. 161.

 

Cox testified that none of the past and future economic loss calculations include any deduction for the costs associated with Brown’s ownership of Crosswinds. For example, he made no deduction for payments on the amount owed on the Freightliner truck, maintenance costs for the truck, or other expenses. He did not do so because he had no information regarding those expenses. Cox tr. test. In calculating the earnings of Brown, he assumed that Brown and Crosswinds were the same, and thus attributed all earnings of Crosswinds to Brown. Id. He did not consider the fact that Webster was the co-owner of Crosswinds, and would be entitled to some portion of the amount of income derived from its contract with Rush or other future income that might be earned by Crosswinds. According to Cox, Webster’s entitlement to a portion of Crosswinds’s earnings presented a legal question he was not asked to consider. Cox tr. test.

 

Cox did not rely on income tax returns to perform his calculations, as he believes it is difficult to predict taxable income for a small proprietorship due to uncertainty in the amount of deductions for depreciation and other factors. Id. However, he testified that the 2007 and 2008 tax returns for Crosswinds would show a higher annual income than the $21,000 he used as the basis for his calculation of Brown’s past lost income. Id.; 2007 and 2008 tax returns, Plaintiff’s Ex. 164, pp. 125, 151, and 153.

 

Cox testified that his calculations regarding lost future earnings were based on the fact that Wilbur Swearingin testified Brown is totally disabled and will never be able to return to work in any employment. Cox also confirmed that, in calculating future losses associated with the life care plan prepared by Wingate, he relied completely on the contents of her plan and the items of costs she included as necessary for Brown’s future medical and personal needs. Cox tr. test.

 

Wilbur T. Swearingin, a Certified Rehabilitation Counselor testifying as an expert witness for Brown, opined that Brown is permanently and totally disabled and will not be placeable or employable in the labor market. Swearingin tr. test. by deposition, pp. 54–56; Swearingin expert report, Plaintiff’s Ex. 148. Swearingin testified that he based this opinion on his review of Brown’s medical records, his interview with Brown, and the results of tests he administered to Brown. Swearingin testimony. Three tests were used by Swearingin: 1) the Functional Capacity Checklist (“FCC”), which is completed by the individual being tested and measures the individual’s personal perception of his physical limitations; 2) the Wide Range Achievement Test 4 (“WRAT–4”), which measures basic academic skills in word reading, spelling, and math computation; and 3) the Career Occupational Preference System (“COPS”), which measures the individual’s occupational interests. Plaintiff’s Ex. 148, pp. 5–6; 11–12.

 

*18 The WRAT–4 test results reflect that Brown has fourth grade reading skills, third grade spelling skills, and math computation skills at the fourth grade level. Plaintiff’s Ex. 148, p. 11. According to Brown, he completed the eighth grade, and he thinks he may have obtained a GED evidencing he passed a high school equivalency examination, but he is uncertain. Swearingin tr. test., p. 19, lines 14–22.

 

His responses to the FCC reflect that his perception of his functional capacity is extremely low. Rating various categories of physical abilities, Brown marked 88 of 165 items on the checklist as activities which are “[i]mpossible to do or can do only with great pain.” He marked others as “very difficult to do.” Plaintiff’s Ex. 148, p. 7. Based on this information, Swearingin described Brown as having a profile of profound, severe disability. Id. Although Swearingin explained that the answers on the FCC checklist were marked by Brown, he testified that the individual’s perception of his physical limitations is important in assessing his vocational skills because an individual will not perform tasks which he thinks he cannot perform, even if medical evidence is to the contrary. Swearingin tr. test., p. 36, line 1 through 39, line 6.

 

The COPS test, which also consisted of questions to which Brown marked answers, is designed to measure an individual’s occupational interests. Swearingin tr. test., p. 21, line 7–25, p. 22, lines 1–3. Brown’s answers reflect that his occupational interests are primarily limited to physical work which Swearingin believes Brown is unable to perform.

 

Swearingin also interviewed Brown regarding his daily activities. He did so because one of the items he considers is whether the individual is able to take care of himself, as that is a factor in determining whether the individual can perform the physical activities required of working. According to Swearingin, Brown reported that he is able to dress, bathe, and take care of his personal hygiene needs, and he can feed himself and prepare a simple meal such as a sandwich, and wash his dishes. Swearingin tr. test., p. 27–28. He also reported he could sweep and use a vacuum cleaner for short periods, do his own laundry, and perform limited household chores. Id., p. 29. He is unable to mow the lawn, but is able to tend a small garden to a limited extent. Id.

 

Swearingin applied his findings regarding Brown’s physical limitations to Department of Labor publications defining categories of work and describing the physical requirements of those categories, the Vocational Expert Handbook published by the Department of Health and Human Services, and the Dictionary of Occupational Titles. Plaintiff’s Ex. 148. Swearingin concluded that, given his physical restrictions, Brown cannot perform the physical requirements of his former position as a truck driver or his previous work in construction. Swearingin also ruled out sedentary jobs because the resources he consulted reflect that most sedentary jobs requiring minimal physical exertion also require academic abilities which Brown cannot satisfy with his limited reading and math skills. He further concluded that Brown has no transferable skills that would render him employable in other positions requiring limited physical exertion. Given Brown’s academic test results, Swearingin concluded that Brown is not a candidate for adult education or training. Plaintiff’s Ex. 148, pp. 14.

 

*19 Swearingin testified that his assessment of Brown’s physical limitations was based primarily on Brown’s description of severe pain throughout his entire body, and Swearingin did not attempt to administer any physical tests. Swearingin tr. test., pp. 25, lines 17 through 27, lines 6–7. Swearingin did review documents reflecting Brown’s medical treatment, and he focused on diagnoses which he thought were pertinent to his evaluation of Brown’s ability to work, which he included in his expert report. Swearingin tr. test, p. 32, lines 21 through p. 33, lines 1–3. He acknowledged that he failed to include in his report the fact that Dr. Santosh George had released Brown to return to work following his August 20, 2010 shoulder surgery. Id. at p. 35, lines 10–16.

 

III. Principles of Law and Conclusions of the Court:

The Court has subject matter jurisdiction based on diversity of citizenship of the parties. The parties have stipulated that the Court has personal jurisdiction over the defendants, that service of process was proper, and that the corporate defendant, USA Truck, has been sued in its proper corporate name.

 

Because Watkins admits that he caused the August 28, 2009 accident, the only issues are the scope of the injuries Brown sustained in the accident and the amount of damages which Brown may recover. There is no contention that Brown was negligent or at fault in any manner in causing the accident.

 

The parties agree that this dispute is governed by Oklahoma law. Accordingly, the scope of recovery is as follows:

 

[R]ecovery may be had for all natural and proximate consequences of the defendant’s wrongful act or omission, such as pain and suffering, including future pain and suffering, loss of time and earning capacity, loss of profits, ill-health or disability naturally resulting from the … injury, subsequent aggravations of the injury proximately traceable to the original wrong, and any other damage that can reasonably be said to have followed as the proximate consequence of the injury received.

 

Shebester, Inc. v. Ford, 361 P.2d 200, 202–03 (Okla.1961); see also Strader–Faiazi v. Edmond Fourth of July Festivals, 28 P .3d 1161, 1163 (Okla.Civ.App.2001).

 

Recoverable damages in a tort action consist of “the amount which will compensate for all detriment proximately caused” by the tortious conduct. Okla. Stat. tit. 23, § 61. “A plaintiff cannot recover for negligence unless it was the proximate cause of the injuries for which the plaintiff seeks compensation.” Jones v. Mercy Health Center, Inc., 155 P.3d 9, 14 (Okla.2006). Oklahoma defines proximate cause as that “which in a natural and continuous sequence, unbroken by an independent cause, produced the event and without which the event would not have occurred.” Lockhart v. Loosen, 943 P.2d 1074, 1079 n. 14 (Okla.1997).

 

“ ‘The proximate cause of any injury must be the efficient cause which sets in motion the chain of circumstances leading to the injury; if the negligence complained of merely furnishes a condition by which the injury was possible and a subsequent independent act caused the injury, the existence of such condition is not the proximate cause of the injury.’ “ Pepsi–Cola Bottling Co. v. Von Brady, 386 P.2d 993, 997 (Okla.1964) (quoting Booth v. Warehouse Market, 286 P.2d 721, 723 (Okla.1955)).

 

*20 A plaintiff bears the burden of proving his damages by a preponderance of the evidence. Under Oklahoma law, a preponderance of the evidence is also described as “the greater weight of the evidence,” and is defined as evidence which is more probably true than not true. See, e.g. Badillo v. Mid Century Insurance Co., 121 P.3d 1080, 1096 n. 8 (Okla.2005).

 

A plaintiff may recover only those damages which are ascertainable and not based on speculation. “Damages, to be recoverable, must be susceptible of ascertainment in some manner other than by mere speculation, conjecture or surmise, and by reference to some definite standard.” Lippitt v. Farmers Ins. Exchange, 233 P.3d 799, 802 (Okla.Civ.App.2009) (citing Great Western Motor Lines, Inc. v. Cozard, 417 P.2d 575, 578 (Okla.1966)). “A person who has received an injury due to the negligence of another is entitled to recover all damages proximately traceable to the primary negligence including subsequent aggravation which the law regards as a sequence and natural result likely to flow from the original injury even though there may have been some intervening cause contributing to the result.” Johnson v. Mid–South Sports, Inc., 806 P.2d 1107, 1115 (Okla.1991)(quotation omitted).

 

An injured plaintiff may also recover damages for “future loss caused by a wrongful act provided the damages are reasonably certain to occur.” TK–7 Corp. v. Estate of Barbouti, 993 F.2d 722, 725 (10th Cir.1993) (citing Okla. Stat. tit. 23, § 5). With respect to future business losses, the “anticipated profits of a commercial business or other like business, are ordinarily too speculative to warrant recovery for their loss.” Lippitt v. Farmers Ins. Exchange, 233 P.3d 799, 803 (Okla.Civ.App.2009). However, such future losses may be recovered as an element of damages where they are established, “ ‘not by guesswork, conjectures, uncertain estimates, nor mere conclusions, but by tangible facts, from which actual damages may be logically and legally shown or inferred.’ “ Id. (quoting Bokoshe Smokeless Coal Co. v. Bray, 155 P. 226, 229 (Okla.1916)). “In other words, anticipated profits from an established business may be recovered where the amount of loss can be shown with reasonable certainty and/or by just and reasonable inference.” Lippitt, 233 P.3d at 803 (citing Florafax International, Inc. v. GTE Market Resources, Inc., 933 P.2d 282, 293 (Okla.1997)).

 

A plaintiff prevailing in a tort action may also recover damages for pain and suffering caused by the negligent conduct. See, e.g., Shebester, 361 P.2d 202–03. Damages for pain and suffering and similar claimed losses “are general in nature and are elements which cannot be fixed with an exact amount.” West v. Board of County Commissioners of Pawnee County, 273 P.3d 31, 36 n. 17 (Okla.2011) (citing Government Employees Ins. Co. v. Quine, 264 P.3d 1245, 1247 n. 2 (Okla.2011)). “Proving the precise amount of such damages is, by their very nature, almost impossible.” West, 273 P.3d at 36 n. 17 (citing Browning v. Ray, 440 P.2d 721 (Okla.1968)). When there is no identifiable measure of damages, they are properly determined by the trier of fact according to “the judgment and opinion of a reasonable person.” Id. (citing Hornstein v. Yarrington, 237 P. 73 (Okla.1925)).

 

*21 Based on all the evidence before the Court, including the testimony of both parties’ expert witnesses, the Court concludes that there is insufficient evidence to support the degree of physical harm currently described by Brown as having occurred during the August 28, 2009 accident. The evidence reflects that Brown’s current testimony and his 2012 explanation to Dr. Simon describe significantly more impact and physical movement than he had described in his reports to physicians soon after the accident. Brown’s trial testimony and statements to Dr. Simon also describe impacts to portions of his body, including his head, which were not previously reported to his medical providers. Although the evidence shows that he experienced physical movement within the cab of his truck from the impacts, his description of being thrown around the interior of the sleeping area with significant force is not supported by a preponderance of the evidence.

 

There were inconsistencies in the testimony of both Brown and Watkins regarding the number of impacts occurring during the August 28, 2009 accident. Based on all the evidence, including that of Officer Chavez and both parties’ expert witnesses, the Court concludes that a preponderance of the evidence establishes that there were three low-speed impacts to Brown’s vehicle, which resulted in relatively minor damage to the front driver-side area of the vehicle.

 

There is conflicting evidence regarding the speed of Watkins’s vehicle at the time of the accident. However, the Court concludes that the preponderance of the evidence, including the testimony of the parties’ respective experts, shows that Watkins was traveling at a very slow speed at the time of impact, and likely slower than normal walking speed.

 

There is also insufficient evidence to establish, by a preponderance, that the cab of Brown’s vehicle was subject to significant side-to-side movement. Although Brown’s expert witness, Mr. Christoffersen, opined that side-to-side movement of the vehicle’s cab and sleeping compartment was physically possible, he based that opinion on post-accident re-enactments which involved the placement of force on the sides of the cab area, and there is insufficient evidence that such force occurred during this accident. The physical evidence of the damage to Brown’s truck establishes impacts only to the front section of the vehicle.

 

Even if the cab sustained both front-to-back and side-to-side movement, the evidence does not support a conclusion that Brown was thrown about the interior in the violent manner he currently describes. As noted, supra, Brown’s description of the force resulting from the impacts has been inconsistent, and his description of the force to which he was subjected and the resulting impact to various portions of his body has changed over time. He currently describes the occurrence as being violently thrown about like a rag doll, but initially told Dr. Daffron that he only hit his right shoulder and neck. His initial description is consistent with the minor cut to the neck or upper shoulder area for which he was treated at the scene. It was not until some time later that Brown reported hitting his head after being thrown about inside the sleeping compartment. There is no medical evidence that he exhibited signs of any significant injury to his head immediately after the accident. His medical records also reflect that he has never claimed to have lost consciousness during the accident. Dr. Daffron’s initial opinion, which was supported by x-rays and an NMI taken within a few weeks after the accident, was that he suffered muscle spasms and strains in his neck and shoulder. There was no evidence of any fracture in his neck or shoulder.

 

*22 Brown has proved by a preponderance of the evidence that he sustained an injury as a result of the August 28 accident. A preponderance of the evidence establishes that he sustained muscle strains to his neck and right shoulder, but the evidence is insufficient to show that he sustained the degree of acute traumatic injury to his neck, shoulder, arm, or head that he now claims occurred during the accident.

 

A preponderance of the evidence also shows that, at the time immediately after the accident, Brown had mild carpal tunnel syndrome in both hands. However, there is no evidence that this condition was caused by trauma. Instead, a preponderance of the evidence, including the testimony of his own physicians, reflects that carpal tunnel syndrome is a chronic condition unrelated to the accident. That he experienced increasing numbness, tingling, and pain in his extremities months after the accident is consistent to some degree with the medical evidence that these are typical symptoms of carpal tunnel syndrome, and the condition usually becomes worse over time. While the evidence shows Brown is likely to require future medical treatment for this condition, any costs associated with that treatment are not recoverable as damages in this lawsuit.

 

The evidence also establishes that Brown has cervical degenerative disc disease and possibly has degenerative disc disease in the lumbar region. The evidence further establishes that this is a chronic condition typically occurring in individuals in Brown’s age group. The evidence does not preponderate to support a conclusion that this condition was caused by a traumatic injury such as the August 28, 2009 accident, but it instead develops over time. The fact that, prior to the August 28, 2009 accident, Brown had not experienced discomfort or pain in the cervical, lumbar, or other areas of his back does not support a conclusion that this condition was caused by the accident. A preponderance of the medical evidence instead supports the conclusion that it is not uncommon for persons having degenerative disc disease to have no discomfort or pain for a considerable time, as the condition typically becomes progressively worse with the passage of time. Accordingly, Brown is not entitled to recover damages attributable to current or future medical treatment related to degenerative disc disease.

 

The evidence is also insufficient to support Brown’s contention that his degenerative disc disease was exacerbated by the impacts sustained in the accident. While there is some medical testimony that an individual having degenerative disc disease could experience a herniated disc as a result of an impact to the body, Brown’s medical providers found no evidence following the accident that he had suffered such injury. Instead, the MRIs and x-rays performed within approximately two months following the accident did not show a significant disc herniation, but consistently reflected degenerative disc disease typical of persons in Brown’s age group.

 

*23 Brown has not proved by a preponderance of the evidence that he sustained injury to his brain stem, or shearing of the brain stem, in the August 28, 2009 accident. The only medical opinion that such injury was sustained was offered by Brown’s expert witness, Dr. Simon, and there is no evidence in the medical records of Brown’s treating physicians that would support the existence of a brain stem injury. There was expert testimony at trial regarding the symptoms of brain stem injury, and Brown’s extensive medical records reflect that he did not exhibit those symptoms in the weeks and months following the accident. On this issue, and the issue of other, purportedly related neurological abnormalities, the Court finds most credible and persuasive the testimony of Dr. Dubinsky, who found no basis of support for Dr. Simon’s diagnosis of brain stem and related injuries.

 

Brown has proved by a preponderance of the evidence that he incurred expenses for medical treatment and physical therapy during the time period from August 28, 2009 to March 9, 2010 and that these expenses were the result of the accident. These were performed after Brown complained of continuing pain and/or pain in areas of his body which were not initially reported to Dr. Daffron. Although Defendants contend that some of these expenses should not be allowed because the diagnostic results reflected conditions not related to the accident, the Court finds that the various diagnostic examinations during this time period were performed in order to determine the extent of the injuries he may have suffered. That the examination results do not support a conclusion that he suffered additional injuries does not preclude recovery of the associated costs. Thus, Brown is entitled to recover $28,443.43 for medical expenses incurred during the time period of August 28, 2009 to March 9, 2010.

 

The evidence establishes that, by early January of 2010, Brown’s pain and other conditions resulting from the August 28 accident had subsided to the point that he wanted to return to work, and he was released to work, without restrictions, on January 18, 2010. The evidence also establishes that, by early March of 2010, Brown’s neck and shoulder pain had substantially resolved, as he reported essentially no pain or minimal pain, and his physical examination displayed a normal range of motion in his upper body and extremities.

 

On March 9, 2010, Brown injured his right shoulder while dollying down a trailer. The evidence establishes that this was an acute injury. The evidence does not preponderate, however, in support of the conclusion that the March 9 incident exacerbated the shoulder and neck muscle strain caused by the August 28, 2009 accident. As the Court has concluded, prior to the March 9 incident, Brown was having no pain or minimal pain in his neck and shoulder, and he had full range of motion. Thus, Brown has failed to show by a preponderance of the evidence that the medical treatment for his March 9 injury, and the resulting expenses, were necessitated by the August 28, 2009 accident. Accordingly, Brown is not entitled to recover from Defendants damages based on medical expenses during the period after March 9, 2010.

 

*24 Brown has not shown by a preponderance of the evidence that his August 20, 2010 shoulder surgery was necessitated by an injury caused by the August 28, 2009 accident. A preponderance of the medical evidence establishes that his shoulder surgery was the result of a genetic bone impingement which interfered with Brown’s rotator cuff function, which limited his mobility and caused pain. While the evidence suggests that Brown’s March 9 injury might have exacerbated the existing bone impingement, there is no medical evidence suggesting that the August 28 accident did so.

 

Based on a preponderance of the evidence, any shoulder and right arm pain currently experienced by Brown were not caused by the August 28 accident. The medical evidence indicates that post-surgery pain he may be experiencing likely results from ligament scarring or other complication from the August 20, 2010 shoulder surgery. Although the evidence suggests Brown may require additional medical treatment for his shoulder, including possible surgery, the expenses related to his current and future shoulder treatment are not recoverable as damages attributable to the August 28, 2009 accident.

 

The evidence does not preponderate to support a conclusion that Brown has experienced cervical radiculopathy caused by the August 28, 2009 accident. Although there is some medical evidence that radiculopathy, or nerve damage, may be present, there is no supporting conclusive medical diagnosis of that condition. To the extent there is limited medical evidence that the condition may exist, that evidence does not support a conclusion that it was caused by the August 28 accident.

 

Nor does the evidence support a conclusion that Brown’s future medical and other needs, as detailed in the life care plan prepared by Tracy Wingate, are attributable to injuries caused by the August 28, 2009 accident. Although some of the future medical treatment included in the life care plan may be required, the evidence is insufficient to show that such extensive treatment was necessitated by the shoulder and neck injury sustained by Brown in the subject accident. As previously noted, Ms. Wingate substantially relied on the opinions of Dr. Simon when crafting the life care plan. However, to accept that the extensive physical maladies covered by the life care plan and necessitating future care approaching $1,000,000.00 are causally attributable to the August 28, 2009 accident would require the Court to ignore the opinions of a number of treating physicians and contemporaneous diagnostic tests, in favor of Plaintiff’s shifting subjective descriptions of symptoms and pain and the lone opinion of Plaintiff’s expert witness, Dr. Simon. The evidence does not support such a conclusion.

 

With respect to Brown’s claim for damages attributable to his lost income, a preponderance of the evidence shows that, following the August 28, 2009 accident, he was unable to work due to the injury to his shoulder and neck. There is sufficient evidence of record to show that he was unable to fully perform the physical requirements of his work as a truck driver during the time period he was undergoing medical treatment, including injections, physical therapy, and diagnostic examinations after August 28. Although the evidence shows that his initial examining physician, Dr. Daffron, directed that he not work for a period of days, there is no evidence that she released him to return to work. Instead, when he continued to complain of pain in his neck and shoulder, she referred him to an orthopedic specialist. As a result, additional diagnostic tests were performed, and additional physical therapy was prescribed. The evidence establishes that he was released to return to work on January 18, 2010, and he began driving for Rush again on January 27, 2010.

 

*25 The Court finds that a preponderance of the evidence shows that Brown was unable to work during that time period because his medical providers were providing treatment and performing diagnostic examinations designed to determine the extent of the injuries caused by the August 28, 2009 accident. The evidence is sufficient to show that, during this time period, he was unable to fully perform the physical aspects of his job, and was undergoing reasonably necessary medical treatment and diagnosis. Accordingly, the Court finds by a preponderance of the evidence that Brown is entitled to recover damages for lost income during the period of August 28, 2009 to his return to work on January 27, 2010. The Court concludes there is sufficient evidence to show that Rush would have assigned Brown the same number of trips and the same routes during the time period from August 28, 2009 through January 26, 2010 as he was assigned prior to the accident. The income he earned during the brief time period he actually worked for Rush reflects that he would have earned $9,037.74 during this time period. Brown is entitled to recover that amount from Defendants as damages for lost income caused by the August 28, 2009 accident.

 

The evidence establishes that Brown returned to work on January 27, 2010 and continued to drive for Rush until he sustained a shoulder injury on March 9, 2010. The evidence also establishes that, following March 9, Brown has never returned to work. Brown presented evidence that he is currently unable to work and may be totally disabled and unable to work in the future. However, as the Court has concluded, the evidence is not sufficient to establish, by a preponderance, that his inability to work after March 9, 2010 and in the future is causally connected to the August 28, 2009 accident. Therefore, the Court finds that he is not entitled to recover damages from Defendants for lost income from March 9, 2010 to the date of trial, nor is he entitled to recover damages based on future lost income from the date of trial through the remainder of his work life.

 

With respect to Brown’s contention that he is entitled to recover damages for pain and suffering and emotional distress caused by the August 28, 2009 accident, the Court finds that he has shown, by a preponderance of the evidence, that he suffered pain initially and for some time after the accident. A preponderance of the evidence also shows that, although physical therapy and injections eased his discomfort, he continued to experience pain in his neck and right shoulder until approximately January, 2010, when he reported to both his physical therapist and treating physician that his pain was minimal. The Court concludes that he is entitled to recover damages for pain and suffering during this period. A reasonable amount to compensate him in this regard is $20,000.00.

 

Brown also seeks an award of attorney fees as the prevailing party in this action, and Defendants object, arguing that such fees are not recoverable under Oklahoma law. Brown argues that he may recover fees pursuant to Okla. Stat. tit 12, § 696.4. Under Oklahoma law, however, Brown is not entitled to attorney fees in this case, and the statute on which he relies is inapplicable. The statute does not authorize an award of fees to a prevailing party in any designated type of claim. Instead, it merely sets out filing deadlines for fee applications where the party is statutorily entitled to recover such fees. Nothing in the language of § 696.4 authorizes the recovery of attorney fees to a prevailing party in a claim for personal injury damages.

 

*26 “In diversity cases, an award of attorneys’ fees is a substantive legal issue determined by state law.” Morton v. Progressive Northern Ins. Co., 498 F. App’x 835, 842 (10th Cir.2012) (unpublished) (citing N. Texas Prod. Credit Ass’n v. McCurtain County Nat’l Bank, 222 F.3d 800, 817 (10th Cir.2000)). “ ‘Oklahoma follows the American rule concerning the recovery of attorney fees. It provides that each litigant pay for legal representation and that courts are without authority to assess attorney fees in the absence of a specific statute or contract.’ “ G & C Holdings, LLC v. Rexam Beverage Can Co., 2013 WL 2321611, at *3 (10th Cir. May 29, 2013) (unpublished)(quoting Whitehorse v. Johnson, 156 P.3d 41, 47 (Okla.2007)). A “cause of action for personal injury would not support an award of attorney fees.” Fletcher v. Monroe, 208 P.3d 926, 927 (Okla.2009). The Oklahoma statutes authorize an attorney fee to a prevailing party in an action “to recover damages for the negligent or willful injury to property.” Okla. Stat. tit. 12, § 940(A) (emphasis added); Fletcher, 208 P.3d at 929. However, “[n]o provision exists for the recovery of attorney fees by a prevailing party for a personal injury claim.” Lee, 990 P.2d at 233 (emphasis added).

 

In this action, Brown does not seek recovery for any claimed damage to property, and all damages sought are based on personal injuries. Accordingly, fees are not recoverable.

 

Brown also seeks prejudgment interest on any damages that are awarded. “A federal court sitting in diversity applies state law regarding prejudgment interest.” ClearOne Communications, Inc. v. Chiang, 432 F. App’x 770, 773 (10th Cir.2011) (unpublished) (citing AE, Inc. v. Goodyear Tire & Rubber Co., 576 F.3d 1050, 1055 (10th Cir.2009)). In this case, prejudgment interest is authorized by Okla. Stat. tit. 12 § 727.1(E), which allows prejudgment interest on a judgment for personal injury damages. According to the statute, prejudgment interest accrues 24 months after the suit resulting in the judgment was commenced, and runs to the date judgment is filed in amounts determined in accordance with the statute. Prejudgment interest shall be included in the instant judgment.

 

To summarize, the Court finds Plaintiff, Eric Brown, entitled to recover the following damages:

 

• Medical expenses for services from August 28, 2009 to March 9, 2010 in the amount of $28,443.43.

 

• Lost wages from August 28, 2009 to January 27, 2010 in the amount of $9,037.74; and

 

• Pain and suffering from August 28, 2009 to January 18, 2010 in the amount of $20,000.00; and

 

• Prejudgment interest in the amount of $7.90.FN7

 

FN7. The amount of prejudgment interest is calculated according to the Oklahoma Statute, which provides in pertinent part that prejudgment interest shall not begin “to accrue until twenty-four (24) months after the suit resulting in the judgment was commenced.” Okla. Stat. tit. 12, § 727.1(E). The statute further provides that the interest rate for computation of prejudgment interest shall begin with the rate “which is in effect for the calendar year which is twenty-four(24) months after the suit resulting in the judgment was commenced,” and such rate remains in effect “until the end of the calendar year in which interest begins to accrue or until the date judgment is filed, whichever first occurs.” Id. The file reflects that this action commenced on July 18, 2011. Thus, prejudgment interest began to accrue 24 months thereafter, on July 18, 2013. Accordingly, the prejudgment interest rate for calendar year 2013 applies, and continues until the date judgment is entered or the end of calendar year 2013, whichever is earlier. Judgment is being entered in this case on September 11, 2013. Thus, Plaintiff is entitled to prejudgment interest at the 2013 rate of 0.09% from July 18, 2013 to September 11, 2013. See Notice Re: Postjudgment and Prejudgment Interest, Oklahoma State Courts Network, January 2, 2013. The $7.90 in prejudgment interest on Plaintiff’s judgment was calculated on a per diem basis from July 18, 2013 to September 11, 2013.

 

Accordingly, the Court finds that Eric Brown is entitled to judgment as set forth herein. Judgment is hereby entered in favor of Eric Brown and against Defendants in the total amount of $57,489.07.

 

IT IS SO ORDERED.

Court of Appeal,

Second District, Division 4, California.

Salvador RODRIGUEZ et al., Plaintiffs and Appellants,

v.

RWA TRUCKING COMPANY, INC., Defendant and Appellant.

 

B241727

Filed September 12, 2013

As Modified September 20, 2013

 

APPEAL from a judgment of the Superior Court of Los Angeles County, Emilie Elias, Judge. Affirmed in part, reversed in part, and remanded. (Los Angeles County Super. Ct. Nos. BC182763 & BC182764)Miles L. Kavaller for Defendant and Appellant.

 

Law Offices of Stephen Glick, Stephen Glick, and Anthony Jenkins for Plaintiffs and Appellants.

 

SUZUKAWA, J.

*1 Defendant RWA Trucking Company, Inc. (RWA) appeals from the trial court’s judgment that it violated the unfair competition law, Business and Professions Code section 17200 (UCL or section 17200), by charging its drivers for automobile liability insurance, physical damage insurance, cargo insurance, and workers’ compensation insurance from 1993 to 2011. RWA contends that the UCL causes of action and the state laws on which they are based are preempted by federal law. We affirm in part, reverse in part, and remand the matter to the trial court.

 

FACTUAL AND PROCEDURAL BACKGROUND

I. The Parties and the Dispute

RWA is an interstate trucking company registered as a “for-hire interstate motor carrier” with the Federal Motor Carrier Safety Administration (FMCSA). At all relevant times, RWA conducted its trucking business from facilities in Long Beach, California, transporting containers and other cargo from the ports of Los Angeles and Long Beach.

 

RWA contracted with plaintiff Salvador Rodriguez and other drivers who owned their own tractors (drivers) under written lease agreements (Agreements). Under the Agreements, RWA leased the tractors from the drivers and dispatched the drivers to transport cargo. The Agreements characterized the drivers as independent contractors.

 

The Agreements required each driver to carry automobile liability insurance, physical damage insurance, and cargo insurance (collectively, liability insurance), and it gave the drivers the option either to obtain their own policies or elect coverage under RWA’s fleet policies. If the drivers elected coverage under RWA’s fleet policies, RWA deducted from the drivers’ earnings (or “charged back” from his or her compensation) the costs of the insurance. RWA also deducted from the drivers’ earnings the cost of workers’ compensation insurance. The chargebacks were reflected on weekly settlement statements given to each driver.

 

The Agreements authorized RWA to charge an administrative fee for arranging insurance for the drivers. An administrative fee for that purpose of at least 1 percent was deducted from the drivers’ compensation during some years.

 

RWA deducted the following amounts from the drivers for workers’ compensation: December 12, 1993, to December 31, 1994: $71,688.60; December 31, 1994, to December 31, 1995: $71,688.60.

 

During the years 1993 to 1995, RWA collected from its drivers a 1 percent administration fee for automobile liability insurance, physical damage insurance, and cargo insurance. During the years 1996 to 2002, RWA collected significantly less from its drivers than it paid in insurance premiums, ranging from $2,611.48 in 2002 to $244,269.55 in 1997. During the years 2003 to 2009, RWA deducted more from its drivers than it paid in insurance premiums.

 

II. The Present Litigation

 

A. The Pleadings and Class Certification

 

Plaintiff filed the present action in Los Angeles Superior Court in 1997. The complaint alleged: (1) plaintiff was an employee, not an independent contractor, but was denied employee benefits; (2) defendants failed to comply with federal Truth–in–Leasing regulations, thereby breaching fiduciary duties to plaintiff; and (3) defendants sold insurance to plaintiff without a license. ( Rivas v. Rail Delivery Serv. (9th Cir.2005) 423 F.3d 1079, 1081.) On January 16, 1998, defendants removed the case to federal court; on September 8, 2005, the Ninth Circuit held plaintiff lacked article III standing and remanded the case back to state court. ( Id. at p. 1084.)

 

*2 Plaintiff filed the operative fourth amended complaint on May 12, 2009. The first cause of action alleged RWA “transacted insurance” within the meaning of Insurance Code section 1631 by “selling insurance to Plaintiff for compensation” and “charging Plaintiff an administrative fee of at least 1% on the aforementioned insurance that Defendant sold to Plaintiff.” Such transactions were unlawful, plaintiff alleged, because RWA was not licensed to transact insurance in California. Further, RWA “failed to properly disclose the total premium it charged Plaintiff and each Class Member by failing to properly disclose the at least 1% commission Defendants earned, violating California Insurance Code § 381(f).” These Insurance Code violations were alleged to be unlawful and to constitute unfair business practices in violation of the UCL. The second cause of action alleged RWA violated section 17200 by charging plaintiff for workers’ compensation insurance, in violation of Labor Code section 3751 (section 3751) and Albillo v. Intermodal Container Services, Inc. (2003) 114 Cal.App.4th 190, 8 Cal.Rptr.3d 350 ( Albillo ).

 

The court granted plaintiff’s motion for class certification and, on June 9, 2011, it issued an order certifying the following class: “All persons and entities in California that provided trucking services, including the transport of cargo and freight, for RWA Trucking Co., Inc., from December 12, 1993 through the present, who had money deducted from their earnings by RWA Trucking Co., Inc. to pay for Liability Insurance Coverage, Property Damage Insurance Coverage, Cargo Loss Insurance Coverage, or Workers’ Compensation Insurance Coverage.”

 

B. Trial and Decision

The case went to trial on stipulated facts. On December 6, 2011, the court filed a statement of decision. Following is a summary.

 

1. First Cause of Action: Transacting Insurance Without a License

Prior to trial, the court found that RWA was transacting insurance and receiving compensation for doing so within the meaning of the Insurance Code. The court explained: “It is undisputed that RWA received compensation in connection with obtaining insurance for Rodriguez. Accordingly, RWA was required to have a license to transact insurance, but, undisputedly, RWA did not have a license. [¶] The Court finds that Albillo v. Intermodal Container Services, Inc.[, supra,] 114 Cal.App.4th 190 [8 Cal.Rptr.3d 350] does not compel a different result as to the transacting insurance without a license issue.” (Fn.omitted.)

 

Following trial, the court further found that RWA did not comply with the Insurance Code’s disclosure requirements: “RWA stipulated that it did not comply with Insurance Code § 381…. RWA did not give any class member an insurance policy or certificate of insurance, nor any of the items listed in Insurance Code Section 381, i.e., nothing was given to the class members that showed the insurance premium, rates, or criteria used to determine how much to charge the truck driver for insurance.

 

“… RWA stipulated in Fact Nos. 38, 47 and 48, just as Farmers did in the Troyk case, that it charged Plaintiff an ‘administrative fee’ for providing insurance to Plaintiff. Troyk [v. Farmers Group, Inc. (2009) ] 171 Cal.App.4th [1305,] 1324–1325 [90 Cal.Rptr.3d 589]. RWA, like Farmers, did not comply with the disclosure requirement in Insurance Code § 381(f). Following Troyk, RWA violated Insurance Code § 381(f) and Plaintiff has established through Stipulated Fact No. 48 that Plaintiff and each class member has standing to sue RWA under California’s Unfair Competition Laws for RWA’s violation of Insurance Code § 381(f).

 

“

 

“… The Court also rejects RWA’s argument that its practice of violating Insurance Code § 381 is permitted by the ‘Truth–in–Leasing’ regulation in 49 C.F.R. § 376.12(j).[ FN1] Regardless whether charge-backs for insurance might be permitted, RWA must comply with the law in making any such charge-backs, such as complying with California Insurance Code § 381.”

 

FN1. Unless otherwise indicated, all further references to the federal regulations are to title 49 of the Code of Federal Regulations (49 C.F.R.).

 

*3 Based on these findings, the court found that RWA violated the “unlawful” prong of section 17200, and it ordered restitution in the amount of “the difference for each class member between the premium for each such insurance and the amount of money deducted by RWA from each class member for such insurance,” or $502,636.32, plus prejudgment interest of $377,490.33.

 

2. Second Cause of Action: Charging Plaintiffs for Workers’ Compensation Insurance

 

Prior to trial, the court granted plaintiffs’ motion for summary adjudication of the second cause of action. The court found that under Albillo, RWA was not permitted to require plaintiffs to reimburse it for the cost of workers’ compensation insurance. It explained: “The facts of this case are nearly identical to the facts in Albillo. Here, as in Albillo, the Workers’ Compensation Policy at issue protects Defendant from lawsuits made by Plaintiff, should Plaintiff suffer a work-related injury. Following Albillo, Plaintiff is treated as though he were an employee and Defendant is treated as if it were an employer under the § 4150 election; thus, it is unlawful for Defendant to receive from Plaintiff any portion of the cost of the Workers’ Compensation Insurance. Albillo, 114 Cal.App.4th at 198 [8 Cal.Rptr.3d 350].

 

“The Albillo Court explained, ‘While it is correct that an election under Labor Code section 4150 does not make a person an employee for all purposes, it does expressly subject him or her to the compensation provisions of division 4 of the Act. Labor Code section 3751 is one of those provisions. [Citation.] Accordingly, we hold that by deducting amounts from appellants’ compensation to secure workers’ compensation coverage, respondents violated Labor Code section 3751.’ [Citation.]”

 

Following trial, the court applied its summary adjudication holding to the entire plaintiff class and ordered RWA to “restore to Plaintiff and the Class all funds RWA retained by means of the unfair and unlawful business acts and practices alleged herein.” It awarded the plaintiff class “the principal amount of $143,377.20, and prejudgment interest through September 26, 2011 in the amount of $233,360.”

 

3. Federal Preemption

In concluding that plaintiffs were entitled to compensation for RWA’s violations of California law, the court determined that these laws were not preempted by federal law, namely, the Federal Aviation Administration Authorization Act of 1994 (FAAAA), title 49 United States Code section 14501 et seq., or the Truth–in–Leasing Act. It explained: “There is no California case that says that the UCL is preempted in a FAAA[A] case. [¶] … [¶] … Equally important, the U.S. District Court for the Central District of California already rejected the precise preemption arguments raised by RWA; holding that Plaintiff’s claims here are not preempted by 49 U.S.C. § 14501(c). See Renteria v. K & R Transportation, Inc. (C.D.Cal.1999) 1999 WL 33268638…. Furthermore, the McCarran–Ferguson Act, 15 U.S.C. § 1012, prevents the Court from interpreting 49 U.S.C. § 14501(c) so as to preempt Plaintiff’s claims that are based upon California insurance laws. Here, Congress expressly reiterated State authority to regulate insurance when enacting 49 U.S.C. § 14501(c)(2). Renteria, 1999 WL 33268638 at *2. The Renteria Court held that ‘[t]he aim of the regulation [49 C.F.R. § 376.12(j)(1) ] is to compel disclosure of the contract terms between the owner-operators and the carriers, not to govern the terms for which the parties are permitted to bargain. Nothing in the federal regulations prevents a state from passing legislation that mandates a particular contract term with regard to the costs of insurance. Similarly, while separate licensing requirements in each state may impact carriers in some way, the brokering of insurance is not the focus of the federal law[,]’ so 49 U.S.C. § 14501(c) does not preempt California’s worker’s compensation insurance or liability insurance laws. Renteria, 1999 WL 33268638 at *3 (emphasis added). Under 49 U.S.C. § 14501(c), ‘[t]he effects of the state insurance, wage, and workers’ compensation laws on defendants … [are] insufficient to “relate to” prices…. Additionally, insurance and wage requirements are areas generally reserved to the states. See [Californians for Safe and Competitive Dump Truck Transp. v.] Mendonca [ (9th Cir.1998) 152 F.3d 1184]; 49 U.S.C. § 14501(c)(2).’ Renteria, 1999 WL 33268638 at *4.” (Fns. & underling omitted.)

 

*4 C. Judgment and Appeal

The court entered judgment on May 22, 2012. The judgment awarded plaintiffs “as and for restitution for the first cause of action the sum of $502,636.32 principal, plus prejudgment interest through May 17, 2012 in the amount of $409,716,08 and for the second cause of action, $143,377.20 principal plus prejudgment interest in the amount of $231,845.50 through May 17, 2012 for a total of $1,287,575.10.”

 

Notice of entry of judgment was served on May 25, 2012. RWA timely appealed from the judgment, and plaintiffs timely cross-appealed.

 

RWA’S APPEAL

RWA contends: (1) RWA did not engage in the sale of insurance under California law; if it did violate California insurance law, that law is preempted by federal law; (2) California law, which prohibits an employer from charging an independent contractor the costs of his or her workers’ compensation insurance, is preempted by the FAAAA; (3) the trial court erred in awarding plaintiffs prejudgment interest. Because RWA’s appeal presents solely issues of law on stipulated facts, our review is de novo. ( Weingarten Realty Investors v. Chiang (2012) 212 Cal.App.4th 163, 167, 150 Cal.Rptr.3d 813.)

 

I. FEDERAL LAW PREEMPTS PLAINTIFFS’ CLAIM FOR UNLAWFULLY TRANSACTING INSURANCE

During all the years relevant to this action, RWA required each of its drivers to maintain automobile liability insurance, physical damage insurance, and cargo insurance for his or her vehicle. RWA gave each driver the option of accepting coverage under RWA’s fleet policies; if the driver elected such coverage, RWA deducted the cost of the insurance from the driver’s earnings. During some years, RWA also deducted an additional administrative fee from the drivers’ earnings.

 

Plaintiffs allege that these deductions or “chargebacks” constitute the “transacting” of insurance without a license in violation of the Insurance Code. RWA disagrees, contending that the chargebacks at issue do not violate the California Insurance Code; in the alternative, RWA urges that if the chargebacks do violate California law, that law is preempted by federal law. We address these issues below and conclude that because the claim for unlawfully transacting insurance is preempted by federal law, the award of restitution and prejudgment interest as to the first cause of action must be reversed.

 

A. “Transacting” Insurance Under California Law

Insurance Code section 1631 provides that unless exempt by the provisions of this article, a person “shall not solicit, negotiate, or effect contracts of insurance, or act in any of the capacities defined in Article 1 (commencing with Section 1621)” unless the person holds a valid insurance license. The capacities defined in article 1 of the code include acting as an insurance broker—i.e., “for compensation and on behalf of another person, transact[ing] insurance… with, but not on behalf of, an admitted insurer.” (Ins.Code, § 1623, subd. (a), italics added.)

 

“Transacting insurance” under section 35 of the Insurance Code includes all of the following:

 

*5 “(a) Solicitation.

 

“(b) Negotiations preliminary to execution.

 

“(c) Execution of a contract of insurance.

 

“(d) Transaction of matters subsequent to execution of the contract and arising out of it.”

 

Insurance Code section 1635, subdivision (h) provides that an individual need not hold a license to complete or deliver a declaration or certificate of coverage “under a running inland marine insurance contract evidencing coverage thereunder and including only those negotiations as are necessary to the completion or delivery if the person performing those acts or his or her employer has an insurable interest in the risk covered by the certificate or declaration,” so long as “no commission is paid or allowed, directly or indirectly, by the insurer, creditor, retailer, or other person for acting in those capacities or engaging in those activities.”

 

Plaintiffs contend that by purchasing insurance for its drivers and charging the drivers an administrative fee, RWA “transacted insurance” for compensation within the meaning of the Insurance Code. Further, plaintiffs urge that RWA does not come within the exemption of Insurance Code section 1635, subdivision (h), because not all the insurance coverage RWA provided its drivers was cargo insurance, and RWA recovered a commission for transacting insurance for its drivers.

 

For the reasons that follow, we believe that California insurance law, if interpreted as plaintiffs suggest, is preempted by federal law. We therefore assume for the sake of argument that RWA’s activities did violate California law and address the preemption issue below.

 

B. Federal Law Governing “Chargebacks” of Insurance Costs by Federal Motor Carriers

1. Federal Truth–in–Leasing Regulations

As federal cases have recognized, motor carriers frequently prepay the costs of certain goods for which drivers ultimately may be responsible. The cost of these items then is deducted from drivers’ compensation in a process known as “chargebacks.” Chargebacks are noted along with compensation on drivers’ weekly pay stubs, also known as settlement sheets or statements. ( Owner–Operator Independent Drivers Asso., Inc. v. Swift Transportation Co., Inc. (9th Cir.2011) 632 F.3d 1111 ( Swift ).

 

[1]The Department of Transportation is authorized to regulate the relationships between drivers and motor carriers, including required terms of their leases. The federal Truth–in–Leasing regulations, 49 C.F.R. part 376, set forth specific requirements with regard to chargebacks. ( Swift, supra, 632 F.3d at p. 1113, citing OOIDA v. Swift Transp. Co. (9th Cir.2004) 367 F.3d 1108, 1110.)

 

2. Federally Mandated Motor Carrier Liability Insurance

Section 13906 of title 49 of the United States Code requires federal motor carriers to carry specified levels of liability insurance, as follows: “Liability insurance requirement. The Secretary [of Transportation] may register a motor carrier under section 13902 only if the registrant files with the Secretary a bond, insurance policy, or other type of security approved by the Secretary, in an amount not less than such amount as the Secretary prescribes pursuant to, or as is required by, sections 31138 and 31139, and the laws of the State or States in which the registrant is operating, to the extent applicable. The security must be sufficient to pay, not more than the amount of the security, for each final judgment against the registrant for bodily injury to, or death of, an individual resulting from the negligent operation, maintenance, or use of motor vehicles, or for loss or damage to property (except property referred to in paragraph (3) of this subsection), or both.” (49 U.S.C. § 13906(a)(1).) The Secretary “may determine the type and amount of security filed under this section.” (49 U.S.C. § 13906(d).)

 

*6 The Truth–in–Leasing regulations, 49 C.F.R. section 376.12(j), provide for the allocation of these insurance costs between motor carriers and drivers as follows:

 

“Insurance. (1) The lease shall clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public pursuant to FMCSA regulations under 49 U.S.C. 13906. The lease shall further specify who is responsible for providing any other insurance coverage for the operation of the leased equipment, such as bobtail insurance. If the authorized carrier will make a charge back to the lessor for any of this insurance, the lease shall specify the amount which will be charged-back to the lessor.

 

“(2) If the lessor purchases any insurance coverage for the operation of the leased equipment from or through the authorized carrier, the lease shall specify that the authorized carrier will provide the lessor with a copy of each policy upon the request of the lessor. Also, where the lessor purchases such insurance in this manner, the lease shall specify that the authorized carrier will provide the lessor with a certificate of insurance for each such policy. Each certificate of insurance shall include the name of the insurer, the policy number, the effective dates of the policy, the amounts and types of coverage, the cost to the lessor for each type of coverage, and the deductible amount for each type of coverage for which the lessor may be liable.”

 

3. Federal Cases Holding That Motor Carriers May Lawfully Charge Back Insurance Costs to Drivers

The Seventh Circuit Court of Appeals considered whether section 376.12 permits motor carriers to lawfully charge back to drivers the costs of liability insurance in Owner–Operator Independent Drivers Asso., Inc. v. Mayflower Transit, LLC (7th Cir.2010) 615 F.3d 790 ( Mayflower ). There, defendant Mayflower paid its truck drivers a negotiated price per mile, reduced by the cost of insurance in the form of a chargeback. Some of the truckers sued, contending that the chargebacks violated 49 C.F.R. section 376.12(i), which provides that “the lessor is not required to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into the lease arrangement.” The truckers contended that a requirement to reimburse Mayflower for the cost of insurance constituted a “purchase” of insurance within the meaning of section 376.12(i). ( Id. at p. 791.)

 

The Seventh Circuit disagreed. It explained: “Plaintiffs treat the chargeback as a sale of insurance by Mayflower. Yet it is not an insurer. It is not authorized to underwrite risks. The regulation requires motor carriers to purchase insurance underwritten by real insurers, so that persons injured by a motor carrier’s operations may find a source of compensation more reliable than the motor carrier itself, which often is thinly capitalized. Mayflower is a large and solvent firm that has been in business for decades; it can pay for its own casualties (and will do so indirectly because its insurer will set an experience-rated premium that covers the costs of indemnity, plus a loading charge for the insurer’s administrative overhead). But many other motor carriers are small, and some would take too few precautions against accidents if they anticipated that a major loss would lead them to declare bankruptcy. Then the owners would reap profits as they came in, and use the corporate shield of limited investors’ liability to protect themselves against tort judgments. The insurance requirement prevents that. And the regulation places on the motor carrier under whose certificate the service is rendered the obligation to secure insurance; that makes enforcement much easier than placing a separate mandatory-insurance obligation on the many owner-operators who own and lease a single truck. Yet nothing in this rationale for mandatory insurance implies that lessors need not pay for the coverage secured through the motor carrier; as we’ve observed already, they will pay indirectly (through lower rates per mile) if they do not pay through a chargeback.” ( Mayflower, supra, 615 F.3d at p. 793.)

 

*7 The court continued: “If this were not clear from the text of § 376.12(i ) and the fact that Mayflower is not an insurer (so it can’t be selling insurance to the lessors), it is made clear by comparing § 376.12(i ) with § 376.12(j)(1), which speaks to the topic. This subsection, captioned ‘Insurance,’ reads: [¶] ‘The lease shall clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public pursuant to FMCSA regulations under 49 U.S.C. 13906. The lease shall further specify who is responsible for providing any other insurance coverage for the operation of the leased equipment, such as bobtail insurance. If the authorized carrier will make a charge back to the lessor for any of this insurance, the lease shall specify the amount which will be charged-back to the lessor.’ [¶] The reference to chargebacks in the third sentence is incompatible with the owner-operators’ contention that chargebacks are ‘sales’ forbidden by § 376.12(i ). Courts do not read regulations to create such a glaring, and unnecessary, inconsistency.

 

“Plaintiffs want us to read the third sentence, which speaks of chargebacks, as limited to the second, which deals with ‘other insurance coverage … such as bobtail insurance.’ But the third sentence refers to ‘any’ of ‘this’ insurance, and that construction is best understood as including the insurance mentioned in the whole subsection. It would have been easy to write: ‘If the authorized carrier will make a charge back to the lessor for any of [the other] insurance [mentioned in the previous sentence], the lease shall specify the amount which will be charged-back to the lessor.’ But that’s not what the third sentence says. Section 376.12(j)(1) confirms our understanding of § 376.12(i ): A chargeback for the cost of insurance is not a sale of insurance.” ( Mayflower, supra, 615 F.3d at pp. 793–794.)

 

The Eighth Circuit Court of Appeals reached a similar result in Owner–Operator Independent Drivers Asso. v. United Van Lines, LLC (8th Cir.2009) 556 F.3d 690 ( United ). There, individual truckers who leased trucks to United Van Lines, a federally registered motor carrier, alleged that United improperly charged back the cost of federally-mandated public liability and property damage (PL/PD) insurance. The court disagreed: “ ‘The first sentence [of § 376.12(j)(1) ] establishes that all carriers must maintain public liability and property damage insurance. The second sentence provides that carriers and drivers may decide who is responsible for maintaining other insurance, such as bobtail insurance. The third sentence permits the carrier to charge back to the driver ‘any of this insurance.’ The inclusion of the word ‘any’ and the exclusion of the word ‘other’ signify that ‘this insurance’ [in the third sentence] refers to all insurance referenced in the paragraph, not just to the insurance discussed in the previous sentence.’ ” ( Id. at p. 697.) The court also rejected the truckers’ contention that construing section 376.12(j)(1) to permit chargebacks conflicted with federal motor carrier financial responsibility statutes, which the truckers urged reflected Congress’s intent to bar insurance chargebacks so as to improve carriers’ level of care. The court explained: “Without question, Congress requires that motor carriers maintain adequate levels of PL/PD insurance to protect the public and to encourage safer motor carrier operations. See 49 C.F.R. § 387.1. But the statutes requiring insurance and minimum levels of financial responsibility—49 U.S.C. §§ 13906(a) and 31139—do not specify which party to a motor carrier lease must bear the cost of that insurance. Thus, the legislation ‘neither grants nor denies the [Secretary] power to regulate compensation paid under lease arrangements.’ … In these circumstances, we must apply the plain language of § 376.12(j)(1) reflecting the Secretary’s decision not to dictate how these private parties must resolve this aspect of their financial arrangement.” ( Id. at p. 697, fn.omitted.) FN2

 

FN2. Plaintiffs quote United only in part and assert that “ United held that Congress has not addressed who must pay for the insurance, or whether a trucking company can transact insurance as an insurance broker under state law for that matter, thus leaving the states to exercise their traditional state power to make such determination.” Not so. Immediately after the sentence plaintiffs quote, the court states that in the absence of a clear statement by Congress of whom shall bear the cost of liability insurance, courts must apply the plain language of federal regulations “reflecting the Secretary’s decision not to dictate how these private parties must resolve this aspect of their financial arrangement.” ( United,supra, 556 F.3d at p. 697.)

 

4. Federal Cases Holding That Motor Carriers May Lawfully Mark-up Chargebacks to Drivers

*8 In Swift, supra, 632 F.3d 1111, the Ninth Circuit considered the claim of independent drivers that motor carriers violated federal law by marking-up chargebacks. The court concluded that federal law permitted motor carriers to mark-up chargebacks, as long as the mark-ups were not excessive. The court explained: “[49 C.F.R § 376.12] intended to curb excessive mark-ups by motor carriers and level the playing field with regard to information about how charge-backs are computed. See Final Rule, 47 Fed.Reg. 51136, 51139, 1982 WL 146684 (Nov. 12, 1982). However, [drivers] seem to erroneously equate ‘excessive’ with ‘any’ mark-ups in this instance. See DC Opinion & Order, 2007 WL 2808997, at *2. The district court, and virtually every court that has addressed the issue, has correctly concluded that profiting from charge-backs is not per se unlawful. Id.; see also, e. g., [Owner–Operator Indep. Drivers Ass’n v. Landstar Sys.], 622 F.3d [1307,] 1319 [ (11th Cir.Fla.2010) ]; OOIDA v. C.R. England, Inc., 508 F.Supp.2d 972, 981 (D.Utah 2007) (‘[C]harge-backs that include profits and fees are not per se unlawful under § 376.12(h)….’). Thus, to ascribe to the regulations a purpose of eliminating carriers’ profits is unsustainable.” ( Swift, supra, at p. 1117, fn. omitted.)

 

5. Summary

Mayflower and United stand for the proposition that federal law permits motor carriers to charge back the cost of liability insurance to their drivers. Swift stands for the related proposition that federal law also permits motor carriers to profit from chargebacks by marking-up (or charging an administrative fee on) charged-back items. Having thus established the state of federal law, we turn to the question before us—whether these federal regulations preempt contrary state law.

 

C. Federal Preemption

[2]“A preemption ‘question is basically one of congressional intent. Did Congress, in enacting the Federal Statute, intend to exercise its constitutionally delegated authority to set aside the laws of a State? If so, the Supremacy Clause requires courts to follow federal, not state, law.’ ( Barnett Bank [of Marion Cty., N.A. v. Nelson (1996) ] 517 U.S. [25,] 30 [116 S.Ct. 1103, 134 L.Ed.2d 237], citing U.S. Const., art. VI, cl. 2; see also Viva! Internat. Voice for Animals v. Adidas Promotional Retail Operations, Inc. (2007) 41 Cal.4th 929, 935 [63 Cal.Rptr.3d 50, 162 P.3d 569] ( Viva! International ).)” ( Parks v. MBNA America Bank, N.A. (2012) 54 Cal.4th 376, 382–383, 142 Cal.Rptr.3d 837, 278 P.3d 1193 ( Parks ).)

 

[3][4][5][6][7][8]The Supreme Court has recognized “ ‘four species of federal preemption: express, conflict, obstacle, and field.’ ( Viva! International, supra, 41 Cal.4th at p. 935 [63 Cal.Rptr.3d 50, 162 P.3d 569].) ‘First, express preemption arises when Congress “define[s] explicitly the extent to which its enactments pre-empt state law. [Citation.]….” [Citations.] Second, conflict preemption will be found when simultaneous compliance with both state and federal directives is impossible. [Citations.] Third, obstacle preemption arises when “ ‘under the circumstances of [a] particular case, [the challenged state law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ ” [Citations.] Finally, field preemption, i.e., “Congress’ intent to pre-empt all state law in a particular area,” applies “where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress ‘left no room’ for supplementary state regulation.” [Citation.]’ ( Id. at p. 936 [63 Cal.Rptr.3d 50, 162 P.3d 569]; accord, Bronco Wine Co. v. Jolly (2004) 33 Cal.4th 943, 955 [17 Cal.Rptr.3d 180, 95 P.3d 422]; see also Barnett Bank, supra, 517 U.S. at p. 31 [116 S.Ct. 1103].)” ( Parks, supra, 54 Cal.4th at p. 383, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) FN3

 

FN3. “Federal regulations have the same preemptive effect as the statutes under which they are promulgated, and the agency’s reasonable construction of the statute it is charged with enforcing is entitled to deference. ( Aguayo v. U.S. Bank (9th Cir.2011) 653 F.3d 912, 919, 920.) The agency’s interpretation of its own regulations controls unless it is plainly erroneous or inconsistent with the regulations. ( Long Island Care at Home, Ltd. v. Coke (2007) 551 U.S. 158, 170–171 [127 S.Ct. 2339, 168 L.Ed.2d 54].)” ( Akopyan v. Wells Fargo Home Mortgage, Inc. (2013) 215 Cal.App.4th 120, 138, 155 Cal.Rptr.3d 245.)

 

*9 [9]We begin with obstacle preemption. Obstacle preemption is implicated when state law “stands as an obstacle to the accomplishment and execution of” federal law. ( Parks, supra, 54 Cal.4th at p. 383, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) Such preemption may exist even where compliance with both federal and state law is not impossible—i.e., because federal law “requires … something that state law prohibits.” ( Id. at p. 384, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) Rather, obstacle preemption may exist where state law prohibits something permitted (but not required) by federal law, thus standing as an obstacle to accomplishing the purposes of the federal law.

 

Parks illustrates such circumstances. In Parks, the California Supreme Court considered whether the National Bank Act of 1864(NBA), which grants national banks “ ‘all such incidental powers as shall be necessary to carry on the business of banking,’ ” preempted Civil Code section 1748.9, a California law requiring that certain disclosures accompany preprinted checks issued by a credit card issuer to its cardholders. ( Parks, supra, 54 Cal.4th at p. 380, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) Specifically, section 1748.9 required that a credit card issuer that extended credit to a cardholder through preprinted checks (convenience checks) “ ‘shall disclose on the front of an attachment that is affixed by perforation or other means to the preprinted check or draft, in clear and conspicuous language, all of the following information: (1) That “use of the attached check or draft will constitute a charge against your credit account.” (2) The annual percentage rate and the calculation of finance charges, as required by Section 226.16 of Regulation Z of the Code of Federal Regulations, associated with the use of the attached check or draft. (3) Whether the finance charges are triggered immediately upon the use of the check or draft.’ ” ( Parks, supra, at p. 380, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) The federal NBA did not require such disclosures. After using convenience checks that did not include the disclosures required by section 1748.9, plaintiff sued his credit card company, MBNA America Bank (MBNA), on behalf of himself and similarly situated MBNA customers, alleging that the bank engaged in unfair competition in violation of section 17200 by failing to make the disclosures mandated by section 1748.9. ( Id. at p. 381, 142 Cal.Rptr.3d 837, 278 P.3d 1193.)

 

The Supreme Court held that plaintiff’s claims under sections 17200 and 1748.9 were preempted by the NBA. ( Parks, supra, 54 Cal.4th at pp. 386–387, 142 Cal.Rptr.3d 837, 278 P.3d 1193.). The court explained that the broad power granted by the NBA to national banks to exercise “ ‘all such incidental powers as shall be necessary to carry on the business of banking’ ” expressly included the power to loan money on personal security. ( Id. at pp. 386–387, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) The disclosure requirements in section 1748.9 purported to impose a condition on that federally granted power, providing that it could be exercised only if national banks offered credit through convenience checks containing specific disclosures. Further, “[t]he specific disclosure obligations imposed by section 1748.9 exceed any requirements in federal law. The requirement in section 1748.9 that disclosures appear ‘on the front of an attachment that is affixed by perforation or other means to the preprinted check or draft’ has no counterpart in federal law. The same is true of section 1748.9’s requirement that precise language (‘ “use of the attached check or draft will constitute a charge against your credit account” ’) appear on each check. (§ 1748.9, subd. (a)(1).) In addition, although federal regulations require certain disclosures when the terms of using a convenience check differ from the terms of the customer’s credit account (12 C.F.R. § 226.9(b)(1), (2) (2012)), they do not mandate that every convenience check disclose ‘[w]hether the finance charges are triggered immediately upon the use of the check,’ as section 1748.9, subdivision (a)(3) requires.” ( Id. at p. 387, 142 Cal.Rptr.3d 837, 278 P.3d 1193.)

 

*10 The court continued: “In characterizing the disclosure requirements of section 1748.9, the Court of Appeal said that the statute ‘does not forbid the exercise of a banking power authorized by the NBA. Section 1748.9 does not bar national banks from loaning money on personal security through convenience checks.’ It is true that section 1748.9 … does not outlaw a category of banking activity. However, to say that MBNA may offer convenience checks so long as it complies with section 1748.9 is equivalent to saying that MBNA may not offer convenience checks unless it complies with section 1748.9. Whether phrased as a conditional permission or as a contingent prohibition, the effect of section 1748.9 is to forbid national banks from offering credit in the form of convenience checks unless they comply with state law. As demonstrated by the instant lawsuit brought under California’s unfair competition law (Bus. & Prof.Code, § 17200 et seq.), a national bank may be subject to monetary liability, and its convenience check offers may be enjoined, if it does not comply.” ( Parks, supra, 54 Cal.4th at pp. 387–388, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) Such a requirement, the court concluded, “ ‘significantly impair[s] the exercise of authority’ granted to national banks by the NBA.” ( Id. at p. 388, 142 Cal.Rptr.3d 837, 278 P.3d 1193.)

 

Further, the court said, although the disclosures required by California law were not themselves onerous, “our preemption analysis must consider the burden of disclosure ‘regimes imposed not just by [California], but by all States in which the banks operate.’ ( Watters [v. Wachovia Bank, N.A. (2007) ] 550 U.S. [1,] 13 [127 S.Ct. 1559, 167 L.Ed.2d 389].) If disclosure requirements such as those in section 1748.9 were allowed to stand, national banks operating in multiple states would face the prospect of ‘ “limitations and restrictions as various and as numerous as the States.” [Citation.]’ ( Id. at p. 14 [127 S.Ct. 1559].) National banks would have to monitor requirements as to the content, language, manner, and format of disclosures for each of the 50 states (and possibly municipalities as well), and continually adjust their convenience check offers to comply with the prescriptions of each local jurisdiction. Such ‘[d]iverse and duplicative [regulation] of national banks’ engagement in the business of banking … is precisely what the NBA was designed to prevent.’ ( Id. at pp. 13–14 [127 S.Ct. 1559].)” ( Parks, supra, 54 Cal.4th at pp. 388–389, 142 Cal.Rptr.3d 837, 278 P.3d 1193.)

 

[10]Applying the principles articulated in Parks, we conclude that if state insurance laws prohibit RWA from charging back its liability insurance costs to its drivers, those laws are preempted by 49 C.F.R. section 376.12. As we have said, 49 C.F.R. section 376.12 permits motor carriers to charge back liability insurance costs to its drivers, so long as the amounts of those chargebacks are clearly specified. In contrast, if California insurance law is interpreted as plaintiffs suggest, it would forbid such chargebacks unless the motor carriers were licensed to sell insurance. Thus, under plaintiffs’ interpretation of California law, it would prohibit precisely the kind of chargebacks that federal law permits.

 

As in Parks, there is no indication here that Congress intended to subject the rights granted by federal regulation to state or local restriction. ( Parks, supra, 54 Cal.4th at p. 387, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) And, as in Parks, if the present state law is enforceable against federal motor carriers, motor carriers may be subject to monetary liability if they do not comply with state law. Thus, as in Parks, requiring compliance with state insurance regulation as a condition of charging back insurance costs to drivers under the federal Motor Carrier Act would “ ‘significantly impair the exercise of authority’ granted” under federal law. ( Id. at p. 388, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) Further, if the state insurance law at issue is allowed to stand, motor carriers operating in multiple states would face the prospect of “ ‘ “limitations and restrictions as various and as numerous as the States.” [Citation.]’ [Citation.]” ( Ibid.) Federal motor carriers would have to monitor chargeback requirements for each of the 50 states and continually adjust their leases with drivers to comply with the prescriptions of each local jurisdiction. “Such ‘[d]iverse and duplicative [regulation] … is precisely what the [FAAAA] was designed to prevent.’ [Citation.]” ( Id. at pp. 388–389, 142 Cal.Rptr.3d 837, 278 P.3d 1193.) FN4

 

FN4. Because we have concluded that obstacle preemption applies, we need not consider the other three species of federal preemption.

 

*11 Plaintiffs contend that obstacle preemption cannot apply where Congress has expressly defined the scope of preemption, but we do not agree. As our Supreme Court has explained: “ ‘In Freightliner Corp. v. Myrick (1995) 514 U.S. 280 [115 S.Ct. 1483, 131 L.Ed.2d 385], the court clarified the relation between express preemption clauses and implied preemption doctrines, explaining that “an express definition of the pre-emptive reach of a statute ‘implies’—i.e., supports a reasonable inference—that Congress did not intend to pre-empt other matters,” but the express clause does not “entirely foreclose[ ] any possibility of implied pre-emption.” ’ ” ( Martinez v. Regents of University of California (2010) 50 Cal.4th 1277, 1297, 117 Cal.Rptr.3d 359, 241 P.3d 855, italics added; see also Freightliner Corp. v. Myrick, supra, 514 U.S. at p. 287, 115 S.Ct. 1483 [“As an initial matter, we must address the argument that we need not reach the conflict pre-emption issue at all. According to respondents and the Court of Appeals, Cipollone v. Liggett Group, Inc., 505 U.S. 504 [112 S.Ct. 2608, 120 L.Ed.2d 407] (1992) held that implied pre-emption cannot exist when Congress has chosen to include an express pre-emption clause in a statute. This argument is without merit.”], italics added.)

 

[11]Plaintiffs also contend that the McCarran Ferguson Act, title 15 of the United States Code section 1012, prohibits the court from finding that the FAAAA preempts provisions of the Insurance Code. Again, we do not agree. The McCarran–Ferguson Act provides: “No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance [.]” (15 U.S.C. § 1012(b), italics added.) “This act preserves a state statute from federal preemption where: ‘(1) the state statute has been enacted “for the purpose of regulating the business of insurance;” (2) application of the relevant federal statute would “invalidate, impair, or supersede” that state statute; and (3) the federal statute does not itself “specifically relate to the business of insurance.” ’ [Citations.] [¶] As the United States Supreme Court has explained, consistent with Congress’s clear mandate under the McCarran–Ferguson Act, ‘state laws enacted “for the purpose of regulating the business of insurance” do not yield to conflicting federal statutes unless a federal statute specifically requires otherwise.’ [Citations.]” ( Pagarigan v. Superior Court (2002) 102 Cal.App.4th 1121, 1135, 126 Cal.Rptr.2d 124.)

 

[12]In the present case, the controlling federal statutes and rules clearly “relate to” the business of insurance. Title 49 United States Code section 13903 requires motor carriers to file a bond or insurance policy; section 31139 authorizes the Secretary of Transportation to “prescribe regulations to require minimum levels of financial responsibility sufficient to satisfy liability amounts established by the Secretary covering public liability, property damage, and environmental restoration for the transportation [of property] by motor carrier”; and section 14102 authorizes the Secretary of Transportation to require motor carriers using motor vehicles owned by others to “obtain liability and cargo insurance on them.” These powers are implemented through 49 C.F.R. section 376.12(j), which is entitled “Insurance” and requires that leases between motor carriers and drivers shall “clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public pursuant to FMCSA regulations under 49 U.S.C. 13906” and shall “further specify who is responsible for providing any other insurance coverage for the operation of the leased equipment, such as bobtail insurance.” (Italics added.)

 

[13]Plaintiffs contend, finally, that even if RWA did not violate the Insurance Code, it violated 49 C.F.R. section 376.12 because it did not provide its drivers with certificates of insurance that specified the cost to the drivers of each kind of insurance coverage. Whatever the merits of this argument, it was neither pled in the operative complaint nor litigated in the trial court, and thus we do not reach it.

 

II. THE FAAAA DOES NOT PREEMPT CALIFORNIA LAW PROHIBITING EMPLOYERS FROM SEEKING REIMBURSEMENT FROM INDEPENDENT CONTRACTORS FOR THE COST OF WORKERS’ COMPENSATION INSURANCE

*12 During some of the years relevant to this action, RWA charged back to plaintiffs RWA’s costs for workers’ compensation insurance. Plaintiffs contend this violated section 3751, as interpreted by Albillo, supra, 114 Cal.App.4th 190, 8 Cal.Rptr.3d 350. RWA agrees that charging plaintiffs for workers’ compensation insurance violated California law, but urges that the state law is expressly preempted by the FAAAA. For the reasons that follow, plaintiffs are correct. We conclude that because section 3751 is not preempted by federal law, the award of restitution under the second cause of action was proper.

 

A. The Workers’ Compensation Law

The workers’ compensation law (Lab.Code, § 3200 et seq.) “is a comprehensive statutory scheme that governs the compensation provided to California employees for injuries occurring during the course and scope of their employment. ( Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 810, 102 Cal.Rptr.2d 562, 14 P.3d 234….) … ‘The underlying premise behind this statutorily created system of workers’ compensation is the “ ‘compensation bargain.’ ” [Citation.] Pursuant to this presumed bargain, “the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort.” [Citation.]’ ( Id. at p. 811 [102 Cal.Rptr.2d 562, 14 P.3d 234].)” ( Albillo, supra, 114 Cal.App.4th at p. 199, 8 Cal.Rptr.3d 350.)

 

Independent contractors are not, by statute, subject to the workers’ compensation laws. However, pursuant to Labor Code section 4150, employers and independent contractors may elect to “come under the compensation provisions of this division,” including the workers’ compensation provisions.

 

[14][15]Section 3751, subdivision (a) prohibits employers from deducting the cost of workers’ compensation insurance from employee wages. FN5 “Stated simply, this provision requires the employer to bear the entire cost of securing compensation.” ( Albillo, supra, 114 Cal.App.4th at p. 201, 8 Cal.Rptr.3d 350.) The California Courts of Appeal have interpreted section 3751 to apply to independent contractors who have elected to come within the workers’ compensation insurance system. ( Albillo, supra, at p. 194, 8 Cal.Rptr.3d 350.) Thus, under California law, “[p]arties who elect to ‘come under the compensation provisions of this division’ necessarily elect to come under Labor Code section 3751,” which bars employers from requiring independent contractors to cover any portion of the cost of compensation. ( Albillo, supra, at p. 201, 8 Cal.Rptr.3d 350.)

 

FN5. Section 3751 provides: “No employer shall exact or receive from any employee any contribution, or make or take any deduction from the earnings of any employee, either directly or indirectly, to cover the whole or any part of the cost of compensation under this division. Violation of this subdivision is a misdemeanor.”

 

[16]The parties agree that under California law—specifically, section 3751 and Albillo—RWA could not lawfully have charged the plaintiff class for the cost of workers’ compensation insurance. RWA contends, however, that the FAAAA expressly preempts California law in this area and, therefore, charging plaintiffs for workers’ compensation insurance was not unlawful. Plaintiffs disagree, contending that section 3751 and Albillo are not preempted by the FAAAA.

 

B. The FAAAA

In 1978, Congress “ ‘determin[ed] that “maximum reliance on competitive market forces’ ” would favor lower airline fares and better airline service, and it enacted the Airline Deregulation Act [ (ADA) ]. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992) [ ( Morales ) ] (quoting 49 U.S.C.App. § 1302(a)(4) (1988 ed.)); see 92 Stat. 1705.) In order to ‘ensure that the States would not undo federal deregulation with regulation of their own,’ that Act ‘included a pre-emption provision’ that said ‘no State … shall enact or enforce any law … relating to rates, routes, or services of any air carrier.’ Morales, supra, at 378, 112 S.Ct. 2031; 49 U.S.C.App. § 1305(a)(1) (1988 ed.).” ( Rowe v. New Hampshire Motor Transport Assn. (2008) 552 U.S. 364, 367–368, 128 S.Ct. 989, 169 L.Ed.2d 933 ( Rowe ).)

 

*13 In 1980, Congress deregulated trucking. (See Motor Carrier Act of 1980, 94 Stat. 793.) In 1994, Congress similarly sought to preempt state trucking regulation through the FAAAA. In doing so, it modeled its preemption provision on the ADA as follows: “[A] State … may not enact or enforce a law … related to a price, route, or service of any motor carrier … with respect to the transportation of property.” (49 U.S.C. § 14501(c)(1); see Rowe, supra, at pp. 367–368, 128 S.Ct. 989.)

 

Because the relevant preemption language of the ADA and FAAAA are so closely related, the United States Supreme Court has relied on its ADA jurisprudence to interpret the scope of FAAAA preemption. ( Rowe, supra, 552 U.S. at p. 370, 128 S.Ct. 989.)

 

C. U.S. Supreme Court ADA and FAAAA Preemption Decisions

The United States Supreme Court first considered the scope of ADA preemption in Morales, supra, 504 U.S. 374, 112 S.Ct. 2031. There, the issue before the court was whether the ADA preempted “Air Travel Industry Enforcement Guidelines” (guidelines) adopted by state attorneys general that “contain[ed] detailed standards governing the content and format of airline advertising, the awarding of premiums to regular customers (so-called ‘frequent flyers’), and the payment of compensation to passengers who voluntarily yield their seats on overbooked flights.” ( Id. at p. 379, 112 S.Ct. 2031.) These guidelines purported not to “ ‘create any new laws or regulations,’ ” but instead claimed to “ ‘explain in detail how existing state laws apply to air fare advertising and frequent flyer programs.’ ” ( Ibid.)

 

The court concluded that the guidelines were preempted by the ADA. It explained that the ordinary meaning of “relating to” is broad—“ ‘to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with,’ Black’s Law Dictionary 1158 (5th ed. 1979)—and the words thus express a broad pre-emptive purpose.” ( Morales, supra, 504 U.S. at p. 383, 112 S.Ct. 2031.) Accordingly, “[s]tate enforcement actions having a connection with or reference to airline ‘rates, routes, or services’ are pre-empted under 49 U.S.C.App. § 1305(a)(1).” ( Morales, supra, at p. 384, 112 S.Ct. 2031, italics added.) Applying this standard, the court concluded that the guidelines “quite obviously” related to fares. ( Morales, supra, 504 U.S. at p. 387, 112 S.Ct. 2031.) It explained: “One cannot avoid the conclusion that … the guidelines ‘relate to’ airline rates. In its terms, every one of the guidelines enumerated above bears a ‘reference to’ airfares. [Citation.] And, collectively, the guidelines establish binding requirements as to how tickets may be marketed if they are to be sold at given prices.” ( Id. at p. 388, 112 S.Ct. 2031.) Moreover, “beyond the guidelines’ express reference to fares, it is clear as an economic matter that state restrictions on fare advertising have the forbidden significant effect upon fares” because “[a]dvertising ‘serves to inform the public of the … prices of products and services, and thus performs an indispensable role in the allocation of resources.’ ” ( Id. at p. 388, 112 S.Ct. 2031.) Thus, the court held the fare advertising provisions of the guidelines were preempted by the ADA. ( Id. at p. 391, 112 S.Ct. 2031.)

 

The Supreme Court applied its preemptions analysis to the FAAAA in Rowe, supra, 552 U.S. 364, 368, 128 S.Ct. 989. There, it considered whether the FAAAA preempted two provisions of Maine law that regulated the delivery of tobacco to customers within the state. ( Id. at p. 367, 128 S.Ct. 989.) The court noted that in Morales, it had described Congress’ goal in enacting the ADA as “helping assure transportation rates, routes, and services that reflect ‘maximum reliance on competitive market forces,’ thereby stimulating ‘efficiency, innovation, and low prices,’ as well as ‘variety’ and ‘quality.’ ” ( Rowe, supra, at p. 371, 128 S.Ct. 989.) Thus, Morales had held “(1) that ‘[s]tate enforcement actions having a connection with, or reference to ’ carrier ‘ “rates, routes, or services” are pre-empted’ [citation] (emphasis added); (2) that such pre-emption may occur even if a state law’s effect on rates, routes or services ‘is only indirect’ [citation]; (3) that, in respect to pre-emption, it makes no difference whether a state law is ‘consistent’ or ‘inconsistent’ with federal regulation [citation]; and (4) that pre-emption occurs at least where state laws have a ‘significant impact’ related to Congress’ deregulatory and pre-emption-related objectives [citation].” ( Rowe, supra, at pp. 370–371, 128 S.Ct. 989.) Morales further said that “federal law might not pre-empt state laws that affect fares in only a ‘tenuous, remote, or peripheral … manner.’ ” ( Rowe, supra, at p. 371, 128 S.Ct. 989.) However, the court noted, Morales “did not say where, or how, ‘it would be appropriate to draw the line,’ for the state law before it did not ‘present a borderline question.’ ” ( Ibid.)

 

*14 The court held that the Maine tobacco law was preempted by the FAAAA because it “has a ‘significant’ and adverse ‘impact’ in respect to the federal Act’s ability to achieve its pre-emption-related objectives.” ( Rowe, supra, 552 U.S. at pp. 371–372, 128 S.Ct. 989.) It explained: “The Solicitor General and the carrier associations claim (and Maine does not deny) that the law will require carriers to offer a system of services that the market does not now provide (and which the carriers would prefer not to offer). And even were that not so, the law would freeze into place services that carriers might prefer to discontinue in the future. The Maine law thereby produces the very effect that the federal law sought to avoid, namely, a State’s direct substitution of its own governmental commands for ‘competitive market forces’ in determining (to a significant degree) the services that motor carriers will provide.” ( Id. at p. 372, 128 S.Ct. 989.)

 

The court concluded: “The provision … requires the carrier to check each shipment for certain markings and to compare it against the Maine attorney general’s list of proscribed shippers. And it thereby directly regulates a significant aspect of the motor carrier’s package pickup and delivery service. In this way it creates the kind of state-mandated regulation that the federal Act pre-empts. [¶] … [T]o interpret the federal law to permit these, and similar, state requirements could easily lead to a patchwork of state service-determining laws, rules, and regulations. That state regulatory patchwork is inconsistent with Congress’ major legislative effort to leave such decisions, where federally unregulated, to the competitive marketplace.” ( Rowe, supra, 552 U.S. at p. 373, 128 S.Ct. 989.)

 

D. Dillingham

The Supreme Court considered whether state labor laws were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA) in California Division of Labor Standards Enforcement v. Dillingham Construction, N.A., Inc. (1997) 519 U.S. 316, 117 S.Ct. 832, 136 L.Ed.2d 791 ( Dillingham ). There, a California law required contractors on public works projects to pay their workers the prevailing wage in the projects’ locale. An exception to that requirement permitted a contractor to pay lower wages to workers participating in approved apprenticeship programs. Before the court in Dillingham was whether ERISA’s preemption provision—which provided that ERISA shall supersede state laws “insofar as they … relate[d] to any employee benefit plan” (29 U.S.C. § 1144(a))—preempted California’s prevailing wage law to the extent that the wage law prohibited paying an apprentice wage to an apprentice trained in an unapproved program.

 

The court said that a law “ ‘relate[s] to’ ” a covered benefit plan for purposes of section 514, subdivision (a) “ ‘ “if it [1] has a connection with or [2] reference to such a plan.” ’ ” ( Dillingham, supra, 519 U.S. at p. 324, 117 S.Ct. 832.) It explained that where a State’s law “acts immediately and exclusively upon ERISA plans, … or where the existence of ERISA plans is essential to the law’s operation, … that ‘reference’ will result in pre-emption.” ( Id. at p. 325, 117 S.Ct. 832.) Further, a law that does not refer to ERISA plans “may yet be pre-empted if it has a ‘connection with’ ERISA plans.” ( Ibid.) “[T]o determine whether a state law has the forbidden connection, we look both to ‘the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive,’ [citation], as well as to the nature of the effect of the state law on ERISA plans, [citation].” ( Ibid.) In doing so, “[a]s is always the case in our pre-emption jurisprudence, where ‘federal law is said to bar state action in fields of traditional state regulation, … we have worked on the “assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” ’ [Citations.]” ( Ibid.)

 

*15 The court concluded that the prevailing wage law did not explicitly “make reference to” ERISA plans, and thus it was not barred by the second prong of the test. ( Dillingham, supra, 519 U.S. at p. 325, 117 S.Ct. 832.) The law also did not “ha[ve] a ‘connection with’ ” ERISA plans, and thus was not barred by the first prong of the test, because it had only an “ ‘indirect economic influence’ ” on such plans. ( Id. at p. 329, 117 S.Ct. 832.) The court explained: “The wages to be paid on public works projects and the substantive standards to be applied to apprenticeship training programs are … quite remote from the areas with which ERISA is expressly concerned—‘ “reporting, disclosure, fiduciary responsibility, and the like.’ ” [New York State Conf. of Blue Cross & Blue Shield Plans v.] Travelers [Ins. Co. (1995) 514 U.S. 645,] 661 [115 S.Ct. 1671, 131 L.Ed.2d 695] (quoting Shaw [v. Delta Air Lines (1983) ] 463 U.S. [85,] 98 [103 S.Ct. 2890, 77 L.Ed.2d 490]). A reading of § 514(a) resulting in the pre-emption of traditionally state-regulated substantive law in those areas where ERISA has nothing to say would be ‘unsettling,’ Travelers, 514 U.S. at 665 [115 S.Ct. 1671].” ( Dillingham, supra, at pp. 331–332, 117 S.Ct. 832.)

 

The court continued: “[T]he apprenticeship portion of the prevailing wage statute does not bind ERISA plans to anything. No apprenticeship program is required by California law to meet California’s standards. See [Southern Cal. Chapter of Associated Builders and Contractprs, Inc., Joint Apprenticeship Committee v. California Apprenticeship Council ] Southern Cal. ABC [ (1992) ], 4 Cal.4th [422] at 428 [14 Cal.Rptr.2d 491, 841 P.2d 1011]. If a contractor chooses to hire apprentices for a public works project, it need not hire them from an approved program (although if it does not, it must pay these apprentices journeyman wages). So, apprenticeship programs that have not gained [California Apprenticeship Council] approval may still supply public works contractors with apprentices. Unapproved apprenticeship programs also may supply apprentices to private contractors. The effect of § 1777.5 on ERISA apprenticeship programs, therefore, is merely to provide some measure of economic incentive to comport with the State’s requirements, at least to the extent that those programs seek to provide apprentices who can work on public works projects at a lower wage…. It cannot be gainsaid that § 1777.5 has the effect of encouraging apprenticeship programs—including ERISA plans—to meet the standards set out by California, but it has not been demonstrated here that the added inducement created by the wage break available on state public works projects is tantamount to a compulsion upon apprenticeship programs.” ( Dillingham, supra, 519 U.S. at pp. 332–333, 117 S.Ct. 832, fns. omitted.)

 

The court concluded: “The prevailing wage statute alters the incentives, but does not dictate the choices, facing ERISA plans. In this regard, it is ‘no different from myriad state laws in areas traditionally subject to local regulation, which Congress could not possibly have intended to eliminate.’ Travelers, 514 U.S. at 668 [115 S.Ct. 1671]. We could not hold pre-empted a state law in an area of traditional state regulation based on so tenuous a relation without doing grave violence to our presumption that Congress intended nothing of the sort. We thus conclude that California’s prevailing wage laws and apprenticeship standards do not have a ‘connection with,’ and therefore do not ‘relate to,’ ERISA plans.” ( Dillingham, supra, 519 U.S. at p. 334, 117 S.Ct. 832.)

 

E. Lower Federal Court Decisions Addressing the Effect of FAAAA Preemption on State Labor Laws

Following Morales, Rowe, and Dillingham, the lower federal courts have struggled with the scope of FAAAA preemption, particularly as applied to state labor laws. A case illustrating this struggle is Californians for Safe and Competitive Dump Truck Transp. v. Mendonca, supra, 152 F.3d 1184 ( Mendonca ). There, the Ninth Circuit considered whether the FAAAA preempted enforcement of California’s Prevailing Wage Law (CPWL). (Lab.Code, §§ 1770–1180.) Under that law, contractors and subcontractors awarded public works contracts were required to pay their workers “ ‘not less than the general prevailing rate … for work of a similar character in the locality in which the public work is performed,’ ” and contractors who failed to pay prevailing wages were assessed penalties. ( Mendonca, supra, at p. 1186.) Plaintiffs, public works contractors who provided transportation on publicly-funded projects in California, failed to pay their workers prevailing wages and were assessed penalties by California enforcement authorities. Thereafter, plaintiffs filed suit seeking declaratory and injunctive relief, claiming that enforcement of the CPWL violated the Supremacy Clause of the United States Constitution because the FAAAA preempted the CPWL. ( Ibid.)

 

*16 The Ninth Circuit held that the FAAAA did not preempt the CPWL. It began by noting that state laws dealing with matters traditionally within a state’s police powers, such as prevailing wage laws, should not be found to be preempted unless Congress’s intent to do so was clear. ( Mendonca, supra, 152 F.3d at p. 1187.) Here, Congress had expressed no such clear intent. The court explained: “While CPWL in a certain sense is ‘related to’ [plaintiffs’] prices, routes and services, we hold that the effect is no more than indirect, remote, and tenuous. See Dillingham, 117 S.Ct. at 842. We do not believe that CPWL frustrates the purpose of deregulation by acutely interfering with the forces of competition. See Travelers, 514 U.S. at 668 [115 S.Ct. 1671]. Nor can it be said, borrowing from Justice Scalia’s concurrence in Dillingham, that CPWL falls into the ‘field of laws’ regulating prices, routes, or services. See Dillingham, 117 S.Ct. at 843. Accordingly, we hold that CPWL is not ‘related to’ [plaintiffs’] prices, routes, and services within the meaning of the FAAA Act’s preemption clause.” ( Mendonca, supra, at p. 1189, fn. omitted.)

 

The court reached a similar conclusion in Air Transport Asso. of America v. City and County of San Francisco (9th Cir.2001) 266 F.3d 1064 ( Air Transport ). There, a provision of San Francisco’s administrative code required city contractors to provide employee benefits to the domestic partners of employees, whether married or registered with a government entity. Plaintiffs United Airlines, Federal Express, and others (airlines) urged that the city ordinance was preempted by the ADA. ( Id. at p. 1068.) Specifically, the airlines urged that there was a forbidden connection with routes and services because if they did not comply with the ordinance, they would be unable to lease property at San Francisco International Airport (SFO). The court disagreed: “What the Airlines are truly complaining about are free market forces and their own competitive decisions. Whatever leverage the City has in its negotiations over the Airlines is created by the market conditions that were allowed to blossom through the passage of the ADA. The ADA allows air carriers to make their own decisions about where to fly and how many resources to devote to each route and service. In this deregulated environment, airlines can decide whether or not to make large economic investments at the San Francisco airport. Now, as the Airlines claim, ‘because of competitive demands and the economic commitments made to respond to those demands,’ they are committed to staying at San Francisco. That economic decision may mean the Airlines will have to agree to abide by the Ordinance’s nondiscrimination requirements as a ‘cost’ of maintaining their leases at SFO. That San Francisco may have bargaining power because of the Airlines’ competitive decisions does not, however, thereby disable San Francisco from enforcing its nondiscrimination Ordinance; it is not using that power to force the Airlines to adopt or change their prices, routes or services—the prerequisite for ADA preemption. [¶] …

 

“Indeed, the costs of providing the domestic partner employment benefits at issue here—the only costs the Airlines complained about—are a small, if not inconsequential, fraction of the Airlines’ costs of flying through SFO…. The Airlines could comply with the Ordinance’s requirements by reducing or eliminating these benefits altogether, thereby avoiding any additional costs. Moreover, some of the plaintiffs have actually begun extending employment benefits to their employees’ domestic partners on a nationwide basis during the pendency of this appeal, even though they were not obligated to do so under the Ordinance. This further evidences that the costs of providing these benefits are not enough to compel the Airlines to change their routes and services. [Citation.] Hypothetically, there might be some contract term the City could demand whose costs would be so high that it would compel the Airlines to change their prices, routes or services. [Citation.] The nondiscrimination provisions at issue here, however, do not approach that level.” ( Air Transport, supra, 266 F.3d at pp. 1074–1075, fn. omitted.)

 

*17 The court reached a contrary result in Dilts v. Penske Logistics, LLC (S.D.Cal.2011) 819 F.Supp.2d 1109 ( Dilts ). There, defendant Penske hired hourly employees to provide warehouse and warehouse management services to Whirlpool Corporation in California. Penske employees received customer orders, caused appliances to be manufactured outside California and then delivered to Whirlpool warehouses, inventoried the appliances, loaded appliances onto trucks, and then delivered appliances to customers. ( Id. at pp. 1111–1112.) Because Penske “expected” employees to take meal breaks, it automatically deducted 30 minutes from its employees’ work time “ ‘without inquiry into whether the employee was actually provided with a timely 30–minute uninterrupted and duty-free meal period.’ ” ( Id. at p. 1112.) Plaintiffs, hourly appliance delivery drivers and installers assigned to Penske’s Whirlpool account, sued, alleging violations of several provisions of the California Labor Code as well as unfair business practices in violation of Business and Professions Code section 17200. Penske moved for summary judgment, contending that all of plaintiffs’ causes of action were preempted by the FAAAA. ( Id. at p. 1113.)

 

The district court granted summary judgment, finding that plaintiffs’ claims were preempted by the FAAAA. It explained that although state law need not directly regulate motor carriers to be preempted, a law will be preempted if its effect is such that motor carriers “would have to offer different services than what the market would otherwise dictate or ‘freeze into place services that carriers might prefer to discontinue in the future.’ See Rowe, 552 U.S. at 371–72, 128 S.Ct. 989 (‘the effect of the regulation is that carriers will have to offer tobacco delivery services that differ significantly from those that, in the absence of the regulation, the market might dictate’).” ( Dilts, supra, 819 F.Supp.2d at p. 1118.) The court noted, however, that neither Morales nor Rowe indicate “exactly where, or how, it would be appropriate to draw the line between a significant impact and a tenuous effect because neither of the state laws at issue in those cases presented a ‘borderline question.’ Morales, 504 U.S. at 390, 112 S.Ct. 2031; Rowe, 552 U.S. at 371, 375–76, 128 S.Ct. 989.” ( Dilts, supra, at p. 1118.)

 

The court continued: “In a very recent decision, the Ninth Circuit examined a ‘borderline case’ of federal preemption under the FAAA Act. See Am. Trucking Assoc., Inc. v. City of Los Angeles, 660 F.3d 384 (9th Cir.2011). American Trucking acknowledged that ‘[t]he waters are murkier … when a State does not directly regulate (or even specifically reference) rates, routes, or services.’ Id. at 396. Recognizing that preemption by the FAAA Act may occur even when the effect on rates, routes, and services is only indirect, American Trucking sets out the proper inquiry in ‘borderline cases’ where the effect on prices, routes, and services may be close to merely tenuous or remote: ‘the proper inquiry is whether the provision, directly or indirectly, “binds the … carrier to a particular price, route or service and thereby interferes with competitive market forces within the … industry.” ’ Id. (citing Air Transport Ass’n of Am. v. City & Cnty. of San Francisco, 266 F.3d 1064, 1071 (9th Cir.2001)). Air Transport considered whether a city ordinance relating to equal protection of domestic partners had an effect on the routes of airlines, finding that the ordinance was not preempted because it ‘cannot be said to compel or bind the Airlines to a particular route or service,’ even though it might require airlines to increase their rates or cease operating at San Francisco Airport. Air Transport, 266 F.3d at 1072–74. In spite of the ordinance, air carriers could still ‘make their own decisions about where to fly and how many resources to devote to each route and service.’ Id. at 1074.

 

“Thus, American Trucking and Air Transport make clear that the Court’s task here is to determine whether these laws, which do not directly target the motor carrier industry, ‘bind’ Penske’s prices, routes, or services and thereby ‘interfere with competitive market forces within the … industry.’ Although it is a close question, the Court finds that they do.

 

“

 

*18 “Penske argues these M & RB [meal and rest break] laws have a significant effect on the routes of a motor carrier. The fairly rigid meal and break requirements impact the types and lengths of routes that are feasible. ‘The five stops Plaintiffs insist Penske should have ensured at specified times in a 12–hour workday would thus have necessarily forced drivers to alter their routes daily while searching out an appropriate place to exit the highway, [and] locating stopping places that safely and lawfully accommodate their vehicles.’ While the laws do not strictly bind Penske’s drivers to one particular route, they have the same effect by depriving them of the ability to take any route that does not offer adequate locations for stopping, or by forcing them to take shorter or fewer routes. In essence, the laws bind motor carriers to a smaller set of possible routes.

 

“Additionally, the M & RB laws have a significant impact on Penske’s services. The parties both agree that ‘scheduling off-duty meal periods for drivers “would require one or two less deliveries per day” per driver.’ Penske states further that the mandated duty-free 10–minute rest periods every four hours (preferably in the middle of the four-hour period) and duty-free 30–minute meal breaks every five hours reduce driver flexibility, interfere with customer service, and, ‘by virtue of simple mathematics,’ reduce the amount of on-duty work time allowable to drivers and thus reduce the amount and level of service Penske can offer its customers without increasing its workforce and investment in equipment. (Id.) Plaintiffs do not contest these facts.

 

“

 

“Here, the length and timing of meal and rest breaks seems directly and significantly related to such things as the frequency and scheduling of transportation. Both parties agree that the M & RB laws impact the number of routes each driver/installer may go on each day, and Plaintiffs do not oppose Penske’s argument that the laws impact the types of roads their drivers/installers may take and the amount of time it takes them to reach their destination from the warehouse. The connection to ‘schedules, origins, … and destinations’ is far from tenuous. While Penske has not shown that the M & RB laws would prevent them from serving certain markets, the laws bind Penske to a schedule and frequency of routes that ensures many off-duty breaks at specific times throughout the workday in such a way that would ‘interfere with competitive market forces within the … industry.’

 

“

 

“[T]o allow California to insist exactly when and for exactly how long carriers provide breaks for their employees would allow other States to do the same, and to do so differently. ‘And to interpret the federal law to permit these, and similar, state requirements could easily lead to a patchwork of state service-determining laws, rules, and regulations.’ Id. Thus, the Court finds state regulation of details significantly impacting the routes or services of the carrier’s transportation itself preempted by the FAAA Act.” ( Dilts, supra, 819 F.Supp.2d at pp. 1118–1120, internal record citations omitted.)

 

F. Fitz–Gerald v. SkyWest Airlines, Inc.

Division Six of this district considered the effect of ADA preemption on state wage and hour laws in Fitz–Gerald v. SkyWest Airlines, Inc. (2007) 155 Cal.App.4th 411, 65 Cal.Rptr.3d 913 ( Fitz–Gerald ). There, plaintiffs were flight attendants who sued their employer for unpaid minimum wages, unpaid meal and rest breaks, overtime, waiting time penalties, and violations of the UCL. ( Id. at p. 415, 65 Cal.Rptr.3d 913.) In the main portion of the opinion, the court concluded that plaintiffs’ claims were preempted by the federal Railway Labor Act (45 U.S.C. § 151 et seq.). In the alternative, the court considered whether plaintiffs’ claims were also preempted by the ADA. The court held that the ADA did not preempt plaintiffs’ causes of action for violations of state labor law, explaining: “SkyWest … cites no authority that the ADA preempts actions to enforce state minimum wage laws or state laws governing meal/rest breaks. Although the ADA has been broadly interpreted as preempting state ‘enforcement actions having a connection with, or reflect to, airline “rates, routes, or services,” ’ it has its limits. ( Morales [, supra,] 504 U.S. at p. 384 [112 S.Ct. 2031].) If the rule was otherwise, ‘any string of contingencies is sufficient to establish a connection with price, route or service, [and] there will be no end to ADA preemption. [Citations.]’ ( Air Transport v. City and County of San Francisco (N.D.Cal.1998) 992 F.Supp. 1149, 1183.)” ( Fitz–Gerald, supra, at p. 423, 65 Cal.Rptr.3d 913.) The court reached a different result, however, with regard to plaintiffs’ UCL cause of action, which apparently was based on the underlying Labor Code violations. In that regard, it concluded without analysis that “[b]ased on [ Morales and American Airlines, Inc. v. Wolens (1995) 513 U.S. 219 [115 S.Ct. 817, 130 L.Ed.2d 715]], we conclude that the ADA bars the fifth cause of action for relief under the California Unfair Business Practices Act.” ( Fitz–Gerald, supra, at p. 423, 65 Cal.Rptr.3d 913.) FN6

 

FN6. Division Five of this district rejected Fitz–Gerald’s analysis in part in People ex rel. Harris v. Pac Anchor Transportation, Inc. (2011) 195 Cal.App.4th 765, 125 Cal.Rptr.3d 709, review granted August 10, 2011, S194388. In Pac Anchor, the State of California brought a UCL cause of action based on defendant’s alleged misclassification of its workers as independent contractors. As a result of the classification, defendant did not obtain workers’ compensation insurance, withhold state disability insurance or income taxes, pay unemployment insurance on behalf of drivers, insure payment of the state minimum wage, or provide its drivers with written statements of hours and pay. ( Id. at p. 774, 125 Cal.Rptr.3d 709.) Like the Fitz–Gerald court, Division Five concluded that the state’s action to enforce the state statutory obligations under the Labor Code “is not related to Pac Anchor’s prices, routes, or services, even though it may remotely affect the prices, routes, and services that the motor carrier provides.” ( Id. at p. 774, 125 Cal.Rptr.3d 709.) Such a remote affect, it said, “is too tenuous for preemption under the FAAAA.” ( Ibid.) The court disagreed with Fitz–Gerald, however, that all state unfair business practices statutes are preempted by the ADA and FAAAA: “Where a cause of action is based on allegations of unlawful violations of the state’s labor and unemployment insurance laws, we see no reason to find preemption merely because the pleading raised these issues under the UCL, as opposed to separately stated causes of action. We respectfully disagree with Fitz–Gerald’s contrary conclusion as to preemption of causes of action under the UCL.” ( Id. at p. 773, 125 Cal.Rptr.3d 709.)

 

Pac Anchor is currently under review by the California Supreme Court, where the question presented is as follows: “Is an action under the Unfair Competition Law (Bus. & Prof.Code, § 17200 et seq.) that is based on a trucking company’s alleged violation of state labor and insurance laws ‘related to the price, route, or service’ of the company and, therefore, preempted by the Federal Aviation Administration Authorization Act of 1994 (49 U.S.C. § 14501)?”

 

G. Analysis

*19 [17][18]As we have said, the FAAAA preempts state laws that “relate[ ]” to a “price, route, or service of any motor carrier.” (49 U.S.C. § 14501(c)(1); Rowe, supra, 552 U.S. at pp. 367–368, 128 S.Ct. 989.) Taken together, the cases discussed above hold that a state law “relates” to federal law if it has “ ‘a connection with’ ” or “ ‘reference to’ ” the subject of the federal law. Preemption may occur even if the state law’s effect “ ‘is only indirect,’ ” but there is no preemption if that effect is only “ ‘tenuous, remote, or peripheral.’ ” ( Rowe, supra, 552 U.S. at pp. 370–371, 128 S.Ct. 989.) Generally applicable state labor laws are not preempted if they do not “acutely interfere[ ] with the forces of competition” or prevent carriers from making “their own decisions about [routes] and how many resources to devote to each route and service.” ( Mendonca, supra, 152 F.3d at p. 1189; Air Transport, supra, 266 F.3d at p. 1074.) However, if the state labor laws are such that they “bind” the motor carrier’s prices, routes, or services, they interfere with competitive market forces and are preempted by the FAAAA. ( Dilts, supra, 819 F.Supp.2d at pp. 1117–1118.)

 

Here, both plaintiffs and RWA appear to agree that the California laws at issue do not “reference” motor carrier prices, routes, or services within the meaning of Morales, Rowe, and Dillingham. That is plainly true—section 3751 is a law of general application that does not apply exclusively to motor carriers. The law therefore does not “act[ ] immediately and exclusively upon” motor carriers. Further, “the existence of” motor carriers is not “essential to the law’s operation.” ( Dillingham, supra, 519 U.S. at p. 325, 117 S.Ct. 832.) Therefore, section 3751 does not “reference” motor carrier prices, routes, or services.

 

We turn therefore to the second part of the analysis—whether section 3751 and Albillo have a “connection with” motor carrier prices, routes, or services within the meaning of Morales, Rowe, and Dillingham. For the following reasons, they do not.

 

[19][20]First, as in Dillingham, the laws at issue concern the exercise of the state’s “historic police powers.” ( Dillingham, supra, 519 U.S. at p. 325, 117 S.Ct. 832.) “Examples of historic police powers include ‘[c]hild labor laws, minimum and other wage laws, laws affecting occupational health and safety, and workmen’s compensation laws….’ ( De Canas v. Bica (1976) 424 U.S. 351, 356–357, 96 S.Ct. 933, 47 L.Ed.2d 43.) ‘States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State.’ ( Ibid.)” ( Farmers Brothers Coffee v. Workers’ Comp. Appeals Bd. (2005) 133 Cal.App.4th 533, 538–539, 35 Cal.Rptr.3d 23, italics added.) Under these circumstances, there can be no federal preemption “ ‘ “unless that was the clear and manifest purpose of Congress.” ’ ” ( Dillingham, supra, at p. 325, 117 S.Ct. 832.)

 

Moreover, as in Dillingham —and as distinct from Morales and Rowe —the workers’ compensation laws at issue have only an indirect economic influence on motor carriers. That is, unlike the statutes at issue in Morales and Rowe, the workers’ compensation laws at issue here neither “establish binding requirements” as to how the motor carriers’ products may be marketed ( Morales, supra, 504 U.S. at p. 388, 112 S.Ct. 2031), nor “freeze into place services that carriers might prefer to discontinue in the future” ( Rowe, supra, 552 U.S. at p. 372, 128 S.Ct. 989). Indeed, as in Dillingham, the laws at issue do not “bind [motor carriers] to anything.” ( Dillingham, supra, 519 U.S. at p. 332, 117 S.Ct. 832.) Specifically, they do not require California motor carriers to purchase workers’ compensation insurance for their independent contractors. They merely provide that if motor carriers choose to purchase such workers’ compensation insurance, the motor carriers cannot pass the costs of that insurance on to their independent contractors. Whether motor carriers purchase workers’ compensation insurance is entirely their own decision—state law does not force their hand in this regard. As in Dillingham, state law may “alter[ ] the incentives, but does not dictate the choices” facing motor carriers. ( Id. at p. 334, 117 S.Ct. 832.)

 

*20 RWA urges that section 3751 has a direct connection with prices because it transfers “an operating expense from the contract trucker to the motor carrier, … necessarily undermin[ing] the pricing decision the motor carrier made when determining what to charge its customers.” This has the effect, RWA contends, of “substituting a governmental policy for the forces of free market competition” and, thus, is preempted by the FAAAA. We do not agree. The crux of RWA’s preemption argument is that the effect of California law, as interpreted by Albillo, is to increase its operating expenses and, thus, decrease its profitability. As we have said, however, California law does not require RWA to purchase workers’ compensation insurance for its independent contractors. To the extent that motor carriers incur workers’ compensation insurance expenses on behalf of their independent contractors, it is because they choose to purchase workers’ compensation insurance—not because state law mandates that they do so.

 

[21]Moreover, on the present record there is no evidence that section 3751 increases RWA’s operating expenses. Under California law, employers such as RWA may choose to forgo workers’ compensation insurance for their independent contractors—thus exposing themselves to “ ‘ “the wider range of damages potentially available in tort” ’ ” ( Albillo, supra, 114 Cal.App.4th at p. 199, 8 Cal.Rptr.3d 350)—or they may purchase workers’ compensation insurance, which eliminates a worker’s tort recovery in most cases. There is before us no evidence that purchasing workers’ compensation insurance increased RWA’s operating expenses over what they would have been had RWA chosen not to purchase that insurance. Indeed, RWA presumably chose to purchase workers’ compensation insurance because it believed that doing so would decrease, not increase, its expenses.

 

RWA also contends that Albillo affects RWA’s services because RWA “may or may not be a less attractive place for a contract trucker to work” and “[t]he environment in which the contract trucker works … has a direct effect on the quality of RWA’s service to its customers.” RWA’s argument seems to suggest a direct connection between the services RWA offers its drivers and the services it offers its customers. RWA cites no authority for this proposition, nor are we aware of any. In any event, we reject this contention for the same reason we rejected the suggestion of an effect on price—nothing in California law requires RWA to provide workers’ compensation insurance for its independent contractors.

 

Finally, RWA cites Fitz–Gerald for the proposition that the FAAAA preempts all UCL causes of action, even if the underlying labor laws on which the UCL causes of action are based are not themselves preempted. Although Fitz–Gerald appears to so hold, it does not explain or justify its conclusion other than by a brief reference to Morales and Wolens. ( Fitz–Gerald, supra, 155 Cal.App.4th at p. 423, 65 Cal.Rptr.3d 913.) Thus, like the Court of Appeal in Pac Anchor, supra, 195 Cal.App.4th 765, 125 Cal.Rptr.3d 709 (see fn. 5, ante ), we respectfully disagree with Fitz–Gerald and conclude that where a cause of action is based on allegations of unlawful violations of the state’s labor laws, there is no reason to find preemption merely because the pleading raised these issues under the UCL, rather than directly under the provisions of the Labor Code alleged to have been violated.

 

For all of these reasons, we conclude that section 3751, as interpreted by Albillo, is not preempted by the FAAAA. The trial court did not err in so concluding.

 

III. THE TRIAL COURT ERRED IN AWARDING PLAINTIFFS PREJUDGMENT INTEREST UNDER CIVIL CODE SECTION 3287

The trial court granted plaintiffs prejudgment interest for the period December 12, 1993, through May 2012. RWA contends that the trial court did not exercise its discretionary power in making this award, but rather awarded prejudgment interest on the basis of Civil Code section 3287 and section 3751. RWA contends this was error; citing M & F Fishing, Inc. v. Sea–Pac Ins. Managers, Inc. (2012) 202 Cal.App.4th 1509, 136 Cal.Rptr.3d 788, RWA urges that because a monetary award under the UCL is restitution, not damages, it does not support prejudgment interest.

 

*21 Plaintiffs disagree. They assert that the trial court awarded prejudgment interest under its equitable powers; alternatively, they urge that a restitution award supports an award of prejudgment interest under Civil Code section 3287.

 

[22]For the reasons stated below, we conclude Civil Code section 3287 does not authorize prejudgment interest on an award of restitution under the UCL. ( M & F Fishing, supra, 202 Cal.App.4th at p. 1528, 136 Cal.Rptr.3d 788.) Because we are affirming the restitution award under the second cause of action, we remand the matter for the trial court to determine whether to award prejudgment interest as to that claim under its equitable powers.

 

A. The Trial Court’s Award of Prejudgment Interest

The trial court awarded plaintiffs prejudgment interest as to the second cause of action, as follows: “As to Plaintiff’s Second Cause of Action, the Court previously held that RWA is liable under Plaintiffs’ Second Cause of Action related to the workers’ compensation insurance coverage charges…. [¶] … The Court finds that Restitution should be Ordered as the harm to Plaintiff and the certified class outweighs any utility of RWA’s policies and practices in unlawfully deducting the cost of workers’ compensation insurance coverage from the compensation of Plaintiff and the certified class members. [Citation.] Pursuant to Business and Professions Code §§ 17200, 17203, 17535 and pursuant to the equitable powers of this Court, RWA is Ordered to restore to Plaintiff and the Class all funds RWA retained by means of the unfair and unlawful business acts and practices alleged herein….

 

“The parties argued whether prejudgment interest should be awarded. [¶] RWA argues that prejudgment interest should not be awarded on the amount of money RWA unlawfully withheld from Plaintiff and the Class for workers’ compensation insurance coverage until, at least, the date on which the Albillo case was published. The Court finds that Albillo does not indicate that its decision should not be applied retroactively and Albillo did not create new law, but only interpreted workers’ compensation laws that have existed for many years prior to the decision being rendered.

 

“The trial Court awards Plaintiff and the certified class members prejudgment interest at 10% [per] annum. The trial court is authorized to award prejudgment interest under California Civil Code § 3287, based upon RWA’s violation of Business and Professions Code §§ 17200, et seq., using as a predicate RWA’s violation of California Labor Code § 3751. Civil Code § 3287(a) states: ‘Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day[.]’ The California Supreme Court long ago held that Civil Code § 3287 provides for prejudgment interest. See, e.g., Mass v. Board of Education (1964) 61 Cal.2d 312 [612, 39 Cal.Rptr. 739, 394 P.2d 579].

 

“Prejudgment interest under Civil Code § 3287 is awardable when a defendant violates a statute. See, Tripp v. Swoap (1976) 17 Cal.3d 671, 681–682 [131 Cal.Rptr. 789, 552 P.2d 749] (overruled on other grounds in Frink v. Prod (1982) 31 Cal.3d 166, 180 [181 Cal.Rptr. 893, 643 P.2d 476]). In Tripp, the California Supreme [Court] upheld an award of prejudgment interest in a case based on a statutory violation. Thus, prejudgment interest may be awarded for a violation of Business and Professions Code §§ 17200, et seq., that is predicated on a violation of Labor Code § 3751; defendants that violate those statutes are not shielded against an award of prejudgment interest under Civil Code § 3287.

 

*22 “The courts have explained that prejudgment interest is intended to put a plaintiff back in the same position the plaintiff was in before money was unlawfully taken from the plaintiff. [Citation.] If plaintiff is not put in the same position as before having money unlawfully taken, then the wrongdoer ‘ “benefits from denying liability and continuing to litigate, while he retains the use of money to which the plaintiff is entitled, and the plaintiff is deprived of the benefit he should have derived from an immediate recovery.” ’ [Citation.] This could not be more true than in the case at bar, that has been litigated for over 10 years, all while RWA benefited from the use of the money that it unlawfully took from Plaintiff and the certified class members.

 

“… Plaintiff and each class member is entitled to interest on the amount of money unlawfully deducted from their compensation for the cost of workers’ compensation insurance coverage and all amounts of restitution in this case pursuant to Business & Professions Code § 17203. See, Ballard v. Equifax Check Servs., Inc. (E.D.Cal.2001) 158 F.Supp.2d 1163, 1176–1177; Irwin v. Mascott (N.D.Cal.2000) 112 F.Supp.2d 937, 956.)

 

“The parties stipulated that the interest calculated on the total deduction set forth … above up to the date of September 26, 2011 is $233,360. The parties agree that the total deductions from the class members’ compensation for workers’ compensation insurance coverage is $143,377.20, plus interest, in the total amount of $366,737.20.

 

“

 

“Defendant is ordered to restore to the Plaintiff and the Class, pursuant to this and further orders regarding restitution procedures, on Plaintiff’s Second Cause of Action for unlawfully charging the Plaintiff and the Class the cost of workers’ compensation insurance in violation of Labor Code § 3751, the principal amount of $143,377.20, and prejudgment interest through September 26, 2011 in the amount of $233,360. Prejudgment interest on the principal amount continues to accrue at the rate of 10% simple interest until [the] entry of judgment….” (Paragraph numbering & internal record citation omitted.)

 

B. Civil Code Section 3287

Civil Code section 3287 provides: “(a) Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt….” (Italics added.)

 

In M & F Fishing, Inc. v. Sea–Pac Ins. Managers, Inc., supra, 202 Cal.App.4th 1509, 136 Cal.Rptr.3d 788, the court held that section 3287 does not authorize prejudgment interest on an award of restitution under the UCL. The court explained: “Civil Code section 3287, subdivision (a) also is inapplicable because it governs recovery of damages…. As we noted ante, under the UCL a plaintiff is entitled to injunctive relief and restitution, but not damages. (See Korea Supply [Co. v. Lockheed Martin Corp. (2003) ] 29 Cal.4th [1134,] 1144 [131 Cal.Rptr.2d 29, 63 P.3d 937]; see also Cel–Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179 [83 Cal.Rptr.2d 548, 973 P.2d 527].)” ( M & F Fishing, Inc., supra, at p. 1538, 136 Cal.Rptr.3d 788.) The court said, however, that although section 3287 did not authorize prejudgment interest under these circumstances, the trial court had inherent discretionary authority to award such interest, and it remanded the case to allow the trial court to exercise its discretion. ( Id. at p. 1539, 136 Cal.Rptr.3d 788.)

 

We are not persuaded by plaintiffs’ argument that the trial court in the present case awarded prejudgment interest pursuant to both section 3287 and its equitable powers. To the contrary, the statement of decision suggests that the award of prejudgment interest on the second cause of action was based solely on section 3287. We therefore remand the matter for the trial court to exercise its discretion with regard to an award of prejudgment interest on the second cause of action.

 

PLAINTIFFS’ CROSS–APPEAL

*23 Plaintiffs contend in their cross-appeal that the trial court should have ordered RWA to restore to the drivers all of the money it collected for liability insurance, not merely the additional administrative fee RWA charged. According to plaintiffs, RWA “offset its own insurance costs by unlawfully taking money from the truck drivers. RWA should be disgorged of all money it unlawfully took from the truck drivers for liability, physical damage, and cargo insurance, pursuant to RWA’s unlawful scheme of transacting insurance without a license under Insurance Code § 1623 and failing to properly disclose premiums in policy documents under Insurance Code § 381. Otherwise, RWA benefits from its unlawful acts.”

 

For the reasons discussed above, RWA did not violate the law by charging plaintiffs for the costs of liability insurance. Accordingly, the trial court correctly declined to order RWA to disgorge the money charged plaintiffs for that insurance.

 

DISPOSITION

We reverse the trial court’s award of restitution and prejudgment interest as to the first cause of action for unlawfully transacting insurance in violation of the Insurance Code. We affirm the trial court’s award of restitution as to the second cause of action for unlawful reimbursement of workers’ compensation insurance, and we remand the matter for the trial court to exercise its discretion with regard to prejudgment interest in accordance with the views expressed in this opinion. The parties are to bear their own costs on appeal.

 

We concur:

EPSTEIN, P.J.

MANELLA, J.