Finally – summer. Hope you all have some plans to take advantage of the slower pace of summer. Even the news is short this month as it appears everyone is heading off to vacation.
This month we report:
CVSA ROAD CHECK 2009 – Good news from the CVSA. This year’s road check indicates that carriers seem to be even safer than before, with the road check resulting in some of the best safety results in years. There were drops in vehicle and driver out of service. Data show the highest overall vehicle compliance rate — 80.4 percent — since 1996, and the highest overall driver compliance rate — 95.7 percent — ever. For North American Standard Level I inspections, the compliance rates of 77.8 percent (vehicles) and 96.1 percent (drivers) were both records. Safety belt violations dropped down 276, which was a 22.2% improvement over last year.
FMCSA FINANCIAL RESPONSIBILITY – The FMCSA has proposed amendments to financial responsibility regulations which will allow Canadian insurers to issue filings for Canadian based carriers. Comments are due on August 9, 2009 in the event that you wish to comment. A copy of the notice can be viewed here.
NAFTA – Canacar, Mexico’s national trucking association has filed for arbitration under NAFTA. The organization seeks $6 billion in damages for lost business as a result of the US continued delays in opening the border.
FMCSA LEADER – The president of the Maryland Motor Association has been nominated as the next head of the FMCSA. If confirmed she gets the pleasure of dealing with the never ending saga of NAFTA and Hours of Service.
UCR FEES – Last month we reported on the proposed increase in UCR rates to combat the serious shortage due to under collection of fees. The FMCSA has rejected the increase, apparently acknowledging that collecting the money owed by some is better than increasing payments for those who are already paid.
ECONOMIC REPORTS ON TONNAGE AND VEHICLE REGISTRATION AND JOBS – While April tonnage was reported to be the lowest since November 2001, the May report indicates that there was an increase of 3.2 percent. Another survey reports that new truck registrations have dropped 40% since last year, with only 78,900 vehicles being registered. Those numbers, if carried through for the year, are expected to result in low numbers not seen since 1991. The trucking industry also lost 8,100 jobs in May, which is actually a slow down in the monthly number of jobs which have been lost in past months.
As you know, we search far and wide to find news which will impact the trucking industry. During that search we find some irrelevant but bizarre information. For example, new ways to transport illegal drugs into the country seem to crop up monthly. This month a Mexican trucker was caught hauling more than $1 million worth of marijuana, all hidden in hollowed-out stacks of metal plates on his truck’s flatbed and another was caught with $2.5 million of marijuana mixed in with his watermelons. Amazing what people think they can get away with.
CURRENT CASES:
The Supreme Court of South Carolina addressed the factors used to determine whether a carrier would be a common carrier or a private carrier for the purpose of regulatory financial responsibility requirements. In this case the court held that the insured was a common motor carrier when hauling logs and increased the insurer’s limits to reflect the statutory minimum requirements. The court also addressed what constituted exempt logging operations. (Bovain v. Canal Ins., 2009 WL 1587089)
The Supreme Court of Virginia rejected an insurer’s efforts to avoid the impact of the intra policy stacking of UM/UIM coverages. While the state will generally permit intra policy stacking, it will permit an insurer, if done so properly, to clearly define the maximum recovery. Unfortunately the insurer did not. (VIRGINIA FARM BUREAU MUTUAL INSURANCE COMPANY)
A likely little known fact to be passed along. In Mississippi a motor carrier bears full liability for any damage to a structure it hits if the vehicle height, with cargo exceeds 12 feet six inches. That also means that the motor carrier has no right against the owner of the structure for the cargo loss. The court did hold that the statute had no bearing on a personal injury claim or a claim for damages to other vehicles caused by the impact. (Moncrief v. Bennett Truck Transport, LLC, 2009 WL 1585890)
Punitive damages continue to be an issue for motor carriers. This month the District Court in Idaho permitted the plaintiff to amend the complaint and assert a claim for punitive damages against a motor carrier where there was evidence that the driver suffered from mental illness, was involved in a number of preventable accidents, and misstated information on his employment application. (Davis v. Nevarez 2009 WL 1532270)
In a rather bizarre case in the 10th Circuit, plaintiffs were injured when sweeping up a trailer after delivery of a load of recycled paper and were found to have been exposed to PCP. There was no evidence that the trailer had ever hauled hazardous materials and there was no trace of the PCP in the recycled paper. No one knew where it came from. The court held that there was no basis to hold the motor carrier liable for the injuries suffered and that the motor carrier had no duty to protect the dock workers from this type of injury. (Lamb v. JB Hunt Transport Services, Inc., 2009 WL 1514001)
The Court of Appeals in Indiana was required to determine how far the “statutory employee” rules would go. The court held that when a regulated carrier subcontracted its work out to another regulated carrier the driver of that carrier would not be the statutory employee of the original carrier under 49 CFR 390.5. The court also addressed other state law vicarious liability provisions, and dangerous instrumentality exceptions holding the originating carrier free from liability for the actions of the driver. (Illinois Bulk Carrier, Inc. v. Jackson, 2009 WL 1674967)
The District Court in Arizona held that parties to a transportation contract can waive the provisions of Carmack yet still selectively incorporate the provisions in to the contract. This does create a concern as the carrier is essentially waiving the preemption benefit of Carmack and also the right to remove the case to federal court. (Smithfield Beef Group-Tolleson, Inc. v. Knight Refrigerated, LLC, 2009 WL 1651289)
To be a package or not to be a package? That is always the question. The Southern District in Florida once again held that determining what was a package under COGA, bags or pallets, would be a question of fact. (Garland Corp. v. Evergreen Marine Corp., 2009 WL 1660311)
A shipper’s efforts to avoid a limitation of liability were ineffective in the Northern District of Ohio. The court held that when the shipper uses its own form bill of lading, which incorporates the carrier’s tariff, it can not argue that it has no notice of the limitation. (F.M. Machine Co. v. R and L Carriers, Inc., 2009 WL 1759577)
The Southern District of Mississippi also considered limitations of liability in negotiated contracts, upholding its application. It is important to understand how tightly these limitations are construed and how clarity is critical to avoid these extensive litigations. The court also held that the material deviation doctrine, which can avoid a limitation, was inapplicable to any claim brought under Carmack. (KLLM, Inc. v. Watson Parma, Inc., 2009 WL 1702075)
Co-insurance provisions in a cargo policy can be enforced. The Court of Appeals in Texas held that the coinsurance provision was not ambiguous and applied to the value of the cargo on the truck. (RSI Intern., Inc. v. CTC Transp., Inc., 2009 WL 1740051)
The Southern District of Texas held the Carmack Amendment inapplicable to a cargo theft which occurred in Mexico. While the motor carrier had transported the goods from South Carolina to Mexico the jurisdiction of the Carmack Amendment ended at the border. The court held that state law applied and that Texas choice of law principles would likely result in the application of Mexican law. (Northern Marine Underwriters, Ltd. v. FBI Exp., Inc., 2009 WL 1546084)
