Volume 16, Edition 11

Hopefully you have woken from your turkey coma and are back at the job.  A recent study I read indicated that we are most productive at 10:00 a.m. on Monday morning. After that it all goes downhill.  So hopefully this report coincides with your productive moment, or at least your coffee break.  In any event, we hope you all enjoyed the Thanksgiving break.

We are gratified that so many of you have been taking the time to attend our training webinars to learn how the CABAdvantage can work for you. In December we will again offer our CAB Basics session, which is an hour long and will include an overview of our new features as well as a refresher of the features and navigation of the CAB website.  We will also offer a focus session in December and this month the subject will be VITAL. We would like your feedback on topics for future focus sessions or any other comments on our training options.  Please email us by clicking here with the topics you would like us to cover or other comments. To register for this month’s sessions click on the following:

CAB Basic Training- December 11th at 3:00 EST:  https://www1.gotomeeting.com/register/331222697

CAB Focus – VITAL December 12th at 3:00 EST:  https://www1.gotomeeting.com/register/511866488

This month we report:

FMCSA CRASH STUDY– According to the FMCSA crash study for the year 2011, truck accidents occur most often during the day, midweek and in good weather.  Truck crashes have increased 3% to 3,608.  Speeding tops the list of driver-related factors assigned to the drivers of large trucks in fatal crashes at a high 7.9 percent of all driver-related factors.  The majority of fatal crashes, more than 97 percent, happened on two-way roads and 81.9 percent happened on roads with a posted speed limit of 65 mph or lower. Fatalities among pedestrians also increased, mostly in urban areas, at non-intersections, and at night.  Thirteen states and the District of Columbia experienced reductions in overall traffic fatalities, led by Mississippi (48 fewer), New Jersey (38), Georgia (34), Alabama (30) and Utah (26). In addition, 18 states and Washington D.C. showed decreases in drunk driving deaths. New Jersey had the greatest decrease (30 fewer) followed by Colorado (27), Utah (20), Oklahoma (17) and Virginia (17). A copy of the report can be viewed here.

HOS ATTACKS – The attacks on the new hour of service rules continue, with the DOT in the line of fire at recent hearings considering whether the rules should be suspended pending further review.  A recent OOIDA survey concluded that that respondents say they are more fatigued, more stressed, have less flexibility, make less money, and find parking even more difficult than before.  An American Transportation Research Institute study on the issue was also released this month.  Accordingly to the ATRI almost half of the drivers who responded to the survey said they have been severely impacted by the once a week and 1 a.m. to 5 a.m. provisions. Among the other operational and economic impacts identified by ATRI are:

•        Among commercial drivers surveyed by ATRI, 82.5 percent indicated that the new HOS rules have had a negative impact on their quality of life, with more than 66 percent indicating increased levels of fatigue.

•        Commercial drivers are forced to drive in more congested time periods, although the FMCSA Regulatory Impact Analysis did not address increased safety risks with truck traffic diversion to peak hour traffic.

•        The majority of drivers (67 percent) report decreases in pay since the rules took effect.

•        The impacts on driver wages for all over-the-road drivers total $1.6 billion to $3.9 billion in annualized loss.

Legislation has been proposed to suspend the rules, and the FMCSA indicated that it might consider such a request.  This appears to be a hot topic for the end of the year.

CVSA SAFETY BRAKE RESULTS – The CVSA also released its report on out of service violations for brake-related issues as a result of its most recent brake safety week blitz.  The report indicated that the number of vehicles placed out of service dropped nearly 2 percent compared with last year  This year, participating agencies inspected 20,067 vehicles. Of those, 2,714 commercial vehicles were placed out-of-service for brake violations, roughly 13.5 percent for all brake-related violations conducted in North America, compared with 15.3 percent for the same week in 2012.

FMCSA OVERSIGHT? – The National Transportation Safety Board has recommended audits of the Federal Motor Carrier Administration’s oversight of the truck and bus industries. The NTSB investigated four separate crashes that resulted in 25 deaths and 83 injuries. During the course of those investigations, NTSB investigators identified safety deficiencies and missed signs that were present before crashes.  The NTSB indicated that additional actions by the FMCSA may have taken these carriers out of service before these fatal crashes occurred.

VEHICLE TO VEHICLE TECHNOLOGY – The General Accounting Office released a report in conjunction with the government efforts to reduce accidents on the roads.  The GOA concluded that vehicle to vehicle technology, if widely deployed, will help reduce motor vehicle crashes, which costs about $304 billion in productivity losses, property damage and medical costs. The DOT believes V2V technologies could provide warnings to drivers in as much as 76 percent of potential multi-vehicle collisions involving at least one light vehicle, such as a passenger car.

SMS WEBSITE CHANGES – The FMCSA has announced new changes to the display of information on the SMS Website. These proposed enhancements do not include changes to the SMS methodology.  The FMCSA is looking for comments on the changes. CAB premium subscribers can continue to view all of the data in a more industry oriented report when viewing the CAB Report and will not have to work through the various proposed changes as we take care of it for you!

PRIMARY FREIGHT NETWORK – The Federal Highway Administration released its initial notice regarding the development of the Primary Freight Network. The notice can be viewed here.  Officials report that the Primary Freight Network, which was  requested by Congress, is inadequate as it does not represent the most critical highway elements in the freight system that exist in the United States. The network, capped at 27,000 miles, has left two states, Montana and New Hampshire with no miles, and Vermont, South Dakota and New Mexico with less than 2 miles and many of the highways do not even connect to other highways. The agency also released a 41,000-mile version which addresses these concerns.

PRE-EMPLOYMENT SCREENING – The FMCSA released a study which concluded that carriers that use the Pre-employment screening program had 8% fewer crashes than carriers that don’t use the system, with 17% fewer driver-related out-of-service orders,  The study compared crash rates and driver-related out-of-service orders for the 5,476 motor carriers that used the database, looking at safety records from the 12-month period prior to the start of the pre-screening program and the 12-month period after. The information then was compared with the 424,943 carriers that had not yet requested information from the program. The system contains 3,473,286 driver records, which varies as records are updated, according to FMCSA. The report can be viewed here.

OUT OF SERVICE REPORTS – Passenger carrier Autobuses Rayon, Inc. was declared an imminent hazard and placed out-of-service both because of its own vehicle and safety violations and also because it allowed at least three other bus companies previously shut down by FMCSA to continue passenger services using vehicles with the registration markings of Autobuses Rayon. Also, Cherryville, NC based trucking company Rocky Lee Brown d/b/a Moonlight Express and Atlanta, GA based All Pro Transportation Services d/b/a All Pro Motor Coach were declared an imminent hazard and placed out-of-service. Five related movers, Allegiant Van Lines, Inc., of Davie, FL.; Northern Van Lines, Inc., of Cooper City, FL.; Northeastern Vanlines, Inc., of Pembroke Pines, FL.; United West Moving and Storage, Inc., of Anderson, SC; and Direct Movers, Inc., of Pikesville, MD. were shut down by the FMCSA’s Moving Fraud Task Force for holding customer shipments hostage and failing to turn over records related to their investigations.

CURRENT CASES

CARGO

Preemption of state law claims continues to be an issue of litigation, despite the many cases on the issue. The Northern District of Illinois held that state law claims are preempted. The Court also held that state law remedies which allow for attorney’s fees are also preempted, as Carmack does not allow for attorney’s fees.  (On A Roll Trucking v. ATP Express, 2013 WL 5940680) The Eastern District in Pennsylvania held that claims for cargo loss were preempted even if the plaintiff alleges conversion.  The only thing impacted by conversion would be a limitation of liability. The Court also held that willful blindness to the activities of third parties would not rise to conversion.  (Certain Underwriters v. UPS, 2013 WL 5803777)

An insurance broker was liable for failing to procure the correct type of cargo coverage for a company engaged in storing loaded containers at its premises. The Court of Appeals in North Carolina allowed the judgment for unfair practices, which allowed for treble damages, to stand.  (FSI v Newson, 2013 WL 5947132)

There is a limited time to remove a case to federal court. While Carmack Amendment claims can be removed, it is imperative that the removal take place within 30 days after the complaint alleges facts to support a Carmack cause of action.  When a defendant waited to remove until a specific cause of action was alleged under Carmack the Court in the Western District of Washington held it time barred.  (Harris v. All State Van Lines Relocation, Inc., 2013 WL 5912571) Speaking of removal, the Northern District in Mississippi remanded a case by a trucker against his cargo insurer.  As the jurisdiction was based upon diversity the required minimum claim of $75,000 was required. As it was absent the court sent the case back to state court.  (J. Williams Trucking, LLC v. Progressive Gulf Insurance Co., 2013 WL 5770491) In the District of Nebraska the court remanded a cargo claim under a transportation contract back to state court, concluding that even if the carrier was correct that some portion of the claim was preempted by Carmack, there was no evidence that the state court did not have concurrent jurisdiction. (ConAgra Foods v. YRC Worldwide, Inc., 2013 WL 6118418)

A shipper was bound by a carrier’s limitation of liability contained in the tariff in the Middle District of Tennessee. The Court held that when the shipper used a form which incorporated the tariff it was on notice of the limitation.  The Court also concluded that the carrier was not liable for delay when delivery was not a term of the contract and the tariff had the appropriate limitation in the tariff.  (Tennessee Wholesale Nursery v. Wilson Trucking Corp., 2013 WL 5780124)

AUTO

The MCS-90 is not triggered when the policy itself applies and the limit is greater than the required limit set by the FMCSA. The Northern District in Illinois refused to extend the MCS-90 to create a separate coverage limit over the policy. (McComb v. National Casualty Company, 2013 WL 5874562)

The 8th Circuit held that under Missouri law a shipper did not breach its duty of safe loading when a driver was injured. The Court concluded that the absence of securing devices was open and obvious.  The driver’s claim that he received assurances that the pallets were loaded correctly was unsupported by other evidence and summary judgment was awarded to the shipper. (Aragon v. Wal-Mart Stores, 2013 WL 5989433)

The Northern District in Alabama considered whether a driver who was driving his “work” truck to the location where his tractor and trailer was located was covered by his occupational policy when he was injured.  While the court acknowledged that it was likely that the underwriter did not intend there to be coverage, the policy was sufficiently ambiguous to support coverage. The Court also provides a good explanation for the different types of bad faith in Alabama, concluding that there was no claim for normal bad faith, but that there was a question of fact as to whether the insurer committed abnormal bad faith.  (Phillips v. National Union Fire Ins. Co., 2013 WL 5974906)

While the Graves Amendment may preclude liability on the part of U-Haul who had rented a vehicle to the plaintiff, the Court held that the purchase of insurance through U-Haul could support a claim for recovery.  The Eastern District of Louisiana held that was sufficient to conclude that joinder of a non-diverse party was not fraudulent and therefore remanded the case to state court.  (Robinson v. Moises, 2013 WL 6004069)

The Court of Appeals In Michigan held that a truck driver had a duty to pedestrians to make sure that his vehicle was safely parked and did not protrude into the roadway.  However, the court held the breach of that duty was not the cause of the plaintiff’s injuries when the plaintiff was struck by a third party who fell asleep behind the wheel.  (Kalinowski v. McAlester, 2013 WL 6083719)

The Western District in Pennsylvania addressed the right of an insurer to recover from an agent who failed to obtain reduced UIM waivers required under Pennsylvania law resulting in extra payments by the insurer.  The Court held that there would be no right to common law indemnification if it was ultimately determined that the insurer was in any way at fault and also held that it would not dismiss the negligence action under the economic loss doctrine as it was not yet clear whether the contract was the sole basis for the recovery or if in fact there was a separate responsibility imposed on insurance professionals.  (Berkley Mid-Atlantic Group. v.  G.F. Hock Co., 2013 WL 6094520)

Continuing to report on experts who credentials or methodology is questioned by the court, this month we report that the Northern District of Georgia concluded that accident Reconstructionist Donald Roberts could testify as to the speed of a truck. The Court concluded that his methodology was sufficient to overcome any Daubert arguments raised. (Lewis v. New Prime, Inc., 2013 WL 6097568)

Just because a vehicle is licensed by the DMV does not always make it an auto for the purposes of insurance coverage.  The Appellate Division in New Jersey held that a car crusher which was being towed was mobile equipment, triggering coverage under the general liability policy and not the auto policy when the equipment struck an overpass and caused substantial property damage. (First Mercury Insurance Co. v. Cholish Salvage, 2013 WL 5975836)

A trucking company was granted summary judgment on claims of negligent entrustment where plaintiff produced no specific factual support for such a conclusion. The Eastern District in Michigan also held that the absence of evidence of statutory violations by the driver mandated that the plaintiff be precluded from relying on the statutory violations as a basis for its claim against the driver.  (Fontenot v. Jama, 2013 WL 5775340)

Contrary to a decision we reported on last month, this month the Court of Appeals in Wisconsin held that a shipper could seek indemnity from the trucking company when the truck driver was injured at the shipper’s place of business. The Court held that the indemnity provision would extend to that claim, but only to the extent of the percentage of fault. The Court also held that the insurer of the shipper was entitled to seek recovery for the defense costs paid and further remanded the case to address whether the trucking company was liable for sanctions for discover delays.  (Fabco Equipment v. Kreilkamp Trucking, 2013 WL 5989683)

For those of you dealing with the surety bonds for brokers, cases on freight charges continue to make their way through the system and carriers continue to push for ways to find payment.  The Eastern District in New York held that an employee was liable for moving charges even though his employer had contracted for the move and actually had a contract with the relocation company.  As the employee was listed on the bill of lading it remained primarily liable for the charges.  (United Van Lines v Crye-Leiode, Inc., 2013 WL 579573)

Merry Christmas and Happy Holidays to All.  See you next month.