Well here we are again, summer is at an end and the kids are heading back to school Where did the time go?  Long gone are the slow days of summer. We continue at the speed of light 24/7.

This month we report:

HOURS OF SERVICE – It would appear that after all these years, the Hours of Service rules are now set.  The final court decision can be viewed here …and the buzz is that the main opposition is now ending the battle. It has been many years, and many battles for these final rules to come into place.   The only change to the current rules relates to short haul drivers, who will not be subject to the 30-minute off-duty break requirement. FMCSA issued guidance stating that “effective immediately’ the agency will no longer enforce the 30-minute rest break on short-haul drivers. The agency is defining short-haul operations as those that operate in a 100 air-mile radius of the normal work reporting location and non-CDL drivers that operate within a 150 air-mile radius of the location where the driver reports for duty. Now that the rules are set, members of congress are pressing the Department of Transportation for a firm date to finish a field study on the newly revised 34-hour restart provision of the hours-of-service rule. The study was due before the new HOS rule became final on July 1 but it has not yet been released.

UNIFIED REGISTRATION SYSTEM – The FMCSA rulemaking has been released which amends its regulations to require interstate motor carriers, freight forwarders, brokers, intermodal equipment providers (IEPs), hazardous materials safety permit (HMSP) applicants, and cargo tank facilities under FMCSA jurisdiction to submit required registration and biennial update information to the Agency via a new electronic on-line Unified Registration System (URS). FMCSA establishes fees for the registration system, discloses the cumulative information to be collected in the URS, and provides a centralized cross-reference to existing safety and commercial regulations necessary for compliance with the registration requirements. The final rule implements statutory provisions in the ICC Termination Act of 1995 (ICCTA) and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 2005 (SAFETEA-LU). The URS will streamline the registration process and serve as a clearinghouse and depository of information on, and identification of, motor carriers, brokers, freight forwarders, IEPs, HMSP applicants, and cargo tank facilities required to register with FMCSA.  The effective date of the rule is October 23, 2015 and can be viewed here in its full splendor.

CSA CHALLENGE – The Federal Court will hear arguments in September on whether the federal government followed the law in implementing and publicizing the new Compliance, Safety, Accountability program for trucking and bus company safety rankings. The Alliance for Safe, Efficient and Competitive Truck Transportation (ASECTT), a group of brokers, shippers and carriers, filed the lawsuit last year, contending that the FMCSA failed to follow the rulemaking process when it informed shippers and brokers to consider CSA scores when hiring carriers.  Argument is set for September 10.

BUSY ROADS – The U.S. Department of Transportation’s Federal Highway Administration has released a new report on the nation’s busiest interstates showing people drove more than 84.7 billion miles on California highways in 2011, more than 900 times the distance from the Earth to the Sun.  Overall, vehicles traveled 2.95 trillion miles on U.S. roads in 2011, the eighth-highest level ever recorded, and nearly double the amount traveled in 1980. Traffic volume data from 2011, the most recent year available, show that California at the top, followed by Texas, Florida, and Ohio. Rounding out the top ten are Illinois, Georgia, Virginia Pennsylvania, North Carolina, and Michigan. A complete list of the data, available by state and interstate, can be viewed here.

CSA CHANGES – The FMCSA has updated CSA with two additional violations, one based on the new hours-of-service regulations, while the other is based on a more detailed description of existing controlled substances and alcohol regulations. The table below includes descriptions of the new violations, the Behavior Analysis and Safety Improvement Categories (BASICs) they relate to, and how they are weighted in the SMS.

BASIC Violations Added to the SMS
BASIC	Violation Code	Description	Severity Weight	Violation Group	Driver-Related (Y/N)
HOS Compliance	395.3(a)(3)(ii)	Driving beyond 8-hour limit since the end of the last off-duty or sleeper period of at least 30 minutes (Note: Does not apply to short haul drivers)	7	Hours	Y
Controlled Substances/Alcohol	392.5(a)(3)	Driver in possession of intoxicating beverage while on duty or driving	3	Alcohol Possession	Y

The violation related to the Controlled/Substances Alcohol BASIC was added based on industry and law enforcement feedback and enables roadside inspectors to distinguish between alcohol possession and alcohol use, says FMCSA. SMS assigns a lower severity weight to alcohol possession.

TRANSPORTATION STATISTICS – The U.S. Department of Transportation’s Bureau of Transportation Statistics has just released the Transportation Statistics Annual Report for 2012. This report presents key transportation indicators along with an overview of the transportation system. It also includes data and information about freight movement, transportation and the economy, system reliability, transportation safety, energy use and environmental impacts.  In addition, it focuses on closing data gaps and improving the ways in which transportation statistics are collected, compiled, analyzed, and published. The entire report can be viewed here.

OUT OF SERVICE REPORTS – There were three passenger carriers subject to imminent hazard actions this month and put out of service, The People’s Choice, Hardeeville, SC, All Nations Coach, Inc. (and its chameleon™ operation Tichy Express, Inc.), Staten Island, NY and McRea Transportation, Inc., Hialeah, FL.

CURRENT CASES

CARGO

Cargo adjusters will be interested in this decision, as I know I have been asked this question before. Is a chute a part of a refrigeration unit so that when it is knocked off in transit coverage exists under the cargo policy?  The Southern District of Ohio concluded that the answer was yes.  (Central Marketing Associates, Inc. v. Crespap, 2013 WL 4081054)

The District Court in Arizona upheld the preemptive effect of the Carmack Amendment on a claim for damage during a household goods move. However as there was a possibility that the customer’s goods were not supposed to be moved, the Court left room for an amendment for damages for those items.  The Court also held that there would be no claim against the agent for the regulated carrier.  (Olympian Worldwide Moving & Storage v. Showalter, 2013 WL 3875299)

A shipper’s effort to avoid its own contractual limitation by seeking to recover from a downstream carrier failed in the Southern District of Ohio.  The Court held that even though the broker/carrier contract made the carrier liable for $100,000 as the shipper/forwarder carrier had a lower limitation that was the maximum recovery.  The Court also held that there was no material deviation when the driver stopped within 200 miles of pick up, which was prohibited by the contract.  (Tokio Marine v. Flash Expedited, 2012 WL 4010312)

A broker’s repeated efforts to sue for a cargo loss were once again stymied in the Northern District in Texas. The Court held that a broker cannot sue under the Carmack Amendment for the cargo owner’s damages when it only has a power of attorney from the cargo owner.  Unless the real party in interest ratifies, joins or substitutes into the action the broker goes back to state court for its limited personal state court claims.  (Pyramid Transportation v. Greatwide Dallas Mavis, 2013 WL 382426)

A trucker in the Middle District of Tennessee was not permitted to bring the cargo owner in as a third party defendant in the action commenced by the cargo owner’s insurer.  As the insurer conceded that any defense that the trucker had could be asserted against the insurer there was no need for the cargo owner. I hope we see where this case goes as the trucker is asserting, as a defense, that the cargo owner failed to disclose the value and prevented the trucker from protecting itself with insurance.  (American Guaranty & Liability Insurance Co. v. Crosby Trucking, 2013 WL 3878953)

AUTO

A plaintiff’s law suit in California against a trucker arising from an accident in Nevada was transferred to that jurisdiction for litigation. The California Court held that when the accident occurred in Nevada, and most of the witnesses were in Nevada it was more convenient for the action to be addressed in Nevada.  (May v, Haas, 2013 WL 4010293)

An auto liability policy was held inapplicable to a truck accident when the vehicle involved in the loss was not scheduled on the policy.  The plaintiff also sought to invoke the MCS-90 on an intra state shipment by arguing that the materials used to manufacture the cargo which was being transported actually came from out of state. That was rejected by the Southern District of Mississippi. (Progressive Gulf Insurance Company v. Estate of Jones, 2013 WL 3967532)

Generally we see suits in which the insurer is arguing that its policy does not provide coverage. However this month in the Eastern District of New York the insurer was arguing for coverage. The insurer sought judgment against an agent who may have failed to cancel the policy, which resulted in the insurer forced to settle a serious personal injury action.  Applying New Jersey law the court completed a very detailed analysis of hired auto coverage and the effect of owner operator leases and coverage under Symbol 8 and 9. The court concluded that there was coverage.  It is also interesting to note that the Court held that the information on the FMCSA website on carrier authority dates is inconclusive as to dates of operating authority.  (Luizzi v. Pro Transport, Inc., 2013 WL 3968736)

The Court of Appeal in California dismissed a judgment holder’s effort to obtain recovery under general liability and a trucker’s auto policy for a cargo loss.  The Court agreed that the general liability policy excluded property in the care, custody or control and the auto liability did not apply nor the physical damage.  (Cavalier Sportswear v. Castlepoint National Insurance Co., 2013 WL 3960425)

The truck center where a driver left his loaded trailer while they were repairing his tractor was found by the Southern District of Illinois to bear no liability for its theft. There was no evidence that the truck center voluntarily assumed possession of the trailer when the driver simply left it there.  (Zurich American Ins. Co. v. LCG Logistics, 2013 WL 3819672)