Bits & Pieces

Volume 18, Edition 3


March Madness is at the end and it is time to get back to work! The annual IMUA meeting will be held in Charlotte, NC in May.  Registration is open and we look forward to seeking many of you there.  Stop by our table and visit.  You can find the information on the IMUA website.

This month we report:

CROSS-BORDER OPERATIONS – The U.S. Department of Commerce reports that trucks moved more than 60% of all cross border freight, and the dollar value in December was more than 9 percent greater than a year earlier. Truck cargo grew 9.3 percent, and trucks were responsible for $3 billion in freight.  In other NAFTA news another law suit has been filed to prevent the opening of the Mexican-US border. The International Brotherhood of Teamsters the Advocates for Highway and Auto Safety and the Truck Safety Coalition, filed suit this month in the Ninth Circuit claiming that the program violated the Administrative Procedures Act. The suit relies in part, on an audit released by the Inspector General which concluded that the program failed to prove that Mexican carriers should be given access to US roadways.   We will see where this goes.

CSA ATTACK– This has been a tough month for the FMCSA as it faces battles on many fronts. The U.S. Senate’s Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security of the Committee on Commerce, Science, and Transportation had hearings on the Oversight and Reform of the Federal Motor Carrier Safety Administration this month. The FMCSA faces a number of attacks on the public release of data under CSA and demands for full reform of the agency.  U.S. Rep. Lou Barletta, R-Pa., has filed HR1371, the Safer Trucks and Buses Act of 2015, in the House of Representatives. The act targets CSA and seeks removal of the data from public view. Barletta’s bill calls for FMCSA to revamp CSA and use only data “determined to be predictive of motor carrier crashes” in its scoring mechanism, prohibit the use of data from crashes in which the motor carrier was not at fault, specifically if the motor carrier’s vehicle is struck by an intoxicated driver or wrong-way driver, or if the motor carrier’s vehicle is struck while the truck driver is otherwise engaged in lawful operation.

CARGO THEFT – FreightWatch has released a report indicating that while the number of verified and reported instances of cargo theft in the U.S. declined in 2014, the average loss value per incident once again increased. According to the report, the number of verified cargo theft incidents in the U.S. fell 12 percent in 2014. Electronics lead the pack as a target commodity.  The average loss value per incident rose 36 percent.  90 percent of verified thefts in 2014 occurred when the truck was stationary and unattended. The vast majority of all thefts were theft of truckloads, and 87 percent of thefts with a known location were stolen from unsecured parking areas like truck stops, public parking and roadsides. Thefts from secured parking locations actually fell from 11 percent to 2 percent. High-value electronics theft incidents tripled from 2013 to 2014, with the category seeing a 43 percent surge in the total average loss value of all electronics thefts, at $568,664. Where are the hits taking place?  Florida, California, Texas, Georgia and New Jersey lead the pack, something most cargo underwriters already know.

ANTI-INDEMNITY STATUES – An Arkansas Anti-indemnification bill has moved through both chambers and has moved to the Governor’s desk.  Once signed it will become effective immediately and will make Arkansas the 42nd state to pass legislation preventing shippers from requiring indemnity clauses in their contracts.  Once the Arkansas bill becomes law, only Mississippi, Ohio, Delaware, New York, New Jersey, Rhode Island, Vermont and New Hampshire will be without anti-indemnification laws.

FMCSA RESTART STUDY – In the Consolidated and Further Continuing Appropriations Act of 2015, Congress directed FMCSA to conduct a commercial motor carrier driver restart study. The FMCSA has started the study, which will compare 5-month driver work schedules and assess operator fatigue and safety critical events (SCEs) between the following two groups: CMV drivers who operate under the hours of service (HOS) restart provisions in effect between July 1, 2013, and December 15, 2014 AND CMV drivers who operate under the provisions as in effect on June 30, 2013. Safety critical events, driver fatigue/levels of alertness, and driver health outcomes will be evaluated using:

Electronic Logging Devices (ELDs) (which track drivers’ time on duty).

The Psychomotor Vigilance Test (PVT) (which measures alertness).

Actigraph watches (which assess sleep).

Onboard monitoring systems and/or cameras that record or measure SCEs and driver alertness.

The Karolinska Sleepiness Scale (KSS) (which measures drivers’ assessment of sleepiness).

ADDITION OF NEW SERIOUS VIOLATIONS TO SMS. The FMCSA updated the Safety Measurement System (SMS) to add new serious violations. The following will now be considered serious violations:

§172.704(a)(4), Failing to provide security awareness training (Hazardous Materials (HM) Compliance Behavior Analysis and Safety Improvement Category (BASIC))

§172.704(a)(5), Failing to provide in-depth security awareness training (HM Compliance BASIC)

§383.37(c), Knowingly allowing, requiring, permitting, or authorizing an employee with more than one commercial driver’s license to operate a commercial motor vehicle (Driver Fitness BASIC)

§395.3(a)(3)(i), Requiring or permitting a property-carrying commercial motor vehicle driver to drive more than 11 hours (Hours-of-Service (HOS) Compliance BASIC)

§395.3(a)(3)(ii), Requiring or permitting a property-carrying commercial motor vehicle driver to drive if more than 8 hours have passed since the end of the driver’s last off-duty or sleeper-berth period of at least 30 minutes (HOS Compliance BASIC)

BTS 2014 NORTH AMERICAN FREIGHT NUMBERS – The BTS released its North American Freight numbers report this month which reflects the transport of goods between 2010 and 2014.  The report provides excellent statistical data on the modes of transport, the goods transported and the values of product moving across this continent, too much to summarize here.  Click here to review the report.

BTS STATE TRANSPORTATION BY THE NUMBERS PROFILE – The BTS also released a two-page collection of transportation information for each of the 50 states and the District of Columbia. The profiles include information on infrastructure, safety, freight transportation, passenger travel, registered vehicles and vehicle-miles traveled, economy and finance, and energy and environment. A copy of the report can be viewed here.



The Interstate Commerce Commission Termination Act does not preempt personal injury actions against a transportation broker.  The District Court on California concluded that plaintiff was entitled to remand its personal injury action against the broker to State Court as it was not precluded by federal law from bring suit against the broker.  The broker could be sued for damages stemming from an interstate accident.  (Montes v. El Paso-Los Angeles Limousine Express, 2015 WL 1250139)

The fact that the Trial Court allowed a jury to award separate awards for each injured plaintiff was not enough to allow for the overturn of a 2.6 million judgement against a motor carrier. The 9th Circuit also ruled that plaintiffs were not entitled to interest because they filed an offer of judgment while the matter was pending.  The Court ruled that the offer of judgment was an opportunity offered to defendants and not plaintiffs.  (Medina v. Pile Trucking, 2015 WL 778272)

The estate of a driver who died three months after being involved in a serious accident was held not to be entitled to recovery for worker’s compensation benefits.  The Court of Appeals in Iowa held that the plaintiff was unable to sustain her burden that the death was related to the accident where there was substantial evidence that the driver suffered from numerous medical issues unrelated to the accident.  (Moad v. Jensen Trucking, Inc., 2015 WL 1063049)

The 8th Circuit concluded that the terms of the MCS-90 did not preclude a subrogating insurer from collecting under the endorsement. The Court held that while the MCS-90 was only intended to respond when there was no other available insurance that did not include insurance which the injured party had in place.  (Tri-National, INc. v. Yelder, 2015 US Ap. LEXIS  4542)

10 years after an accident a plaintiff filed an action against 3 insurers claiming coverage under the underinsured coverage afforded to a trucker. The defendants removed the case. In a motion to remand the Western District of Missouri held that the defendants had not meet the jurisdictional limit of $75,000 for each plaintiff, in part because the defendants were unable to locate policies, and/or the underinsured limits were less than the $75,000 minimum for a removal on the basis of diversity.  (Lowe v First Financial Ins. Co., 2015 WL 753139)

The District Court in New Jersey considered the apportionment of defense costs against 3 insurers who had all been previously held to provide primary coverage for the liability of a defendant for a truck accident.    After determining the appropriate percentage of the defense costs required to be paid by each insurer the Court went on to conclude that 2 of the insurers were also entitled to their costs incurred in defending the declaratory judgment action brought by the third insurer who was found to also cover the loss.  In addition the Court held that the plaintiff was also required to add interest to the amounts it owed the other insurers in reimbursement for settlement of the underlying action.  (Carolina Casualty Insurance Co. v. Travelers Property & Casualty Company, 2015 WL 794909)

In the 5th District in California the Court of Appeals upheld a 15 million verdict against a trucking company that arose out of an accident when the driver ran over a mother and daughter in a cross walk.  The Court ruled that the fact that the daughter was under the influence of methamphetamines at the time of the accident did not impact the accident.  The fight over the fact that the award was excessive and punitive was dismissed by the Court who held that while they may not have awarded as much they would not overturn the award on appeal as it as not shocking. (Paregein v. Perez, 2015 WL 1014194)

Over in Wisconsin an insurance broker who incorrectly notified CH Robinson that a carrier’s insurance was cancelled was responsible for reimbursing the motor carrier for income lost when it was shut out of transportation requests from CH Robinson.  (Borders v Behrman, 2015 WL 751818)

A vehicle owner who leases his truck to another, and exercises no control over the operations of the truck, is not liable for an accident.  While the owner did assume responsibility for maintenance that would not create liability when there was no claim that improper maintenance led to the accident.  The Court also held that assuming responsibility for maintenance did not impact the leasing regulation that required that the motor carrier have exclusive possession of the vehicle.  The Northern District of Indiana also held that there was no claim against the driver for punitive damages where there was no evidence to support that this was anything other than a basic accident.  (Sambrooks v. Choiseme, 2015 WL 846520)

A plaintiff’s efforts to avoid the impact of a statute of limitations in Michigan failed and a trucking company had the case dismissed.  Plaintiff’s contention that the statute of limitations was tolled while the plaintiff was insane was not permitted where there was no evidence that the plaintiff was insane at the time the claim accrued.  (Raschke v. Citizens Insurance Co of America, 2015 WL 928870)

A trucking company was not liable under the tort of intentional spoliation when it totaled and destroyed a truck two days after the accident.  The Supreme Court of Appeals in West Virginia held that the trucking company had no knowledge of any potential claim that there was a defect in the truck so as to warrant them maintaining the unit before they received any demand.  As it was a single vehicle accident subject to worker’s compensation the trucker would not reasonable expect a separate action by the driver against the vehicle manufacturer.  (Williams v. Werner Enterprises, 2015 WL 1000779)

The Eastern District of Louisiana denied a request for sanctions against a motor carrier and its insurer for the alleged spoliation of various types of evidence, including statements, ECM Data, Qualcomm tracking, messaging data and hours of service records. The Court held that the plaintiff failed to establish that the defendants acted in bad faith or intentionally destroyed any evidence.  (Garnett v. Push, 2015 U.S. Dist LEXIS 33593)

When a trucking company schedules its tractors and trailers on the policy is each piece of equipment entitled to equal limits – allowing for a multiple limit when a scheduled tractor and a scheduled trailer are involved in a loss?  The Supreme Court of New Mexico answered the question in the negative, concluding that in that case the single accident limit was applicable to the loss. (Lucero v. Northland Insurance Co., 2015 N.M. LEXIS 100)

When a transportation broker agrees with the shipper that it will make sure that a shipment is properly delivered, that broker may then be considered a general contractor and obligated to maintain workers compensation coverage for the driver.  The Court of Appeals in North Carolina concluded that the broker was obligated to provide that protection and could not seek protection under the Interstate Commerce Act.  (Atiapo v. Goree Logistics, Inc., 2015 N.C. App. LEXIS 219)

An insurer was successful in limiting its coverage to owned vehicles and held not provide coverage for a leased truck under the newly acquired provision of the policy.  The Appellate Court in Illinois concluded that were plaintiff did not have coverage for owned and leased vehicles it could not use the “newly acquired coverage” under the policy to obtain coverage, post loss, for a leased vehicle.  (Schuster v Occidental Fire & Casualty Company of North America, 2015 IL App (1st) 140718)


Be careful what you argue, as one plaintiff found out in the 2nd Circuit Court of Appeals.  The steamship line contracted with a domestic rail carrier to perform a domestic portion of an interstate shipment. When the plaintiff had previously argued that the Carmack Amendment was the controlling law it waived any right to assert to assert a separate contractual claim against the steamship line.  (American Home Assurance Co. v., A.P. Moeller Maersk,  2015 U.S. App. LEXIS 5009)

A motor carrier was successful in compelling arbitration over a cargo loss when it incorporated its terms and conditions on its delivery receipts, which were routinely given to the shipper.  The delivery receipt confirmed that the terms and conditions were available on its website, as noted in the receipt.  The Southern District of New York held that was enough to place the plaintiff’s insured on notice of the arbitration requirement  (Affiliated FM Insurance CO. v Bridge Terminal Transport Services, 2015 WL 685244)

ICCTA preempts a claim against a broker for fraud.  The Court in the Northern District of Illinois held that a claim that the broker promised to get insurance for the cargo was not permitted to stand in light of 49 U.S.C. 14501 which preempts those actions.  The Court further held that there was a question of fact as to whether there was an agreed upon limitation of liability.  (Midwest Trading Group v. Globaltranz, 2015 WL 1043554)

A carrier’s claim against a broker for tendering shipments in excess of its insurance limits was dismissed in the District Court in Maryland.  The Court held that when the action by the plaintiff was dismissed against the broker there was no basis for a cross-claim by the carrier against the broker.  The Court determined that the issue of whether the carrier had a claim against the broker was separate and distinct from the carrier’s liability to the customer, concluding that a separate action was warranted. (AIG Europe v. General Systems, Inc. 2015 WL  1276757)

The District Court in Oregon concluded that a broker had no duty to advise a motor carrier of the value of a shipment, holding that the obligation rested with the carrier to determine the value.  However the Court did not conclude that there was a question of fact as to whether there was a contractual agreement to advise the carrier as to the value of the shipment.  (Complete Distribution Services, Inc. v. All States Transport LLC,  2015 U.S. Dist. LEXIS  37379)

The Carmack Amendment will preempt any claim that a shipper has for damage to household goods.  However, the District Court in New Jersey concluded that claims for damages to the home during the move would not be preempted by the Carmack Amendment.  (Brudnak v. A.A. Moving & Storage, 2015 U.S. Dist. Lexis 36359)

Meeting the burden of proof is often difficult for a cargo claimant. The Northern District in Ohio concluded that a plaintiff lacked standing to sue the carrier under the Carmack Amendment when it could not show it was the shipper or consignee under a bill of lading and further concluded that plaintiff was unable to produce any documentation establishing delivery in good order and condition to the carrier.  Finally the Court held that there was no claim against a broker for damage caused by a motor carrier.  (Northrich Company v. Group Transportation Services, Inc., 2015 U.S. Dist LEXIS 35826)

A household goods carrier’s efforts to have a complaint for bad faith refusal to settle a household goods claim dismissed failed in the District Court in Nebraska.  The Court held that as there were questions of fact on whether insurance was sold by the carrier dismissal was premature.  The Court held that a claim arising under an insurance policy sold to a customer was separate from a claim under the Carmack Amendment.  (Muzi v North American Van Lines, 2015 WL 1243177)

See you next month.   Happy Spring.

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