Bits & Pieces

Volume 19, Edition 9


Autumn is with us and everyone is heading back to the salt mines and gearing up for the fall rush.  I am looking forward to seeing many of you in Orlando this week at the MCIEF Annual Conference, next week at the NTHECC and later in the month at the IMUA meeting in Virginia.  I look forward to chatting with you about the new CAB services.

Things were pretty quiet in the news this month as the final summer holidays were taken.  This month we report:

AUTOMATED VEHICLE POLICY – The DOT has announced its policy regarding automated vehicles.  The policy targets the highly automated vehicles and is broken into four components – vehicle performance guidance, model state policy, current regulatory tools and modern regulatory tools.  You can read the policy here.

Basically the vehicle performance guidance for automated vehicles includes a 15-point safety assessment for manufacturers.  It also requires data sharing that allows regulators to access databases for information regarding crashes. All classes of vehicles, including trucks and buses, are affected by the 15-point safety assessment.

The model state policy is a framework that will hopefully be employed by the states, who are free to modify any model. Suggested state policies include law enforcement considerations; liability/insurance; registration and titling; drivers of deployed vehicles; policies and regulations traditionally set at the state level.

While the NHTSA has existing regulatory tools, such as letters of interpretation the NTHSA has modified the process to permit quicker response, expected within 50 days. The NTHSA can also allow exemptions to the rules.  In addition the DOT is asking to allow NHTSA pre-market approval and pre-market safety assurance. It is also seeking the right to issue cease and desist orders in the event of an imminent hazard.  NHTSA is requesting the authority to regulate post-sale software changes in automated vehicles. An increase in exemptions allowed is also being requested. NHTSA is asking to increase the number of exemptions to 5,000 vehicles per year for up to five years. An increase from 5,000 to 25,000 vehicles will allow for more efficient safety data, according to the DOT.

WINDSHIELD LAW – The DOT now agrees that drivers may mount gadgets on the windshield of a vehicle if it is part of a vehicle safety technology likely to achieve a level of safety that is equivalent to or greater than the level of safety that would be achieved absent the exemption.  The exemption will go into effect 30 days following publication on September 23. Devices that truck drivers and motor carriers will be able to mount on their windshields include “fleet-related incident management” systems, “performance of behavior management” systems, speed management systems, lane departure warning systems, forward collision warning or mitigation systems, active cruise control systems and “any other technology that the Secretary (of Transportation) considers applicable.

ELD RULES IN TEXAS –  The Texas Department of Public Safety has issued a final rule requiring intrastate motor carriers and drivers to install and use ELDs that meet the requirements in Part 395 of the Federal Motor Carrier Safety Regulations (FMCSRs) by December 16, 2019.

Until December 16, 2019, intrastate motor carriers in Texas may use:

* An ELD that meets the requirements in Part 395, Subpart B;

* An automatic on-board recording device that meets the requirements in Section 395.15; or

* A record of duty status that meets the requirements in Section 395.8.

Under the federal ELD regulations carriers must be compliant by December 18, 2017. Motor carriers that have installed compliant automatic onboard recording devices (AOBRDs) in vehicles and require drivers to use them by that date will have until December 16, 2019, to upgrade or replace the unit with an ELD. FMCSA is developing roadside inspection technology and training for roadside officers, which is expected to be deployed several months ahead of the December 2017 date.

INTERCHANGE RULES – The FMCSA has announced its intent to issue a rulemaking concerning revisions to its May 27, 2015, final rule titled “Lease and Interchange of Vehicles; Motor Carriers of Passengers.” The purpose of the rule is to identify the motor carrier operating a passenger-carrying commercial motor vehicle that is responsible for compliance with the safety regulations and ensure that a lessor surrenders control of the CMV for the full term of the lease or temporary exchange of CMV(s) and driver(s).

The FMCSA, after consideration of various petitions is considering the following regulatory changes:

Excluding “chartering” (i.e., subcontracting) from the leasing requirements.

Amending the CMV requirements for the location of temporary markings for leased/interchanged vehicles.

Changing the requirement that carriers notify customers within 24 hours when they subcontract service to other carriers.

Expanding the 48-hour delay in preparing a lease to include emergencies when passengers are not actually on board a bus.

The FMCSA will hold a roundtable discussion on the scope of the issues to be addressed in the forthcoming rulemaking. The meeting will be public and will seek public input regarding the assignment of responsibility for safety violations to the correct party. Individuals with diverse experience, expertise, and perspectives are encouraged to attend. If all comments have been exhausted prior to the end of the session, the session may conclude early.



 The Western District of Virginia considered the various causes of action against a trucking company arising from a motor vehicle accident.  The Court dismissed causes of action based upon placard liability, negligent hiring, negligent entrustment and negligence per se and dismissed a punitive damage claim against the carrier, but not the driver.  The Court also concluded that the motor carrier could be vicariously liable for the actions of some of the defendants.  (Lester v SMC Transport, 2016 WL 4595696)

The Court of Appeals in Indiana upheld a default judgment against a driver and a motor carrier.  The Court concluded that the plaintiff’s service on the truck driver at the address provided to law enforcement following collision and the service on the trucking company through Secretary of State using business address provided by truck driver comported with due process. There was no basis to vacate the default. (Jordache White & American Transport, LLC v. Reimer, 2016 WL 4698963)

The Court in Louisiana held that plaintiff was time barred from pursuing a trucker and its insurer when it failed to file a timely suit in the state. The fact that plaintiff had filed a timely case in another state, but failed to complete service, was insufficient to toll the limitation period.  (Gallagher Basset v. Canal Insurance Co., 2016 WL 4942331)

The Middle District of Pennsylvania decided that the motor carrier’s training records could be construed as showing persistent and profound problems with the driver’s performance and permitted a cause of action for punitive damages to proceed.  The Court held that the evidence could permit an inference that the defendants were aware of a significant risk to safety and failed to act in the face of this known risk. (Botey v. Green 2016 U.S. Dist. LEXIS 121591)

While the Court was not ready to make a decision on the applicability of coverage for a series of claims against a motor carrier, the Middle District of Pennsylvania held that an insurer would not be liable under Pennsylvania law, for bad faith because it provided a defense under a reservation of rights for some, but not all similar claims.  (Westfield Insurance Co v. Icon Legacy Custom Modular Homes, 2016 WL 4502456)

The Court of Appeals in Texas held that a plaintiff was not entitled to recover under the MCS-90 when the judgment was not against the named insured.  In the absence of a judgment against the named insured there was no direct right of action. (KLLM Transport Services v Hallmark County Mutual Insurance Co., 2016 Tex. App. LEXIS 10089)

The 6th Circuit held that a consignee was not subject to suit when a motor carrier’s driver was injured while unloading freight.  The Court held that under Kentucky law the process of unloading materials amounted to work that the consignee or similar business perform with their employees and they should be entitled to rely upon the defense that the exclusive remedy for the driver was worker’s compensation.  (Black v Dixie Consumer Products, 2016 WL 4501680)

The Southern District of New York denied a plaintiff’s motion to set aside a defense verdict entered in favor of a trucking company  The Court sustained the finding in the underlying action that the plaintiff had failed to suffer a serious injury, a prerequisite for recovery.  (Manlapig v. Horace, 2016 WL 4617305)

The Court of Appeals for the 5th Circuit refused to permit a garnishment proceeding against an insurer based upon a judgment entered against the motor carrier defendants. The Court concluded that the judgment was void as plaintiffs had not properly affected service on the defendants. (Stephens v. Holcomb Logging, 2016 U.S. App. LEXIS 16354)

In another time bar case, the Court  in Texas held that when an accident injuring a truck driver took place on May 14, 2014, in Houma, Louisiana, the Louisiana based plaintiff who filed his personal injury lawsuit in Texas on May 15, 2015 was time barred under Louisiana law and could not pursue a claim against the customer.  The Court held that the driver was not entitled to rely upon provisions of a master service agreement that the customer had with the motor carrier to apply Texas law to claims under the contract.  (Oubre v. Schlumberger, 2016 U.S. Dist. LEXIS 130251)


Everyone points the finger in identity theft cases.  The Northern District of New York dismissed a third party action brought by the broker against the shipper contending that the shipper should have known that the driver was a fraud. The Court held that even under the duty to act with reasonable care in releasing freight there was no plausible claim that the shipper acted improperly. The Court did grant the broker one last opportunity to try and allege a breach of contract claim. (Golub Corp. v Sandell Transport, 2016 WL 4703734)

A party who was not listed anywhere on a bill of lading, as a shipper or consignee, was determined by the Court in the Eastern District of Michigan to have no standing under the bill of lading.  Moreover the Court concluded that even if the plaintiff, another motor carrier who was buying the freight, had standing, it had failed to comply with the claim filing requirements and that the actual motor carrier was not estopped to assert the nine month requirement.  (Loves Express Trucking v. Central Transport, 2016 WL 4493674)

A broker or a carrier?  The Western District of Arkansas held that the contractual agreement between the plaintiff and defendant supported the conclusion that the defendant was a broker and not a carrier and accordingly the defendant was not liable under the Carmack Amendment for a cargo loss. The Court invited the parties to further brief whether a negligence claim against a broker was preempted.  (Zumba Fitness, LLC v. ABF Logistics, 2016 WL 4544355)

The Eastern District of Washington held that a .60 cent per pound limitation of liability was reasonable for a household goods shipment, despite plaintiff’s argument that the number was unreasonable as the goods were unique. The Court also held that the motor carrier undertook all required steps to limit its liability.  (Kimsey v. SML Relocation, 2016  WL 4728108)

The nine month claim filing requirement contained within the Fed Ex tariff was a game changer for the plaintiff in the Northern Division of Alabama.  The Court held that plaintiff’s delay claim, filed two years after the alleged event was too late to be addressed,  (Skanes v, Fedex Ground Package System, 2016 U.S. Dist. LEXIS 123255)

The Middle District of Florida held that an Offer of Judgment, which was not accepted, would not permit the defendant to recover attorney’s fees when it won the case.  The Court held that a state statute allowing for such fees was inapplicable when the only claim against the defendant was asserted under the Carmack Amendment.  (National Union Fire Ins. Co. v. All American Freights, Inc. 2016 U.S. Dist. LEXIS 120828)

Attorney’s fees are not recoverable under the provisions of the Carmack Amendment.  The Middle District of Florida reached that conclusion, even while entering a default judgment against the motor carrier.  While the defendant would be responsible for the cargo loss it would not be responsible for attorney’s fees.  (Scotlynn USA v. Singh, 2016 WL 4734396)

Do the terms of an ocean bill of lading apply when the cargo is damaged while being loaded onto the motor carrier’s truck at the port?  The District Court in Maryland held that there was a question of fact as to whether there was a delivery prior to the damage so as to end the terms of the bill of lading.  (Lofthouse Manufacturing v Port America Baltimore, 2016 WL 4662337)

Preemption ruled again in the District of Nevada as the Court dismissed all causes of action against a motor carrier when the plaintiff had pled only state law claims. The Court did grant leave for the plaintiff to allege a proper Carmack claim.  (Viswanathan v. Moving USA, Inc. 2016 WL 4521676)

A motor carrier’s efforts to have a declaratory judgment action dismissed by an insurer who had not yet paid a cargo claim failed in the Central District of California. The Court held that Carmack Amendment did not preclude declaratory judgment or a cross-claim for indemnity by a party to the shipping contract.  All parties were permitted to proceed with their actions against the motor carrier. (Kidd v American Reliable Ins Co., 2016 WL 4502459)

Over in the District of New Jersey the Court reconsidered a prior motion and concluded that a motor carrier could not be liable under both Carmack and contract, also finding that the contract contained an express waiver of the Carmack Amendment. The Carmack claim was not permitted and the Court went even further, concluding that the plaintiff was not an intended third party beneficiary of the contract that the motor carrier had with its customer and therefore had not standing to continue the action for cargo loss. (Sanofi Aventis v. Great American Lines, 2016 WL 4472949)

Cargo policies have many exclusions that are often a surprise to motor carriers after a loss.  The Western District of Kentucky held that an insurance agent bore no liability when a cargo claim for the theft of copper was denied based upon the policy exclusion for copper. (Atic Enterprises, Inc. v. Cottingham & Butler Insurance Services, Inc. 2016 U.S. Dist. LEXIS 127715)

If the temperature is high, but there is a question as to whether the goods are truly damaged, has the claimant met its burden of proof?  The District Court in New Jersey said yes. The Court held that a temperature threshold is a reasonable safeguard to assure food integrity, prolong shelf life, minimize deterioration, and protect the clamant and its customers. The product does not have to turn rancid or grow mold to warrant concern. (Mecca & Sons Trucking Corp. v. White Arrow, LLC 2016 U.S. Dist. LEXIS 127260)

The Southern District of Ohio upheld the preemptive effect of the Carmack Amendment, dismissing state law claims against a motor carrier. The Court concluded, however that there were questions of fact on whether the motor carrier had validity limited its liability and given the shipper an opportunity to declare a value.  (Synergy Flavors, LLC v. Averitt Express, Inc. 2016 4761932)

The Court of Appeals in Ohio dismissed an action brought against a motor carrier four years after a claimed loss for which the motor carrier had already paid its contractual liability. The Court held that the action was preempted by the Carmack Amendment and plaintiff had no basis for any further claim.  (Dickson v UPS Store, 2016 WL 4527187)

Claims against car haulers do not up very often so cases considering the car carrier bills of lading are interesting. The Northern District of Ohio refused to allow the motor carrier to rely on a provision which precluded liability when another car leaked fluid on to the damaged vehicle. The Court held that the bill of lading did not effectively limit the carrier’s liability, which was strict. The Court also held that the fact that the plaintiff would actually obtain a better vehicle with the required repairs was not enough to discount the payment to be made by the motor carrier. (Schneider v. Fifth Wheel, 2016 WL 4424944)

Have a great October.  See you next month.

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