Bits & Pieces

Volume 19, edition 8


This month we report:

CARGO THEFT DATA COLLECTION REPORTS – Public comments are being sought on a proposal by the FBI to extend the use of its cargo theft incident report. Under the current proposal, law enforcement agencies submit cargo theft data to the FBI in three ways: via an electronic Cargo Theft Incident Form spreadsheet; the Cargo Theft Technical Specifications; or the National Incident-Based Reporting System. The FBI is seeking comments on whether the proposed collection of information is necessary for its job performance. Electronic reporting is now being considered.  According to the notice “approximately 18,439 law enforcement agency respondents submit monthly for a total of 221,268 responses.  That is a lot of cargo theft incidents per month.

CARGO THEFT – Speaking of cargo theft, Freightwatch reports that cargo theft is down, but the value of the stolen cargo has increased. From April to June, the company recorded 166 incidents of cargo theft in the U.S., down from 221 for the previous quarter, with an average loss value per incident of $154,184, up from $112,467 in the previous quarter. Food and Beverages comprised one of every five stolen shipments. California remains the top state for cargo theft, with 40 percent of all reported thefts occurring in the Golden State. The rate represents a 91 percent increase compared to Q1 2016, and a 122 percent increase compared to the same quarter in 2015. Texas came in second with 19 percent of total reported thefts, followed by New Jersey (8 percent), Florida (7 percent) and Georgia (6 percent). Theft of full truckload remains the most prevalent method of cargo theft, accounting for 78 percent of all reported thefts. The report states that the most prevalent location for cargo thefts continues to be unsecured parking, identified in 82 percent of all incidents in which a location was declared.

DANGEROUS TRUCKING JOBS – U.S. Department of Labor bloggers have released data indicating that trucking is one of the most dangerous jobs around. One out of every six American workers killed on the job is a tractor-trailer truck driver.  In 2014 761 tractor-trailer truck drivers were killed while working,  Truck drivers have the highest number of nonfatal injuries and illnesses that require days off from work across all occupations (a total of 55,710 in 2014).

BILL OF LADING CHANGES – The National Motor Freight Traffic Association has just made substantial changes to the terms and conditions of the Uniform Straight Bill of Lading which became effective on August 13, 2016. The key changes directly affect claims against trucking companies for lost or damaged cargo. The changes include the following:

Section 1.(a) – changes the responsibility for cargo loss and damage from the “carrier or party in possession” of the cargo to the “carrier shown as transporting the property.”

Section 1.(b) – changes the burden of proof to require the shipper to prove the carrier or party in possession of the cargo was negligent rather than the carrier being required to prove that it was not negligent.

Section 1.(b) — adds “riots or strikes” to the list of carrier defenses to a cargo claim, and adds “or any related causes” in reference to the entire list of defenses.

Section 2. – eliminates the “reasonable dispatch” standard relating to delay claims against carriers, and simply says the carrier “will transport the shipment in the regular course of its providing transportation services.”

Section 3.(b) – changes the requirement that claims for failure to make delivery (i.e., claims for loss of cargo) must be filed “within nine months after a reasonable time for delivery has elapsed,” and substitutes a shorter time period of “not more than nine (9) months from the date of the bill of lading.”

Any motor carrier that is a member, and the list is long, now reaps the benefit of these changes.  Various organizations sought to prevent the implementation of the new changes by filing petitions with the STB to suspend the .changes. The STB declined to suspend the regulations but deferred a ruling requesting further investigation. So at this point the rules stand and the bill of lading has changed.  We suspect that non-members will start changing their form bills of lading to mirror this standard.

VAPES – Never thought I would be reporting on VAPE use in the Bits & Pieces.  This month the FMCSA issued a safety advisory for battery-powered portable electronic smoking devices in or around commercial vehicles. The FMCSA wants carriers and drivers to be aware of the potential safety hazards. Particularly, those transporting hazardous materials should be careful when possessing, storing, charging or using any of these devices while loading or unloading.

TOW OPERATIONS – The Colorado Public Utilities Commission has extended its protection of non-consensual tows to include heavy-duty trucks. The regulations will include a strong definition of “non-consensual tow,” reasonable maximum per hour wrecker/rotator fees, prohibited fuel surcharges, strengthened invoicing requirements, a reasonable standard for what is necessary in a tow/recovery, and a provision to address what is referred to as double-billing. Non-consensual tows include tows ordered by law enforcement are included even when the owner or operator of the vehicle consents to a law enforcement official ordering a tow.  Importantly the invoices will have to provide more specific information and will not allow for double billing.

The regulations call for specific information on the invoice, such as the time of dispatch, the time the truck leaves the yard or other staging location, the time the tow truck arrives on scene, the time tow truck leaves the scene, and the time the vehicle is unhooked.

In order to discourage overcharging, the commission retained language that says the towing carrier shall not charge or retain any fees or charges for the services it performs if it is found in violation of state statute or the commission’s rules. This would likely be applied only to the most serious of violations.

The regulations also guard against double-billing by not allowing additional fees for towing a tractor and trailer together.

RECALLS – The NHTSA has announced that another round of manufacturers are recalling trailers due to an issue with Bendix spring valves. More than 9,000 Manac, Polar Tank, Heil and Hyundai trailers are affected in this latest notice, according to National Highway Traffic Safety Administration documents.

On June 8, NHTSA sent out a recall notice regarding an issue with nearly 195,000 Bendix SR-5 trailer spring brake valves. According to NHTSA, brake valves were improperly machined without a radius on the internal check valve seat, causing a delay of application of the spring brakes while parking.

Bendix’s public relations firm reached out to Land Line via email on July 29, and offered their own description of the problem: “Under a combination of a unique set of circumstances, it is possible (though not probable) for an internal leakage to develop in the SR-5 unit, resulting in slow-to-apply spring brakes when parking the trailer.”

On Tuesday, Aug. 9, NHTSA sent out a recall notice with specific makes and models of trailers affected by the recall. Affected trailers include:

  • 2016 Manac flatbed trailers
  • 2017-2018 Manac van trailers
  • 2014-2016 Polar Tank DOT 406 tank trailers
  • 2014-2016 Polar Tank DOT 407 tank trailers
  • 2014-2016 Polar Tank DOT 412 tank trailers
  • 2014-2015 Polar Tank MC 331 tank trailers
  • 2014-2016 Polar Tank non-code tank trailers
  • 2014-2016 Heil crude trailers
  • 2014-2016 Heil dry bulk trailers
  • 2014-2016 Heil flatbed trailers
  • 2014-2016 Heil petroleum pull trailers
  • 2004-2016 Hyundai Translead chassis
  • 2004-2016 Hyundai Translead containers
  • 2004-2016 Hyundai Translead van reefer trailers
  • 2004-2016 Hyundai Translead van trailers

The SR-5 valve is a reservoir-mounted trailer valve that can control four spring brake actuators during parking or emergency applications, a NHTSA safety recall report explains. A trailer will have an audible air leak from the dash mounted park control valve or red gladhand when it is disconnected, prior to decoupling when a slow-to-park situation occurs. This leakage will continue until the trailer reservoirs and spring brake chambers are depleted of air pressure.

For those interested the NHTSA recall number for the original Bendix equipment recall is 16E-045



As we see more and more transportation procured through truck brokers the cases are mounting on the many issues that plague this form of cargo transport. Different courts are ruling different ways, making it difficult to ascertain what the right course of action is. This month we saw a number of cases on the issue.  For example, the Middle District of Florida denied a motion to dismiss a claim against a transportation entity. The Court held that a Carmack claim would stand against the defendant as there was a reasonable basis to conclude that it held itself out as a carrier, while at the same time concluding that a negligence claim for failure to procure a good carrier would stand if the defendant was a broker.  (Edelbrock v. TT of Naples, Inc., 2016 WL 4157426).  Over in the Eastern District of Michigan the Court held that an insurer who paid a cargo claim on behalf of a broker had no standing to sue a carrier under the Carmack Amendment in the absence of an assignment from the shipper.  (Acuity Insurance Co. v. Nick’s Trucking & Excavating LLC, 2015 WL 4060975).  A similar result was reached in the same Court when the Court granted a motion to dismiss a complaint brought by the broker against the motor carrier, with the Court concluding that the broker lacked standing to sue under the Carmack Amendment.  (United Road Logistics, LLC v. DVM Car Trans, LLC, 2016 WL 4011264).The Southern District of Ohio granted a truck broker’s motion to remand a case against a trucker for a cargo loss to state court on the theory that the claim was under the broker-carrier contract and not the Carmack Amendment. (Total Quality Logistics v. James J. O’Malley, 2016 WL 4051880)

The Eastern District of Michigan denied a request for reconsideration of a prior order granting defendant a limitation of liability under tariff provisions.  The Court concluded that the new arguments which plaintiff made in the reconsideration motion could have been made in the initial motion, precluding them for being considered later.  (Kelly Aerospeace Therma Systems v. ABF Freight Systems, Inc. 2016 WL 4374917)

A trucking company attempted a third party action against a truck broker when the trucker was sued for a cargo loss in the Northern District of California. The Court granted the broker’s motion to dismiss, enforcing the forum selection clause in the broker/carrier contract and concluding that an equitable claim for contribution arose from the contract.  (Global Quality Foods, inc. v. Van Hoekelen Greenhouses, Inc. 2016 WL 429126)

A motor carrier sought to defeat indemnity obligations under a master service agreement based upon Texas’s Oilfield Anti-Indemnity Act. The Southern District in Texas concluded that the master service agreement expressly extended to the sole negligence of the parties and that the services provided by the motor carrier were not a close nexus to drilling or mining.  Finally the Court held that the motor carrier had not proved that the plaintiff’s settlement of the underlying action was unreasonable and that plaintiff established that there was no evidence that it was unreasonable, striking the defendant’s affirmative defenses.  (Catlin Specialty Ins. Co v. L.A. Contractors, Ltd., 2016 WL 4276131)


The Eastern District of Kentucky held that evidence of negligent hiring, training, supervision, entrustment and retention would not be admissible when the trucking company had admitted vicarious liability for the actions of the driver.  While the rule in a Kentucky state would be to the contrary the Court held that such a conclusion would violate the federal rules of evidence.  (Martin v. Browning, 2016 WL 4119790)

The Court of Appeals in Texas upheld a jury verdict against a trucking company, concluding that the jury had ample support for imposition of liability not only for negligence but for gross negligence. The Court held that the plaintiff’s experts were credible and fully supported the verdict.  (Greenwood Motor Lines v. Bush, 2016 WL 4385456)

The Court of Appeals in Ohio held that a scheduled driver on a liability policy was not entitled to uninsured coverage when injured in an accident while operating a personal auto.  The Court held that there was no ambiguity in adding a schedule of drivers and that it did not make those drivers insured under the policy for all purposes. (Wetzel v. Auto-Owners Insurance Co., 2016 WL 4262814)

Summary judgment afforded to the insurer of a trailer being operated during an accident was upheld in the 7th Circuit. The Court held that it would not apply a hyper technical interpretation of endorsements addressing who was an insured under the policy. The Court further concluded that the trailer interchange agreement did cover the trailer involved it the accident and the trailer was not being used in the owner’s business.  Finally the Court held that the endorsement did not violate Wisconsin law because it excluded permissive users as the statute was not applicable to the policy which was not issued to a Wisconsin insured. The Court held that filing a certificate of insurance with the state DOT was not the same as delivering a policy in the state.  (Great West Casualty Co. v. Robbins, 2016 WL 43667690

Discovery disputes can turn ugly for some.  The Appellate Division in New York held that FOIA information obtained by counsel was not subject to attorney work product privilege and that imposition of sanctions for destroying electronic records would be appropriate. Sanctions would be limited to a negative inference regarding the lack of records.  (Cioffi v. SM Foods, Inc., 2016 WL 4199347)

A trucking company lost its effort for summary judgement in the Northern District of Alabama when there was limited evidence that one of its trucks forced plaintiff’s motorcycle off the road.  The Court held that there was enough evidence through witness testimony to at least support a question of fact on a negligence claim but not a wantonness claim  (Howze v Western Express, 2016 WL 4180898)

A trucking company lost its efforts to exclude the expert testimony of Brook Rugemer on the topic of the screening policies for hiring contract drivers.  The Court concluded that the expert was qualified to discuss whether the motor carrier failed to properly screen the driver, who was involved in a fatal accident while operating under the influence of alcohol.  (Ramos-Becerra v. Hatfield, 2016 WL 4127387)

A cause of action against a trucker for negligent failure to maintain or properly equip the vehicle was dismissed, along with any claim for wantonness.   However the Middle District in Alabama concluded that a claim for negligent entrustment would continue.  (Trinidad v. Moore, 2016 U.S. Dist. LEXIS 106099)

The Court of Appeals in Indiana upheld a jury verdict of $32 million against a driver and trucking company concluding that it would not substitute its analysis for that of the jury. The accident arose when the truck jack knifed and was lying of the side of the road and was struck an hour later by the plaintiff. The Court held, among other things, that not bifurcating liability and damages was not prejudicial and admitting post remedial measures of the trucking company was not an error. (JB Hunt v. Zak, 2016 Ind. App. LEXIS  300)

Over in the 10th Circuit the Court upheld a verdict in favor of a driver’s accident with a company vehicle, concluding that the evidence supported such a finding. The Court also denied an award of costs for rejection of a settlement demand. The Court held that counsel’s letter that he had authority to make a settlement demand was not the same thing as actually making one, therefore it was not rejected as required under the statute.  (Xiong v. Knight Transportation, 2016 US App LEXIS  13648)

Roadside Inspections.  One trucker argued in the Eastern District of Missouri that roadside inspections were unconstitutional. The Court concluded otherwise finding that there is a substantial governmental interest in regulating trucking and that warrantless inspections facilitate the regulation intent.  (Calzona v. Koster, 2016 WL 4036898)

Notice Prejudice Rule – The Supreme Court of Wyoming had held that  under its state law an insurer must be prejudiced before being entitled to deny coverage for failure to give notice as soon as practicable.  A trucker had been declined coverage by his umbrella insurer because the insurer was not notified of a loss.  (Century Surety Company v. Jim Hipner, 2016 WL 4399921)

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