Happy Holidays Everyone!
Dreaming of a white Christmas took on a whole new meaning here in the Tri-state area. As I write this newsletter I am looking out the window at 30 inches of snow. I am glad Santa could get here before the storm hit, but I do not think it did much for the post Christmas shoppers.
We here at CAB would like to take a moment to wish you all a very happy and prosperous New Year. We look forward to working with you to help that happen.
I will keep this short as I have to quickly move on to writing the yearly report That report will be coming your way in the next few weeks.
CSA 2010 – The FMCSA has no need to change the name of its newest system as it was able to roll out CSA2010 before the end of 2010. It was touch and go at the end as some industry groups tried to block the roll-out. That effort was denied by the court. The first few days that the site was active saw hits of over 22,000 per hour, swamping the system. SafeStat numbers are gone, replaced now with the BASIC system. Our premium subscribers can already get the information on our site, along with a comprehensive analysis of the carrier’s operations.
BROKER REGULATIONS – New FMCSA rules will go into effect at the end of January which will require brokers, among other things, to utilize only authorized carriers, to physically survey shipments within 50 miles of the mover or the broker and only advertise the use of carriers for which the broker has a contract. In 2012 the bond requirement will also go from $10,000 to $25,000. A copy of the final rule can be viewed here.
HOURS OF SERVICE.- The FMCSA has been busy this month. The new proposed hours of service rules have now been released. There is not much that was changed. While the hours have been reduced to 13 hours, a driver can now take a one hour rest and then continue to complete 14 hours of service. The 34 hour restart rule also applies, provided that there are 2 rest periods – from midnight to 6 a.m. A restart will only be allowed once in a seven day period. The proposed regulations, which are not open to comment can be viewed here.
FOOD SAFETY AND MODERINIZATION ACT – The Act has passed Congress and has gone to the President for signature. Under the new act, the FDA will be able to recall products if there is suspected contamination and will also have control over goods being imported from other countries. It is expected that the FDA will follow with additional regulations which will impact the transportation industry.
DISTRACTED DRIVERS – The DOT has issued new proposed regulations which prohibit commercial vehicle operators from using hand held cell phone devices. Each offense will bring a $2,750 fine and possible suspension of the driver’s CDL after additional violations. The proposed regulations can be viewed here.
TRANSPORTATION COMMITTEE – Sen. John Mica, a Republican from Florida, has been selected to take over as the head of the Transportation and Infrastructure Committee.
PORT REGISTRIES ATTACKED – A petition has been filed with the DOT seeking to prevent area ports from implementing registries for approved local drayage companies. The petition contends that these registries, and the requirement that trucks be properly signed to indicate the required registration, are a violation of interstate commerce rules. We will keep you advised as to the status of the petition.
CURRENT CASES
CARGO
Preemption applies even to claims for failure to collect COD payments ruled the 5th Circuit Court of Appeals this month. The court held that the carrier’s limitation of liability applied even to this failure to collect monies. (Tran Enterprises LLC v. DHL Express, 2010 WL 5064376)
The Western District of Wisconsin dismissed a plaintiff’s claim for attorney’s fees and punitive damages under Carmack holding that neither Carmack nor Wisconsin law permitted such damages. However, the court did allow a cause of action which alleged violation of cargo claim regulations. (Viasystems Technologies v. Landstar Ranger, 2010 WL 5173163)
While preemption is generally all encompassing, it will not extend to intra-state shipments. The Middle District in Tennessee remanded a case back to state court and awarded fees to plaintiff when the complaint clearly noted that the transportation was intra-state. (Burkett v. Fox Moving and Storage of Tennessee, LLC, 2010 WL 5184828)
While transportation brokers can be liable for their own negligence, they should not be liable for conversion, or fraud or other claims stemming solely from the actions of the motor carrier. The Central District of California dismissed all such causes of action against the motor carrier. (Buchanan v. Neighbors Van Lines, 2010 WL 4916644)
The Supreme Court of North Dakota held that the hand written notations on a bill of lading as to the temperature of goods at delivery was admissible as a business record. The motor carrier was found liable for the temperature abuse to the product based upon the document. (Pizza Corner, Inc. v. C.F.L. Transport, 2010 WL 51558209)
AUTO
The Eastern District in Missouri refused to dismiss a punitive damage claim against a motor carrier. The court held that the allegations of the plaintiff which alleged knowledge on the part of the motor carrier as to the actions of the driver, as well as repeated violations of regulations, was sufficient to withstand a motion to dismiss. (Gilbee v. RJW Transport, 2010 WL 4974863)
An auto carrier was permitted to interplead its policy limits into the court in North Carolina and was granted an order restraining parties injured in an auto accident from filing suits against the motor carrier in other courts or states. (Great West Casualty Co v. Fredrics, 2010 WL 4818010)
The District Court in Colorado granted judgment to a truck insurer concluding that its policy did not apply to the death of the plaintiff who was working for the insured at the time of the accident. The court did refuse to conclude that the driver was an employee because of the “statutory employee”, holding that the insurer should have provided an expansive definition of employee if it intended that concept to apply. However the court went on to conclude the driver was still an employee under general worker’s compensation statutes. (Northland Ins. Co. v. Rhodes, 2010 WL 5110107)
The Supreme Court in Delaware held that the UM/IUM exclusion in a non-trucking use liability policy was invalid under state law. In that case the insurer attempted to limit the UM/UIM coverage by excluding its protection when the insured was transporting cargo. Only those exclusions permitted by statute were permissible. (Castillo v. Clearwater Ins. Co., 2010 WL 4705132) (thanks Carl Sadler for discovering this case!)
The Eastern District of Louisiana granted summary judgment in favor of a trucking insurer. The Court held that the MCS-90 was inapplicable when the truck, which was being driven by the repair shop, was not operating in interstate commerce. (Pace v. Travelers Indemnity Company of America, 2010 WL 5141252)
We do not see many cases from Vermont on trucking and insurance. This month the Supreme Court of Vermont affirmed a judgment on the allocation of settlement costs between insurers. In this case the insurer of the independent contractor, and the insurer of the trucking operation argued as to who was insured under each policy and the impact of the primary/excess clauses of the policy. Once again determining whether the driver was an independent contractor or an employee was critical. The court held that both insurers provided primary coverage and order settlement costs paid out based upon percentage of limits. (Hathaway v. Tucker, 2010 WL 5186046)
MISCELLANEOUS
The Northern District of California refused to permit service on a motor carrier by publication where there was an absence of evidence that the plaintiff undertook all reasonable steps to complete personal service on the motor carrier. (Savage v, MTF Relocation, Inc., 2010 WL 4791698)
Although most policies have a “no voluntary payment” provisions, many states are hesitant to enforce those provisions. The Northern District in California held that while California would enforce such a provision, it would apply Washington law to interpret the clause. The motor carrier had settled a large personal injury suit. Washington law required a showing of prejudice. The Court remanded the case to permit the insurer to attempt to meet its prejudice burden. (Columbia Casualty Company v Gordon Trucking, 2-1- WL 5141865)
The Court of Appeals in Indiana upheld a default judgment against two carriers for failure to respond to discovery demands. At least for one of the carriers counsel attempted to argue that a default was an improper penalty when the carrier was effectively out of business because its operating authority was revoked. The court did not accept that argument and entered judgment against the carriers. (Hummer Transportation v. Spoa-Harty, 2010 WL 5168366)
Efforts to sue a Mexican shipper for injuries caused by improper loading of a trailer were foiled by jurisdictional issues. The Court of Appeals in Texas held that there was neither general nor specific jurisdiction over the Mexican company for an accident which occurred in Texas. The shipper had no contacts with the state of Texas, although it did routinely ship goods to other states. (Zinc National v. Bouche Trucking, 2010 WL 5115877)
Jurisdiction was also an issue in West Virginia. The court refused to permit the insurer of a West Virginia trucking company to continue a declaratory judgment action against an injured party when the accident occurred in Texas where the party resided. While the court dismissed the action against the injured party it would not dismiss against the trucking company. While the trucking company asserted that it was not seeking indemnity from the insurer for the loss, the trucking company had not agreed to sign a stipulation to that effect and therefore the court held the request for dismissal unwarranted. (United Financial Cas. Co. v. Newsom, 2010 WL 4929123)
