Mayflower Transit, LLC, et al. v. T.J Campbell, et al., 2012 WL 666686 (E.D. Mo. 2012)
This must happen most frequently when one of two divorcing spouses ships household goods as the sole shipper of record. It started out routine – T.J Campbell hired Mayflower to move his stuff from Iowa to Illinois; accepted a bill of lading with all the standard terms; and asked for delivery at a new residence he planned to have by the time his stuff arrived. However, he didn’t have a new residence in the Prairie State when the carrier’s truck was ready to offload. Per its bill of lading terms, Mayflower converted the freight to storage in transit, and hired warehouseman Dodge Moving & Storage to hold it pending further instructions. Then appeared Rita Case, relationship to T.J unclear (but suspected), who claimed the freight belonged to her.
Now, Mayflower and Dodge had possession of freight that two folks said they owned, but neither wanted to pay for. Following procedures outlined in 49 USC §80110, the two service providers filed an interpleader action, naming T.J. and Rita as defendants, and asking for judgment for some 14 grand in transportation and storage charges from one or both of them. The defendants appeared pro se and didn’t put in responses to the plaintiffs’ motion for summary judgment, so all factual assertions were assumed accurate.
Interpleader is a legal mechanism allowing a party that agrees it owes an obligation to two or more others (here, the delivery of freight), but doesn’t know which one, and doesn’t want to risk double liability by acceding to the demand of one of the claiming parties. But by their dispositive motion, the plaintiffs were only interested in getting their green, and didn’t specifically ask for a determination of which defendant gets the freight. Judgment was granted in favor of Mayflower against T.J per the bill of lading’s terms regarding payment, but not in favor of Dodge, which didn’t have a contract with anyone. Rita skates Scot free. Trial (assuming T.J. and Rita show) will determine who gets the property.
Blue Gulf Industrial Supply v. P.J.T. Transport, Inc., 2012 WL 141322 (N.J. Super. A.D. 2012)
Blue Gulf Industrial Supply purchased 31,180 pounds of copper products from Connecticut-based Mueller Streamline Co., which delivered the cargo to the New Jersey facility of motor carrier PJT Transport which, after a short storage, hauled it intrastate to the Port of Newark for ocean shipping to Nigeria. It’s not clear which of these entities issued shipping documentation, or whether a through bill of lading governed the haul. The freight arrived short, and Blue Gulf gave timely notice of a claim to PJT. PJT declined.
Fast forward two years and 44 days, and Blue Gulf files suit against PJT in a Garden State court. PJT alleges Carmack governs, and apparently pointing to a two-year time-to-bring-suit clause, urged that the case should be dismissed. Affirming the trial court, the New Jersey Court of Appeals agreed.
Blue Gulf argued that PJT hauled only intrastate, such that Carmack shouldn’t apply. Per precedents, the court concluded that “if the final intended destination at the time the shipment begins is a foreign nation, the Carmack Amendment applies throughout the entire portion of the shipment taking place in the United States, including intrastate legs of the shipment.” But for all PJT knew and was involved with, the intended transit might have ended in Newark. This issue would be much easier to analyze if the court’s opinion told us about who issued what kind of shipping documentation.
Washington Trucking Associations, et al. v. Trause, et al., 2012 WL 585077 (W.D. Wash. 2012)
Washington’s agency charged with auditing companies for compliance with the state’s workers compensation tax statutes is the Washington State Employment Security Department (WSESD). WSESD made a determination that owner operator drivers are motor carrier “employees” for purposes of the state’s workers’ comp laws, such that they must pay taxes (essentially premiums) to obtain mandatory coverage for such employees. A number of Washington carriers, in coordination with their Evergreen State trade association, the Washington Trucking Associations, filed suit in the U.S. District Court for the Western District of Washington against WSESD personnel who made that determination.
The carrier plaintiff group argued that this tax reg substantially impacts the cost of interstate motor carrier operations which, in turn, violate prohibitions contained within the Federal Aviation Administration Amendments Act, 49 USC §14501(c), against states meddling in interstate transportation’s operations or economics. They wanted the court to nix state law that allowed Washington to levy workers’ comp taxes against motor carriers based on their owner operator leases.
The WSESD employees moved to dismiss, claiming that the Tax Injunction Act, 28 USC §1341 (TIA), and the Eleventh Amendment to the U.S. Constitution, deprive the federal court of jurisdiction. The court agreed, and tossed the carriers’ suit.
TIA provides that “[t]he district courts shall not enjoin, suspend or restrain the assessment, levy, or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such state.” Going through a U.S. Supreme Court test for TIA, the court found that the relief plaintiff sought would have just this effect on a state tax issue. The plaintiffs claimed they didn’t have a “plain, speedy and efficient remedy” because the underlying proceedings were administrative instead of in a court. But they had the right of judicial appeal; they could always take the Constitutional issues to court; and none of this was “outside the boundary of a speedy remedy.”
BNSF Logistics, LLC v. L&N Express, Inc., 2012 WL 525526 (N.D. Cal. 2012)
BNSF Logistics, LLC (BNSF), the railroad’s intermediary service, entered into a broker/carrier agreement with motor carrier L&N Express for some of its intermodal hauls originating in California. L&N identified Nathan Tran as its representative for this service, and gave BNSF Tran’s email address for freight bookings. Apparently, some no-goodnik calling himself “Garik” and claiming to be with L&N, called BNSF about a load of cargo destined for Pennsylvania. BNSF gave him the load, and it was never seen again.
Repeating his success, Garik obtained a second BNSF load intended for delivery in Nevada. It also vanished, along with Garik. BNSF paid the consignees some 112 grand and sued L&N in California state court. L&N allegedly had failed to advise BNSF that Tran was no longer with L&N, and that the email address was no longer effective. BNSF felt that L&N’s failure to update its contact info was negligent and breached the broker/carrier agreement. Had it known the email address wasn’t good, BNSF would have known something was awry with this Garik character.
The carrier removed the action to the Northern District of California, and promptly moved to dismiss BNSF’s state law claims based on Carmack and Interstate Commerce Commission Termination Act (ICCTA) preemption. The court considered BNSF’s argument that, hey, L&N never touched the freight. L&N’s alleged wrongdoing had nothing to do with an actual transport. Carmack preemption, BNSF urged, doesn’t kick in with respect to a breach-of-contract claim that didn’t involve the carrier’s actual handling or movement of freight.
The court disagreed and found Carmack preemption. “The duty to inform the shipper of changes in important personnel and to promptly respond to communications regarding shipments is an important part of a carrier’s service. Within the context of a carrier’s service, this duty is not any less important than the duty to deliver the goods in a timely manner, or the duty not to lose the goods.”
The court went through a separate analysis with respect to ICCTA preemption, addressing the notion that “a state may not enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route, or service of any motor carrier.” 49 USC §14501(c)(1). This also preempts BNSF’s claims, as L&N’s alleged wrongdoing “references L&N’s services as a carrier because BNSF relied on the Broker/Carrier Agreement when it released the products to Garik.” The loss therefore affects L&N’s services. The opinion isn’t entirely clear on this point, but the court granted BNSF leave to reinstate its claims against L&N properly.
American Road Lines, et al. v. Workers’ Compensation Appeal Board (Royal, et al.) v. Workers’ Compensation Appeal Board (Ayerplace Enterprises, LLC, et al.), 2012 WL 581101 (Pa.Cmwlth. 2012)
The trend toward holding trucking companies liable for claims involving other people’s employees continues. The latest involved an owner-operator’s driver who was tragically killed during a maintenance operation of its truck in preparation for a haul ordered by the motor carrier.
Driver Fred Royal was an employee of single-truck owner operator Ayerplace Enterprises, which was under lease to motor carrier American Road Lines. Ayerplace’s principal confirmed he operated “an outpost” for American to tend to American’s primary customer, Geo Specialty. In fact, Ayerplace’s principal drove for American himself (apparently in the latter’s tractor); American approved Royal as a driver; dispatched him (through Ayerplace); negotiated his pay; fueled his truck; restricted him from driving for anyone else; bought his insurance (but then charged Ayerplace back for it); and had him submit his paperwork (logs, etc.) to American instead of Ayerplace.
Sound like adequate control to render Royal an American employee, as opposed to the independent contractor status owner operators and their employees usually get? A workers’ comp ALJ in Pennsylvania found that both entities shared sufficient control that both should be jointly liable for his death. Questions raised by the Keystone State’s employment legislation regarding the propriety of joint employer liability prompted the decision to go through a Workers Compensation Appeals Board proceeding, which reversed the ALJ, finding that only American was Royal’s “direct employer,” such that it’s alone on the hook.
A state court agreed. Just like the forwarders and other intermediaries who’ve been tagged in recent years for injuries to or caused by drivers not in their direct employ, the court looked to the level of exercised control in determining who should be liable. But in this instance, the court construed federal regs which for time immemorial have held owner operators and their employees to be independent contractors to motor carriers which lease them. This is partially because owner operators, who often have their own operating authority, are charged by law with complying with safety and other operational regs. This court found that, notwithstanding contractual language specifying an independent contractor relationship, this scenario’s specifics demonstrated that Ayerplace was an “agent” of American. Maybe not quite an alter ego, but largely restricted from doing anything but the carrier’s bidding. Thus, Ayerplace isn’t liable, American is, and we have another precedent in support of broadened motor carrier liability.
R&R Express v. Commonwealth of Pennsylvania, 2012 WL 402556 (Pa.Cmwlth 2012)
Pennsylvania’s Motor Carriers Road Tax Act (the Act) requires truckers to pay a fuel consumption tax in coordination with the International Fuel Tax Agreement (IFTA), through which states pay each other percentages of fuel taxes that their in-state carriers pay for travel out of state. Pennsylvania-based R&R Express (the opinion suggests it’s a broker which hires out owner operators, but this doesn’t quite make sense) didn’t keep good records of its fuel purchases. When Keystone State taxing authorities imposed a fuel tax based on estimated travel mileage, R&R objected and sued, claiming the estimated taxes, which exceeded 440 grand with interest, were improper. It argued it should get tax credits for taxes already paid on retail fuel (it didn’t have its own bulk fuel facilities). These, R&R argued, could be estimated reliably without purchase documentation.
But the Act and IFTA don’t contemplate such educated guesswork. To the contrary, they require retention and presentation of documentation confirming exempt fuel expenditures. Because measures are clearly outlined for taxpayers to be credited, there is no risk of an unconstitutional discriminatory tax scheme resulting in unfair double taxation. R&R must pay up.
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