MOTOR CARRIER (HOURS OF SERVICE & LIVESTOCK) – Federal Motor Carrier Safety Administration grants 90-day waiver from 30-minute rest break requirement for the transportation of livestock. That’s restricted to July, August and September 2013.

“Hours of Service; Limited 90-Day Waiver From the 30-Minute Rest Break Requirement for the Transportation of Livestock.”

Notice of Waiver. July 11, 2013.

Premise of this is that the 30-minute rest break requirement for the new (effective July 1, 2013) Hours of Service regulations for motor carriers from the Federal Motor Carrier Safety Administration will exacerbate harm to livestock transported by truck during the seasonally hotter months of July, August and September.

This preempts inconsistent state and local requirements.

But this is just a waiver.

No word on next year.

FMCSA maintains that there is no safety trade-off or penalty for this concession to the health and wellbeing of livestock: “The Agency has determined that the waiver, based on the terms and conditions imposed, would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such waiver.”

REMARKS – The MCS-90 endorsement mandated by the Motor Carrier Act held not to require issuer of that endorsement to pay out to another insurance company – in light of MCS-90’s design that was to protect an “injured member of the public” harmed by “negligent authorized interstate [motor] carriers”. It simply does not apply “between two or more insurance companies”. COMMENT: At some point the federal court systems will need to resolve this question about application of MCS-90 as between two or more insurance companies. The law is unsettled in the various jurisdictions – including as interpreted by federal and state courts.

Carolina Casualty Insurance Co. v. Canal Insurance Co., Case No. 2:11-cv-736 (U.S. District Court for the Southern District of Ohio, April 18, 2013). Free copy from the court available here.

Legal Take-Away:

Application of MCS-90 to cases between two or more insurance companies is unsettled in the law.

Practical Take-Away:

Until law is resolved on the application of MCS-90 to cases between two or more insurance companies, counsel for insurance carriers (1) should assume for planning purposes that MCS-90 will not apply to such circumstances, and (2) should always – in the context of an accident case presenting this situation – explore the possibility of making a good faith claim for recovery in such circumstances unless and until the law is settled to say otherwise.

REMARKS – Plaintiff shipper’s contract and tort claims against broker who arranged motor carrier shipment in which plaintiff’s freight (a machine) was damaged was NOT PREEMPTED by the Carmack Amendment because that statute does not cover actions by a broker. COMMENT: The basics of Carmack Amendment’s coverage remain the subject of confusion and – as here – unnecessary litigation.

ATLAS Aerospace LLC v. Advanced Transportation, Inc., Case No. 12-1200-JWL (U.S. District Court for the District of Kansas, April 24, 2013). Free copy from the court available here.

Legal Take-Away:

The legal take-away is entirely unremarkable. A simple reading of the Carmack Amendment (49 U.S. Code § 14706) reveals that the Carmack Amendment does not apply to a “broker” but instead to a “carrier”.

Applicable “broker” and “carrier” definitions (49 U.S. Code § 13102) are mutually exclusive.

Practical Take-Away:

Non lawyers should assure themselves that counsel understand transportation law before paying them to bring expensive litigation.

Lawyers should know what they are doing before they file pleadings.

Not to be snarky, but there is no excuse for any lawyer bringing a lawsuit against a “broker” under the Carmack Amendment, or with Carmack Amendment defenses being raised with respect to the actions of a “broker”. 

MOTOR CARRIER (OWNER-OPERATOR AND TITLE VII) / Title VII case alleging sex discrimination for motor carrier’s termination of an owner-operator agreement with plaintiff following a period when such plaintiff had been an “employee” of such motor carrier – held: Title VII does not govern contract relations between a motor carrier and an owner-operator where, applying agency principles provided by state law, such owner–operator relationship truly denotes independent contractor status for the owner-operator. In particular, the fact that owner-operator opted under her contract to elect to receive multiple additional services offered to her by motor carrier did not evidence such motor carrier’s “control” as she had in fact chosen to take them – they were not a precondition of being an owner-operator.

Zents v. Baylor Trucking Co., No. 5:11CV1941, Slip opinion (U.S. District Court for the Northern District of Ohio, April 11, 2013). Free copy of opinion available here.

Court relied heavily on two precedents applying state agency law to determine owner-operator / independent contractor versus employee truck driver status:

Laredo v. CRST Malone, Inc., 820 F.Supp.2d 698 (E.D.N.C. 2011). Free copy of opinion available here

Taylor v. BP Express, Inc. 2008 WL 5046071 (S.D. Ga. 2008). Free copy of opinion available here.

ANNOUNCEMENT / “Statement from Secretary LaHood on the New International Trade Crossing” relating to Detroit-to-Ontario road connection by a new bridge connecting Detroit to Windsor. COMMENT: Obviously this augments the decades-long reliance on the 1929-built Ambassador Bridge that has in recent decades carried 60-70% of regional truck traffic at this key logistics point.

Announcement available here.   

“The New International Trade Crossing will be much more than just a bridge connecting Detroit to Windsor, Ontario – as those who have worked so hard to move this project forward know, it will be an economic engine for the entire region. That’s why I’m so pleased that the State Department today issued a presidential permit that clears the way for the project to begin, which is great news for the state of Michigan, the United States and Canada. I want to particularly congratulate Governor Snyder for his tireless leadership on this critical project, which will create thousands of jobs, relieve crippling congestion that slows the flow of travelers and goods between our countries, and make our North American auto manufacturing industry more competitive in the global market. We look forward to continuing to work closely with our partners in Michigan and Canada as this key project gets underway.”

REMARKS / The Federal Motor Carrier Safety Administration has made numerous enforcement determinations in the past few weeks shutting down motor carriers in both passenger and freight. COMMENT: This probably indicates something about enforcement priorities – but candidly I do not know more about the detail of such changes.

See here, here, here, and here.

Also, U.S. DOT Secretary LaHood and FMCSA Administrator Ferro met recently  (April 5) with representatives of the passenger motor carrier industry to address safety issues.

Federal Motor Carrier Safety Administration (NAFTA Trucking Pilot Program) / FMCSA announced that two Mexican trucking companies failed to pass the safety test.

“FMCSA announces information concerning the Pre-Authorization Safety Audit (PASA) for Transportes Mor SA de CV (USDOT# 555687) and Adriana De Leon Amaro (USDOT# 2117609), which applied to participate in the Agency’s long-haul pilot program to test and demonstrate the ability of Mexico-domiciled motor carriers to operate safely in the United States beyond the municipalities in the United States on the United States-Mexico international border or the commercial zones of such municipalities. These motor carriers did not successfully complete the PASA.” 

“On July 8, 2011, FMCSA announced in the Federal Register[76 FR 40420] its intent to proceed with the initiation of a United States-Mexico cross-border long-haul trucking pilot program to test and demonstrate the ability of Mexico-domiciled motor carriers to operate safely in the United States beyond the border commercial zones as detailed in the Agency’s April 13, 2011, Federal Register proposal [76 FR 20807]. The pilot program is a part of FMCSA’s implementation of the North American Free Trade Agreement (NAFTA) cross-border long-haul trucking provisions in compliance with section 6901(b)(2)(B) of the Act. FMCSA reviewed, assessed, and evaluated the required safety measures as noted in the July 8, 2011, notice and considered all comments received on or before May 13, 2011, in response to the April 13, 2011, notice. Additionally, to the extent practicable, FMCSA considered comments received after May 13, 2011.” 

“Pilot Program on NAFTA Trucking Provisions” 

April 4, 2013. Notice.

FREIGHT DAMAGE (CARMACK AMENDMENT & CARRIAGE OF GOODS BY SEA ACT / “COGSA”) / Two high-value shipments of aerospace parts from Italy to Southern California arrive at seaport unharmed but are damaged on motor carrier move to inland destination – Held: Cross-motions for summary judgment denied based on controverted facts.


1. UPS-Supply Chain Services (3PL / logistics company) motion for summary judgment based on liability limitation contained in its “Master Services Agreement” with shipper denied – held: Activities triggering such limitation of UPS’ liability do not correspond to what UPS-Supply Chain Services is alleged to have performed in this case (“UPS-SCS’s position on this issue is a bit amorphous”).

2. Similar motion under a separate agreement between UPS-Supply Chain Services and shipper called “Customs Brokerage Services Agreement” by which UPS agreed to act as customs broker for shipper – held: Motion denied to the extent that controverted facts require trial to determine whether or not UPS acted solely as a customs broker in this case. Put another way, shipper argued that UPS had also acted “as a freight forwarder or motor carrier”.

3. Similar motion by inland motor carrier limiting damages under Carriage of Goods by Sea Act denied – held: Facts controverted as to whether or not UPS had in fact issued a “through” bill of lading for the sea voyage  between Italy and the Southern California seaport that protected such motor carrier as a third party beneficiary.

4. Similar motion by shipper to recover against inland motor carrier under Carmack due to controverted issue of facts as to whether or not a “through” bill of lading had been issued by UPS, thereby covering such motor carriage as third party beneficiary under the Carriage of Goods by Sea Act. 

My point: Much of such cases’ outcome depends upon drafting of agreements, including the bill of lading – but much also relates to managing the process so as to make clear who is issuing what bill of lading and what services in a liability limitation agreement are in fact going to be performed by the 3PL / logistics company.

Rohr, Inc. v. UPS-Supply Chain Solutions, Inc., Case No. 11cv617-GPC (WVG) Slip copy (U.S. District Court for the Southern District of California, April 8, 2013). Free copy available here.

LEASING (GRAVES AMENDMENT) / 49 U.S. Code § 30106 that provides that the owner of a motor vehicle who leases such vehicle shall not be vicariously liable for harm that results from its use, operation or possession during the period of the lease – held: It preempts a Florida statute that imposes liability on a short-term lessor of a motor vehicle for the negligent acts of any person actually operating such leased vehicle.

Note that in its controversial decision in Vreeland v. Ferrer, 71 So. 3d 70, 73 (Fla. 2011), cert. denied, 132 S. Ct. 1557 (2012)[free copy available here], the Florida Supreme Court held that, “a state law claim brought against an aircraft lessor under Florida’s ‘dangerous instrumentality’ doctrine for the death of the leased aircraft’s passenger was not preempted by 42 U.S.C. §44112 because the passenger was killed while in the plane and not while on the ground beneath the plane”. Contemporaneous Smith, Gambrell & Russell LLP newsletter

Rosado v. DaimlerChrysler Financial Services Trust., SC09-390 Slip copy (Supreme Court of Florida, April 4, 2013). Free copy available here.

Case Study / Appellate disposition of a trucking accident case raises this question: Where federal court certifies question of state law to supreme court of the state whose law it is applying under Erie v. Tompkins in a diversity action, if such state supreme court opines that the law of its state compels it to decline giving an answer, may the federal court nevertheless arrive at its own answer thereafter?

Learmouth v. Sears, Roebuck & Co., — F.3d —, No. 09-60651, 2013 WL 708170 (5th Circuit, February 27, 2013).

Free copy of opinion available here. 

Mississippi jury awarded plaintiff $4 million in general verdict – and the jury had not instructed to separate its verdict to differentiate between “economic” damages and “non-economic”.   

Mississippi has a statute that caps “non-economic” damages at $1 million. Based on this statute the federal district court remitted $2,218,905 of the stipulated non-economic damages portion of the verdict to $1,000,000 – and entered an order for judgment totaling $2,781,094. 

On appeal to the U.S. Court of Appeals for the 5th Circuit defendant truck operator (Sears) appealed the jury’s verdict, and plaintiff appealed the “non-economic” damages statute (i.e., the one limiting such to a cap of $1,000,000) under provisions of the Mississippi Constitution.  

The 5th Circuit upheld the verdict, and on the validity of the $1,000,000 damages cap under the Mississippi Constitution certified those constitutional questions to the Mississippi Supreme Court. 

The Mississippi Supreme Court declined to answer the certified question on the ground that to do so would be “speculation” or “conjecture”. All it knew of the verdict, so the Mississippi Supreme Court reasoned, was that it was a “general” verdict undifferentiated at a lump sum of $4 million. It’s sole basis for quantifying such a would-be verdict for “non-economic” damages would be guesswork, therefore, it would, “decline to answer a certified constitutional question outside the clear context of its application”.  

Upon receiving this response from the Mississippi Supreme Court, the 5th Circuit asked the parties to brief it and then ruled on the Mississippi Constitution question on which the Mississippi Supreme Court had declined to rule. It upheld the (Mississippi) constitutionality of the damages cap and affirmed the judgment of the federal district court. 

Brad Clanton, Esq. of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., in “Circuit Notes: Fifth Circuit” as edited by Emma J. Hinnegan, Esq. of Liskow & Lewis, offers a compelling summary of the significance of this case in the “Appellate Practice” Committee of the American Bar Association Section of Litigation – concluding

“In Learmonth, the Mississippi Supreme Court declined to answer the certified questions, so the Fifth Circuit answered those questions itself. However, in the course of explaining its refusal to directly answer the certified questions, the Mississippi Supreme Court stated that Mississippi law would not allow it to answer the certified questions even if they had come before it on direct appeal due to the “speculation” necessary to answer the constitutional questions. Should the Fifth Circuit have deferred to the Mississippi Supreme Court’s answer on that question of Mississippi law? Are there any binding requirements placed on federal courts regarding deference, or lack thereof, to answers to questions certified to a state appellate court, or the declination by the state court to answer the questions based on the law of that state that also governs in federal diversity matters? Is the Full Faith and Credit Clause of the U.S. Constitution implicated in these instances? Are there other limitations placed on the certifying court in these instances?”