Bits & Pieces

Volume 20, Edition 6

Welcome to summer.  Hopefully everyone is trying to find some time to relax and enjoy.  If you are heading toward the Jersey Shore stop in for a visit!

We have some news for you as you head out for the July 4th holiday:

CSA STUDY COMPLETED – As you may recall Shuie & I had the opportunity to appear before the National Academies of Sciences when they were addressing whether CSA accomplishes what it was intended to do.  We were there to address your concerns and your need for data.  The CSA report has come out and can be viewed here.  Overall the general feeling is that the system is sound but needs some improvement. The FMCSA was advised to develop a more statistically principled approach based on an item response theory (IRT).  The report identified a number of data quality issues and recommended that FMCSA should continue to collaborate with states and other agencies to improve the collection of data on vehicle miles traveled and on crashes, data which are often missing and of unsatisfactory quality.  Including vehicle miles traveled data by state and month will enable SMS to account for varied environments where carriers travel.  In addition, the report says FMCSA should research ways of collecting data on carrier characteristics — including driver turnover rates, type of cargo, and method and level of compensation. This additional data collection would require greater collaboration between FMCSA and the states to standardize the effort and to protect carrier-specific information. They did not address whether the SMS ranks should be made public because they felt there was a need for a more formal evaluation of the consequences of public disclosure.

CDL LICENSES – The FMCSA has proposed two regulations to help minimize the national shortage of truck and bus drivers.  Under the new rules, State Driver Licensing Agencies can waive the CDL knowledge test for qualified veterans and active duty personnel, including National Guard and Reserves.  Under a second rule states will be allowed to issue a CDL learner’s permit with an expiration date of up to one year, replacing the current six-month limitation.

TRUCK AND BUS STATISTICS – The FMCSA has released the Pocket Guide to Truck & Bus Statistics.  The report is interesting and provides information on the overall state of the industry, enforcement activity, details on violations and incidents and costs of crashes.  From a number perspective, the FMCSA regulates all registered commercial motor vehicles that operate interstate or that carry hazardous materials.  As of December 2016, 524,058 interstate motor carriers and intrastate HM motor carriers had recent activity operating in the United States.  272,928 were for-hire carriers, 200,094 were private carriers, 46,529 were both for-hire and private carriers, 4,507 were neither for-hire nor private carriers (e.g., government).   There are approximately 5.9 million CMV drivers operating in the United States.   A copy of the report can be viewed here.

INSURANCE REQUIREMENTS – In case you missed our news blast, the FMCSA has withdrawn the notice of proposed rulemaking on possible increases in filing limits for motor carriers.  Public comments did not provide the FMCSA with the necessary data it needed to move forward with the rulemaking to revise minimum levels of financial responsibility for motor carriers, freight forwarders, and brokers.

SUPREME COURT REJECTS REVIEW REQUESTS – The Supreme Court has rejected requests for review of the OOIDA attack on ELDs and the PSP program, letting stand lower court decisions upholding the regulations. Under the ELD rule drivers must use ELDs by December 18, 2017.   The PSP was held not to violate a driver’s privacy and will continue to operate.

LEASE & INTERCHANGE REGULATIONS FOR BUSES DELAYED – Passenger-carrying vehicles do not have the same leasing/interchange regulations and requirements that motor carriers of property are subject to. They can lease, interchange, borrow other vehicles (including their drivers), assign and re-assign their motor coaches with other companies with limited documentary requirements. In 2015 the FMCSA published rules to require identification of the motor carrier operating a passenger-carrying commercial motor vehicle that is responsible for compliance with the Federal Motor Carrier 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). There were a number of requests for reconsideration of the rule and so the FMCSA has decided to delay the final rule until January 1, 2019 to allow a more detailed analysis.

CANADIAN STUDY – As we get more inquiries on Canadian issues we will post news that may be of interest to you on trucking in Canada. A new study was released indicating that speed-related, at-fault collisions involving large commercial vehicles fell by 73% after mandatory speed limiter legislation took effect in Ontario, according to a recent study by the Ontario Ministry of Transportation.  The Ontario Trucking Association released a year-long study conducted between 2014-2015 which examined data from pre-(2006-2008) and post-(2010-2012) speed limiter legislation by using fatal, injury and police reported property damage collisions on high-speed highways. It also looked at MTO enforcement officers’ large vehicle driver speed data, among other real-world data. The percentage of truck drivers struck in the rear stayed the same from pre- to post legislation (10.03 % of total collisions 2006-2008 and 10.47% 2010-2012), while the rate increased for other drivers (18.6% 2006-2008; and 21.3% 2010-2012).



As you may know, the Carmack Amendment has a venue statute which sets forth places where a motor carrier can be sued for a cargo loss.  The Central District of Illinois held that the venue provisions were permissive and not restrictive, meaning you could use them but would not be required to bring suit in those designated venues.  General venue statutes would also apply. Unfortunately for the plaintiff it met none of the venue statues and the action was transferred.  (Starr Indemnity & Co. v. Luckey Logistics, 2017 WL 2466505)

At the same time the District Court in Utah held that it was a mandatory forum selection provision. The Court held that the Carmack Amendment preempted the application of a forum clause in a tariff and master service agreement.  The Court also held that state law causes of action were preempted, permitting plaintiff to amend the complaint to allege only a Carmack action.  (ICON Health & Fitness v. NVC Logistics Group, 2017 U.S. Dist LEXIS 95734)

A shipper was not permitted to seek recovery against a broker for amounts not recovered from the motor carrier in the Court of Appeals in Ohio. The Court held that the claim against the broker was expressly preempted by the Carmack Amendment and the broker was entitled to recover all unpaid freight bills from the shipper.  (Total Quality Logistics v Red Chamber Co., 2017 WL 262818)

The problem with complaints seeking recovery for cargo damage is that they are often broad and the relevant facts needed to address certain issues need not be pled.  That is what happened in the Southern District of California where the defendant sought dismissal of a Carmack claim alleging that the damage occurred in Mexico, which is outside the scope of Carmack.  As the location of the loss was not pled in the complaint the Court would not consider that evidence and allowed the general cargo allegations under Carmack to proceed.  (Certain Underwriters v. Transport Continental, Inc., 2017 WL 2363604)

The Northern District of Texas held that an insurer would be obligated to provide a defense to a warehouseman who was sued for damage to goods in storage when it was aware of water damage to the goods and tried to remediate the goods without disclosing it to plaintiffs.  The Court held that the criminal acts exclusion would not permit the insurer to avoid a defense when there was also a negligence claim.  The Court also held that it would not determine whether the insurer had a duty to indemnify the insured when the ultimate issues would be best resolved in the underlying case.  (Bedivere Insurance Co. v. Pacific Van & Storage of Texas, 2017 WL 2572775)

The District Court in New Jersey held that a default judgment should not be entered against only one defendant when the second defendant is actively litigating the issues applicable to both defendants.  The Court held that if plaintiff was unsuccessful in recovering against the answering defendant the suit would be dismissed against both parties because the claims were intertwined.  (Federal Ins. Co. v. RT&T Logistics, 2017 WL 2691416)

Unlike other Courts which have addressed the issue, the Eastern District of Louisiana has concluded that the state direct action statute will permit suit against the cargo insurer of a trucker despite the fact that the Carmack Amendment preempts all other claims. The Court did conclude that any claim for bad faith against the insurer was preempted.  (Chisesi Bros v. Transco Logistics, 2017 U.S. Dist. LEXIS 91323)

The Middle District in Florida granted a default judgment against a motor carrier for a cargo loss.  While the Court held that the broker was entitled to payment of the claim under the Carmack Amendment the broker was not entitled to recovery of attorney’s fees even with a broker-carrier agreement. The Court held that any claim, other than a claim under the Carmack Amendment, was preempted.  (Scotlynn USA v. Z Top Logistics, 2017 WL 2560925)

The “Kirby” doctrine continues to be the law of the land.  The Eastern District in Illinois held that a shipper was not allowed to sue third party carriers hired to perform portions of a through bill of lading.  The bill of lading precluded claims against those carriers, leaving plaintiff only with a suit against the carrier issuing the master bill of lading.  (Royal Smit Transformers v HC Bea-Luna, 2017 WL 2364362)


Does a motor carrier owe worker’s compensation premiums for revenue attributable to other states or for brokered loads or overtime?  The District in New Jersey is considering that issue and addressed discovery disputes by the parties. The Court concluded that the insurer would be entitled to driver’s logs and overtime records but not entitled to information on payments to third party carrier and owner operators as it has not yet established a right to recovery premiums for those operations.  (Employers Insurance Co. of Wausau v. Daybreak Express, Inc., 2017 WL 2443064)


A pro-se plaintiff’s efforts to seek compensation from everyone involved in his losing his personal injury action failed in the Middle District of Georgia. The plaintiff sued the trucking company, its insurer, Judge and defense counsel alleging violation of constitutional rights. The Court dismissed all of the plaintiff’s allegations.  (Williams v. Brooks Trucking Co., 2017 WL 2434459)

The Southern District in Florida upheld the provisions of the Graves Amendment, which precludes a claim against a leasing company for the negligence of the trucking company in a personal injury action.  While the Court acknowledged that there was an exception to the rule when there was affirmative negligence on the part of the rental company, the plaintiff had failed to establish any fact to support a claim against the defendant.  (Cardona v. Mason & Dixon Lines, 2017 U.S. Dist. LEXIS 83233)

The 9th Circuit held that a driver was not entitled to seek damages from a consignee  when the driver was damaged by cargo failing from a loaded container he delivered  The Court held that a claim could not be asserted under the Oregon premises liability law when the accident was not caused by a condition on the consignee’s property.  (Haile v. Hickory Springs Mfg Co., 2017 WL 2684119)

A judgment against a truck manufacturer was upheld in the Court of Appeals in Louisiana.  The Court held that the applicable statute of limitations was tolled while the plaintiff truck driver was incapacitated.  The Court further held that it was reasonably foreseeable that the design defect would result in the injury that severely injured plaintiff.  (Marable v.  Empire Truck Sales, 2017 La. App. LEXIS 1163)

Happy 4th of July.  See you next month



Volume 20, Edition 5

Once again we had a wonderful time at the IMUA annual meeting, this year held in Georgia.  It was great to see so many of you and to hear, first hand, how important CAB is to the underwriting and claims departments of so many companies.  We continue to strive to meet your needs in this ever changing environment.

We do want to take a moment to remember the reason for our recent celebration of Memorial Day.  We thank all members of the armed forces for their service and we remember those who made the ultimate sacrifice for us.

MILITARY VETS – As we take this time to remember our servicemen and women, we note that the House Committee on Transportation and Infrastructure approved two bills on May 24 to make it easier for vet to get a CDL. The ADVANCE Act would exempt active duty military and reserve personnel “with qualifying experience” from certain testing requirements.  In addition the VETOPPS Act would allow additional medical professionals in the Veterans Administration system, such as advanced practice nurses and physician assistants, to obtain the necessary certification to conduct medical exams required for CDL for vets.

CARGO THEFTS – Our friends at Cargo Net were at the IMUA reporting on recent cargo thefts.  They are reporting that cargo thefts rose in the first quarter, with 192 incidents at an average loss value of $149,522. In total, 358 supply chain risk incidents were reported in the United States and Canada. Of those, 58% involved stealing a truck, 54% included cargo theft and 7% were related to fraudulent schemes such as identity theft or wire fraud.  Where were the losses?  California had 51 incidents followed by the province of Ontario.

TRAFFIC CONGESTION COST – ATRI has reported that traffic congestion cost $63.4 billion in increased operational costs to the trucking industry in 2015. Why?  Driver downtime, together with the cost of goods not being delivered or arriving late. Poor infrastructure and extreme weather were contributing factors to the cost.  What are the worst areas for congestion in the country?  Florida, Texas, California, New York, New Jersey, Illinois, Ohio, Tennessee and North Carolina

BUDGET HOPES? – The proposed federal budget seeks $657.8 million for motor carrier and commercial motor vehicle safety outreach, enforcement, and research operations, which would indicate some support for the continued emphasis on safety regulations.  $239.1 million was set aside for FMCSA general operations.  There is also a proposed pilot program that would allow drivers under the age of 21 to operate a commercial motor vehicle in interstate commerce if they had received specialized military vehicle operator training.

FMCSA AGENDA – Interested in letting the FMCSA know what you think is important.   The Motor Carrier Safety Advisory Committee (MCSAC) meeting has been announced by the Federal Motor Carrier Safety Administration (FMCSA) and the meeting, which will be held on June 12-13th is open to the public.   They will address highly automated commercial vehicles,, development of the Agency’s fiscal year 2018-2022 strategic plan, and review of the Federal Motor Carrier Safety Regulations (FMCSRs) to identify potential opportunities to reduce regulatory burdens while still maintaining motor carrier safety. If you want to attend you can email the FMCSA by June 7th at

WITHDRAWAL OF BUS REGULATIONS – The FMCSA has decided not to move forward with rulemaking action requiring states to implement annual inspection programs for passenger-carrying commercial motor vehicles.  They decided that there is not enough data and information available to support moving forward with proposed rulemaking entitled “State Inspection Programs for Passenger-Carrier Vehicles.”



A shipper will not be liable for personal injuries which occur during the unloading process when the defect in the loading was not latent and the driver was given an opportunity to inspect the shipment and was an experienced driver.  The Northern District of Illinois also considered the testimony of an expert, Donald Hess concluding that his experience allowed him to testify as to loading and shipping practices and the shipper’s internal policies, but not on whether the shipper was subject to the FMCSR or the legal duties of a shipper. (Kucharski v Orbis Corporation, 2017 US Dist. Lexis 68611)

One truck driver was successful in upholding a jury verdict against another driver and trucking company as well as a private maintenance facility when he was injured on the site.  The Court of Appeals in Michigan held that the verdict was not excessive.  The Court considered an interesting issue – is an indemnification agreement, such as the UIIA, similar to insurance and therefore inadmissible under Michigan law?  The Court held that there was no precedential ruling concluding that it was and as the issue of indemnification was admitted for the purpose of explaining the relationship between the parties the Court held that it was not an error to allow it to be presented to the jury.  (Holt v. Ushe, 2017 WL 2263107)

The Western District of Oklahoma dismissed a direct action against a trucking company’s insurer when the plaintiff had not yet obtained a judgment against the motor carrier.  The Court held that the Oklahoma direct action statute did not apply to interstate carriers, but left open the option that the insurer could be brought back into the case if the motor carrier had been issued a license by the Oklahoma DOT for intra-state transport.  (Simpson v. Litt, 2017 U.S. Dist LEXIS 77821)

On its own motion, the Court of Appeals in Texas withdrew its own opinion and vacated its own judgment in a trucking personal injury action. The Court upheld a jury verdict against a motor carrier and the driver, which included both actual and punitive damages, concluding that the driver was grossly negligent in his operation of the vehicle and the trucking company grossly negligent in its retaining the driver and failing to provide adequate training.  The Court found that the trial court properly admitted evidence objected to by the defendants.  (Greenwood Motor Lines v Bush, 2017 WL 1550035)

An insurer’s effort to have its coverage case litigated in the Western District of Pennsylvania when the personal injury action was being litigated in South Carolina failed.  As the insurer was also part of the South Carolina action the Court held that the “first filed” rule required dismissal of the Pennsylvania action.  Of note is the Court’s comment that its local Court had more empty judicial chairs than South Carolina.  (Cypress Insurance Co. v. Mickens Transportation Specialists, 2017 WL 1541892)

A bus company and its insurer were found not liable for an accident when a piece of metal flew through the bus window and struck a passenger.  The Court of Appeals in Louisiana held that there was no evidence that the driver failed to properly operate his bus and that it was simply an accident.  (Zeno v. Great Southern Coaches of Arkansas, 2017 WL 2152518)

The MCS-90 is not limited to those occasions when the policy does not provide any coverage for environmental remediation. The Western District of Oklahoma held that the endorsement applied because the underlying policy limited coverage for pollution clean up to $10,000.  After the policy was paid out the insurer was on the hook for the balance and was instructed to seek recovery from the motor carrier for the payments it had to make.  In my years of experience the chance of successful reimbursement is slim.  (Environmental CleanUp, Inc. v. Ruiz Transport, 2017 US Dist LEXIS 72707)

The Northern District of Illinois addressed the applicable law to be considered when determining if additional causes of action could be asserted against a motor carrier who had conceded vicarious liability for a driver’s action. While Illinois, Nebraska and Missouri law could all potentially apply, the Court concluded that the place of the accident, Nebraska would apply.  The Court further concluded that as the only relevant decision indicated that additional causes of action could be asserted even when vicarious liability was accepted the motion to dismiss was denied.  (Planera-Ohren v. Guerrero, 2017 US Dis LEXIS  69591)

The Supreme Court in South Carolina held that a trucking company and its driver were not entitled to seek an  apportionment finding against a settling party.  The other driver was held not liable to the defendants for all or part of the claims against them under the Joint Tortfeasor’s Act when it had already settled with the plaintiff. The Court dismissed the trucking company’s third party action against the settling defendant and denied the request to add the other driver on the verdict form.  (Smith v. Tiffany, 2017 WL 1489053)


The Eastern District of Michigan denied a motor carrier’s request for reconsideration of the Court’s decision that a broker’s claim was preempted by Carmack where there was no express waiver of Carmack in the contract.  The Court held that the requirement of an express waiver applied only to contracts between shippers and motor carriers. The Court denied the carrier an interlocutory appeal on this interesting issue. (United Road Logistics v Alpha Transportation Group, 2017 US Dist LEXIS 68802)

Preemption continues to be litigated. The Eastern District of Louisiana held that a plaintiff’s state law claims for damage to goods in interstate commerce was preempted by the Carmack Amendment.  The Court concluded, however that a Carmack action could be read into the general allegations of the complaint, thus denying the motion to dismiss.  More interesting was the question of whether there is a direct cause of action against the insurer of the motor carrier under Louisiana law. The Court requested additional briefing on whether there could be a direct action against a motor carrier’s cargo insurer under Louisiana law when the cause of action was based upon a loss to goods in interstate commerce. We will follow to see if a decision is issued on this issue.  (Chisesi Brothers Meat Packing Co. v Transco Logistics, 2017 US DIST LEXIS 75580)

Over in the District Court in Kansas, the Court refused to allow a plaintiff to amend a complaint to allege a claim for violation of a state consumer law when there was a Carmack claim for damage to interstate commerce.  While the Court held that a plaintiff might be allowed to assert a claim under a state statute for incidental damages in certain cases, that result would not be warranted when the applicable statute only provided an alternative remedy for the cargo claim.  (Pickett v. Graebel Van Lines, 2017 U.S. Dist LEXIS 79885)

Here is one to definitely read.  The Southern District of Ohio held that a motor carrier was not entitled to rely on a limitation of liability noted on a bill of lading prepared by the shipper.  The Court held that the rate was not dependent upon value and the carrier offered no choice of rates.  The Court also addressed the issues surrounding the measure of damages – selling price vs cost and who bears the burden of proving the right measure.  Something all cargo folks should pay attention to.  (Exel, Inc. v. Southern Refrigerated Transport, 2017 WL 18338010)

A default judgment was vacated against a motor carrier when the agent for service of process failed to remit the suit to the motor carrier.  The Northern District of Illinois held that where there were multiple carriers named on different bills of lading there was a question of fact as to whether the defendant was the correct carrier and resolution on the merits was required.  (Coyote Logistics v, AMC Cargo, Inc., 2017 WL 1862642)

When a plaintiff files a suit for $9,900 for a cargo loss is it removable under Carmack?  The Eastern District of Virginia said that the answer could be no, provided the plaintiff verified by affidavit that it would not seek damages in excess of $10,000.  The Court granted a motion for a more definitive statement, but implied that it would dismiss the case once the damages were determined to be under $10,000. (Bad Company v.  Expeditors International of Washington, 2017 WL 1969479)

Where oh where does suit belong against a motor carrier when it is both the delivering carrier and the carrier on whose line the loss occurred?  The Northern District of California transferred a cargo case to Delaware when California was the point of destination but there was no evidence as to where the loss occurred.  When the plaintiff’s insured was based in Delaware and the motor carrier operated through Delaware, and the shipment was picked up in Delaware the Court held that Delaware was the more appropriate venue.  (National Fire Insurance Company of Hartford v. UPS Freight, Inc., 2017 WL 1927683)

The 6th Circuit Court of Appeals held that an insurance agent was not liable for providing a cargo policy to a motor carrier which excluded copper as a covered property.  The Court held that the agent provided ample notice to the motor carrier and that the motor carrier had failed to disclose to the agent that it even hauled copper.  (Atic Enterprises, Inc. v. Cottingham & Butler Insurance Services, 2017 WL 2261004)

Hope you have a great June!  Talk to you next month.






© 2018 Central Analysis Bureau