Bits & Pieces

Volume 20, Edition 7

Hope everyone is having a wonderful summer and taking some time to enjoy the summer slowdown.   I already feel the fall rush starting up as conferences and meetings get scheduled.  It is going to be a busy fall.  I don’t know about you but I would like a little more summer.

This month we report:

DRUG TESTING – The FMCSA has reported that the rate of illicit drug use among commercial drivers continues to remain below the level that would require motor carriers to conduct more random testing.  The positive drug usage rate for 2015 was 0.8 percent, reversing an upward trend that began in 2012. When the usage rate is less than 1.0 percent for at least two years running, the FMCSA is authorized to lower the annual random testing rate to 25 percent of drivers, as it did for the 2016-2017 calendar years.

BRAKE SAFETY – CVSA announced the results from an unannounced brake safety day.  79 percent of the large trucks and buses examined did not have any critical item vehicle violations. 9,500 commercial motor vehicles were inspected.  There were 8,140 CMV inspections in the U.S. and 1,384 in Canada. CVSA reports that vehicles were placed out of service during the one-day event:

21 percent of the time for vehicle violations in general, and

12 percent of the time for brake-related violations.

ELECTRONIC INSPECTIONS – An inspection level that is conducted electronically or wirelessly while the commercial motor vehicle is in motion was approved by the CVSA. The newly created Level VIII Electronic Inspection to the North American Standard Inspection Program has no direct interaction with roadside inspectors. Level VIII Electronic Inspection requires an exchange of specific data elements, including location (i.e., GPS coordinates), electronic validation of the driver, driver’s licensing, driver’s medical status, hours-of-service compliance, vehicle registration, operating authority, and Unified Carrier Registration (UCR) compliance.  It may be a while down the road as no member jurisdiction has IT capable of capturing the data to meet CVSA’s definition of Level VIII Electronic Inspection.

FMCSA GOA AUDIT – The GOA released a report on the status of IT at the FMCSA.    The FAST Act required the GOA to review the FMCSA’s IT, data collection and management system. During the review, GAO focused on four investments at FMCSA:

Aspen: a desktop application that collects commercial driver/vehicle inspection details and creates and prints a vehicle inspection report.

Motor Carrier Management Information System (MCMIS): captures data from field offices and is the authoritative source for inspection, crash, compliance review, safety audit and registration data.

Safety Enforcement Tracking and Investigation System (Sentri): used to facilitate safety audits conducted by FMCSA and state users.

Unified Registration System (URS): intended to replace existing registration systems with a single comprehensive, online system and provide FMCSA-regulated entities a more efficient means of submission and manipulation of data pertaining to registration applications.

The GAO concluded that the FMCSA “plan lacks timelines to guide FMCSA’s goal and strategies” and has implemented a modernization plan for existing IT systems.

ELECTRONIC LOGGING DEVICE RULES – The House Committee on Appropriations has advised the FMCSA to implement a “full or targeted delay in the ELD mandate.”  While there was some press indicating that it might be the start of the demise ELD’s others are not so sure.  Right now it is full speed ahead. The FMCSA has taken to the road to explain to carriers how to ensure compliance.

SAFETY FITNESS DETERMINATIONS – The aforementioned bill also contains language that prevents FMCSA from proceeding with Safety Fitness Determinations until the DOT Office of Inspector General certifies all deficiencies have been addressed.  The report does indicate that insurers or potential insurers might be considered as a group authorized to see the data.

HOUSEHOLD GOODS RULES – Some states have moved to implement regulations on household goods. In Arizona a bill was passed that prohibits moving companies from holding in-state customer possessions over a payment dispute. Effective Aug. 8, moving companies will be required to accurately and completely disclose information about fees, charges and insurance. Movers cannot refuse to deliver goods unless they provided consumers with an up-front estimate and the consumer has failed to pay. The new law permits police to take possession of household goods that a mover refuses to deliver and unload.

Louisiana will require HHG moving businesses to be open for business and to be staffed during regular business hours and will suspend or cancel business operations for carriers that fail to maintain a permanent establishment in the state. A hearing would be required to take place before the suspension or cancellation can take effect. In West Virginia HHG carriers are now exempt from the jurisdiction of the Public Service Commission and authority will no longer be required. In Pennsylvania penalties will be increased for “rogue” household goods movers operating in the state. State law now requires HHG movers to register and obtain a permit with the Public Utility Commission, maintain workers compensation coverage, pay wages subject to taxation, and have adequate insurance coverage for goods moved.  The Senate voted unanimously to advance a bill that applies criminal penalties to HHG movers who fail to adhere to existing rules in the state, with initial fines of $5,000, misdemeanor charges and confiscation of vehicles.

DATA REVIEWS – On August 1, 2017, the FMCSA will begin accepting Requests for Data Review (RDRs) into its Crash Preventability Demonstration Program through DataQs.  Crashes eligible for the Crash Preventability Demonstration Program must have occurred on or after June 1, 2017.  The Crash Preventability Demonstration Program is expected to last a minimum of 24 months. FMCSA will use the information from the program to evaluate if these preventability determinations improve the Agency’s ability to identify the highest-risk motor carriers.  More information is available at How to Participate in the Crash Preventability Demonstration Program and Crash Preventability Determinations.

ATA FORECAST – The ATA released its 2017-2028 Freight Transportation Forecast. It concludes that the trucking industry is set to be a trillion dollar industry by 2024.  Industry revenue is expected to keep growing annually by 5.4 percent between 2018 and 2023, according to the American Trucking Association’s report, then top $1 trillion by 2024. Growth is then expected to slow to 4.7 percent through 2028, with motor carrier revenue expected to total $1.24 trillion by the end of that year. Growth in the industry will driven by manufacturing, consumer spending and international trade. For-hire carrier revenue fell 3.8 percent to $368 billion in 2016, but it is expected to increase to 5.4 percent annually between 2018-2023, to $538 billion. For-hire carrier revenue should hit $679 billion by 2028, according to the report. Truckload carrier revenue is forecasted to reach $454 billion by 2023 and $568 billion by 2028. It will experience an average annual increase of 5.4 percent in 2018-2023 and 4.7 percent in 2024-2028

DATA & PREDICTIVE ANALYTICS – A yearly survey conducted by global law firm Norton Rose Fulbright among 196 logistics providers, manufacturers, financiers, and government regulators, among others, founds that 43% of respondents believe big data and predictive analytics will be the most significant driver of change in the transportation industry over the next five years.  82% of respondents anticipate an increase in cyber-attacks over the next five years.  We here at CAB agree that big data is key to understanding the transportation industry!



Independent contractor or employee?  That was the question considered by the Eastern District of Missouri when a driver was injured while a passenger in the sleeper berth.  The Court ruled that under California law the actions of the passenger were those of an independent contract, barring the application of the employee exclusion. The Court paid due attention to the fact that the drivers were paid per shipment and were able to work for other carriers.  The Court also held that the MCS-90 determination of employee would not govern the interpretation of the policy.  (Spirit Commercial Auto Risk Retention Group v. Kailey, 2017 v. 2935726)

The Northern District of Illinois awarded judgment to a truck driver who was injured when his vehicle was struck by another trucking company.  While defendant argued that the plaintiff was not actually injured in the incident, the Court held that there was enough evidence to support a judgment in favor of the plaintiff.  (Leak v. Wadsworth, 2017 U.S.  Dist. LEXIS 101394)

A trucking company was granted summary judgment in the Western District of Texas in an action seeking damages for running over hunting dogs.  The Court held that there was insufficient evidence of negligence.  Plaintiff was also not entitled to assert a claim for outrage against the defendant trucking company.  (Jones v. Duane Livingston Trucking, Inc., 2017 US Dist. LEXIS 99030)

We continue to see cases dealing with indemnity claims against motor carriers.  The 8th Circuit considered a double indemnity issue where a company which offered services, including trucking, to a plant operator and agreed to full indemnity, in turn entered into another contract with the underlying motor carrier which also contained an indemnity clause.  While the Court held that the company offering the services to the plant was obligated to indemnify the plant for personal injuries which occurred when a tank exploded at the site, the same company was precluded from obtaining indemnity from the actual motor carrier.  (Chapman v Hiland, 2017 WL 2990177)

It is interesting to see the number of cases that deal with the question of monetary recovery when considering removal to federal Court. The Western District of Oklahoma held that even though plaintiff asserted damages of exactly $75,000, which would allow for remand, the additional possibility of recovery of attorney’s fees would allow the amount to fall within the diversity jurisdiction requirement of more than $75,000.   The Court kept the case.  (Smith v. Robert Oakley Brown, 2017 WL 2964824)

When injuries were suffered by contact with hazardous materials inside a container which was being cleaned, the injured parties brought suit against the company which had agreed to clean the tanks and outsourced it to the plaintiffs’ employer. The Eastern District in Louisiana held that the plaintiffs’ could not allege a cause of action against the defendant based upon premises liability, however they could allege a cause of action for negligent hiring based upon a known record of safety violations.  (Hernandez v. Dedicated TCS, 2017 U.S. Dist. LEXIS 103378)

Applying the Savage rule, the Western District of Wisconsin concluded that a shipper was not liable for a defect in loading which was open and obvious.  Where the driver was actually involved in the loading process he could not claim that the shipper bore any liability for the defective loading. The final responsibility was held to rest with the carrier.  (Malovanyi v. North American Pipe Corp., 2017 WL 298364)

A plaintiff was permitted to proceed with an action against UPS when she fell over a package left on her doorstep. The Court in the Central District of Illinois held that the claim was not preempted under the Carmack Amendment or the FAAAA.  UPS could also not assert the defense of “open and obvious” as that pertained to a claim for premises liability and not negligent placement of freight. (Muzzarrelli v. UPS, 2017 WL 2786456)

Over in the District Court in New Jersey, the Court decided to abstain from deciding a declaratory judgment on whether a trucker’s liability policy was properly cancelled by the insured.  The Court concluded that as there was a parallel action pending in the state court and on an overall balance the state court action would adequately protect the interests of the parties it need not consider the case.  (National Liability & Fire Insurance Co. v. LP Trucking, 2017 WL 2829602)


Although this case involves a warehouse policy, our inland marine underwriters and claim teams will want to read this one.  The 7th Circuit upheld the policy requirement that the insured issue a warehouse receipt, rate confirmation sheet or contract of storage.  The fact that the insured used bills of lading for receipts was not enough to comply with the requirements of the policy.  The Court also noted that the consent to settlement clause did not apply because the insurer denied the claim before the insured entered into a settlement with the property owner.  It was also interesting that the Court held that the insurer did not waive the terms of the policy by accepting an application which noted that the insured used bills of lading because the insured also attached a warehouse receipt.  (PQ Corporation v. Lexington Insurance Co., 2017 WL 2772587)

The Southern District of Texas held that it would retain jurisdiction over an action involving loss or damage to freight transported from Malaysia to Texas.  As the various defendants had issued bills of lading governing the transport the Court held that the complaint was subject to, and preempted by COGSA, permitting the Court to exercise jurisdiction over the action.  (Ziegler v. Subalipaxk, 2018 WL 2671148)

The District Court on New Jersey considered the impact of the Carmack Amendment on a conversion claim against a common carrier on a pipeline.  The Court concluded that a claim for conversion was preempted by the Carmack Amendment. (George E. Warren v. Colonial Pipeline Company, 2015 WL 30308251)

We see motor carriers now taking the initiative in filing declaratory judgment actions seeking to enforce limitations of liability.  The Northern District in California denied a customer’s motion to dismiss the declaratory judgment filed by a household goods carrier, concluding that the motor carrier asserted the necessary allegations to establish the potential for the limitation to be applicable.  (United Van Lines v.  Deming, 2017 WL 3149301)

See you next month!

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



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