Bits & Pieces

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.






Volume 20, Edition 4

The IMUA annual meeting is coming up. If you are not registered there is still time.  Come on down and join us for a great annual meeting in Atlanta, GA and stop by our table for a visit. CAB will be sponsoring the transportation session.

There is not much to report this month.  It seems like everyone is waiting to see what regulations will continue under the new administration so that they can figure out how to present their position.  This month we report:

BRAKE VIOLATIONS – The FMCSA added an out-of-service (OOS) brake violation to the list of citations to be scored for CSA.  This violation differs from other OOS brake violations currently in the SMS. A carrier will be considered in violation if 20 percent or more of the total brakes are defective and the vehicle is placed out of service. Violations which occur prior to May, 2017 will not be part of the calculation.

LARGE TRUCK AND BUS CRASH REPORT – FMCSA released its Large Truck and Bus Crash Facts for 2015. The initial point of impact of the truck was in the front in more than half of fatal truck crashes, followed by the rear at 20 percent, left side at 10.2 percent and the right side at 6.2 percent.  When a truck rear-ends a passenger vehicle, both the trucker and car driver recorded driver-related factors 62.8 percent of the time. However, when a passenger vehicle rear-ends a truck, only 28.4 percent of truckers reported driver-related factors. Two-thirds of fatal truck crashes reported another vehicle’s encroachment into a trucker’s lane or other vehicle in the truck’s lane as a “critical pre-crash event.” Only 21 percent of crashes involved a trucker losing control or the truck’s movement, e.g. crossing intersection, turning left or right, etc.  Only approximately 6% of fatal accidents resulted from faulty equipment on a truck. The report has many factors and breaks down the data into many categories.  You can review the crash facts here.

CRASH REPORTS – A review by the National Safety Council (NSC) of motor vehicle crash reports from across the U.S. finds that no state “fully captures” critical data regarding incidences involving drunk and/or drugged drivers, distracted driving, and fatigued driving, among others. The findings are summarized in a new NSC report entitled: “Undercounted is Underinvested: How incomplete crash reports impact efforts to save lives.”  According to the report there is a wide variety in what is reported by the various states, calling into question whether there is sufficient common data to allow analysis.

Preliminary estimates from the NSC indicate as many as 40,000 people died in car crashes in 2016. That marks a 6% increase over 2015 and a 14% increase over 2014 – the most dramatic two-year escalation since 1964. The NSC identified 23 specific crash factors that should be captured on crash reports. You can view the report here.

The recommendations of the NSC include:

* Filling out crash reports electronically

* Updating forms more frequently to capture emerging issues such as fatigue and the use of new technologies by drivers

* Adopting an “investigatory approach” to motor vehicles crashes

* Using electronic data recorders to collect crash factors such as performance information on any advanced driver assistance system in the vehicle



There was an interesting decision out of the Court in the Northern District of North Carolina.  A motor carrier was sued by its customer for the theft of a shipment of cargo.  The Court allowed the motor carrier to proceed against the shipper of the goods in a third party action for implied in law indemnity when the shipper allegedly misled the motor carrier as to the value of the freight, preventing the carrier from providing additional security.  The Court also held that the motor carrier had a claim for deceptive trade practices under the applicable state law.  (Macy’s v. Western Express, 2017 WL 1194358)

The Eastern District of Michigan denied a request to consolidate five cases in which the same broker sued 5 different truckers for cargo losses. The Court held that while the broker used the same contract with each carrier the remaining facts of each case differed sufficiently to warrant a denial of consolidation.  (United Road Logistics v. JM Transfer, 2017 WL 1077951)

Everyone always asks about the exempt commodities, which is always a confusing issue.  The Eastern District of Michigan addressed the issue and determined that bags of salad were exempt from regulation and therefore a Carmack Amendment claim would fail   The Court vacated a default against the motor carrier and dismissed the action for lack of subject matter jurisdiction.  (Service First Logistics v J. Rodriguez Trucking, 2017 WL 1365410)

Over in the Southern District of Texas the Court also dismissed all state law claims against a household goods carrier.  Only the Carmack claim and the claim for attorney’s fees were permitted to continue.  (United Van Lines v. Hajjar, 2017 US Dist. Lexis  54096)  The same result was received in the Eastern District of Michigan when the transport was intended for overseas transport but was involved in an accident in the origin state. (Al Joukhay Trading v. Vantage International Shipping, 2017 WL 1382296)


A driver seeking recovery from a shipper for injuries at the transport site was unable to avoid dismissal of his personal injury as time barred under the applicable statute of limitations.  While the shipper and the motor carrier had a master service agreement which allowed for an extended statute of limitations the 5th Circuit held that the agreement did not provide any protection for the driver. (Oubre v. Schlumberger, 2017 US App LEXIS 5890)

A motor carrier was not liable for the intentional torts of a driver who hit another driver.  The Northern District of Ohio held that the driver was not operating within the scope of his employment when he hit the driver.  The Court also held that there was no negligent hiring claim as the motor carrier undertook all necessary steps to vet the driver and that criminal background checks were not required.  (Herndon V. Torres, 2017 WL 1422847)

The Eastern District of New York refused to remand an action back to State Court when the evidence led to a conclusion that the motor carrier who defeated complete diversity was fraudulently joined by the plaintiff.  The non-diverse motor carrier was not the owner of the vehicle and did not employ the motor carrier, who was employed with the contractor hired by the motor carrier.  The Court held that the motor carrier could not be held liable for the loss and was dismissed from the suit.  (Pondexter v. Oruzio, 2017 WL 1079974)

In another decision the Eastern District did remand a case back to State Court when the plaintiff added a non-diverse party.  This time the plaintiff tried to fight the remand alleging that the non-diverse party was really part of an extended corporate structure with a nerve center out of the state. The Court rejected that argument.  (Palmiotti v. JAF Carriers, 2017 WL1166364)

Summary judgment was denied to a motor carrier who asserted the sudden emergency defense as the reason why he hit the plaintiff.  The motor carrier was traveling in the lane when the plaintiff turned into the lane ahead of the defendant.  The Southern District of Ohio held that there were questions of fact as to whether the accident happened so suddenly that the defendant could not avoid it.  (Miller v. TST Transforce, 2017 WL 1079984)

An insured’s rejection of uninsured motorist coverage was held valid under Indiana law, even when executed 5 years prior to the date of loss.  The Northern District of Indiana dismissed an action against the insurer of a motor carrier concluding that the rejection did not have be a part of the policy by endorsement.  The Court concluded that under Indiana law the insured must only sign that coverage was rejected and the effective date of the rejection.  (Kar v Swift Transportation, 2017 WL 1105934)

Ryder Truck Lines was successful in obtaining coverage under a motor carrier’s policy, and payment of all incurred defense costs and fees for the coverage suit.  Ryder was afforded coverage under the Lessor-Additional Insured and Loss Payee endorsement to the policy.  While the insurer argued that coverage was limited to claims against the lessor arising from the negligence of the motor carrier the Eastern District of Wisconsin held that the endorsement did not require a negligent act by the motor carrier.  (Ryder Truck Rental Inc. v. National Fire Insurance, 2017 WL1194663)

See you soon, hopefully in Atlanta.

© 2017 Central Analysis Bureau