OOIDA v. Prime

The Issue

If you have a dispute with a motor carrier over a violation of truth-in-leasing regulations, will you have recourse in federal court or will the resolution of your troubles fall to the jurisdiction of the already-strapped Federal Highway Administration?

A federal statute has clearly assigned dispute resolution functions to the federal courts, and FHWA concurs with the statute. The question of jurisdiction has been complicated with legal challenges by those who don't agree with the intent of the law or who may wish to re-interpret the intent of the law to suit their own purposes.

The answer will likely depend on the outcome of a case now pending before the Eighth Circuit Court of Appeals. The case, the first of its kind, will set an important precedent affecting interstate motor carriers and specifically, their relationship with independent truck owner-operators.

The Case

In August of 1997, the Owner-Operator Independent Drivers Association brought suit in federal district court against interstate motor carrier New Prime, Inc. (Prime), alleging that Prime had violated the federal motor carrier truth-in-leasing regulations by unlawfully retaining funds that rightfully belong to truckers with whom Prime contracted. OOIDA sought to enforce the leasing regulations through private right of action provisions afforded in the ICC Termination Act.

"It is critical for owner-operators to have an effective means of settling disputes with motor carriers over the truth-in-leasing regulations," says OOIDA President Jim Johnston. "Government enforcement resources devoted to economic regulation are extremely limited and there is a general unwillingness to invest those resources in addressing complaints which, individually (at least as far as the government is concerned) are for very small if not insignificant amounts. Of course, a few thousand dollars is not a small amount to most small business truckers, and the private right of action provides a reasonable way to fight for fair treatment through our legal system."

What is Private Right of Action?

The private right of action is a procedure afforded injured parties under the ICC Termination Act of 1995 and is an important protection for truckers. Concerned with the absence of enforcement, OOIDA fought hard to have this "private right of action" provision included in the ICC Termination Act (ICCTA). Prior to the enactment of this provision the only option open for enforcement of the leasing regulations was the difficult and often unsuccessful process of seeking enforcement from the federal regulatory agency charged with the responsibility of their oversight (formerly the ICC, now the USDOT/FHWA). The private right of action allows individuals or their representatives the option of seeking enforcement of the federal regulations through the court system.

The Controversy

The District Court dismissed OOIDA's complaint under the doctrine of "primary jurisdiction," holding that the FHWA is better equipped than the federal courts to make a legal determination that would resolve OOIDA's claims. OOIDA appealed the trial court's ruling.

While OOIDA's appeal was pending, the FHWA issued a notice (May 29, 1998) announcing its intention to stay clear of private disputes involving the federal leasing regulations, citing a congressional mandate set forth by the ICC Termination Act. FHWA's decision was based on orders from Congress that the agency should not spend its scarce resources resolving private disputes between parties who have been provided with an adequate private remedy in court. With regard to primary jurisdiction, FHWA observed that special expertise is generally not needed to resolve such disputes and therefore, they were not better equipped to resolve claims.

The Players

As the issue bounced back to the courts, Prime and another motor carrier, Arctic Express, petitioned FHWA for a review of this decision. The American Trucking Associations, in support of the motor carriers, entered the picture, claiming FHWA should be the one to accept responsibility of jurisdiction. ATA's argument zeros in on the actual wording in the U.S. Code section 14704 that created the private right of action. ATA asserts that the way 14704 is worded makes it susceptible to other interpretation.

The Problem the Wording

In 49 USC section 14704 (a)(1) and (2), it is set forth, in plain language, a motor carrier's liability for damages sustained as a result of a violation of the laws regulating motor carriers and the right to bring a civil action for injunctive relief for violations of laws regulating motor carriers. Looking at the legislative history of the ICC Termination Act that brought the private right of action into existence, it's evident that Congress clearly intended such disputes to go to the courts.

Prime, Arctic Express and ATA, however, argue that the "violations" actually mean violations of the orders of the Secretary (DOT, generally speaking) and therefore, the case must go first to FHWA.

"They understandably prefer enforcement to rest with an agency operating with scarce resources and who can award only injunctive relief," says Johnston, "rather than in the courts where monetary as well as injunctive relief can be awarded."

What's Next?

OOIDA's appeal of the District Court's dismissal ruling is now pending before the Eighth Circuit Court of Appeals and has been consolidated with the petitions for review filed by Prime, ATA and Arctic Express.

"We believe the Court of Appeals should find that FHWA's decision not to exercise primary jurisdiction is reason enough to overturn the District Court's dismissal," says Johnston. "We are asking the Court of Appeals to therefore return the case to the District Court with instructions to hear OOIDA's complaint. We are confident they'll do the right thing." LL