On June 30, 1997, OOIDA and three individual members (Carl Harp, Garvin Keith Roberts, and Michael Wiese) filed a complaint in the United States District Court for the Southern District of Ohio against Arctic Express, Inc., and D&A Associates, Ltd. The complaint alleges that Arctic and D&A are affiliated companies with common ownership, and that D&A offers trucks in a "lease-purchase" arrangement to drivers who then lease the trucks, with their driving services, to Arctic, which then deducts funds from the drivers' compensation to make the "lease-purchase" payments to D&A, and payments for the truck's maintenance, which were collected in a "maintenance fund."
The maintenance fund balances were refundable to the drivers if the lease ran its term, or if the lease was terminated before the end of the specified term by the driver's exercise of the purchase option, but if the lease was terminated early without exercise of the purchase option, the maintenance fund balance was lost to the drivers. All of the individual plaintiffs in this action lost their funds in this way. The complaint alleges that the maintenance fund balances were illegal under the federal leasing regulations, or that even if they were legal, the failure to refund the money, no matter when the lease was terminated, violated the regulations.
The case against Arctic is similar to the New Prime case, and was delayed while the court in that case decided procedural issues (see September/October 1999 Land Line). Once those issues were decided, the court was free to move the case forward. On Mar. 3, 2000, the Southern District of Ohio ruled on the Motions to Dismiss that had been filed by Arctic Express. The court disagreed with Arctic's contention that the "maintenance fund" did not qualify as an "escrow fund" under the regulations. In doing so, the court affirmed the decision of the ICC in the Dart Transit case - the first time a court has examined the issues in that case. The court also found that D&A is subject to the regulations' escrow provisions since it is affiliated with Arctic. This part of the court's decision opens the door to the refund of all "maintenance fund" money held by Arctic after termination of owner-operator leases. OOIDA will now seek discovery of all owner-operator escrow and maintenance funds, and will press for restitution of all sums unlawfully withheld by Arctic.