A federal judge in Utah has denied C.R. England’s attempt to refer claims brought by OOIDA and several C.R. England drivers to arbitration, and has granted OOIDA’s motion for summary judgment on those issues.
In his ruling, U.S. District Judge Ted Stewart found that the company’s independent contractor operating agreement is “unconscionable.” The judge ruled that the operating agreements are so one-sided as to unfairly surprise an innocent party. He found that there is an overall imbalance in favor of C.R. England and against the drivers in the rights and obligations of the parties under the agreements.
In particular, the judge noted that during any dispute between C.R. England and a driver, the company has control over the driver’s money. The agreements allow C.R. England to choose whether to go to court or to bring a claim in arbitration. Also, C.R. England has the right to sell its claims to a collection agency and avoid the cost of either arbitration or a lawsuit.
In contrast, the agreements give drivers only one option — an expensive arbitration proceeding. In his own words, the judge was “stunned” by the fact that C.R. England would insist that the agreements require all disputes with drivers to be submitted to arbitration, yet “not a single one of its 2,591 claims under the operating agreements” was actually sent to arbitration.
The judge also based his decision on several other grounds. He ruled that owner-operators are exempt from arbitration under the Federal Arbitration Act, because they are “workers actually engaged in the movement of goods in interstate commerce.” In making this finding, the judge relied on another OOIDA litigation that came to the same conclusion — OOIDA v. Landstar — which is in federal court in Florida.
The Utah judge additionally found that the fact that drivers would be required to pay half the costs of an arbitration proceeding — which can be many thousands of dollars — in and of itself made arbitration an “inaccessible forum” for drivers to resolve their rights under the federal truth-in-leasing regulations.
The ruling was not limited to the arbitration issues. The Utah court became yet another court to find that owner-operators have a private right of action to go directly to court to enforce their rights under the truth-in-leasing regulations. Drivers do not have to go first to the FMCSA before they can sue in federal court.
Citing three previous OOIDA cases, Judge Stewart also confirmed that the statute of limitations on claims under the truth-in-leasing regulations is four years, not two years. In making that ruling, the judge relied on findings in OOIDA v. Ledar, filed in Missouri, OOIDA v. Heartland, filed in Iowa, and OOIDA v. Bulkmatic, filed in Illinois.