Lawsuit Update
OOIDA vs. Bulkmatic Transport Co.
Court brushes away carrier’s arguments against private right of action

Mike Schermoly

The District Court for the Northern District of Illinois has denied motions by Bulkmatic Transport Co. to dismiss a class-action complaint brought by OOIDA and 10 of its owner-operator members.

The complaint against Bulkmatic Transport had been filed on Nov. 5, 2003, alleging that the Griffith, IN-based carrier violated the truth-in-leasing regulations by failing to provide freight bills on request by owner-operators and unlawfully reducing and understating the gross revenue received from shippers before calculating compensation to owner-operators. The complaint also alleged that the carrier’s lease agreements do not conform to the truth-in-leasing regulations because they do not contain certain required provisions, while at the same time containing provisions that are in conflict with the regulations.

In its recent motions, Bulkmatic had attempted to challenge the owner-operators’ private right of action to seek injunctive relief and damages against a carrier in court for violations of the federal leasing regulations. U.S. District Court Judge David Coar, however, rejected that position outright, voicing his agreement with the reasoning of previous courts in other OOIDA cases upholding the private right of action.

Attorneys for Bulkmatic had also argued that a two-year statute of limitations should apply to the claims for damages sought by the owner-operators. As it has in other cases, OOIDA argued that there was no specific statute-of-limitations for truth-in leasing regulations violations. In such circumstances, OOIDA argues, the court should use a general four-year statute of limitations created by Congress for all federal causes of action. In his rulings, Judge Coar agreed that the four-year statute of limitations would be applied. Again, he noted court decisions in three separate OOIDA lawsuits — against C.R. England, Ledar Transport and Heartland Express — upheld the four-year limit.

In a final attempt to avoid or postpone the proceedings of the owner-operator claims, Bulkmatic had argued, on the basis of primary jurisdiction, that the case should be stayed pending a ruling by the FMCSA as to the proper standard for compliance with the leasing regulations. The carrier had contended that “substantial compliance” is the applicable standard by which to assess allegations of leasing regulation violations, as opposed to a standard of “literal compliance.” Judge Coar pointed out that OOIDA’s complaint presents an issue of whether the carrier complied at all with the regulations, ruled that the carrier’s arguments were not convincing and denied the stay.

Commenting on the case, OOIDA President Jim Johnston pointed out that Bulkmatic was one of several examples of small- to medium-sized carriers that the association had turned its attention to. “It’s important for both OOIDA members and the industry at large to recognize that the association’s commitment to protecting the rights of professional truckers is in no way limited to large, high-profile motor carriers. Smaller carriers that violate the federal regulations are not going to slip below the association’s radar just because the numbers of owner-operators involved are fewer. We will pursue them every bit as vigorously as we do larger carriers.” Johnston also added that the establishment of many of the most important legal rulings to date had come in cases involving smaller carriers such as Ledar Transport and AAFAB Inc.