Owner-operators will get their day in court, says Utah judge in OOIDA vs. C.R. England
OOIDA obtained several significant rulings in its favor during January when the U.S. District Court for the District of Utah agreed to hear a suit filed against C.R. England by OOIDA on behalf of five OOIDA members. On Jan. 15, the court rejected the Salt Lake City-based motor carrier’s bid to force owner-operators to arbitrate their claims individually. The complaint against C.R. England contends the carrier’s lease agreements fail to include certain provisions that are required by the federal truth-in-leasing regulations, while incorporating other provisions that conflict with the truth-in-leasing regulations.
Judge Ted Stewart held that owner-operators are part of the class of “workers in interstate commerce” who are exempt from compulsory arbitration under the Federal Arbitration Act. The court also found that the cost of arbitration would be too high in relation to the size of the typical owner-operator claims, thereby preventing it from providing a viable forum to resolve owner-operator/motor carrier disputes. Judge Stewart took particular note of the fact that virtually no owner-operator claims at C.R. England had ever been resolved through arbitration and that C.R. England had never filed an arbitration claim itself. Instead, the carrier referred claims against some 2,600 owner-operators to collection agencies.
Judge Stewart also denied C.R. England’s motion to dismiss the case, reaffirming truckers’ rights to sue for damages for violation of federal regulations, and ruled in favor of OOIDA’s position that the statute of limitations was four years rather than only two years as contended by C.R. England. In making these rulings, Judge Stewart noted supporting rulings in several other OOIDA lawsuits against motor carriers.
One of the issues argued before the court was whether or not drivers truly had the ability to negotiate the terms of a lease with C.R. England. This would help determine whether drivers had truly agreed to the arbitration clause in the C.R. England lease. OOIDA attorneys cited the example of C.R. England’s latest revised lease agreement. Shortly after the filing of this case, England distributed to all leased operators a revised lease agreement. The attorneys informed the court that drivers were told that if they did not sign the new agreement, they would be terminated. In defense, England attorneys told the court the company had made every attempt to get them to sign and indicated it only had to fire fewer than 10 of the drivers. The court was not persuaded this was a reasonable form of negotiation.
“Judge Stewart’s ruling is an important victory for OOIDA and all owner-operators,” said OOIDA President Jim Johnston, who attended the hearing. “It will serve as a giant step forward establishing an important precedent in other pending cases as well as clearing the way for a hearing on the merits of owner-operator claims against C.R. England. Most importantly, the court in making its ruling recognized the impracticality of drivers’ vindicating their federally protected rights through individual arbitration actions. More and more carriers are beginning to add these provisions as a means of avoiding lawsuits challenging what we believe to be blatant violations of the truth-in-leasing regulations.”
OOIDA seeks Supreme Court review of Prime ruling
OOIDA has filed a petition to the U.S. Supreme Court to review the rulings of the U.S. District Court and Appeals Court in its case against New Prime Inc. The District Court ruled and the Eighth Circuit Court of Appeals affirmed that owner-operators who signed leases prior to Jan. 1, 1996, could not prosecute their claims under the federal truth-in-leasing regulations in federal court. This issue stopped the case before a trial could be held to prove whether or not Prime violated the leasing rules.
Commenting on the association’s decision to petition the Supreme Court, OOIDA President Jim Johnston said, “We continue to assert that this carrier has had a history of violating federal leasing regulations through unauthorized deductions and failure to properly refund escrow accounts to thousands of owner-operators. We believe the Eighth Circuit Court has erred in its opinion on the retroactivity issue. Carriers had the duty to obey the leasing regulations well before Jan. 1, 1996, and that the only thing that changed on that date was the owner-operator’s ability to take them to court.”
Johnston pointed out a ruling from the federal judge in the Sixth Circuit in OOIDA’s case against Arctic Express, where the court agreed that owner-operators with leases pre-dating the ICCTA could pursue their claims.
Getting the Supreme Court to now hear the case is not a certainty. The Supreme Court receives more than 7,000 petitions each year. Of these petitions, only 80-90 cases are selected for consideration by the high court. The court attempts to select the cases that have the greatest legal significance, however, and the likelihood that the court will review any one case is not great regardless of its merit.
During the past months, New Prime has issued statements to the press indicating that its position had prevailed on the merits of the case and that it had been vindicated by the court. To this, Johnston has responded, “Prime’s press releases tried to leave the impression that the court found its conduct with respect to owner-operators to be proper. This is absolutely false. The only thing that the federal court decided was that drivers with pre-1996 leases could not attack New Prime’s misconduct in federal court. No judgment was made that in any sense vindicated New Prime’s conduct under these pre-1996 leases.”
Recently, the federal judge in Springfield, MO, announced that it would award attorneys fees and costs in excess of $500,000 to New Prime. Again, OOIDA feels strongly that the judge’s ruling is wrong and contrary to congressional intent. The association intends to appeal that decision.
Addressing any potential for concern by OOIDA members on this latest ruling, Johnston pointed out, “Litigation against major motor carriers is time consuming and expensive. We want to assure all members, however, that OOIDA has the patience and resources to continue the fight against New Prime and other motor carriers whose conduct, in its opinion, violates federal law and regulations.” He added, “We are well aware of the risks involved with initiating litigation. We would not pursue our claims without being fully prepared to go the distance to protect the rights of owner-operators from the abuses of unscrupulous motor carriers.”