Lawsuit Update
Favorable opinions move existing cases along
What’s happening with OOIDA lawsuits

OOIDA has filed a class-action complaint in the U.S. District Court for the District of New Jersey against Bridge Terminal Transport Inc. alleging violations of the federal truth-in-leasing regulations. OOIDA is joined in the complaint by five of its owner-operator members.

The complaint contends the carrier’s lease agreements are in violation of the truth-in-leasing regulations through their failure to include certain required provisions, while incorporating other provisions that conflict with the federal regulations. 

It also accuses the New Jersey carrier of undisclosed deductions from settlements, unauthorized deductions of escrow funds, failure to provide documentation upon request, failure to state rates of compensation in their lease, and unjust enrichment from surcharges it receives from shippers without providing compensation to owner-operators. 

Furthermore, OOIDA is also alleging that BTT, through the use of its carrier Comdata fuel card, has enriched itself by charging owner-operators amounts for fuel that are higher than the amounts actually paid by BTT for such fuel as well as excessive transaction fees.

The complaint seeks the declaratory, injunctive and monetary relief being sought on behalf of owner-operators affected by BTT. OOIDA also has filed a motion for a preliminary injunction to prohibit BTT from doing business with equipment it does not own until its leases are brought into compliance with federal regulations.

OOIDA has demanded a jury trial on all issues.

The Bridge Terminal complaint is not the only OOIDA case to see action in the courts this summer. Since the end of July, OOIDA has obtained a number of favorable court decisions in its class-action lawsuits against C.R. England, Allied Van Lines, Swift Transportation and Arctic Express.

Court: C.R. England’s agreement unconscionable 
A federal judge in Utah granted OOIDA’s motion for summary judgment and denied C.R. England’s attempt to refer claims brought by OOIDA and several C.R. England drivers to arbitration.

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 were too one-sided in favor of C.R. England and against drivers.

For example, the lease agreements allow C.R. England to choose whether to go to court or to bring a claim in arbitration. The lease agreements also give C.R. England 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. The judge was “stunned” by the fact that C.R. England would insist that drivers submit their disputes to arbitration, yet C.R. England did not request arbitration for a single one of its 2,591 previous claims against drivers.

The judge also 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.” 

Finally, the Utah judge 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.

Statute of limitations upheld in OOIDA vs. Allied Van Lines 
The U.S. District Court for the Northern District of Illinois dismissed arguments by Allied Van Lines that a two-year statute of limitations should be applied to the class-action suit brought by OOIDA on behalf of owner-operators. 

Instead, the court agreed with the OOIDA position that a four-year statute of limitations was applicable. The court’s ruling means the plaintiffs have the potential of recovering damages dating back four years instead of just two years.

OOIDA filed a class-action complaint with two of its owner-operator members against Allied Van Lines Inc. and one of Allied’s authorized agents, TFC Inc., May 5. 

The complaint alleges that Allied Van Lines, through TFC, and TFC itself violated the truth-in-leasing regulations by making a series of undisclosed, undocumented and excessive chargebacks; by failing to provide rated freight bills to owner-operators; by deducting a percentage of the owner-operators’ linehaul revenue to pay for its own insurance responsibilities; and by failing to return owner-operator escrow accounts within the required 45 days after termination of a lease agreement.

Court resolves issues in OOIDA case against Swift
A U.S. District Court has issued an order resolving a number of outstanding motions in favor of OOIDA in its class-action suit against Swift Transportation Inc., paving the way for the case to proceed.

OOIDA and 10 of its owner-operator members filed the class- action complaint in July 2002 against Swift Transportation Co. Inc. (Arizona), Swift Transportation Co. Inc. (Nevada), M.S. Carriers Inc. and M.S. Carriers Warehousing Distribution Inc.

OOIDA contends that the leases of Swift and M.S. Carriers violated the federal truth-in-leasing regulations. 

It also contends the carriers failed to provide owner-operators with required documentation for chargebacks against compensation; forced purchase of insurance and other products and services; made illegal deductions from escrow accounts; and failed to return escrow accounts within the required time after termination.

Subsequent to the filing, the claims against M.S. Carriers were referred to arbitration by the court. 

The court then granted a request by OOIDA to add Interstate Equipment Leasing Inc. — the truck leasing company that is wholly owned by Swift president and CEO Jerry Moyes and his wife — as defendants in the class action.

Most recently, on July 28, Judge Paul G. Rosenblatt of the U.S. District Court for the District of Arizona ruled that the truth-in-leasing claims brought by OOIDA on behalf of owner-operators are governed by the four-year federal statute of limitations, as opposed to a two-year statute of limitations urged by Swift. 

The court’s ruling means the plaintiffs have the potential of recovering damages dating back four years instead of just two years as well as extending the potential class to all owner-operators whose claims fall within that time frame.

Judge Rosenblatt also granted OOIDA’s motion to dismiss counterclaims asserted by M.S. Warehousing against a number of the named plaintiffs, as well as a motion to dismiss the named plaintiff’s claims against M.S. Warehousing. 

OOIDA welcomed this because the motion will allow the named plaintiffs to pursue their complaint against Swift without being exposed to counterclaims by the motor carrier.

The judge also denied a motion by Interstate to dismiss its status as a defendant in the case, agreeing with OOIDA’s argument that the affiliation between Interstate and Swift was close enough to allow him to exercise jurisdiction over Interstate. 

OOIDA alleges that Interstate violated the truth-in-leasing regulations and breached its fiduciary and trust duties arising from the regulations.

Settlement distribution OK’d in OOIDA vs. Arctic Express
The U.S. District Court for the Southern District of Ohio has issued an order approving a class settlement and settlement distribution plan in the lawsuit brought by OOIDA against Arctic Express. 

OOIDA had sued the carrier to recover maintenance escrow funds withheld from owner-operator drivers who had leased their trucking equipment from Arctic affiliate D&A Associates Ltd.

In August 2001, the court ruled Arctic Express had violated the federal leasing regulations and “absconded” with the escrow accounts of the owner-operators who terminated equipment and operating leases early. On Oct. 31, 2003, just before the scheduled trial to measure the damages owed to owner-operators, Arctic Express filed for Chapter 11 bankruptcy protection. 

This action suspended the trial, but allowed Arctic Express to continue to operate. 

Under the settlement agreement approved by the court, Arctic would pay from its bankruptcy estate an amount reflecting part of the total damages owed to owner-operators. With the settlement now approved, OOIDA and the class representatives will seek to have the remaining judgment satisfied out of funds that Arctic improperly transferred to third parties, including Comerica Bank, to pay off its debts.

OOIDA President Jim Johnston expressed satisfaction with the latest rulings on these cases.

“This latest group of rulings should now help us move some of the cases forward to where we will eventually have our day in court,” Johnston said. 

“Attorneys for the carrier companies in some of these court actions have spent months employing what has become a standard checklist of delay tactics such as the statute of limitations argument. 

While unfortunately time-consuming, we are confident the courts will continue to side with us to resolve and define these issues and eliminate remaining obstacles.”

– By the OOIDA staff