News
Issues & Positions
Why do we go to court? To level the playing field

Jim Johnston
OOIDA President

 

Editor’s note: This issue, our Issues & Positions column comes from a Q and A session between OOIDA President and CEO Jim Johnston and Mark Reddig, the host of the Association’s XM Satellite Radio show “Land Line Now.”

From its beginning, OOIDA has taken a three-pronged approach to protecting the rights of America’s professional truck drivers: lobbying for fair legislation, representing truckers before regulatory agencies and fighting for truckers in the courts.

Probably the most controversial of these activities is the Association’s effort in the courts.

Question: Critics have said the Association is “lawsuit happy.” How do you respond to that?

Answer: That’s just not true. The fact is, each case has been carefully chosen. Each is part of a strategic effort to improve life for truckers on the road.

And by the way, those critics are usually motor carriers - carriers that are either being sued or are afraid they are going to be sued.

Those carriers weren’t complaining, though, when we were taking on the states for taxes. In fact, they pocketed refunds just like owner-operators did. They don’t have to be afraid of us suing them. All they have to do is quit stealing, treat truckers honestly and comply with the regulations.

Question: Why all the class-action suits?

Answer: Big businesses don’t worry about individual truckers or owner-operators filing suit because of the difference in economic power - the little guy rarely wins. That’s one reason our lawsuits, for the most part, are class actions.

For example, when a carrier rips off an owner-operator or a driver for $1,000 or $2,000 and this carrier has attorneys on staff and is willing to spend a couple hundred thousand dollars in his defense, the individual doesn’t have a chance.

How is a trucker even going to get an attorney to handle something like that? It would cost more than would be recovered. So, the class-action lawsuits provide a mechanism where we can go in and attack a particular provision that is in violation of the regs and gain recovery for all of the truckers who were ripped off.

Question: Don’t these cases take a lot of time and money?

Answer: It is a drain on resources, but that’s what we’re here for and that’s what those resources are supposed to be doing - creating a level playing field for the people we represent.

The foundation of that level playing field is case law, and that’s what OOIDA has been building with its legal actions.

As we progress through these cases, we establish precedent. That precedent is cited by other courts in later cases. Essentially we are making new case law here.

We are determining the precedent as we go along. And so far, we’ve been pretty successful in establishing precedents favorable to truckers.

Question: What were some of the Association’s first experiences as it began to seek help for truckers through the court system?

Answer: Our first venture into the legal arena was against Oklahoma and involved unconstitutional taxes against out-of-state truckers. That action was successful, but we really didn’t get much for owner-operators individually. However, it opened our eyes to the importance of using methods to assure that owner-operators actually receive what they are due.

Then we initiated several actions against other states, also involving unconstitutional taxes levied against out-of-state truckers.

The American Trucking Association also filed actions against several states, and the Private Truck Council initiated three different actions against states. We intervened - primarily because of what we discovered in the Oklahoma case. We wanted to make sure that any court-ordered tax refunds went to the people who actually paid the taxes.

Motor carriers were pocketing the refunds even though they had charged back the amount of the taxes to owner-operators. That particular issue involved a court battle of almost three years.

We had to get past the ATA, which wanted to see those refunds go directly to the motor carriers. The ATA was absolutely certain the motor carriers would do the right thing and pass the refunds along to the owner-operators. We weren’t so sure of that.

In fact, past practice indicated that wasn’t going to happen at all.

So, we set up distribution plans in all the cases to make sure that the people who had actually paid the taxes received the refunds.

Of the things the states were doing at that time, one that was particularly onerous was the retaliatory tax. In other words, if a state imposed a tax against truckers from another state, then that state would impose a tax against truckers from the first state to retaliate.

Those types of taxes discriminated in favor of in-state truckers and were ruled unconstitutional. There were 18 cases all together. A total of 484,000 owner-operators got refunds in those cases totaling more than $20 million.

Question: What good did those cases do?

Answer: The benefit of those lawsuits was two-fold: truckers got their money back, and most of those discriminatory tax laws are gone.

In the grand scheme of things, the legal actions are a very important way for the Association to help small-business truckers be successful.

Another benefit of our efforts in court is to discourage illegal and unfair behavior. Our case against Arctic Express would be a good example. The judge, in making his ruling against Arctic, said the carrier didn’t comply at all with the federal regulations and that the carrier had absconded with the owner-operators’ escrow accounts.

The strong language of that opinion should help deter other carriers from stealing money from truckers.

We want to see this industry cleaned up; we want these practices to cease. There is no reason these carriers can’t go out there and make a profit operating an honest trucking company where their drivers are treated like the honorable, hardworking citizens they are.

Question: What gives OOIDA the right to file these lawsuits?

Answer: One reason OOIDA has been able to successfully challenge carriers on behalf of individual truckers and owner-operators is something called the private right of action. And we took action years ago to make sure that right would be available if carriers didn’t obey the federal truth-in-leasing regulations.

We had worked with the Interstate Commerce Commission for a couple of years to develop those regs. They were put in place in 1979 and they meant companies had to tell the truckers the truth and treat them fairly.

In 1995, when the ICC Termination Act was passed, we lobbied to keep the leasing regulations in place and for the private right of action to be included in them.

The leasing rules were retained, and enforcement was transferred to the Department of Transportation. But DOT didn’t have the budget or the inclination to enforce economic regulations. So we made sure the private right of action would be available to individuals or their representatives to file actions through the court system to enforce those regulations.

The leasing rules were put in place to level the playing field between one-man-one-truck operations and multi-million-dollar corporations. They require full disclosure and basically say, “thou shall not steal.” Unfortunately, we have to go to the court to enforce those rules against far too many companies.

One of the main considerations we use in our philosophy on these legal actions is that it’s really important to recognize that what affects one of us, affects all of us in form or another. If a motor carrier is able to generate its profits by stealing from an owner-operator or driver, then they don’t have to make their profits hauling freight. And you are competing with those people.

Lease-purchase programs are a good example of how a lot of carriers steal money. They deduct huge amounts for escrow accounts for tire maintenance and repair of the truck and then keep those escrows.

The companies make thousands of dollars from the owner-operators who are essentially renting their jobs from the motor carrier and not getting paid for it, in many instances, that is.

I’m sure there are some lease-purchase programs out there that work pretty well. But I’m pretty much opposed to most of them because it becomes the “company store” thing - you can’t leave the company because you are buying your truck from them - they just have too much power over you.

Question: Some critics say the Association is going to court to get rich. Is that true? If not, what’s in it for OOIDA?

Answer: As far as making a profit lawsuits, there is no way. The Association has millions of dollars invested in different lawsuits around the country.

To say we have recovered 50 percent of what we’ve spent would be a stretch. Hopefully, as these cases progress, we will be able to recover far more.

Some of our critics question what happens to the money that the courts have ordered companies to pay back.

The answer is simple - the money goes back to the individual owner-operators that were scammed. The best the Association can hope for is to recover the attorneys’ fees invested in the cases.

OOIDA is owned and controlled by its members through the Board of Directors they elect. No one draws any money out of the Association except for the employees’ payroll.

As I’ve said before, the Association doesn’t get rich, doesn’t make a profit, doesn’t earn any money whatsoever off these lawsuits. We do what we are here to do, which is represent truckers.

The court system is there for the people, and truckers are people. It’s our legal system, and it’s not just there to convict people of wrongdoing. It’s there for people to use to right wrongs.

It’s a difficult, costly and time-consuming process, but in the long run, that’s how laws are made. That’s how precedents are established and how things get changed.

Truckers have just as many rights as everyone else. When a motor carrier sits down and drafts a contract that’s so lopsided it won’t sit on the table, the owner-operator can certainly use the legal system to challenge provisions that are in violation of the regulations.

March/April
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