Lawsuit Update

By Coral Beach
staff editor

Federal judge will determine fate of C.R. England and its leases
As the presses were rolling with this issue, OOIDA’s legal team was also rolling in Salt Lake City, trying a case against C.R. England on behalf of thousands of owner-operators who contend the motor carrier made illegal profits.
The trial, in the court of U.S. District Judge Ted Stewart, was scheduled to run two weeks. On Oct. 3, Stewart issued rulings in favor of the truckers. After that, attorneys for the Owner-Operator Independent Drivers Association decided to forego a jury and have the judge decide the case.
Included in the judge’s rulings was a crucial victory for the truckers regarding markups and fees on goods and services that are charged back to drivers.
“The judge found there is no specific language in the regulations that prohibit a motor carrier from marking up a product ... However, the court ruled it must be disclosed,” attorney David A. Cohen said.
Cohen, of The Cullen Law Firm, is the lead attorney on OOIDA’s legal team in the class-action case. The case includes truckers currently or formerly leased to C.R. England beginning in August 1998 and continuing through the resolution of the lawsuit.
“That is a significant ruling because it is the first time that a federal court has specifically made that ruling,” Cohen said.
Stewart’s ruling can be cited and applied in similar legal battles OOIDA is fighting against other carriers – including Swift, FFE and M.S. Carriers.
The C.R. England lawsuit cites holes in the company’s lease, its use of escrow funds, its undocumented markups on goods and services, and the forced purchase of goods and services.
“In the case of C.R. England, they profited to the tune of millions of dollars by their fuel chargeback practices in which they retained 60 percent of the discounts that were generated by owner-operator fuel purchases,” Cohen said.
“What we will seek is for the court to order what’s called ‘disgorgement’ to force them to return these illegal profits. The court agreed with the Association’s position that it had the power to do that. C.R. England denied vigorously that the court even had the power to require them to return illegal profits. The court disagreed (with the carrier).”
In another ruling in favor of the truckers, Stewart agreed with OOIDA on escrow funds. Cohen said the Association and the truckers contend that the federal regs require leases to specify exactly what deductions a motor carrier can make from truckers’ escrow funds.
“The C.R. England leases have language that says the company can use escrow funds to satisfy any obligation,” Cohen said.
“OOIDA contends that does not comply with the regs ... if they say they can deduct for everything, in reality they specify nothing. One of the rulings that the court made in the C.R. England case was that it was going to adopt OOIDA’s position on escrow funds.”

Appeal in DAC Services lawsuit could result in verdict being thrown out
Attorneys representing truckers who sued DAC Services are appealing several decisions by the federal judge in the case, which could result in the jury’s verdict favoring the company being thrown out.
The legal team filed the notice of appeal Oct. 3 with the U.S. Court of Appeals for the 10th Circuit. As of press time, the court had not set a deadline for the filing of the truckers’ full appeal brief, but the lead attorney on the case, Randall S. Herrick-Stare, said the goal of the appeal will be to reinstate several claims that were dismissed by the court, retry the claims that went to the jury, and establish the case as a class action.
Halfway through the trial in late August, the judge threw out two of the six individual truckers and dismissed three of the four counts that the remaining truckers had against DAC. Those decisions are being appealed.
Another point being appealed is Judge Robert E. Blackburn’s decision to allow DAC to present evidence about what motor carriers do after they receive a report on a driver. Herrick-Stare said that evidence could have clouded a key issue for the jury: Did DAC, as required by the Fair Credit Reporting Act, try to assure maximum possible accuracy when publishing the reports?
The appeal will also include a request to overturn Blackburn’s decisions to dismiss OOIDA from the case and deny class-action status to the tens of thousands of truckers the Association sought to include.
The Owner-Operator Independent Drivers Association filed the suit in 2004 with a handful of individual truckers and the intention of it becoming a class action to include any trucker who had been the subject of a DAC report since July 7, 1999.
Even though Blackburn dismissed OOIDA, the Association still provided legal representation for the individual truckers involved.

Class-action hearing set in lumping case
A federal judge in Minnesota has scheduled a key hearing in December in a case driven by one of the classic thorns in truckers’ sides – being forced to pay for lumpers.
On Dec. 18, U.S. District Judge John R. Tunheim is scheduled to hear OOIDA’s request to make the case a class action against SuperValu Inc., a nationwide grocer and supply chain. He could rule at that time or take the question under advisement.
OOIDA wants the class action to include any owners and operators who moved freight from March 28, 2005, through Dec. 20, 2005, and were required by SuperValu to pay for lumping services in violation of federal statute.
The case, filed Dec. 5, 2005, by the Owner-Operator Independent Drivers Association and two of its members, concerns a policy that SuperValu had in place for most of 2005. The Association and the truckers contend that the policy violated federal law because it required truck drivers to pay for lumping services.
That policy, which was instituted March 28, 2005, required truckers who wanted to unload their own freight to show proof of general liability, worker’s comp and other insurance above and beyond what is required by federal statutes and regulations.
If truckers did not have proof of the “required” coverage, they had no choice but to hire lumpers and may or may not have been reimbursed.
OOIDA wants the federal court to order SuperValu to revise its policies and to return to the class members the amounts they were required to pay lumpers, said Randall S. Herrick-Stare, the attorney from The Cullen Law Firm who is handling the case for OOIDA.