Overruled
With the exception of the issue of prejudgement interest, the U.S. District Court for the District of Utah denies the latest volley of objections from C.R. England

By Sandi Soendker, editor-in-chief

The class action lawsuit of OOIDA v. C.R. England has been in the news since it was first filed more than 10 years ago. In 2007, the landmark win was awarded to the truckers when the U.S. District Court for the District of Utah Central Division found the Salt Lake City-based mega carrier in violation of federal Truth-in-Leasing regulations.

Judge Ted Stewart also held that C.R. England’s lease violated the escrow provisions of the leasing regulations, and specifically found that the motor carrier had improperly managed thousands of truckers’ escrow accounts.

The Utah-based mega carrier was ordered to account for every penny of every escrow fund. Figuring out how much is owed to the class members has been complicated and lengthy.

BACKGROUNDER
The class-action lawsuit was filed in 2002 and went to trial in federal court in 2006. U.S. District Court Judge Ted Stewart for the District of Utah, Central Division, issued his Findings of Fact and Conclusions of Law on June 20, 2007. He entered a declaratory judgment in favor of OOIDA and the class, which included a group of owner-operators who were leased to Salt Lake City-based motor carrier C.R. England.

Judge Stewart ruled that the lease agreement C.R. England used between 1998 and the summer of 2002 with its owner-operators violated federal regulations. He ruled that C.R. England’s Independent Contractor Operating Agreement pervasively violated the charge-back, forced-purchase and escrow provisions of the leasing regulations. LL

The district court judge referred the case to Magistrate Judge David Nuffer to oversee the accounting of individual class member’s escrow claims.

With the accounting process finally completed, Judge Nuffer issued a number of rulings on the propriety of setoffs that England could assert against the drivers’ escrow funds.  These rulings included prohibiting England from asserting setoffs for newly discovered maintenance and repair charges; charges for recovering trucks allegedly abandoned by drivers; and truck lease payments after the termination of the lease. Judge Nuffer also rejected England’s argument that drivers had to prove “detrimental reliance” in order to recover their escrow funds.

According to David Cohen, an attorney with The Cullen Law Firm, OOIDA’s litigation counsel, C.R. England filed objections to virtually all of the rulings of the magistrate judge.

THE LATEST RULING:
On Feb. 11, 2013, U.S. District Court Judge Ted Stewart denied all of CRE’s objections and motions to reconsider, with the exception of the appropriate prejudgment interest rate to be paid on the unlawfully kept escrow funds.

How much that rate of interest should be was one of the big issues facing Judge Nuffer. For drivers who had entered into a lease agreement that contained an 18 percent default provision, Nuffer ruled the interest rate CRE was required to pay was 18 percent.

C.R. England asserted that the 18 percent rate was “not reasonable” so it’s no surprise they objected to the magistrate judge’s ruling to the district court judge. In his Feb. 11 ruling, Judge Ted Stewart overturned the 18 percent interest rate, calling it punitive instead of compensatory. Instead, he ordered the interest paid according to the 91-day Treasury bill rate, as established by the escrow provision of the Truth-in-Leasing regulations.

CURRENT STATUS
In his Feb. 11 ruling, Judge Stewart ordered OOIDA’s counsel to submit a proposed final judgment for the court’s signature by March 11, 2013. The proposed judgment will include damages and prejudgment interest.

“We are working on the prejudgment interest right now,” said Cohen, “but I can tell you that the actual damages stipulated to by the parties at the conclusion of the final accounting are more than $1 million.” LL