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10/16/2006
SPECIAL REPORT: C.R. England trial begins in federal court

Oct. 16, 2006 - OOIDA's legal team began presenting evidence today in Salt Lake City in a federal case against C.R. England on behalf of thousands of owner-operators who contend the motor carrier made illegal profits by violating federal leasing regulations.

The trial, in the court of U.S. District Judge Ted Stewart, is scheduled to run two weeks. On Oct. 3, Stewart issued key 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 alone decide the case.

Included in Stewart's rulings was a crucial victory for the truckers regarding whether motor carrier leases must disclose markups and fees on goods and services that are charged back against drivers' settlement sheets. It establishes law that can be applied in other similar cases.

"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 told "Land Line Now" on XM Satellite Radio recently.

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 of Stewart's statements about disclosure requirements.

Judge Stewart's ruling can be cited and applied in other similar legal battles OOIDA is fighting against other carriers - including Landstar, Swift, FFE and M.S. Carriers.

Specifically, the C.R. England case addresses 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," attorney David Cohen told "Land Line Now" on XM Satellite Radio.

"What we will seek at the conclusion of the trial 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 that)."

In another important ruling in favor of the truckers, Stewart agreed with OOIDA's interpretation of the federal truth-in-leasing regulations on the topic of escrow funds. Cohen explained that the Association and the truckers contend that the federal regs require leases to specify exactly what deductions a motor carrier can make from a trucker's escrow fund.

"The C.R. England leases have language that says the company can use escrow funds to satisfy anyobligation," 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."

- By Coral Beach. staff editor
coral_beach@landlinemag.com

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