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10/18/2006
SPECIAL REPORT: Truckers testify against C.R. England

Oct. 18, 2006 - Truckers took the witness stand this week to tell a federal judge in Salt Lake City about their experiences with C.R. England.

The individual truckers - who are basically speaking on behalf of thousands of owner-operators who are or have been leased to the motor carrier and are included in the class-action lawsuit - described how their compensation had been reduced by undocumented chargebacks, markups and fees deducted by C.R. England.

According to the motor carrier's Web site, the company currently has more than 3,800 drivers and independent contractors hauling freight. The class action, originally filed by OOIDA and five individual truckers, includes truckers currently or formerly leased to C.R. England beginning in August 1998 and continuing through the resolution of the lawsuit.

The trial in the U.S. District Court in Salt Lake City is being heard by Judge Ted Stewart and is expected to last through next week. The legal team for the Owner-Operator Independent Drivers Association decided to forego a jury in this case, opting instead to have the judge determine the outcome. Stewart will likely take the case under advisement at the end of the trial, rather than immediately issuing a verdict.

OOIDA's legal team began presenting evidence Monday, Oct. 16, in the case. The Association and truckers contend C.R. England made illegal profits by violating federal leasing regulations.

On Oct. 3, Stewart issued key rulings in favor of the truckers, including 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 for the case.

"That is a significant ruling because it was 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. For example, the truckers testified that tires and other parts were marked up 30 percent by the motor carrier.

"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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