Seeking more than $5 million on behalf of hundreds of truckers who hauled ice and water for hurricane victims, OOIDA and three of its members have filed suit in federal court against a broker and a water company.
According to the lawsuit, hundreds of truckers contracted to haul ice and water, but after making their deliveries they were offered less than half the contracted rate for detention time. And checks that the broker sent out for the reduced amount included a special endorsement line that truckers should watch out for.
"(The broker) is attempting to coerce individual carriers to abandon their claims for the full amount due by placing special endorsements on its checks indicating that the (trucker) accepts the payment in full satisfaction of all obligations owed," states OOIDA's lawsuit.
In plain language, the endorsement states if truckers cash the checks they are saying they have been paid in full, OOIDA's corporate counsel said Thursday. And it won't do any good to cross out the endorsement before cashing the checks.
"You can't just scratch that out," said Paul Cullen Sr., the Association's attorney. "The check has been tendered to you with the endorsement . it would be like changing the amount of the check."
Cullen said he and other lawyers with The Cullen Law Firm in Washington, DC, are negotiating with the broker to remove the endorsements and hope to have an announcement in coming days.
The lawsuit, filed Oct. 26, 2005, in U.S. District Court in central Florida, names 4 Points Logistics LLC of Leesburg, FL, and Lipsey Mountain Spring Water of Norcross, GA, as defendants.
The truckers joining OOIDA in filing the suit are Icehouse Cartage Express Inc. of Hamilton, MO; Grain Express Inc. of Emporia, KS; and Northstar Express Inc. of Middletown, NY. The Association has asked that the court declare the case a class action and include any trucker who was involved in the contracts.
The contracts called for detention pay of $60 per hour per truck, 24 hours a day. After being detained for an average of 10 days or more, the truckers were finally allowed to make their emergency deliveries, but 4 Points sent out letters after the fact telling them they would receive the detention pay for only 10 hours a day, not 24 as the contracts stated.
The result, said OOIDA President and CEO Jim Johnston, are huge, unjustified and undeserved profits for the middleman with the truckers getting skinned.
"What 4 Points and Lipsey have done can be categorized as rank profiteering," said Johnston. "Together, they have seized this unfortunate opportunity to make as much money as they can from the efforts of others without any thought about the impact their opportunism will have on future disaster relief efforts.
"Why should truckers put themselves at risk to make less money than they could delivering other freight, only to make a whole lot of money for folks who contributed nothing but to serve as middlemen.
"OOIDA has received information that similar rip-offs have been made under FEMA contracts, and we intend to explore possible remedies there as well."
According to the lawsuit, three days after Hurricane Katrina hit, Lipsey Water contracted with Florida to provide ice and water for victims. Because of the urgent need to recruit hundreds of heavy-duty refrigerated trucks and drivers, and the hardships and hazards of delivery to the afflicted region, Florida officials agreed to pay rates well above market average for transportation services.
The contracts provided for payment of $1,600 per truck per day plus an additional $403 per truck per day for ice shipments. 4 Points, acting as a broker, agreed to pay truckers $60 per hour detention, 24 hours a day, which amounted to $1,440 per day for their services and use of their equipment.
The lawsuit states that after transporting the ice and water to Stennis NASA Center in Mississippi, the drivers were required to wait and run their refrigerated units on average 10 days or more before making final delivery. After the drivers completed delivery, 4 Points reneged on the agreement to pay $60 per hour detention, 24 hours a day, and unilaterally limited payment to 10 hours per day, or $600 per truck per day.
That left 4 Points and Lipsey Water to split the balance of the money from the state of Florida, despite the fact that neither firm actually performed delivery or storage services and neither firm endured the hardship and uncertainty of the detention until final delivery.
The provisions in the contracts with Florida were clearly intended to benefit the drivers for coming forward to perform this life-sustaining service and to provide the incentive to the drivers to take their equipment out of service for other hauling jobs they could have had. Therefore, OOIDA and the truckers are seeking full payment of the compensation promised to the drivers from either or both defendants.
Drivers having similar problems with other brokers may contact Nancy Baker at OOIDA by calling 1-800-444-5791.