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7/23/2003
SPECIAL REPORT: OOIDA vs. Arctic: Recent ruling seen as significant for truckers

U.S. District Court rules in OOIDA’s favor on the issue of retroactivity of ICCTA in OOIDA vs. Arctic Express; dismisses carrier’s motion.

A U.S. District Court has dismissed a motion by Arctic Express Inc. for partial summary judgment in a class-action suit brought by OOIDA against the Hilliard, OH, motor carrier. The Arctic motion sought to exclude claims from those plaintiffs and class members whose claims were based on lease-purchase agreements entered into with Arctic’s affiliate truck-leasing company, D&A Associates Ltd., before Jan. 1, 1996, the effective date of the Interstate Commerce Commission Termination Act (ICCTA).

The OOIDA suit against Arctic Express Inc. and D&A Associates Ltd. claimed violations of the federal truth-in-leasing regulations for failure to return escrow accounts after the termination of the owner-operators’ leases. U.S. District Court Judge Algenon L. Marbley (for the Southern District of Ohio, Eastern Division) had ruled in August 2001 that Arctic Express had indeed violated the federal leasing regulations and “absconded” with the escrow accounts of the owner-operators.

In this most recent motion before the court, Arctic argued that the statutes should not be retroactively applied to agreements entered into before the ICCTA effective date. It was the ICCTA that authorized owner-operators to bring private causes of action against carriers for certain violations of the Motor Carrier Act and its regulations.

However, on July 10, Judge Marbley ruled that the duty imposed on Arctic to return escrow funds within 45 days is not new, as the truth-in-leasing regulations have imposed this obligation on carriers since 1979. In his opinion, Judge Marbley wrote, “The ICCTA has no retroactive effect as it neither takes away nor impairs vested rights, nor creates a new obligation or duty, nor attaches a new disability with respect to actions taken prior to its promulgation.”

OOIDA President Jim Johnston said he expected this ruling to have very positive implications for other cases OOIDA currently has pending against carriers. For example, the retroactivity issue was recently argued in May before the Eight Circuit Court of Appeals in the association’s suit against New Prime Inc. A ruling from the court in that case is expected soon.

Johnston said, “We feel this is an important ruling in our efforts to go after carriers that have been engaged in illegal practices for years in their handling of truckers’ escrow accounts. This new defense tactic by carriers employing the retroactivity argument has been seen in several of our court actions over violations of the federal regulations. We are pleased that the court has reaffirmed that a carrier’s legal obligations with regard to leasing agreements were not changed by the ICCTA, and that carriers cannot sanitize illegal activity simply because those contracts predate the act’s effective date.”

While the court has already certified the class and issued summary judgment that Arctic violated the federal leasing regulations, damages are still to be determined in the case.

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