LAWSUIT UPDATE: OOIDA leaders consider further action in DAC case

| 8/26/2008

Tuesday, Aug. 26, 2008 – With more than four years already invested in the fight, leaders of the Owner-Operator Independent Drivers Association are considering whether to pursue further action in a federal case against DAC Services.

The most recent action in the case was an opinion issued by a three-judge panel of the U.S. Court of Appeals for the 10th Circuit in Denver. On Aug. 19, the appeals panel upheld a lower court’s actions in the case, ruling against OOIDA and five individual truckers who were named as plaintiffs.

The trial in the lower court, which took place in late August and early September of 2006, ended with a six-person jury delivering a not guilty verdict in relation to DAC Services and its parent company, USIS Commercial Services Inc.

In appealing the case, OOIDA and the truckers challenged a number of actions by the trial court judge, U.S. District Court Judge Robert E. Blackburn.

The appeal’s panel heard oral arguments in November 2007 and took the case under advisement until filing its opinion this past week.

At the heart of the case are the “termination record forms” that truckers know as “DAC reports.” OOIDA’s legal team argued that the reports fall under the Fair Credit Reporting Act because they are “consumer reports.”

The reports, which are filled out by motor carriers who subscribe to services offered by DAC’s parent company, USIS Commercial Services Inc., are collected and then made available to other motor carriers who are DAC subscribers and who are considering hiring drivers.

DAC officials contended that the termination record forms are not consumer reports and therefore not subject to the Fair Credit Reporting Act (FCRA). The Act includes regulations about how information is to be gathered. It also specifies safeguards requiring that notification be provided to people who are the subject of such reports. The Act also includes clauses excluding certain types of reports.

The OOIDA lawyers argued that the DAC reports are not subject to exclusion clauses in the Act.

The appeals panel stated in its opinion that the truckers’ legal argument “fundamentally mischaracterizes the nature of the exclusion” listed in the Fair Credit Reporting Act.

“The (Act) lists several ‘exclusions’ to the term ‘consumer report,’ ” the opinion states. “...The parties contested who had the burden of proof regarding the application of the exclusion. The district court concluded the plaintiffs bore the burden of proving the exclusion did not apply.”

The opinion also quotes a staff opinion letter that the Federal Trade Commission issued in response to an inquiry from a public school district that was conducting reference checks on prospective employees.

“The letter explained ‘FCRA would not apply to any communication by a previous employer about the applicant’s job performance because (the statute) specifically exempts experiences between the consumer and the person making the report from the definition of consumer report’ in the FCRA,” the appeal’s panel opinion stated.

OOIDA had also requested that the trial court certify the original case as a class action, seeking to include all drivers who were the subject of a DAC report, beginning in July 1999 and continuing through the trial.

Judge Blackburn denied that request for class action status and also ruled in favor of DAC on a number of motions before and during the trial. OOIDA appealed the class action ruling along with other actions by Blackburn.

“We ended up pretty limited on what we could show because of decisions by the trial court,” said Jim Johnston, president and CEO of OOIDA.

The appeals panel upheld Blackburn’s decisions. On the class action request, the panel’s opinion stated that the truckers’ lawyers did not prove that there were “systemic flaws” in DAC’s process. The appeals panel stated that information presented during the trial demonstrated “the necessity of an individualized inquiry into each claim. As a result, denial of class certification was not an abuse of (Judge Blackburn’s) discretion.”

At this point, the options available to OOIDA include requesting a rehearing of the appeal in the 10th Circuit, appealing to the U.S. Supreme Court, or not pursuing the case any further.

Despite the negative opinion from the appeals court panel, leaders with OOIDA contend that the mere fact that the case went to trial has made a difference for drivers.

“If we can change things, even though we lose, it’s still a plus,” said Johnston.

“On the bright side, since our case was filed, DAC has been a bit more responsive to correcting problems and we know that from the OOIDA Member Assistance Department. Some (drivers) who have had issues – bad information – in their DAC reports have encountered less hassle in getting DAC to seriously address those issues.

“We certainly haven’t changed it as much as we would like to at this point, and we are considering what course to take now.

“(The Appeals panel showed) no consideration of the injustices that might be occurring because of the situation that truckers are faced with,” said OOIDA’s Johnston. “This is a hammer that hangs over their head constantly – you’re gonna get DAC’d.”

Johnston also stressed that it’s not only company drivers who can suffer the effects of being DAC’d.

“DAC affects everybody – the employee drivers as well as owner-operators. One of the big things that I’ve looked at over the recent years is the change among truckers in confronting issues or problems or potential abuses. Why don’t as many drivers take a stand against such things now? The reason is because they’re afraid they’re gonna get DAC’d, which in effect could amount to being blackballed from their chosen profession,” the OOIDA president said.

Johnston said that he and other OOIDA leaders are reviewing the legal options and will announce soon how the Association will proceed.

– By Coral Beach, staff editor