A federal judge in Ohio is one step away from a possible ruling that Arctic Express Inc. is in contempt of court for failing to stick to a court-ordered payment schedule in a class-action settlement with truckers regarding escrow funds.
Wednesday, April 18, U.S. District Court Judge Algenon L. Marbley granted a request from OOIDA and thousands of truckers, ordering Arctic to prove that it is not able to make the ordered payments. If detailed evidence is not presented, the judge indicated he will hold Arctic in contempt. A hearing is set for early June.
“If Arctic cannot show, categorically and in detail, that it is impossible for it to meet its obligations to plaintiffs as outlined in this court’s May 28, 2004, order, Arctic shall be found in contempt of this court,” the judge wrote in an eight-page order filed Wednesday, including italicized type to emphasize his point.
Leaders of the Owner-Operators Independent Drivers Association and attorneys representing the association and thousands of truckers in the class action said that they are encouraged.
Attorney Joyce E. Mayers of The Cullen Law Firm in Washington, DC, has been working on the truckers’ case for several years and when Arctic’s settlement checks stopped coming in the mail, she filed a motion requesting the judge to order the Ohio-based motor carrier to “show cause,” or prove, why it is unable to pay the court-ordered installments.
“We’re one step away from the court holding Arctic in contempt,” said Mayers. “The burden is totally on Arctic to justify their default on payments under the settlement agreement.”
The judge made it crystal clear who has the burden of proof in his order of April 18.
“This court finds that clear and convincing evidence exists that illustrates that Arctic violated this court’s orders,” the judge wrote. “Arctic now has the burden of proving, in great detail, that it is presently unable to comply …”
If Marbley finds Arctic in contempt, Richard Durst, Arctic’s president and sole owner, could be held personally responsible and ordered to use his personal assets to make the payments.
Arctic had agreed to pay $900,000 on a $5.58 million court-ordered judgment – less than 20 cents on the dollar. That payment agreement was reached after Arctic declared bankruptcy following OOIDA’s successful lawsuit against it regarding violations of escrow provisions of federal leasing regulations.
The motor carrier made the first two of eight payments in June and December 2005. Then Arctic officials stopped writing the settlement checks.
OOIDA originally filed suit against Arctic Express in June 1997, contending that the carrier had failed to return maintenance escrow money to truckers as required by federal law.
The Association requested that the case be certified as a class action to include thousands of truckers. The judge granted that request in September 2001.
The class includes all independent owner-operators who entered lease agreements with D&A Associates Ltd. which purport to lease, with the option to purchase, trucking equipment under the terms of D&A’s equipment lease-purchase agreement, and leased that equipment to Arctic Express Inc. under the terms of Arctic’s federally regulated lease agreement.
After Arctic went into bankruptcy, OOIDA filed suit against Comercia Bank to recover the remainder of the $5.58 million judgment entered against Arctic. That lawsuit is proceeding, but no ruling has been entered yet on the bank’s responsibility for the maintenance escrow funds.
Copyright © OOIDA