Federal judge orders Arctic Express to pay up

By Coral Beach, staff writer | Tuesday, January 15, 2008

A new payment schedule is in place in relation to a federal class action that pitted drivers against Arctic Express Inc. The case involved the motor carrier’s failure to return escrow money to truckers.

On Jan. 14, the judge in the case filed an order that included the new payment schedule.

A Dec. 14, 2007, hearing had been scheduled, at which the judge had said he would find Arctic in civil contempt of court if the defendants did not show cause why they failed to meet his previously imposed payment schedule.

Arctic paid $205,000 on Dec. 21, which included payment of principal interest and penalties under the previous schedule. Having received that payment, the truckers’ attorneys anticipate another distribution payment to class members soon.

Just before the Dec. 14 contempt hearing, the motor carrier’s officials contacted the truckers’ legal team and said they have secured funds to satisfy outstanding amounts. On Dec. 27, the judge met with the legal teams representing the truckers and the motor carrier for a mediation hearing. He devised the new payment schedule after that mediation session.

As of Jan. 1, Arctic still owed the truckers in the class action $565,000. Under the new schedule Arctic will begin paying that off in April with a $5,000 payment. May and June also require $5,000 payments, but for July through November Arctic is required to pay $10,000 each month. In December, Arctic is scheduled to make a $100,000 payment.

In 2009, payments of $12,500 are due March through November, with a $100,000 payment due at the end of the year. A similar payment schedule is in place for 2010, with a final payment of $75,000 scheduled for “the last banking day of December 2010.”

The case was originally filed June 30, 1997, in U.S. District Court, Southern District of Ohio. On July 16, 2004, the judge approved a settlement and awarded attorney fees. He awarded the truckers damages and interest totaling more than $5.58 million. Because of bankruptcy, the carrier was allowed to agree to pay only $900,000.

Arctic made two payments of $75,000 each, but failed to make payments in June and December of 2006 totaling $250,000. The judge approved a revised payment schedule in the summer of 2007, but Arctic defaulted on the first payment, which was due July 25, 2007.

In related action, OOIDA has filed a federal suit against Comerica Bank to recover the balance of the $5.58 million. The Association contends that the bank improperly used drivers’ escrow money to meet Arctic’s financial obligations and should therefore pay the balance.

Copyright © OOIDA

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