SPECIAL REPORT: OOIDA wins longstanding class action involving Arctic, Comerica

By Sandi Soendker, Land Line editor-in-chief | 4/5/2012

Thursday, April 5, 2012 Can a motor carrier use escrow funds from its leased owner-operators’ money to pay company debts? The Owner-Operator Independent Drivers Association says that’s flat wrong and for 15 years put its money and legal team where its mouth is in what has been the Association’s lengthiest legal skirmish.

“I’ve been waiting for 17 years for my escrow, which was supposed to be returned to me in 45 days. I think they’re late,” says OOIDA member and plaintiff Carl Harp, Doniphan, MO.

That’s how one of the plaintiffs feels about the long years he has waited to get the escrow refunded from a lease-purchase with Arctic Express gone bad many years ago.

Fifteen years ago, OOIDA, along with Harp and another OOIDA member and owner-operator, Michael Wiese, filed a suit against Arctic Express for violating the escrow provisions of the truth-in-leasing regulations. This suit was resolved in OOIDA’s favor in 2004 when the court held that Arctic had violated the leasing regulations and ordered the return of the escrows in the amount of $5.5 million. Unfortunately, Arctic declared bankruptcy and was unable to pay most of the settlement.

During the bankruptcy proceedings OOIDA learned of Arctic’s financial arrangement with Comerica Bank and that bank’s receipt of the maintenance escrow funds that it was using to pay down Arctic’s debts to it.

OOIDA then sued Comerica on the theory that escrow funds were subject to a statutory trust created under the leasing regulations and that Comerica, as the recipient of trust property, was responsible to the drivers for the escrow funds. OOIDA sought the return of all of the escrow funds from Comerica. 

In March 2011, the Sixth Circuit Court of Appeals agreed completely with OOIDA on all of the legal issues in the case: that escrow funds were subject to a statutory trust; that those funds were improperly received by Comerica to pay down Arctic’s debt to it; and that, unless barred by the statute of limitations, Comerica is required to return the escrow funds to the drivers.

The appeals court remanded the case to the federal court in Columbus, OH, to resolve factual questions surrounding the statute of limitations issue.

After a trial on Comerica’s statute of limitations defense, a federal court in Columbus, OH, reviewed the facts of the case and on March 20, 2012, ruled in favor of OOIDA, named plaintiffs, and the certified class of owner-operators. In OOIDA v. Comerica Bank, the court awarded the class restitution in the amount of more than $5.5 million. Comerica has a right to appeal the decision.

It’s a case that OOIDA President Jim Johnston says he is extremely pleased to see reaching a conclusion after all these years.

That sentiment is shared by the case’s other named plaintiff, Michael Wiese, formerly a trucker now living in Florida.

“I wasn’t sure OOIDA would stick it out this long,” he says. “I was hoping they would, but I wasn’t sure.

Wiese says he is sure the “other side” was hoping OOIDA wouldn’t stick it out, either.

“In fact, I’m sure that’s probably why they drug it out so long. … I am sure they were hoping that we would give up.”

OOIDA and the plaintiffs were represented by The Cullen Law Firm, the Association’s legal counsel. The case was one of the first truth-in-leasing lawsuits filed by the firm, which opened its doors in Washington, DC, in March of 1997. The class action was initiated on June 30, 1997.

Cullen Law Firm attorney Joyce Mayers has been lead attorney in the case for 12 years. She says she was assigned to the case the day she walked in the door at the firm.

The case also holds a bit of history with the court. On July 31, 1997, Judge Algenon Marbley was nominated by President Bill Clinton to a seat on the U.S. District Court for the Southern District of Ohio. Marbley received his confirmation on Nov. 7, 1997.

“When Judge Marbley took the bench as a federal judge, this case was one of the first ones on his docket,” said Mike Wiese. “When we were in Columbus in the fall, he told us that.”

For Jim Johnston, president and CEO of OOIDA, it was a truth-in-leasing win he was determined to see go down in the books. For the Association and its legal counsel, the case has been without question their longest active case.

“There are still processes to be completed, and the other side may file an appeal,” said Johnston, “but at this point it looks very good.”

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