Appeals Court: TransAm Trucking's satellite communication fee illegal

By Greg Grisolano, Land Line associate editor | Friday, October 21, 2016

A U.S. Appeals Court has upheld a lower court’s ruling against TransAm Trucking Inc., in a class-action lawsuit brought by owner-operators who said the company’s leasing unit illegally charged them a weekly fee to use the carrier’s satellite communications system.

The 10th Circuit Court of Appeals issued the ruling Oct. 18, upholding the findings of a U.S. District Court in Kansas, which said the company’s $15 a week fee for leased owner-operators to access the company’s satellite communications system was a violation of truth-in-leasing regulations by automatically passing through a fee to buy or rent a product from a carrier as a requirement of the lease.

According to court documents, three owner-operators sued TransAm in 2012 on behalf of themselves and other similarly-situated drivers, alleging the company had violated truth-in-leasing regulations by falsely representing how much drivers could make as independent truckers leasing their trucks to TransAm, rather than driving as TransAm employees. Thecase was filed by the Kansas Attorney General, along with Shaffer, Lombardo, Shurin P.C., of Kansas City, Mo.

The original case in district court included two claims that TransAm violated the Kansas Consumer Protection Act and 13 claims alleging the terms of TransAm’s standard lease agreement violated DOT’s truth-in-leasing regulations. TransAm filed counterclaims alleging the drivers had breached their contracts.

The court ruling notes that TransAm spends $25 per week per driver for its satellite communications system, which is used for electronic logging of drivers’ hours, route planning, and other telemetry data. The court also noted that the fee is only imposed and deducted from owner-operators, not from company drivers.

Based in Olathe, Kan., TransAm operates a fleet of more than 1,000 tractors and 2,400 trailers hauling refrigerated freight.

The Appeals Court also overturned a portion of the lower court’s decision regarding damages, saying the truckers “failed to present any evidence of damages resulting from the unlawful usage fee.”

Editor's note: A previous version of this story misidentified the lawyers representing the plaintiffs in the initial suit. The Kansas Attorney General filed the initial class action on behalf of the plaintiffs, along with private law firm Shaffer, Lombardo, Shurin PC of Kansas City, Mo. 

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