Taking the fight against Landstar System to the next level, OOIDA will appeal a Florida federal judge’s ruling that truckers did not prove they were entitled to damages, even though they did prove that the motor carrier violated truth-in-leasing regulations.

The appeal, to be filed with the U.S. Court of Appeals for the 11th Circuit in Atlanta, will challenge orders filed in late March by U.S. District Court Judge Henry Lee Adams Jr., including his ruling that the truckers were not entitled to a court order to keep the Landstar companies from violating the regs in the future.

OOIDA also wants class-action status restored to the case so that more than 27,000 owner-operators will be included as plaintiffs against Landstar and its operating companies Ranger, Ligon and Inway.

“If allowed to stand, the Jacksonville federal court’s ruling would leave drivers defenseless against chargeback violations by large carriers,” said Jim Johnston, OOIDA president and CEO. “The trial court’s ruling in this case reflects a lack of appreciation for the purposes of the truth-in-leasing regulations and the role of the courts in preventing abusive practices by motor carriers. That is why we have appellate courts.”

Landstar’s failure to provide truckers with documentation about chargebacks is at the heart of the case originally filed in November 2002 by the Owner-Operator Independent Drivers Association and several individual drivers.

The Association requested that the case be certified as a class action to include more than 27,000 owner-operators.

The judge granted that request in August 2005. The class was defined as “all owner-operators in the United States who, after Nov. 1, 1998, and through the pendency of this proceeding, had or have leases with Landstar Inway Inc., Landstar Ranger Inc., or Landstar Ligon Inc. or their authorized agents or business affiliates, that are subject to federal regulations contained in Part 376, Code of Federal Regulations.”

Then, in the fall of 2006, the judge issued a key order. He agreed with the truckers and ruled that Landstar had violated the law by failing to provide documents allowing a driver to determine the validity of chargebacks.

The case went to trial in January 2007 with truckers seeking damages on the theory that Landstar’s failure to provide documentation resulted in improper chargebacks creating a windfall to Landstar and damages to the truckers.

Paul D. Cullen Sr., OOIDA’s trial counsel, said that OOIDA and the plaintiff drivers had taken the position that the leasing regs don’t allow motor carriers to profit on chargebacks, and alternatively, even if profits are not absolutely forbidden, the regulations do not permit carriers to earn undisclosed and undocumented profits.

At the trial, OOIDA and the truckers argued that Landstar’s failure to provide drivers with documents showing that it was charging them more than it was paying to its suppliers prevented drivers from determining the validity of the chargebacks.

OOIDA’s legal team and witnesses headed to Florida in January, ready to try the damages aspects of the case, but on the opening day of the trial, the judge reversed his previous ruling and decertified the class. That meant only the handful of individual named truckers could go forward with the trial.

Once the court decertified the class, OOIDA’s legal team asked the judge to define the standard of proof required to establish damages. The judge declined to do so.

“Plaintiffs were therefore left in the dark as to what testimony they could offer in order to prove that they were damaged by Landstar’s undocumented chargeback items,” said Cullen.

Cullen said in the appeal the plaintiffs will argue that the judge should have found Landstar’s failure to provide chargeback documentation caused the drivers economic harm by hiding its markups on chargeback items.

Also in the appeal, OOIDA and the truckers will argue that the court was wrong in its apparent finding that Landstar’s obligation to document the validity of such chargebacks could be satisfied by identifying the amount of the chargeback on a driver’s settlement sheet.

Cullen said that the trial court is apparently of the belief that a motor carrier’s obligation ends if the amount of a chargeback is stated in its lease and a deduction of that same amount is reported in a settlement sheet.

OOIDA officials are not satisfied with that view of the law and have vowed to continue the fight.

“Under this interpretation,” Johnston said, “the regulations are completely useless in protecting drivers from improper chargebacks by motor carriers.

“This is certainly not what either Congress or the Interstate Commerce Commission intended when the regulations were adopted. I have every confidence that the Court of Appeals will correct these errors when OOIDA presents its appeal.”

– By Coral Beach, staff editor
coral_beach@landlinemag.com