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Uber for Trucking: Uber Freight App Launches
Tuesday, June 13, 2017
Source:
Uber Technologies has announced that it is entering the trucking industry with its new venture, Uber Freight. Launched on May 18, 2017, this app aims to match small carriers with small companies to handle trucking transportation needs. Uber previously acquired Otto in a $680 million deal for the autonomous truck driving tech company. In a trend described as the "Uberization of trucking," Uber Freight joins other automated freight match companies including Transfix, Convoy, and Trucker Path's Truckloads. Uber holds a freight broker license and screens carriers in the same way as a traditional broker. Uber Freight focused efforts in Texas for the launch and is currently available nationwide.
Uber plans to move freight in a fashion similar to its Uber ride-hailing app with surge pricing around peak demand times.
The Ninth Circuit holds that State law claims to recover baggage fees are not preempted by the Airline Deregulation Act
Thursday, May 25, 2017
Source:
Congress enacted the Airline Deregulation Act in 1978 to deregulate the domestic airline industry. The law prohibits states from enforcing laws "related to a price, route, or service of an air carrier." 49 U.S.C. § 41713(b)(1) (2012). In American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995), the Court held that states may not impose rules regarding fares, routes, or services, but may allow remedies for breaches of obligations the airlines took, even when the breach is related to fares, routes, or services. Further, the Supreme Court in Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (2014) identified the differences between voluntary contracts and obligations imposed by state law.
In Hickox-Huffman v. U.S. Airways, Inc., No. 11-16305, 2017 U.S. App. Lexis 7847, 2017 WL 1658487 (9th Cir. Cal. May 3, 2017), the Ninth Circuit held the agreement between the plaintiff and defendant was a routine offer and contract that the airline voluntarily undertook to deliver the plaintiff's bag when she landed. Plaintiff's bag was delayed one day and she sought recovery for the baggage fee of $15 she paid the airline. As a voluntarily assumed contract, state remedies for a breach of contract claim are "not preempted by the Airline Deregulation Act." Hickox-Huffman, 2017 WL 1658487, at *5. The case has been reversed and remanded and the question of class certification has not been answered. Parties should also look to the Department of Transportation for recent regulations on domestic baggage liability with different effects for lost baggage. Analysis will also be different in international law under the Montreal Convention.
NEWS FLASH -- FMCSA Withdraws "Safety Fitness Determination" Rulemaking
Thursday, March 23, 2017
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In an announcement to be published in the Federal Register for March 23, U.S.DOT's Federal Motor Carrier Safety Administration (FMCSA or the Agency) is withdrawing a proposed rulemaking that, as most TLA members know, would have made radical changes in how FMCSA determines whether a bus or trucking company's operations are sufficiently "safe" for it to remain in business.
The Agency's so-called "Safety Fitness Determination" (SFD) proposal was issued in January 2016. The proposed SFD methodology, however, was of older vintage. It was based on a "Safety Measurement System" (SMS) that had been adopted by FMCSA in 2010 without rulemaking. Although SMS was promoted by the Agency as a superior alternative to the "official" system of safety ratings under 49 CFR Part 385, numerous stakeholders have been challenging SMS as statistically and legally flawed since its inception. The multi-pronged attack on SMS has included judicial proceedings, agency comments and Congressional testimony.
The challenges to SMS culminated in December 2015, when Congress added provisions to the FAST Act requiring the National Academies of Science to consider and report on the need for reform of SMS methodology. When the FAST Act did not deter the Agency from repackaging SMS into the SFD rulemaking only a month later, industry groups began efforts on Capitol Hill to de-fund the rulemaking. Support for these efforts expanded rapidly throughout 2016. Ultimately, 62 motor carrier trade associations (now including the American Trucking Associations) signed a letter to new U.S.DOT Secretary Elaine Chao on February 15, 2017, urging that the SFD proposal be withdrawn. Its withdrawal marks the most significant setback for SMS/SFD methodology since its launch in 2010.
It remains to be seen whether FMCSA (now operating under an acting Administrator) will open a new rulemaking on motor carrier safety determinations after the National Academies release the report required under the FAST Act. The report is expected in June 2017. In the meantime, if you need further background or detail on the SFD withdrawal announcement, please do not hesitate to contact either co-chair of TLA's Committee on Federal Legislation, Agency Practice and Security (FLAPS). They are Mark Andrews (mark.andrews@strasburger.com ) and Hank Seaton (heseaton@aol.com ).
Florida District Court Finds Federal Jurisdiction Based on F4A Preemption
Friday, March 10, 2017
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On January 31, 2017, a Southern District of Florida federal judge held that damages arising from an intrastate shipment are preempted by FAAAA and that preemption supports removal to federal court. Plaintiff filed its complaint against UPS in state court, alleging a negligence claim related to UPS's handling of plaintiff's cryopreserved embryos. In response, UPS removed to federal court. The federal judge denied plaintiff's motion to remand, finding that plaintiff's state law claim against UPS is preempted under FAAAA because the handling of the embryos during their movement across Florida is related to the "price, route or service" of UPS's transportation of those items.
The case is Desiree Luccio & Reed Frerichs v. UPS, Co., 2017 WL 412126 (S.D. Fla. Jan. 31, 2017). Click here for decision.
FMCSA Alert - Further Implementation of URS for Truck Fleets, Freight Brokers and Surface Forwarders Has Been "Suspended" Indefinitely
Tuesday, January 17, 2017
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As you may recall, the Unified Registration System (URS) was adopted by a "final rule" in 2013, but has never been officially activated for anyone except new registrants at the Federal Motor Carrier Safety Administration (FMCSA). After three postponements of the effective date for existing registrants because of chronic IT problems with this mandatory on-line filing system, FMCSA announced on Friday, January 13 that it has "suspended" efforts to impose URS on the rest of the industry. TLA's Committee on Federal Regulation, Agency Practice and Security (FLAPS), among others, has been expressing concern to FMCSA for years that this program is neither user-friendly nor consistent with the Agency's substantive regulations regarding such matters as hazmat insurance requirements, process agent filings and the like.
If you have specific questions or wish to see the text of the "suspension" announcement, please contact either of the FLAPS co-chairs. They are Mark Andrews (mark.andrews@strasburger.com ) and Hank Seaton (heseaton@aol.com ).
CLARIFICATION: Please note that the requirement for new registrants to make their FMCSA filings on-line (using URS) does remain in place, despite the "suspension" of URS for existing registrants.
FMCSA Update
Thursday, December 15, 2016
Source: Mark Andrews
As most TLA members know, the Unified Registration System or URS is an on-line filing process which eventually will be the only available format for doing most types of business with the Federal Motor Carrier Safety Administration or FMCSA. Currently, the on-line "URS Wizard" must be used by any first-time applicant for registration with FMCSA, while "legacy" non-URS application forms must still be used by anyone already regulated by the Agency.
On Friday afternoon, December 9, 2016, FMCSA announced a third indefinite postponement of the date on which existing registrants will have start using the "Wizard." Please recall that the legislative mandate for creating a unified registration system dates back to the ICC Termination Act of 1995. Eighteen years later, a "final rule" adopting URS was published on August 22, 2013, and initially was to take effect for all registrants on October 23, 2015. In a first postponement announced in late 2015, that effective date was pushed back to September 30, 2016, for all but new registrants. A second postponement was announced this past summer, putting off the compliance date for existing registrants until April 14, 2017.
Last Friday's announcement indicated that a new effective date for existing registrants will be published in early January 2017. As in the past, the Agency explains the additional delay as necessary to "securely migrate data from multiple legacy platforms into a new central database and to conduct further compatibility testing with its State partners."
Until the new effective date (whatever it is), the status quo will remain in place under which new registrants must use the "Wizard" while all others must use legacy forms for additional authority applications, MCS-150 updates, name changes and other Agency business. For further information, please feel free to contact either co-chair of TLA's Committee on Federal Legislation, Agency Practice and Security (FLAPS). The co-chairs are Hank Seaton (heseaton@aol.com ) and Mark Andrews (mark.andrews@strasburger.com ).
Passing of Duane Acklie
Wednesday, November 30, 2016
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On September 17, 2016, transportation industry leader Duane Acklie of Lincoln, Nebraska passed away at the age of 85. Before serving as Chairman of Crete Carrier Corporation, he engaged in private practice as a motor carrier lawyer and member of TLA. He served on many boards including the American Trucking Associations board where he was elected Chairman. He was active in his community and a philanthropist throughout his life.'
Click here for more information.
Federal Court Blocks FLSA Overtime Rule
Sunday, November 27, 2016
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On November 22, 2016, the U.S. District Court, Eastern District of Texas, granted a preliminary injunction to block the Department of Labor's implementation of the Fair Labor Standards Act (FLSA) new overtime rule. Twenty-one states and over 50 business organizations filed the lawsuit to challenge the new rule to increase the minimum salary level for exempt administrative employees from $455 per week ($23,660 annually) to $921 per week ($47,892 annually). The new rule was to become effective December 1, 2016. Finding that the plaintiffs satisfied all prerequisites for a nationwide injunction, the court ruled that the "[t]he State Plaintiffs' have established a prima facie case that the Department's salary level under the Final Rule and the automatic updating mechanism are without statutory authority."
Click here for the decision.
Tenth Circuit Finds Against Motor Carrier for Violation of the Federal Leasing Regulations
Thursday, October 20, 2016
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In Fox v. TransAm Leasing, Inc., filed October 18, 2016, the U.S. Tenth Circuit Court of Appeals found that the defendant motor carrier violated the DOT's truth-in-leasing regulations by requiring the plaintiff truckers, who lease their trucks and driving services to the motor carrier, to pay the carrier $15 each week to use the carrier's satellite communications system. The applicable regulation, 49 C.F.R. sec. 376.12, precludes a motor carrier from requiring a trucker "to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into the lease arrangement." The Court affirmed partial summary judgment for the truckers, upholding the district court's determination that the carrier violated the regulation. That ruling supports the truckers' requests for injunctive and declaratory relief. Because the truckers failed to present any evidence of their damages resulting from the usage fee, the Court reversed the district court's decision to deny the carrier's summary judgment on the truckers' claim for damages.
Click here for decision
Seventh Circuit Finds Against Freight Brokerage Company in Employment Discrimination Case
Monday, September 12, 2016
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In Henry Ortiz v. Werner Enterprises, Inc., filed August 19, 2016, the U.S. Seventh Circuit Court of Appeals found in favor of Henry Ortiz, reversing the district court's summary judgment in favor of Werner Enterprises, Inc., in an employment discrimination case. Ortiz worked as a freight broker for Werner for seven years until his discharge in 2012. Werner claimed that it fired Ortiz for falsifying business records. Ortiz claimed that Werner fired him because of his Mexican ethnicity, after being subjected to ethnic slurs in the workplace throughout his tenure at Werner ("beaner," "taco eater," "dumb Mexican," "Puerto Rican," etc.). In reversing the summary judgment, the Court noted that the sole question that matters is "[w]hether a reasonable juror could conclude that Ortiz would have kept his job if he had a different ethnicity, and everything else stayed the same." The Court found, among other things, that a reasonable juror could infer that Ortiz's branch managers "didn't much like Hispanics…" and "tried to force him out the door." As a result, the Court held that a trial was necessary. Notably, the Court in its opinion overruled two lines of cases, those that treated "convincing mosaic" as a legal requirement, and those that used the direct-and-indirect framework, when deciding employment discrimination cases.
Click here for more information.
FMCSA Announces Delay of URS Implementation Until 2017
Thursday, July 21, 2016
Source:
On July 20, 2016, The Federal Motor Carrier Safety Administration (FMCSA) announced that it extended the dates for Unified Registration System (URS) compliance by motor carriers, freight forwarders, brokers, and others under FMCSA jurisdiction. The FMCSA will be releasing the URS on January 14, 2017, with a full compliance date of April 14, 2017. URS is a mandatory on-line filing system that currently applies only to new applicants. The postponement just announced delays the requirement for tens of thousands of existing registrants to use this system. TLA's Committee on Federal Legislation, Agency Practice and Security, co-chaired by Mark Andrews and Hank Seaton, has been active in advocating changes to, and monitoring the status of, URS implementation on behalf of the TLA membership.
Click here for more information.
Fifth Circuit Dismisses Commercial Driver's Americans With Disabilities (ADA) Discrimination Claim Against J.B. Hunt
Monday, July 11, 2016
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In Williams v. JB Hunt, filed on June 20, 2016, the U.S. Fifth Circuit Court of Appeals found in favor of J.B.Hunt where it terminated a driver after one doctor rescinded his DOT medical certification for a diagnosis of syncope and ventricular tachycardia. Although the driver received conflicting medical evaluations from different doctors, he never filed an application for the DOT to resolve the conflict pursuant to 49 C.F.R. §391.47. After his termination, the driver filed a lawsuit alleging that he was terminated in violation of the ADA. The federal district court dismissed the case based on the driver's failure to exhaust administrative remedies. On appeal, the Fifth Circuit held that to prove an ADA violation, plaintiff must make out a prima facie case of discrimination by showing: (1) plaintiff has a disability, or was regarded as disabled; (2) he was qualified for the job; and (3) he was subject to an adverse employment action. The Fifth Circuit Court affirmed the lower court, but not for lack of subject matter jurisdiction. Instead, the Court affirmed on alternative grounds, concluding that the driver failed to establish that he was qualified for the job in question.
Click here for decision
Florida Supreme Court Rules State DOT Must Make Indemnity Payments
Thursday, April 21, 2016
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The Supreme Court of Florida has ruled that the state DOT cannot escape its contractual indemnity obligations under a contract entered into by the DOT with private rail line CSX Transportation Inc. A fatal accident on a CSX railroad invoked an indemnity clause in a contract entered into by each company’s predecessor. As compensation for land use, the contract required the DOT to indemnify CSX in the case of liability. Such an event occurred, triggering the clause. The DOT attempted to escape payment, citing Florida State statutes calling for sovereign immunity, and claiming that the State Road Department did not maintain the authority to enter into such an indemnity agreement, thus rendering the clause unenforceable. Regarding the authority issue, the DOT argued that such statutes must grant the agencies express authority to include provisions such as indemnity agreements, and statutes at the relevant time did not. The Florida court disagreed, stating “when the State is statutorily authorized to enter into a contract, that authority includes the obligations necessary to fulfill the terms of that contract.” Effectively, where the authority exists to enter into a contract, clauses such as indemnity clauses are also authorized. As such, the DOT cannot escape fulfilling its indemnity obligations as the clause was deemed enforceable by the Florida Supreme Court.

Click here for decision.
The FDA Rule Governing the Sanitary Transportation of Human and Animal Food is Now Final
Tuesday, April 5, 2016
Source:
The FDA announced that the Food Safety Modernization Act (FSMA) rule on Sanitary Transportation of Human and Animal Food is now final. The goal of this rule is to prevent practices during transportation that create food safety risks, such as failure to properly refrigerate food, inadequate cleaning of vehicles between loads, and failure to properly protect food. The rule establishes requirements for all participants in the motor and rail transportation of human and animal food, requiring the use of sanitary practices to ensure the safety of that food. The comprehensive rules govern the transportation equipment, as well as the operations, records, and training of the shippers, receivers, loaders and carriers who transport food in the United States, whether or not the food is offered for or enters interstate commerce. The requirements do not apply to transportation by ship or air because of limitations in the law. The earliest compliance dates for some companies begin one year after publication of the final rule in the Federal Register.

Click here for ruling.
FMCSA Says No to ATA Exemption Proposal
Friday, April 1, 2016
Source:
The Federal Motor Carrier Safety Administration denied an application from the American Trucking Associations made on March 28, 2016 seeking an exemption from the 14-hour “driving window” limit for drivers who work at oil and natural gas extraction sites. The ATA attempted to create an exemption by excluding the time that drivers wait for cargo to be loaded and unloaded as “on duty” time. The theory being that they could log that time as rest time or “off-duty” time, thus extending the 14-hour on-duty window. The FMCSA, however, denied the ATA's application, concluding that the group "did not demonstrate how the commercial motor vehicle operations under such an exemption would achieve a level of safety equivalent to or greater than the level of safety obtained in the absence of the exemption." The agency further indicated that fatigue would increase under such an exemption, thereby increasing danger, not alleviating it. Other advocacy groups including the Advocates for Highway and Auto Safety weighed in, stating "The ATA's arguments rely on what appears to be deliberate ignorance of regulatory history and a fundamental misrepresentation of agency findings in a thinly veiled attempt to circumvent the agency's prior unambiguous determination that the drivers for which the ATA is seeking this exemption should specifically not be afforded this exemption."
DOT Address’ “Reverse Logistics” With New Hazardous Materials Transportation Rules
Wednesday, March 30, 2016
Source:

On March 25, 2016, the United States Department of Transportation announced a new series of regulations covering “reverse logistics.” These new regulations are aimed at addressing the return transportation of hazardous materials. Under the new regulations, reverse logistics is now defined as “the process of offering for transport or transporting by motor vehicle goods from a retail store for return to its manufacturer, supplier or distribution facility for the purpose of capturing value — e.g. to receive manufacturer’s credit — recall, replacement, recycling or similar reason.” The DOT was alerted by various non-profit associations about the blind spot in hazardous waste transportation almost a decade ago, and these new regulations are the result of efforts to address the problem. The agency released a statement, saying in part "[i]n order to reduce undeclared, misdeclared or improperly packaged hazmat from being offered and transported in commerce, we are amending the HMR to better address the reverse logistics supply chain." "Specifically, we are seeking to ensure retail employers properly identify hazardous materials in the reverse logistics chain and ensure that their employees have clear instructions to safely offer such shipments." Included in the new regulations are specific rules relating to things such as package sizes and battery shipments.
The Florida Supreme Court Denies Carmack Preemption
Tuesday, March 8, 2016
Source:
On March 3, 2016, the Florida Supreme Court issued a decision contradicting many Carmack Amendment preemption cases. The Court denied UPS's motion to dismiss non-Carmack claims alleging Conversion, Profiting by Criminal Activity, Unauthorized Publication of Name or Likeness, and a claim under Florida's Deceptive and Unfair Trade Practices Act. The claims arose after UPS delivered an empty package that had contained two paintings shipped by an artist. At some point, UPS located the paintings and sold them to its lost goods vendor which auctioned them off. The buyer at the auction notified the shipper/artist of the purchase. UPS moved to dismiss all claims, arguing preemption under the Carmack Amendment. The trial court granted its motion and dismissed the case. The Fourth District Court of Appeals affirmed the trial court's final order of dismissal but certified the conflict "[t]o the extent [its] opinion conflicts with the Fifth District's decision in Braid Sales." Plaintiff filed a notice with the Supreme Court to invoke its discretionary jurisdiction to review the Fourth District's decision. The Supreme Court reversed, finding that the plaintiff's claims of a pattern of criminal activity by UPS are separate and apart from a cargo loss occurring during the shipping process. The Supreme Court found that the "allegations illustrate a course of criminal conduct by UPS and its cohorts that bears, at best, only a tangential relationship to the interstate shipment process and, more specifically, a carrier's contractual obligation to transport goods.”

Click here for more information.
First Circuit Court Keeps FedEx Contractor Suit Alive
Monday, March 7, 2016
Source:
The First Circuit Court of Appeals recently ruled that an element of the Massachusetts state law for determining employee versus contractor status was preempted by federal law, while simultaneously reviving a suit against FedEx based upon that very statute. The First Circuit ruled that the lower court was correct in ruling that prong two of the three prong test in the Massachusetts law was preempted by the FAAAA, but that the court erred in dismissing the entire case based upon that finding. The District Court was instructed to determine whether the first and third prongs of the test could still sway a ruling one direction or another.“It would seem that [Massachusetts Independent contractor/Misclassification Law] without Prong 2 still provides as much (or more) protection against misclassification than does Massachusetts law without Massachusetts Independent Contractor/Misclassification Law altogether,” the court said. “We therefore think that the Legislature's plain aim in enacting this statute favors two-thirds of this loaf over no loaf at all as applied to motor carriers with respect to the transportation of property.” The case has been sent back to the District Court for further litigation.

The case is Clayton Schwann et al. v. Fedex Ground Package System Inc., case number 15-1214, in the U.S. Court of Appeals for the First Circuit.
CSA Scores Have Been Removed from Public View
Thursday, December 17, 2015
Source: https://csa.fmcsa.dot.gov/whats_new.aspx
A provision of the newly enacted highway legislation, Fixing America’s Surface Transportation Act or “FAST,” required the FMSCA to review its CSA program and, during that review period, remove scores from public view. Accordingly, as of December 4, 2015, the information previously available on the FMCSA’s website related to property carriers’ compliance and safety performance was no longer displayed publicly. While the agency is not prohibited from displaying all of the data, no information will be available for property carriers while appropriate changes are made. The FMCSA has been working to restore the data that is allowed to remain publicly available. A note on the FMCSA’s website explains, “While the agency is not prohibited from displaying all of the data, no information will be available for property carriers while appropriate changes are made.” In order for the CSA ranking system to become live again, the FMCSA would have to implement or satisfactorily address the numerous issues raised regarding the program in the Inspector General report.

https://csa.fmcsa.dot.gov/whats_new.aspx
Texas Federal Judge Halts Southwest’s Bid To Oust Delta From Dallas Airport
Friday, January 15, 2016
Source:
In a dispute over gate usage at Love Field airport, outside of the city of Dallas, on January 8, 2016, a Texas federal judge ruled that Southwest Airlines Co. cannot force Delta Airlines Inc. out of the airfield, also ruling that Southwest has breached its lease agreement by refusing to accommodate Delta. In an intricate dispute involving FAA investigations and multiple complaints launched against and by the parties involved, U.S. District Court Judge Ed Kinkeade granted preliminary injunction to Delta to stop Southwest from interfering with Delta’s use of gates at the airport that are currently under Southwest control. At the heart of the matter is a dispute over the level of control Southwest has over 18 of the airport’s 20 gates pursuant to a lease agreement between Southwest and the city of Dallas. Judge Kinkeade wrote “Delta has established that immediate and irreparable harm may result if it is prohibited from operating its current schedule of five flights and is forced out of Love Field during the pendency of this case,” “Thousands of passengers, both traveling to and from Love Field, would have to be refunded or rebooked if Delta is forced to discontinue its service at Love Field. Loss of business and goodwill are immeasurable through money damages.”

The case is Dallas v. Delta Airlines Inc. et al., case number 3:15-cv-02069, in the U.S. District Court for the Northern District of Texas, available through PACER.
California District Judge Asked To Approve $1.2M Attorney Fee Award
Tuesday, January 19, 2016
Source:
A class of California truck drivers has asked a federal judge to grant final approval of $1.2M in attorney’s fees as part of a larger $3.5M settlement in a suit brought by drivers for Ruan Logistics Corp. Ruan was sued for a number of different violations of California employment law, including failure to provide meal and rest breaks as well as failure to pay drivers for time worked. Ruan had originally been granted summary judgement in 2013, but that decision was overruled on appeal to the Ninth Circuit, and has since been in intense litigation leading to the current settlement now before the court. Despite the contentious nature of the litigation, the parties have agreed on this settlement, saying in the motion for settlement approval “It is the ‘gold standard’ for wage and hour class action settlements because it imposes almost no burden on the employee while distributing virtually all of the settlement fund,” “This result is particularly impressive in light of the contentious yet professional character of this litigation.”

The case is Burnham et al. v. Ruan Transportation, case number 8:12-cv-00688, in the U.S. District Court for the Central District of California.

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