Category Archives: Trucking

Peterbilt is Recalling 2000 Trucks Due Tire Safety Defect That Can Cause a Crash

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Peterbilt is recalling more than 2,000 trucks because they reach speeds greater than their tires are built to handle. The move by Peterbilt in the U.S. and Canada raises questions about the safety of thousands of other big trucks on U.S. roads. Peterbilt is recalling certain tractors from 2009 to 2016 because they can exceed 75 miles per hour, even though the maximum speed their Michelin tires can handle is 65 mph. Such trucks mainly haul automobiles.  The tires on the front or steer axle can fail and cause a crash.

Media outlets are reporting that dealers will reprogram computers so the trucks can’t go over 65.

The National Highway Traffic Safety Administration is encouraging other truck makers with similar risks to fix the problem. But at this time, the agency is not seeking more recalls. NHTSA began investigating Michelin’s 22.5” diameter XZA tires in 2014, and one of the findings was travelling at speeds higher that the tire can handle can lead to tire failure.

In any crash involving a Peterbilt truck manufactured since 2009, such tire failure should be considered as a possible cause, keeping in mind that the recommended maximum speed for certain Michelin tires is only 65 mph.  If the driver was exceeding 65, he was violating that safety recommendation, even if 65 was within the posted speed limit.

Labeling Fed Ex Drivers as Independent Contractors Does Not Necessarily Make Them So

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Although we generally confine our blog posts to developments in the law from Tennessee, Georgia and Alabama (as well as law firm announcements), this California case is worthy of comment.

In Alexander v. FedEx Ground Package System, Inc., a major decision by the 9th Circuit Court of Appeals (August 27, 2014) the Court determined that Federal Express could not necessarily avoid claims by the drivers for employment expenses and unpaid wages under California law, or duck federal liability under FMLA, by calling the drivers “independent contractors”:

“Labeling the drivers “independent contractors” in FedEx’s Operating Agreement does not conclusively make them so when viewed in the light of (1) the entire agreement, (2) the rest of the relevant “common policies and procedures” evidence, and (3) California law.”

This decision could have broad application nationally to other types of claims against Fed Ex. As the Court stated, “As a central part of its business, FedEx Ground Package System, Inc. (“FedEx”), contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards.  FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent. FedEx contends its drivers are independent contractors under California law. Plaintiffs, a class of FedEx drivers in California, contend they are employees. We agree with plaintiffs.”

The concurring opinion includes this delightful and appropriate comment:

“Abraham Lincoln reportedly asked, “If you call a dog’s tail a leg, how many legs does a dog have?” His answer was, “Four. Calling a dog’s tail a leg does not make it a leg.” Justice Cardozo made the same point in W.B. Worthen Co. v. Kavanaugh, 295 U.S. 56, 62 (1935), counseling us, when called upon to characterize a written enactment, to look to the “underlying reality rather than the form or label.” The California Supreme Court echoed this wisdom in Borello, saying that the “label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.’ ”

Increase in Minimum Liability Insurance for Commercial Motor Vehicles Under Serious Consideration by FMCSA

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According to the Federal Motor Carrier Safety Administration (FMCSA) the agency is exploring the potential to  raise the $750,000 insurance minimum requirement for commercial motor vehicles. In a report to Congress in April 2014, the FMCSA says current minimums are inadequate to meet the costs of some crashes because “inflation has greatly increased medical claims costs and related expenses.” The FMCSA has formed a team to further evaluate required levels of financial responsibility.

The report was mandated by MAP-21 legislation and includes findings from a study that weighed the benefits of increasing insurance minimums, including improved compensation for crash victims and reductions in commercial vehicle crashes, against costs imposed on commercial motor vehicle operators and the insurance industry.

The $750,000 minimum has been in place since 1985, and the agency says if it had kept up with the core consumer price index, the minimum would be $1.62 million, and if it kept up with the medical consumer price index, which measures the annual increase in medical costs, the number would be $3.18 million in liability insurance.

As expected, the Owner-Operator Independent Drivers Association (OOIDA) responded to the FMCSA’s report saying that any increase in insurance rates would devastate small businesses that comprise over 90 percent of the trucking industry.

“Even though the agency’s report confirms that fewer than one percent of all truck-involved accidents result in injuries or property damage that exceed current insurance requirements, it seems pretty clear they plan to raise those requirements anyway,” says Todd Spencer, executive vice president. He also points out that “the amount of insurance carried by motor carriers has never been shown to have a correlation with safety.”

The American Trucking Associations (ATA) echoed the OOIDA in a statement about the report that said “ATA has yet to see any evidence that increased insurance minimums will lead to improved highway safety, and until we can review the underlying study FMCSA’s report relies on, that continues to be the case.”

Despite industry reaction, the FMCSA intends to make the matter a priority and has formed a rulemaking team “to further evaluate the appropriate level of financial responsibility for the motor carrier industry.”

The Hamilton Firm urges a substantial increase in the minimum limits given the devastating effects of a collision between a passenger car or small truck and a tractor trailer or other large commercial vehicle.  The likely result of such collisions is catastrophic injury or death.  The current minimum limit of $750,000 is grossly inadequate.

A copy of the FMCSA’s report can be viewed at:

http://www.fmcsa.dot.gov/mission/policy/report-congress-examining-appropriateness-current-financial-responsibility-and

In Trucking Cases, Can a Claim for Negligent Entrustment,Hiring or Retention Survive Summary Judgment if the Carrier Admits Responsibility for Its Driver’s Acts and Omissions?

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In Kelley v. Blue Line Carriers, 300 Ga. App. 577, 580-581 (2009), the Georgia Court of Appeals held:

“”. . . when an employer admits the applicability of respondeat superior, it is entitled to summary judgment on claims for negligent entrustment, hiring, and retention. The rationale for this is that, since the employer would be liable for the employee’s negligence under respondeat superior, allowing claims for negligent entrustment, hiring, and retention would not entitle the plaintiff to a greater recovery, but would merely serve to prejudice the employer. An exception exists for this general rule, however, where a plaintiff has a valid claim for punitive damages against the employer based on its independent negligence in hiring and retaining the employee or entrusting a vehicle to such employee. In such case, it cannot be said that the negligence claims against the employer are merely duplicative of the respondeat superior claim. Underthese circumstances, the employer is not entitled to summary judgment on the negligent entrustment, hiring, and retention claims”.

In order to support a claim for punitive damages against an employer based on its independent negligence, however, the plaintiff must present “clear and convincing evidence that the defendant’s actions showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.””

So, in Georgia the answer appears to be No, unless punitive damages are alleged and can survive a motion for summary judgment.

 

 

Removal of trucking case to Federal Court allowed more than one year after filing where Plaintiff was found to have acted in bad faith.

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In an interesting trucking case, Cameron v. Teeberry Logistics, 920 F. Supp. 2d 1309 (2013 N.D. Ga.) the district court permitted removal of a case filed in Troup State Court over a year after it was filed alleging that the amount in controversy was less than $50,000.  Through discovery it was revealed that the plaintiff was claiming medical expenses of $62,432.45, and that her doctor was recommending back surgery.  Subsequently the medical total expense increased to $91,413.75.  The case was set for mediation, and prior to mediation plaintiff’s counsel demanded $575,000 to settle.  The demand for $575,000 was made one year and four days after the lawsuit was filed.  Mediation failed and the defendants removed the case to federal court, more than one year after it was commenced.  Plaintiff moved to remand, arguing that the removal came too late under 28 U.S.C. § 1446(b)(3).  Under that statute, the defendant must file notice of removal within 30 days of when he first ascertains that the action is removable.  To remove a case that was not initially removable but later becomes removal, the defendant has to file the notice no “more than 1 year after commencement of the action, unless the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.” 28 U.S.C. § 1446(c).

The District Court found that the plaintiff acted in bad faith and allowed the removal to stand:

“First, Cameron specifically pled that this case was not removable, knowing that her pleading is “entitled to deference” by a district court and has “important legal consequences” regarding federal removal jurisdiction. Burns, 31 F.3d at 1095. Second, she failed to amend her complaint, or otherwise notify Defendants that she considered the amount in controversy to be over $75,000, therefore allowing Defendants to continue to rely upon her representation that she was seeking no more than $50,000 in damages. Third, she sent the time-limited demand letter exactly one year and four days after commencement of this suit, thus ensuring that the one-year limitation of § 1446(c) would be a potential hurdle to Defendants’ removal. Taken together, these actions show bad faith in preventing Defendants from removing this case.  Cf. Bolton v. U.S. Nursing Corp., No. C 12-4466LB, 2012 U.S. Dist. LEXIS 152387, 2012 WL 5269738, at *5 (N.D. Cal. Oct. 23, 2012) (“[A] plaintiff’s refusal to stipulate to damages less than the amount in controversy is not evidence of bad faith and forum shopping.”). Thus, despite the one-year time limitation of § 1446(c), Defendants’ removal is proper.”

Nice try by plaintiff’s counsel, but it goest to show that you can’t have your cake and eat it too!

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