Truck Law

A Transportation Law Blog from TransportationAttorneys.NET

Month: November, 2017

ELD Exemptions and Port Drivers’ Bill Of Rights Act Of 2017

by G. Spencer Mynko, Esq.

This is a two subject article. First of all, I want to write about ELD exemptions. As anyone reading this article should know, the deadline for implementing ELD technology is practically three weeks away. For trucking companies or Independent Contractors/Owner-Operators who are still considering claiming an exemption to ELD requirements, it is worth it to review this topic one more time. Anyone claiming to make an exemption needs to be absolutely clear on the rules, because the consequences for improperly claiming an exemption are disastrous.

Secondly, there have been some new rumblings on the misclassification/Independent Contractor front. This specifically relates to misclassification of port, harbor drayage, and intermodal drivers and proposed federal legislation which would give the Federal Government new powers of prosecuting trucking companies who misclassify employee drivers as independent contractors. While it is unlikely there will be any immediate changes in terms of Federal Government jurisdiction over the situation in the ports or with intermodal shipping, trucking companies need to know that there is a movement in Congress to aggressively target trucking companies (and anyone esle) who misclassifies harbor drayage, port, and intermodal drivers as independent contractors.

ELD Exemptions

Remember, if you claim an exemption, your drivers must be prepared and able to explain it to the officer during a roadside inspection. If your drivers can’t explain the exemption, they’ll receive a violation. Drivers who use the timecard exception are not required to keep records of duty status (RODS) or use ELDs. Additionally, the following drivers are not required to use ELDs; however, they are still bound by the RODS requirements in 49 CFR 395 and must prepare logs on paper, using an Automatic On-Board Recording Device (AOBRD), or with a logging software program when required. Here’s what the FMCSA says:

Drivers who use paper RODS for not more than 8 days out of every 30-day period.
Drivers of vehicles manufactured before 2000.
Drivers who are required to keep RODS not more than 8 days within any 30-day period.
Drivers who conduct drive-away-tow-away operations, where the vehicle being driven is the commodity being delivered, or the vehicle being transported is a motor home or a recreation vehicle trailer with one or more sets of wheels on the surface of the roadway.
Drivers of vehicles manufactured before the model year 2000. (As reflected on the vehicle registration)

Here are some more considerations that may help you determine exemption status:

Some drivers are required to use a paper log today: likely not exempt.

All vehicles are between 10,001 and 26,001 pounds: if interstate, not exempt. If over 26,000 pounds, not exempt even if intrastate.

Haul placardable amounts of hazmat: not exempt

Intrastate operations: state laws will determine (but state law, not federal law, must control and federal preemption must not exist)

Haul recreational vehicles: exempt while making delivery only

Drivers required to complete paper logs more than eight of any 30 day period: not exempt.

Drivers operate a power unit that is part of a driveaway/tow-away shipment: exempt while operating delivered vehicle.

All vehicles older than model year 2000: exempt

Vehicles model year 2000 or greater but no ECM: not exempt

Rental unit: not exempt

All drivers qualify for agriculture exemption all days: exempt

All vehicles operated are for utility service: exempt

All vehicles operated are for pipeline welding: possibly exempt

Oil or gas operation: not exempt

Construction operation: not exempt

Hyrail operation: not exempt

School bus operation: exempt

For hire passenger operation: not exempt

Government: exempt

Government contracted: not exempt

Any companies with any further questions should consult with a knowledgeable expert now.

Certain Members of Congress are taking aim at trucking companies who misclassify Port/ Drayage/ Intermodal drivers. Port Drivers IC Misclassification Bill Introduced In Congress.

Not satisfied to leave targeting of trucking companies who misclassify drivers primarily the duty of California officials, forces in the Federal government are looking to expand their powers or prosecution against illegally operating trucking companies. U.S. Representative Grace Napolitano (D-Cal.) introduced the Port Drivers’ Bill of Rights Act of 2017 (H.R. 4144) in the House of Representatives on October 26, 2017. This bill focuses on a particular industry where IC misclassification is perceived by some legislators to be prevalent. The bill states that it is the sense of Congress that truck drivers, including drayage drivers, have the right not be misclassified as independent contractors and “denied” legal protections, benefits and pay; to enjoy a basic standard of living; to be covered by federal, state and local labor and employment laws; to be included in workplace safety and health laws; to be free from “exploitative” truck lease or rental arrangements; and to bargain collectively for better wages and working conditions. Obviously, the Teamsters will be a driving force in facilitating the enactment of new Federal laws designed to protect common-law employee drivers and allow them to organize.

The bill seeks to have the Secretary of Transportation, in consultation with the Secretary of Labor, establish a Truck Leasing Task Force to examine truck leasing agreements entered into by drayage drivers and create a report regarding the impact of those agreements on take-home pay of truckers and whether changes in regulations may be warranted to protect the ability of drivers to earn a living wage. Rep. Napolitano and her co-sponsors claim there is a need for this bill due to independent studies that have repeatedly documented the low pay and “rampant worker misclassification in the port drayage and intermodal industries,” the many decisions issued by the California Labor Commissioner awarding over 400 port drivers in excess of $40 million in back pay due to wage and hour violations, and the 15 unfair labor practice strikes that have occurred over the past three years to protest misclassification, involving picketing that delayed cargo delivery and created congestion at the ports.

In view of the Republican majority in both houses of Congress and a Republican administration, this bill is unlikely to gain traction. However, eventually, there will be a Democratically controlled Congress with a Democratic administration who will be very sympathetic to this bill and the perceived plight of victimized truck drivers. If the Federal Government has expanded police power over misclassification issues, I think we can expect a severe uptick in enforcement actions against trucking companies who misclassify drivers. Obviously, the misclassification violations in the ports are on the radar of politicians in Washington DC. If the state of California and their enforcement activities are not enough to persuade companies who misclassify drivers to change course, and properly classify drivers as employees, heavy-handed federal regulation may put the practice of misclassifying port/drayage drivers to an end for good.

Transportation Law and Default Judgments

by gspencermynko

I am writing about Default Judgments because I have represented clients seeking to have a Default Judgment entered and, on the other side, seeking to have a Default Judgment set aside (or as we say in the law, “vacated”). Simply put, a default judgment is a judgment against a defendant who fails to answer a lawsuit. If a entity is sued and ignores the lawsuit entirely, the entity suing has the ability to get a judgment upon meeting certain criteria. Default judgments can be obtained in both Federal and California state courts provided certain criteria are met.

The default judgment allows parties to obtain judgments for significant damages without a trial. Because of this, the requirements necessary for obtaining default are substantial. Judges insist on strict adherence to each requirement and routinely reject default requests on technical grounds. The strict requirements are designed to provide defendants due process. On one hand, California or Federal law provides plaintiffs a mechanism to seek damages where the defendant ignores a lawsuit. On the other hand, California and Federal law ensure that basic procedures for fairness are in place. Of course, if you ever are sued, don’t ignore it! 

Basic Requirements for Obtaining a Default Judgment

Defendant must be served with the summons and complaint. In most cases, defendants (including a company or business) must be personally served. However, where a defendant cannot be physically served, service may be accomplished by publication (by obtaining court approval to publish service in a newspaper).
The time for a defendant to answer the complaint (thirty days in most cases) has passed and the defendant has not filed an answer or other responsive pleading to the complaint with the court.
Defendant must be served with a Statement of Damages stating the amount of damages sought. This serves as a final reminder of how much the defendant will be on the hook for if a default judgment is entered against it. The Statement of Damages must be served in the same manner as the summons and complaint.

Once the prerequisites are satisfied, a plaintiff may pursue a default judgment immediately. However, default judgments are time-consuming and complicated and require significant amount of attorney time. Indeed, pursuing a default judgment to its conclusion is expensive and can usually approach or exceed $10,000 in attorney’s fees alone. Furthermore, it is common for defendants to move to set aside default judgments, which efforts are often successful, and which puts the plaintiff back at square one.

Federal Law and Default Judgments

A default judgment is a mechanism within the Federal Rules of Civil Procedure that allows a claimant to win a judgment when the other side does not show up.
(Fed. Rule Civ. Proc. 55.) As long as the claimant in a case can meet certain requirements after filing a lawsuit, the court is required to issue a default judgment and the claimant will win the case. Because it is a claim based on federal law filed in the federal court system, these rules about default judgment also apply to Carmack Amendment claims

The Carmack Amendment and Default Judgments

The Carmack Amendment creates a uniform system of liability for damaged or lost goods shipped from one state to or through another (it applies to goods shipped in interstate commerce). It is a nationwide policy that was created to eliminate the need for trucking companies to be aware of and plan for different state liability laws: Carmack preempts preempts any state laws regarding cargo liability. The policy itself is harsh to carriers who do the actual work of shipping goods because it makes them a de facto insurer of cargo.

Under the Carmack Amendment, a carrier is one hundred percent liable for loss and damage of shipped goods. Once a shipper shows that they delivered the goods in good condition, the burden is then on the carrier to explain why the goods were damaged, and there are only a few exceptions to making the carrier responsible for lost, damaged, or stolen goods.

Because of this policy, most Carmack Amendment cases are fairly straightforward, and come down to fighting over what the number should be regarding damages. However, sometimes the carrier does not even show up to contest the allegations and their default is sought.

In Travelers Property Casualty v. ASF Intermodal, LLC, the case involved the loss of over $90,000 worth of aluminum can tops. According to the complaint, one of the carrier’s trucks backed into the trailer carrying the aluminum, and caused the can tops to be environmentally contaminated. Minus the value of the aluminum on the secondary market, the shipment was a complete loss.

The insurer paid off the shipper, and then went after the carrier for the balance of its losses. They sued, and the carrier simply did not contest the results, so the case went to the federal judge on a motion for default judgment. Default judgment means that because the defendant does not answer the claim, the plaintiff automatically wins with no contest over the claims.

Legal Standard on Default Judgments

One important aspect to any Carmack Amendment case is showing up to defend a case. If a company is properly served with a Carmack Amendment claim and fails to show up and defend it, that company runs the risk of losing the case on a default judgment. Courts do not like to grant default judgments, and they are disfavored under the law. Both Federal and California courts have a strict policy that cases be tried on their merits and not decided on technicalities. Before a judge can rule on a default judgment, they have to make several findings, and establish the following standards:
Conduct an accounting of the case;
Establish what the damages are;
Ensure that all allegations are supported by evidence;
Investigate other matters that would affect dispensing justice in the case.
Moroccanoil, Inc. v. JMG Freight Group, LLC, No. 14-5608 (D.N.J. 2015) is another recent Federal Carmack claim that involved default. Before the court could enter a default judgment on the Carmack Amendment claim, it had to establish four things:
that the court has jurisdiction over both the claimant and the defendant;
that the defendant was properly served under the rules;
that the complaint sufficiently establishes a cause of action; and
that the plaintiff has adequately pleaded damages.
These are the four basic requirements that a court must run through before granting a default judgment.

While these standards are high, it is not difficult for a plaintiff (the suing party) to establish them when the defendant doesn’t show up and challenge what happened in the case. That’s why defaults are unusual and why courts regularly grant motions to have them set aside. Most cases involving the Carmack Amendment have two different business fighting over how much is owed, so both businesses have a vested interest in the outcome. It is understandable why the law disfavors default judgments, because of the burden it puts on judges, and basic lack of a hearing from the party who will face paying the judgment

A Default Judgment is Better Than No Judgment

There are other aspects to a default judgment under federal or state rules, but these are the basics. Of course having a default judgment is not usually as good as a typical judgment. Unfortunately, if a company or individual does not have the means or interest in defending an action in state or federal court, that means they may not have the means to pay for a judgment. But that should not deter anyone from seeking out a default judgment because there are creative ways to collect on a judgment.