We (John & Kevin) recently attended the Annual Conference of the Transportation Lawyers Association and want to pass on to you several of the major issues discussed.
To CSA or Not CSA. As you know, the issue of “carrier qualification” under CSA is a hot topic, and it has been argued and generally accepted by the industry that shippers, brokers and other users of carriers must use CSA and the “basics” to establish standards for the carriers they will use.
This prevailing understanding was turned upside down by several presenters who argue that only the FMCSA is empowered to decide if a carrier is safe enough to operate. That is, 49 USC 385.1 states that Part 385 “establishes FMCSA’s procedures to determine the safety fitness of motor carriers, to assign safety ratings, to direct motorcarriers to take remedial action when required, and to prohibit motor carriers determined to be unfit from operating a CMV.” Thus, the argument goes, unless the FMCSA has determined that a motor carrier is unfit to operate and either assigned it an unsatisfactory safety rating or placed its equipment or drivers out of service, a user is justified in using that motor carrier to provide service. Stated another way, the FMCSA gives its stamp of approval to carriers rated satisfactory and conditional and also to those that are unrated, regardless of what the basics or any other information shows. As a result, a user need only check to make sure a carrier has not been rated unsatisfactory or otherwise placed out of service. Further, if a user establishes any other carrier qualification standard, such as refusing to use a carrier if it has one or more basic scores above a certain level, then it is opening itself up to attacks by, for example, plaintiff lawyers, who can then ask why the user did not establish a more strict standard. For example, if a user establishes a policy that it will not use any carrier with any basic score above 70, the user will be asked why it did not set the standard at 65? Or 60? Or 50? And, further, would not the user agree that a carrier with a score lower than 70 is safer than one with a score of 70?
Needless to say, this argument and position created consternation amongst the lawyers. On the one hand, lawyers recognized that the argument was legally valid, but, on the other hand, they did not know how they could advise their clients to ignore the information that is now readily available. As a group, I do not believe there was any consensus amongst the lawyers as which approach was the better way to deal with CSA. This undoubtedly is a situation where attorneys will need to advise their user clients of the two approaches and the attendant risks of each and let the user client to make the decision.
CSA: Not a Fait Accompli. The dilemma discussed above may be rendered moot, however. It appears that CSA will face a legal challenge once the FMCSA issues its proposed rulemaking establishing its new “safety fitness determination” (SFD) procedures. That proposed rulemaking will revise the current 49 CFR Part 385 procedures for Compliance Reviews and the assignment of satisfactory, conditional or unsatisfactory ratings. The anticipated challenge will argue that CSA was implemented without following the requirements imposed by the Administrative Procedures Act and that the foundation upon which CSA is built is inherently flawed, based on subjective rather than objective standards, and fails to meet the standards required by the courts for expert opinions.
In the Meantime, Use DataQ’s. There was a strong consensus that carriers, in order to protect themselves, should actively challenge every questionable violation using the FMCSA’s DataQs program.
Spoliation was another topic that received considerable attention, which probably is the hottest legal issue nationally and the area of the law that is developing most rapidly. Spoliation is the failure of a party to preserve evidence when it knows or should know that the evidence is relevant to pending or future litigation. The duty arises upon the happening of a triggering event, for example, by the occurrence of a truck accident or freight damage. The triggering event is not the filing of a lawsuit, but rather the occurrence that gives rise to potential litigation. Failure to preserve evidence can have dire consequences.
In case earlier this year, Knight Transportation was found guilty of spoliation for failing to preserve a truck and its tires and for destroying or altering its Qualcomm communications. The truck had been involved in a fatal accident, and the driver did not stop, but drove 1400 miles and then arranged to have the tires replaced. Although Knight claimed it was unaware of the tire replacement, the court did not believe Knight. In addition, although Knight’s employee preserved some Qualcomm communications, it did not preserve the communications during the most critical days before and after the August 11 accident. Knight’s employee said his failure to preserve the “screen shots” for August 8-12, although he saved them for August 13-17, was an oversight. The court did not believe him. The penalty imposed against Knight was extreme: Knight’s pleadings and defenses to liability were stricken and the plaintiff was given the opportunity to add a claim for punitive damages.
Claims of spoliation are not limited to just the “big” cases. Quite frequently carriers, when asked to provide the logs for a driver who was involved in an accident months or even years prior, respond by saying “We threw them out because the regulations [49 USC 395.8(k)] only require us to maintain them for six months.” However, that is not a defense to a claim of spoliation when the carrier knew there had been an accident since any accident might result in litigation. If the carrier cannot produce the driver’s logs, a claim of spoliation might be allowed and, if it is, sanctions will be imposed. One possible sanction is an instruction to the jury that they can and should presume that the logs would have been adverse to the carrier’s position.