O-Os, fleet both find positives in court ruling

JACKSONVILLE, Fla. — Both sides in a lawsuit regarding fleet use of independent contractors found things to praise in an appeals court decision.

The Owner-Operator Independent Drivers Association (OOIDA) had brought a class action lawsuit against Florida-based Landstar in 2002 alleging that the company’s leases violated portions of federal truth-in-leasing regulations because the carrier did not disclose reductions for fees before calculating compensation, and failed to disclose or document mark-ups and profits made on charge-back items.

The U.S. Court of Appeals for the Eleventh Circuit ruled Sept. 3, upholding some of the lower court’s rulings but overturning others.

At issue in the lawsuit were voluntary programs Landstar offers to its owner-operators to buy discounted products and services, which are then "charged-back" against the owner-operator’s settlement compensation. OOIDA had argued that it was illegal for Landstar to offer these items at more than Landstar’s third-party costs — in other words, Landstar could not make money from the program or to recoup its expenses for administering the program.

OOIDA says it will examine options regarding aspects
of the case against Landstar where it did not prevail

The court disagreed, noting that the charged-back amounts were exactly as disclosed in the owner-operator leases. However, the court ruled that the owner-operator is still entitled to access to documents reflecting how the amount of each component of a specific charge was computed.

The appeals court also affirmed the lower court ruling that decertified the class of plaintiffs for the purposed of determining damages, and ruled that in order for an individual plaintiff to recover any monetary damages, that individual must prove "actual damages."

OOIDA claimed victory, saying in a press release, "the ruling agrees with the association’s contention that motor carriers who fail to disclose all charges and provide backup documentation on how those charges are calculated are not in compliance with federal leasing regulations."

However, the association says it is looking into its options regarding aspects of the case where it did not prevail, including the upheld ruling that the carrier is not required to reimburse owner-operators for undisclosed deductions it made against drivers’ settlement sheets.

Landstar also issued a press release, saying it "is overall very pleased with the decision," according to Michael Kneller, Landstar vice president and general counsel.

"The Eleventh Circuit upheld what we believe are the key elements of the District Court’s ruling, which affirmed the validity of Landstar’s current lease," Kneller said. "Although we respectfully disagree that additional disclosures may be required under the federal leasing regulations and are evaluating whether to seek clarification or any further appeal of that portion of the decision, Landstar will fully comply with any final order requiring additional disclosures of any kind."

— via Truckinginfo.com