November 2006

Yesterday in Margate, Florida, a woman sitting on a bench at a bus stop was when an 18-wheeler crashed into the bus stop and trapped her dead body under tons of twisted metal and a maze of downed power lines. According to police and media reports, a flatbed tow truck was heading east on U.S. 441 when it veered to right, striking the bus bench and knocking over a concrete utility pole. 

Today’s Washington Post includes an article about a case arising from  the death of a college freshman under the care of poorly supervised, overworked and highly fatigued young doctors. The resulting malpractice litigation set in motion a series of reforms, most notably a series of work hour limitations instituted by the Accreditation Council on Graduate Medical Education (ACGME), that have revolutionized modern medical education.  The result will likely save countless lives by making the clinical training of young doctors less of an exercise in hazing and sleep deprivation which leads inevitably to gross errors of judgment.

Las Vegas, NV, 11/17/06.   A tractor trailer hauling paper products may have been going 60 mph when it slammed into a stop-and-go line of cars proceeding in two lanes through a construction zone on I-15.  Four people were killed, five people were hospitalized.  The truck driver, identified as Milson Sabino Oliveira Filho, 51, was examined at a local hospital and taken to the Clark County jail, where he was being held on 10 felony charges including involuntary manslaughter and reckless driving,

I’m now participating in a trial of a products liability case in Las Vegas for at least three weeks, and commuting every day to and from the Clark County Courthouse on I-15 past the construction zone where this crash occurred.

Georgia juries are capable of surpassing expectations.  An example occurred this week in Marion County, population 7,144 according to the 2000 census.  It is the prototype of the conservative, predominantly white rural Georgia county.  I have been told that the highest jury verdict in the history of the county prior to this week was $10,000.

The decedent in the wrongful death case tried this week was a 35 year old male inmate in the last 2 months of a 4 year sentence at a Muscogee Prison Camp.   While working as a trash collector for the City of Columbus, he was run over and killed by the driver, a City employee.
The case was filed on behalf of the decedent’s  8 year old son against the driver of a Columbus Sanitation truck for violating policy by (1) failing to give morning instructions to inmates; (2) backing the 36,000lb truck without assuring that collectors/inmates were off the back; (3) backing it without the use of ground guides/inmates 20 feet from the rear of the truck; and (4) backing it when collectors/inmates could not be "plainly seen".  The decedent was riding on the back, fell off & 5 wheels ran over him.  He  briefly survived.    
 
The Marion County jury awarded $400K for pain & suffering prior to death and $600K for wrongful death, a total of $1 million, or 100 times the highest previous verdict in the county. Congratulations to Joan Crumpler, a lawyer with the courage to take on a case that I would not have predicted would come out anywhere near that well!

One of the possible take-home lessons from this case may be that jurors in even the most conservative venue can award substantial damages where a big truck does serious harm, even when the person hurt or killed has undesirable characteristics.

I have nothing against anyone with an impairment of vision or hearing.  I couldn’t live in my house if I did.  But sometimes safety trumps equal opportunity. One of those circumstances is in the operation of 80,000 pound tractor trailers at 70 mph on public highways.  Recently we encountered a situation in which a truck driver who was blind in one eye failed to perceive in time  that a vehicle ahead of him was slowing to turn.  Binocular vision with depth perception might have helped.

The Federal Motor Carrier Safety Regulations, at 49  C.F.R.§ 391.41 (b)(10),  provides:

 “A person is physically qualified to drive a commercial motor vehicle if that person: Has a distant visual acuity of at least 20/40 (Snellen) in each eye with or without corrective lenses, or visual acuity separately corrected to 20/40 (Snellen) or better with corrective lenses; and distant binocular acuity of at least 20/40 (Snellen) in both eyes with or without corrective lenses; and field of vision of at least 70 degrees in the horizontal meridian in each eye . . . .”

The importance of binocular (two eyes) vision for depth perception was recognized long ago.  Here is an illustration by Leonardo da Vinci.

My bride for the past 23 years has monocular vision due to nerve damage from a brain tumor years ago. She is a wonderful person and a careful driver, but without normal depth perception it would not be safe for her to drive a tractor trailer on the highway.

The MCS-90 is an endorsement on a trucking company’s liability insurance policy, required by the Federal Motor Carrier Safety Regulations, which serves the function of a surety for safety of the public. Even if the the trucking company is not entitled to liability coverage due to some exception or exclusion in the insurance policy, an injured member of the public may recover under the MCS-90 endorsement and the insurance company may then seek reimbursement from the trucking company.

The purpose of the Federal Motor Carrier Act("FMCA"), and the regulations issued under the Act, especially the MCS-90, was to stem the unregulated use of vehicles in interstate commerce, which threatened public safety. Integral Insurance Company v. Lawrence Fulbright Trucking, 930 F.2d 258 (2d Cir.1991).  One of the "significant aims" of federal rules regulating motor carriers is to eliminate "attendant difficulties" of fixing financial responsibility for damage and injuries to members of the public. Transamerican Freight Lines v. Brada Miller Freight Systems, Inc., 423 U.S. 28, 37, 96 S.Ct. 229, 46 L.Ed.2d 169 (1975).  Accordingly, the MCS-90 should be construed and applied to protect members of the public injured by interstate motor carriers from uncompensated losses by mandating coverage where there would otherwise be no coverage).  American Alternative Ins. Co. v. Sentry Select Ins. Co., 176 F.Supp.2d 550 (E.D.Va., 2001).

"A motor carrier of property has a duty under federal law to guaranty its financial responsibility for injuries to the public.  Purchasing coverage under an MCS-90 endorsement is one way for a carrier to fulfill this duty." Harco National Insurance Company v. Bobac Trucking et al, 1995 WL 482330 at * 4 (N.D.Ca. 1995); Barbarula ex rel. Estate of He v. Canal Ins. Co., 353 F.Supp.2d 246 (D.Conn., 2004). The MCS-90 is not insurance coverage per se, but operates as a suretyship for the benefit of the public resting on top of the motor carrier’s liability policy.  See, e.g., Canal Ins. Co. v. Carolina Cas. Ins. Co., 59 F.3d 281, 283 (1st Cir. 1995); John Deere Ins. Co. v. Truckin’ U.S.A., 122 F.3d 270, 274 (5th Cir. 1997).  It does not create in the insurer a duty to defend, but only a duty to member of the public pay any judgment against the motor carrier resulting from negligence in operation, maintenance or use of motor vehicles even if not specifically listed on the policy.  See, e.g., Canal Ins. Co. v. First Gen. Ins. Co., 889 F.2d 604, 614 (5th Cir. 1989); Industrial indem. Co. v. Truax Trucklines, Inc., 45 F.3d 986, 991 (5th Cir. 1995); National Am. Ins. Co. v. Century State Carriers, Inc., 785 F.Supp. 793, 795 (N.D. Ind. 1992).

The MCS-90 is applicable to interstate motor carriers.  For intrastate carriers within Georgia a different law applies.  I will cover that in a separate posting.

Occasionally, a motor carrier or freight broker may be held liable for negligent hiring of an incompetent independent contractor if it should have known, or might by the exercise of reasonable care could have found out, that the contractor was not competent. 

A competent contractor is defined as "a contractor who possesses the knowledge, skill, experience, and available equipment which a reasonable man would realize that a contractor must have in order to do the work which he is employed to do without creating unreasonable risk of injury to others.”  A company whose core purpose is the interstate transportation of property on the highways has a duty to use reasonable care in the hiring of an independent trucker, including a duty to make an inquiry into that trucker’s qualifications, knowledge, skill, experience, available equipment, financial responsibility, and compliance with laws governing motor carriers. Peachtree-Cain Co. v. McBee, 254 Ga. 91, 327 S.E.2d 188 (1985); Puckrein v. ATI Transport, Inc., 186 N.J. 563, 897 A.2d 1034 (N.J., 2006); Schramm v. Foster, 341 F.Supp.2d 536, Fed. Carr. Cas. P 84,364 (D. Md. 2004); Restatement (Second) of Torts § 411 (1965); Reuben I. Friedman, Annotation, When is Employer Chargeable with Negligence in Hiring Careless, Reckless, or Incompetent Independent Contractor, 78 A.L.R. 3d 910, 916 (1977); Lee & Lyndahl, Modern Tort Law § 8.03 (1991) W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 71 (5th ed.1984).

The "statutory employee" rules regarding "independent contractor" truck drivers generally are sufficient to hold trucking companies financially responsible for their drivers’ negligence. However, when there are gaps to be filled an old Restatement of Torts rule that was used by courts prior to development of the "statutory employee" rule, may be just the right tool to hold the company to a nondelegable duty to the public.

“An individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for physical harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity.” Restatement (Second) of Torts § 428;  Black v. Montgomery Trucking Co., Inc., 129 Ga.App. 36, 198 S.E.2d 378 (followed Restatement rule), reversed on other grounds without mention of either Restatement rule or federal statutes or regulations, 231 Ga. 211, 200 S.E.2d 882 (1973)(compare Dove v. National Freight, Inc., 138 Ga.App. 114, 225 S.E.2d 477 (1976)); Venuto v. Robinson, 118 F.2d 679 (3rd Cir., 1941)( Restatement (Second) of Torts § 428 applied to hold interstate motor carrier liable for negligence of independent contractor driver); Hodges v. Johnson, 52 F.Supp. 488 (D.C.VA. 1943)(same); War Emergency Co-op. Ass’n v. Widenhouse, 169 F.2d 403 (4th Cir. 1948)(same); Lehman v. Robertson Truck-A-Way, 122 Cal.App.2d 82, 264 P.2d 653 (Cal.App. 3 Dist. 1953)(same); Louis v. Youngren, 12 Ill.App.2d 198, 138 N.E.2d 696 (Ill.App. 1 Dist., 1956).  See also, Eli v. Murphy, 39 Cal.2d 598, 248 P.2d 756 (Cal, 1952)(nondelegable duty of motor carrier to public).

During the first half of the twentieth-century, interstate motor carriers attempted to immunize themselves from liability for negligent drivers by hiring inadequately insured, risky trucks and their drivers – like C&C and the Carnleys in this case.  The companies would classify the drivers who operated the trucks as "independent contractors," and disclaim any association when those uninsured trucks and drivers caused injury to the general public.  See, e.g., White v. Excalibur Insurance Company, 599 F.2d 50, 52 (5th Cir.1979); Morris v. JTM Materials, Inc., 78 S.W.3d 28, 37 (Tex.App.-Fort Worth 2002).

To address this problem, Congress amended the Motor Common Carrier Act in 1956 to require that a motor carrier assume "full direction and control" of leased vehicles in order to prevent trucking companies from eluding liability by engaging in such evasive "independent contractor" relationships.  The federal and state filing requirements were designed to provide a minimal form of coverage for the general public when insolvent and uninsured actors injured them.  See White, 599 F.2d at 53 ("Congress wished to impose on lessee-carriers responsibility for the operation of leased vehicles ‘as if they were the owners of such vehicles." ‘) (citing 49 U.S.C. § 304(e)(2), now codified at 49 U.S.C. § 11107(a)(4)).  "Because the carrier now has both a legal right and duty to control vehicles operated for its benefit, the employees of the vehicle-lessor are deemed statutory employees of the lessee-carrier to the extent necessary to insure the carrier’s responsibility for the public safety just as if the lessee-carrier were the owner of the vehicles." Id. (citing Simmons v. King, 478 F.2d 857, 867 (5th Cir.1973)).

As a result of the regulatory authority granted in the Act, Federal Motor Carrier Safety Regulations require a certificated interstate carrier who leases equipment to enter into a written lease with the equipment owner providing that the carrier-lessee shall have exclusive possession, control, and use of the equipment, and shall assume complete responsibility for the operation of the equipment, for the duration of the lease. 49 C.F.R. §§ 376.11-.12.  This FMCSR was enacted to protect the public by providing it with financially responsible carriers, Indiana Refrigerator Lines, Inc. v. Dalton, 516 F.2d 795, 796 (6th Cir.1975), and by preventing a carrier from "evad[ing] its responsibility to the public by obtaining its trucks through leasing arrangements rather than ownership and employment of drivers."  Toomer v. United Resin Adhesives, Inc., 652 F.Supp. 219, 229 (N.D.Ill.,1986).

The FMCSR  requires a carrier lessee to execute a written lease, to clearly identify the vehicle as in the employ of the carrier, and to observe other formalities evidencing its control over the vehicle and its responsibility for its actions, including displaying the carrier’s placard. 49 C.F.R. § 1057.11(a)-(d).  The majority of authorities concerning such cases involving the liability of carrier-lessees holds that when a carrier-lessee permits a lessor-driver to use its authority without compliance with  Federal Motor Carrier Safety regulations, it is responsible for injuries caused by the lessor-driver, even if the lessor-driver was embarked on an undertaking of his own while using the carrier-lessee’s authority. Rodriguez v. Ager, 705 F.2d 1229 (10th Cir., 1983); Carolina Cas. Ins. Co. v. Insurance Co. of North America, 595 F.2d 128 (3rd Cir., 1979); Wellman v. Liberty Mut. Ins. Co., 496 F.2d 131 (8th Cir., 1974);  Rediehs Express, Inc. v. Maple, 491 N.E.2d 1006 (Ind.App.,1986); Kreider Truck Service, Inc. v. Augustine,  76 Ill.2d 535, 311 Ill.Dec. 802, 394 N.E.2d 1179 (1979); Cox v. Bond Transp., Inc., 53 N.J. 186, 249 A.2d 579 (1969).

Therefore, when a member of the public is injured by the negligence of the driver of leased commercial motor vehicle, under federal law the  motor carrier bears responsibility to the injured person for the negligence of the commercial motor vehicle driver. Dove v. National Freight, Inc., 138 Ga.App. 114, 225 S.E.2d 477 (Ga.App. 1976); Judy v. Tri-State Motor Transit Co., 844 F.2d 1496, 1051 (11th Cir. 1988); Radman v. Jones Motor Co., Inc., 914 F.Supp. 1193, 1198 (W.D.Pa. 1996).  The Motor Carrier Act creates “an irrebuttable statutory employment relationship between [a] driver and the carrier-lessee.” Holliday v. Epperson, No. 1:02-CV-1030-T, 2003 WL 2340746, at *3 (W.D.Tenn. Aug.26, 2003); Gilstorff v. Top Line Express, Inc., No. 96-3081, 1997 WL 14378, at *2 n. 6 (6th Cir. Jan.14, 1997) (suggesting that the Sixth Circuit adopts this interpretation of ICC regulations); Wyckoff Trucking, Inc. v. Marsh Brothers Trucking Service, 58 Ohio St.3d 261, 569 N.E.2d 1049, 1053 (Ohio 1991) (adopting the “doctrine of statutory employment” and holding that “if the driver is negligent, the carrier-lessee is liable as a matter of law for accidents that occur while a lease is still in effect???”).  See also Baker v. Roberts Express, Inc., 800 F.Supp. 1571, 1574 (S.D.Ohio 1992) (adopting the Ohio Supreme Court’s interpretation of ICC regulations in Wyckoff Trucking ). 

Federal Motor Carrier Safety Regulations preempt conflicting state laws, including “independent contractor” laws.  “Th[e] Constitution, and the Laws of the United States which shall be made in Pursuance thereof …, shall be the supreme Law of the Land….” U.S. Const. art. VI, cl. 2.  “Federal regulations have no less pre-emptive effect than federal statutes.” Fidelity Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982).  See also Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985)("state laws can be preempted by federal regulations as well as by federal statutes").  A state law that sets a lower standard for protection of public safety than one expressed or implied by the FMCSR is preempted. Cf.,  Yellow Freight System, Inc. v. Amestoy, 736 F.Supp. 44 (D.Vt., 1990), federal regulations requiring the trucking company to bear financial responsibility for operation of trucks under their authority preempt contradictory state laws of agency.  See, e.g., Empire Fire and Marine Insurance Co. v. Truck Insurance Exchange, 462 So. 2d 76 (Fla. App. 1985); A.C. v. Roadrunner Trucking, Inc, 1993 U.S. Dist. LEXIS 7251 (C.D.Utah 1993); Conlee v. George Transfer, Inc., 1995 Me. Super. LEXIS 206 (1995); Price v. Westmoreland, 727 F.2d 494 (5th Cir., 1984); Proctor v. Colonial Refrigerated Transportation, Inc., 494 F.2d 89 (1974); Simmons v. King, 478 F.2d 857, 867 (5th Cir. 1973); see also, Wellman v. Liberty Mut. Ins. Co., 496 F.2d 131, 136 (8th Cir. 1974); Mellon Nat’l Bank & Trust Co. v. Sophie Lines, Inc., 289 F.2d 473, 477 (3rd Cir. 1961). Therefore state laws and court decisions on independent contractor status, decided without reference to the federal Motor Carrier Act or Federal Motor Carrier Safety Regulations are inapplicable.  See., e.g., Montgomery Trucking Co., Inc. v. Black, 231 Ga. 211, 200 S.E.2d 882 (Ga. Oct 05, 1973); Dove v. National Freight, Inc., 138 Ga.App. 114, 225 S.E.2d 477 (Ga.App. Mar 01, 1976); Flowers v. U. S. S. Agri-Chemicals, 139 Ga.App. 430, 228 S.E.2d 392 (1976).

I have written several times this year about proposals for toll lanes for trucks on metro Atlanta interstate highways.  An article this week shows another reason why this may become a necessity.

The Georgia Department of Transportation expects to spend $160 billion on road construction projects between 2005 and 2035. But revenues from the motor fuel tax that funds road improvement are projected to bring in only $86 billion during the same period. That leaves a $74 billion funding gap.  In addition, federal funding for highway construction has declined sharply in real terms because the federal motor fuel tax is set at 18.4 cents per gallon and is not indexed to inflation, Studstill told the more than 300-hundred attendees at the event. “This shortfall could result in a complete drawdown of the Federal Highway Trust Fund in 2009,” Studstill said. If this occurred, federal highway funds would be exhausted in three years. That leaves a $74 billion funding gap for Georgia roads.

At the same time, increasing road construction costs, population growth and more truck traffic through the state and from the booming port of Savannah increasing pressure on Georgia’s roads.

Three fiscal solutions have been proposed.  One is project-specific Special Purpose Local Option Sales Tax, or SPLOST, on a statewide or regional basis. Another is a statewide 1% sales tax  to replace the fuel tax.  The official estimate is that this would generate $1.5 billion per year, compared with $850 million from the fuel tax.

The third approach would involve public-private partnerships such as toll roads. Georgia law allows GDOT to partner with private or corporate businesses to help finance, design, construct, operate and/or maintain transportation projects. Four are under now consideration in Georgia.

There is also the possibility of rail or other transit relieving commuter pressure on metro Atlanta expressways, while we add another 2 million or more people in the next 25 years. Transit makes good sense in densely populated areas, and the area inside I-285 is rapidly becoming a much more densely packed urban environment.

As with moth things, there are no easy answers.  The tough choices are seldom if ever between good and bad, but between good and good, and between bad and bad.  My hunch is that the federal, state and local government officials will incrementally cobble together some imperfect combination of all these approaches, but we will stay perpetually behind the growth curve until something — either good (e.g., fantastic new energy technology, etc. spurring stronger economic growth)  or bad (environmental, demographic and/or economic collapse)  — causes a dramatic discontinuity in our current patterns.