Issues & Positions
Taking it to the courts

Jim Johnston

A major component of OOIDA’s strategy to effectively represent the interest of its members involves litigation through both the state and federal court systems.

The early focus of the association’s legal actions beginning in the mid-1980s was primarily directed toward challenges to the constitutionality of state permitting and taxation schemes that targeted out-of-state truckers.

In addition to the actions filed directly against the states by OOIDA, we also filed interventions in cases initiated by both the American Trucking Association and the National Private Truck Council. The purpose of these interventions was to prevent motor carriers, who paid the taxes in their name but passed the cost on to owner-operators, from unjustly retaining for their own use those refunds that rightfully belonged to owner-operators.

In total, legal actions were pursued against approximately 30 states resulting in refunds of several hundred million dollars. A few of those actions are still pending final resolution in the courts.

While the refund of hundreds of millions of dollars in unconstitutional taxes is a major victory, an even more important goal of those actions was to put a stop to the proliferation of the unconstitutional practice of imposing discriminatory and burdensome tax and permitting requirements on truckers from other states who had no voting rights in the taxing state. Those outrageous practices were for the most part ended, producing an enormous long-term benefit for the entire industry.

In 1989 — while many of the legal actions against state taxes were just getting into high gear — it became necessary to refocus some of our litigation resources when the U.S. DOT announced its regulation requiring mandatory drug and alcohol testing for all professional truckers. We challenged those requirements in federal court but unfortunately only succeeded in delaying their implementation for a couple of years.

We had more success in the next major legal action, filed against the Tennessee Public Service Commission. Abusive enforcement tactics and violations of truckers’ rights were standard practice for the agency, and those targeted for the most stringent enforcement directly related to who contributed to the TPSC commissioner’s election campaigns.

OOIDA’s federal court action ended those practices and was a direct factor in the total abolishment of the agency two years prior to its 100th anniversary. This action also sent a strong signal to other jurisdictions that overly abusive enforcement tactics against truckers would not be tolerated.

In 1992, another drug testing issue came from DOT in the form of a four-state pilot project implementing random roadside drug testing of truckdrivers. While OOIDA’s legal action against the U.S. DOT did not result in a favorable decision in the lower court, it did demonstrate the flaws in their legal position and its vulnerability to a more favorable ruling in the higher courts. The plan was withdrawn and the project was discontinued.

In 1995, the U.S. Congress began debating legislation to end the remaining vestiges of truck regulation and to terminate the Interstate Commerce Commission. OOIDA succeeded in convincing Congress of the need to retain and transfer to DOT the owner-operator protections contained in the motor carrier truth-in-leasing regulations.

An important part of that congressional action was inclusion of a private right-of-action provision to allow owner-operators or their representative to enforce the regulations directly through the courts rather than continuing the need to rely on the regulatory agency for enforcement. As a potential benefit to all professional drivers, the importance of this congressional action cannot be overstated.

To fully understand and appreciate the significance of the truth-in-leasing regulations and the private right-of-action as an enforcement tool, it’s important to also recognize a bit of the history of the trucking industry and its unfortunate tradition of misuse and abuse of its driver work force.

During the early days of government involvement in establishing fair labor standards for all American workers, the trucking industry succeeded in gaining a key provision that was not allowed for most other classes of workers. That provision was contained in the Fair Labor Standards Act in the form of an exemption from requirements for payment of overtime for truckdrivers.

While on the surface the exemption seemed simple and not all that ominous, the reality was establishment of an environment that required professional truckdrivers to put in twice as many (or more) hours on the job as other workers in order to generate basically the same income. Hours-of-service regulations under the authority of the ICC were originally developed at least in part as a means of protecting drivers from being forced to work excessive hours.

Over the years, the focus of hours-of-service regulations turned more and more toward the safety implications of excessive driving hours, and any labor consideration was all but forgotten.

During the ’50s and ’60s, the use of owner-operators as a means of supplementing company fleets began to grow in popularity and, with that, the discovery by some of even more imaginary ways to further exploit the driver work force to their own advantage. The truck shutdowns in the early ’70s helped draw attention to the many abuses that had developed. Those abuses were verified by ICC, Justice Department and congressional investigations and were addressed by the adoption of the truth-in-leasing regulations put into effect in 1979.

Jurisdiction for enforcement of those regulations rested solely with the ICC. And during the first several years following their implementation in 1979 and despite strong industry resistance, they were aggressively enforced. As the mood and actions in Congress began to turn more and more toward deregulation in the ’80s, the ICC found itself faced with a substantially decreasing enforcement budget, yet still retained sole enforcement jurisdiction. Inevitably — with a lessening threat of enforcement and increasing industry competition — the industry began returning to the practices of the past.

The leasing regulations are neither complicated nor burdensome. They simply require fair and honest dealing on the part of those motor carriers who have historically demonstrated their willingness to use their economic advantage to unscrupulously exploit those drivers they do business with. The fact is the implications of flagrant and illegal abuses that are perpetrated by these unscrupulous companies extend far beyond drivers directly affected to create a negative impact on the entire industry. (Profits generated through illegal and unethical practices create a competitive advantage that drives down the standard for everyone.)

In 1996, OOIDA initiated an aggressive litigation strategy to identify and file court actions against some of those companies perceived as the most flagrant violators of the leasing regulations. The first challenges were filed against New Prime Inc. and Arctic Express in 1997. Since 1997, additional actions have been filed against many other companies, including some of the largest in the industry such as Swift, M.S. Carriers, C.R. England, Heartland Express and the Mayflower companies.

For several reasons, these court actions have been a huge challenge both to the association’s resources as well as to the excellent team of attorneys who have taken the lead in prosecuting the cases.

First, this is a relatively new area of law for the courts, with few precedents to rely on for guidance. Second, most of these companies have very significant financial resources at their disposal in order to mount an aggressive defense, testing every legal loophole imaginable. And third, in many cases they have combined resources and consulted among defense teams to focus on every possible weak point in our offensive. Even some carriers who have not yet been sued are contributing to the defense in order to protect what for many has become a very lucrative system.

In the approximately seven years since this effort began, we have experienced many successes and some disappointing setbacks. Some of the smaller cases have settled prior to going to trial. Others are now expressing more of a willingness to settle and revise their conduct prior to the filing of legal actions in order to avoid the substantial legal costs involved. Many of those sued have revised their leases to come into compliance. Still others we are aware of have begun to revise their practices and their leases to avoid the possibility of legal action.

Overall, while there is still a long way to go, we are gaining substantial legal ground with the establishment of each new legal precedent we are able to achieve. This is an effort OOIDA is totally committed to continue and to expand. Gaining compliance with reasonable, justifiable regulations is considered by OOIDA as an important component in its mission to create a fair and equitable working environment for all professional truckers.