Summary
holding that when read together, 49 C.F.R. §§ 390.5 and 376.12(c) impose statutory liability on a carrier-lessee if that person "permits a non-employee to operate the leased equipment and that operator causes damages."
Summary of this case from Henry v. Sunshine Freight, Inc.Opinion
CIVIL ACTION NUMBER 99-0586, (REF: ALL CASES), SECTION "L" (5).
July 3, 2001
ORDER REASONS
Before the Court is the Motion of Plaintiff's Robert Allen, Jr. and Rhoda Beasley for Summary Judgement on the issue of whether Ryder TRS, Inc. ("Ryder") is the primary liable carrier under the applicable federal law and regulations. Plaintiffs Kim Tolliver, Patricia Tolliver Dillon, Charles Tolliver, Robin Allen, individually and on behalf of Ora Tolliver, and Robert Allen, Sr. join in the motion. After a review of the pleadings and the applicable law, Plaintiffs' motion is DENIED.
I. BACKGROUND
This diversity suit arises out of an automobile accident that occurred on December 31, 1998 on Interstate 10 in St. Charles Parish, Louisiana. A 1990 Plymouth Acclaim owned by Rhonda Beasley and operated by plaintiff Robert Allen, Jr. was allegedly in the emergency stopping lane of eastbound 1-10 with a flat tire, when it was struck by a Ryder truck operated by defendant Danni Naor and owned by defendant Ryder. The car operated by plaintiff Allen burst into flames, killing his mother, Ora Tolliver, and Rhonda Beasley's two children, Cedrica Daniels and Michael Beasley, who also occupied the car. Allen was severely burned and paralyzed; Rhonda Beasley was injured less seriously. In this consolidated case, Plaintiffs seek to recover damages caused by the accident.
American Transfer Moving Systems, Inc. ("American Transfer") rented, pursuant to a written lease agreement, the truck from Ryder at 1510 Southern Blvd. Corp., a Ryder dealer located in Bronx, New York. Danny Naor, an American Transfer employee, was operating the truck at the time of the accident.
Plaintiffs allege that under Federal regulations in effect at the time of the accident, Ryder is the primary liable carrier and, as such, is liable along with American Transfer for Plaintiffs' injuries. Plaintiffs' position is that the Ryder truck involved in the accident did not display any markings indicating that it was being operated by American Transfer and the lease did not contain information required by the Department of Transportation ("DOT") regulations. Instead, the truck was marked with Ryder's name and DOT identification number. Therefore, Plaintiffs argue, under the doctrine of "logo liability" Ryder is liable as the primary carrier.
II. DOCTRINE OF LOGO LIABILITY
"Logo liability" is a judicially-created doctrine that can impose statutory employer liability on the lessee of a vehicle if the lessee permits a non-employee to operate the leased equipment and that operator causes damages. See Simmons v. King., 478 F.2d 857, 860 (5th Cir. 1973), Empire Indem. Ins. Co. v. Carolina Casualty Ins. Co., 838 F.2d 1428 (5th Cir. 1988); Jackson v. O'Shields, 101 F.3d 1083, 1086 (5th Cir. 1996). The Fifth Circuit's application of this doctrine has been limited to cases arising during federally regulated "trip leases" of a tractor-trailer where the logo that appears on the truck is that of the "renting carrier" not the owner. Id. The purpose of the doctrine is to ensure that the lessee takes responsibility and control of leased equipment during the term of the lease. See Jackson, 101 F.3d at 1086.
The Fifth Circuit first utilized this doctrine in Simmons v. King, 478 F.2d 857 (5th Cir. 1973), a case in which a tractor-trailer rear ended another vehicle. The tractor-trailer and its driver were leased to Dubose Trucking Co. ("Dubose"), a carrier certified by the Interstate Commerce Commission ("ICC") to transport sugar. Id. at 862-63. The lease was prepared in accordance with ICC regulations. Id. The Court found that Dubose was liable for the leased driver's acts as a matter of law under the ICC regulations. Id. at 867.
The Fifth Circuit again employed the doctrine in Empire Indemnity Insurance Co. v. Carolina Casualty Insurance Co., 838 F.2d 1428 (5th Cir. 1988). In that case, a truck driver leased his vehicle and his driving services to an ICC certified common carrier. Id. at 1429-30. The driver collided with an automobile and killed the other driver. Id. The Fifth Circuit found that insurers of the truck driver and the common carrier were jointly and equally liable for the accident's damages. Id. The Court reasoned:
Where a leased driver is operating under the permit of a licensed carrier, the driver is considered a `statutory employee' of the carrier, who is vicariously liable under ICC regulations. ICC regulations require display of the carrier's insignia and permit number. Upon termination of a lease, ICC regulations provide that `the authorized carrier shall remove all identification showing it as the operating carrier before giving up possession of the equipment.' 49 C.F.R. § 1057.11 (1986).
There is precedent holding that, when a leased driver is making a trip during the term of but outside the scope of his employment and continues to display the required ICC insignia and permit number, that driver continues to be a statutory employee of the carrier during the period he displays the authority, even though he is not actually operating under that authority at the time of the collision. This sometimes is referred to as the "logo liability" rule.Id. at 1433.
The most recent Fifth Circuit case addressing logo liability is Jackson v. O'Shields, 101 F.3d 1083, 1086 (5th Cir. 1996). In Jackson, a 1976 Freightliner tractor-trailer driven by Timothy O'Shields and owned by Larry Wallen collided with an automobile. At the time of the accident the tractor-trailer bore the ICC placard and emblem of JT Enterprises ("JT"), an ICC authorized carrier. Id. at 1083. The auto passengers sued the driver, the owner, and JT. The Court discussed the applicability of logo liability stating:
Under the authority of 49 U.S.C. § 11107, the Interstate Commerce Commission regulates leases of equipment used in interstate commerce. See 49 C.F.R. § 1057.1 et seq. One of the primary purposes of the ICC's leasing regulations is to ensure that carrier-lessees take control of and responsibility for leased equipment during the term of a lease. [citing 49 C.F.R. § 1057.12(c)(1) which required that, under an ICC-regulated lease, the ICC carrier-lessee assume `exclusive possession, control, and use of the equipment for the duration of the lease' and `assume complete responsibility for the operation of the equipment for the duration of the lease.'] In line with this purpose, we held in Simmons v. King that if there is an existing lease between an ICC-authorized carrier and an owner of leased equipment and the equipment bears the carrier's ICC placard, then the driver of the equipment will be deemed to be the carrier's statutory employee. Consequently, the carrier will be held vicariously liable for injuries resulting from the use of the leased equipment. Other jurisdictions have also employed a `statutory employee' analysis to impose liability on carrier-lessees.Id. at 1086 (internal case citations omitted).
III. ANALYSIS
Plaintiffs argue that the "logo liability" doctrine should be expanded to impose liability on Ryder as the statutory employer of Naor. Plaintiffs' argue that this expansion is appropriate because the DOT regulations in effect at the time of the accident amounted to a comprehensive scheme intended to preempt state tort concepts. The ICC regulations applicable in the previous "logo liability" cases are not relevant here. Instead, Plaintiffs' assert that the applicable regulation is the version of 49 U.S.C. § 390.21 that was in effect at the time of the accident. This regulation governed the marking of commercial motor vehicles. Plaintiffs acknowledge that none of the existing cases applying "logo liability" involve a breach of this regulation. Plaintiffs' position is that this regulation is, in essence, the successor to the former ICC regulations at issue in the previous logo liability cases.
In the Motion, Plaintiffs assert that Ryder also violated the version of 49 C.F.R. § 390.403, Method of Identification, which was in effect at the time of the accident. However, at oral argument Plaintiffs' appeared to concede that 49 C.F.R. § 390.403 was not applicable. The Court notes that 49 C.F.R. § 390.403 is inapplicable in this case, because Ryder was not a "for-hire motor carrier" as defined in the regulations in affect at the time of the accident. See 49 C.F.R. § 390.401; 49 C.F.R. § 390.5.
49 C.F.R. § 390.21 Marking of commercial motor vehicles provides:
General. Every self-propelled commercial motor vehicle operated in interstate commerce and subject to the rules of subchapter B of this chapter must be marked as specified in paragraphs (b), (c) and (d) of this section. Self-propelled commercial motor vehicles operated by for-hire motor carriers under authority issued by the Interstate Commerce Commission (ICC) may meet the requirements of this section by complying with the marking requirements set forth in 49 C.F.R. part 390, subpart D.
. . .
(e) Rented commercial motor vehicles. A motor carrier operating a self-propelled commercial motor vehicle under a rental agreement having a term not in excess of 30 calendar days may meet the requirements of this section in either one of two ways:
(1) The commercial motor vehicle is marked in accordance with the provisions of paragraphs (b) through (d) of this section; or
(2) The commercial motor vehicle is marked as set forth below:
(i) The name or trade name of the lessor is displayed in accordance with paragraphs (c) and (d) of this section;
(ii) The city or community and State (name abbreviated), in which the lessor maintains its principal place of business or in which the commercial motor vehicle is customarily based is displayed in accordance with paragraphs (c) and (d) of this section;
(iii) The lessor's identification number, issued by the FHWA, preceded by the letters "USDOT" is displayed in accordance with paragraphs (c) and (d) of this section; and
(iv) The rental agreement entered into by the lessor and the renting motor carrier conspicuously contains the following information:
(A) The name and complete physical address of the principal place of business of the renting motor carrier,
(B) The identification number issued the renting motor carrier by the Federal Highway Administration, preceded by the letters "USDOT," if the motor carrier has been issued such a number. In lieu of the identification number required in this paragraph, the following may be shown:
(1) Information which will indicate if the motor carrier is engaged in "interstate" or "intrastate" commerce; and
(2) Information which will indicate if the renting motor carrier is transporting hazardous materials in the rented commercial motor vehicle;
(C) The sentence: "This lessor cooperates with all federal, state, and local law enforcement officials nationwide to provide the identity of customers who operate this rental commercial motor vehicle;" and
(v) The rental agreement entered into by the lessor and the renting motor carrier is carried on the rental commercial motor vehicle during the full term of the rental agreement.
Unfortunately for the Plaintiffs, there are significant differences between the DOT regulation at issue in this case and the ICC regulations cited in this Circuit's previous logo liability cases. The ICC regulations governing trip leases imposed strict and detailed requirements on a party wishing to lease a tractor-trailer. See, e.g., Simmons, 478 F.2d at 863 n. 15 ( citing 49 C.F.R. § 1057.4) The Firth Circuit noted that the "legislative-administrative travail behind the ICC regulations on trip leases reflects the importance attached by the Congress and the ICC to the economic necessity for such short term leases and why it is critical that ICC regulations and the leases mandated by them have supreme, controlling significance." Simmons, 478 F.2d at 865-66.
The version of 49 C.F.R. § 390.21 in affect at the time of the accident is not such a comprehensive regulatory scheme that it demonstrates the intent of Congress or the DOT to evade state tort law. While the policy behind "logo liability" — to protect the public from abusive conduct that could occur as a result of the trucking industry's frequent use of leased or borrowed vehicles — could be applicable to protect the public from abuses in the moving van industry, neither Congress, the DOT nor the Louisiana legislature has imposed such liability on van lessors.
The Court cannot agree that "logo liability" should be so greatly expanded as to apply to the facts of this case. Circumventing established state tort liability with a federal regulatory scheme is, of course, not the general rule. If the legislature wanted to impose this system of liability, it is free to do so. However, it has not and the Court declines to circumvent Louisiana's well established law. Because the Court declines to expand "logo liability" to cases involving 49 C.F.R. § 390.21, the Court need not determine whether or not Ryder was in full compliance with that regulation at the time of the accident.
IV. CONCLUSION
For the foregoing reasons, the Court declines to expand the doctrine of "logo liability" to the facts of this case and, therefore, Plaintiffs' Motion for Summary Judgment is DENIED.