SUMMER 2014
TRANSPORTATIONNEWSLETTER
Cover ing legal and other developments affecting those in the transpor tation industry INSIDE THIS ISSUE The Trac Lease: Another Option For Financing Your Fleet . . . . . South Carolina Passes S. 1099 Excluding Lease And Independent Contract Arrangements From Definition Of Employment For Unemployment Compensation . . . . .
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Team Updates . . . . . . . . . . . . . . . . . .
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Equal Employment Opportunity Commission Must Pay Logistics Provider’s Legal Fees For Bringing Frivolous Lawsuit . . . . . . . . .
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Why You Need To Go To Electronic Logs Now . . . . . . . . . . . . .
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TIA Takes The Lead On Federal Preemption For Negligent Selection Of Carrier Claims . . . . . .
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Proposed Rulemaking on Coercion of CMV Drivers . . . . . . . . .
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The Transportation Newsletter is available online!
To view the complete online version of the Transportation Newsletter, visit http://www.smithmoorelaw. com/TNLJune14
Megatrux = Megaproblem for carriers
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n balancing the rights of shippers and carriers, one of the tradeoffs the Carmack Amendment has always provided is the imposition of near-strict liability against motor and rail carriers for freight damage in exchange for the negotiation of limitations on that liability. See, e.g., Hill Construction Corp. v. American Airlines, Inc., 996 F.2d 1315, 1317 (1st Cir. 1993). Under this rule, the law has long allowed intermediary or delivering carriers to rely on limitations of liability negotiated and agreed to between the shipper and an upstream carrier. See, e.g., Mexican Light & Power v.Texas Mexican Ry. Co., 331 U.S. 731, 73335 (1917). More recently, courts have examined the application of limitations of liability where intermediaries such as brokers contract separately with shippers and carriers. While cases such as Norfolk S. Ry. Cov. v. Kirby, 543 U.S. 14 (2004), and Werner Enter., Inc. v. Westwind Mar. Int’l, Inc., 554 F.3d 1319 (11th Cir. 2009), hold that an intermediary carrier or broker can agree to a limitation of liability with a downstream carrier that binds the shipper, courts have only recently begun to examine whether a limitation of liability in a contract between a shipper and broker/intermediary will benefit a downstream carrier by limiting its liability. In UPS Supply Chain Solutions, Inc. v. Megatrux Trans., Inc., --- F.3d --- (11th Cir. May 8, 2014), the United States Court of Appeals for the Eleventh Circuit directly confronted this issue. In Megatrux, a shipment of new and refurbished disk drives owned by Seagate Technology, LLC (“Seagate”) was stolen while in transit. The freight had been brokered by UPS Supply continued on page 2 >>