Transportation Industry News Spring
2017 It’s in the Details: Drafting an Effective 3 Reservation of Rights Letter Not Without My Permission: Confidentiality and Release of 4 Information Under the DOT Drug and Alcohol Testing Process Passenger Vehicles and the Internet of 5 Things: The Tide Is Turning Team Directory 7
SO, YOU WANT TO BE IN FEDERAL COURT? Fredric Marcinak | fredric.marcinak@smithmoorelaw.com If you are a motor carrier or broker defending a claim
In
of any sort, you generally want to be in Federal Court
cryopreserved embryos intrastate within the State
rather than State Court. But this is especially true on
of Florida. The embryos were allegedly mishandled
cargo claims. Federal judges are typically more familiar
and damaged during their transportation to a storage
with the law governing cargo claims, are more likely
facility. As a result, plaintiffs brought suit against the
to enforce contractual terms limiting the claimant’s
medical providers involved and also against UPS, the
liability, and are more likely to grant summary judgment
defendant carrier. Plaintiffs alleged negligence against
in favor of defendants. It is no secret that for these
UPS for its handling and storage of the embryos during
reasons brokers and carriers prefer to be in Federal
their transportation across Florida.
Court. But until recently it was unclear whether brokers
the
Desiree
Luccio
case,
plaintiffs
shipped
and carriers have the ability to remove a case from
UPS removed the case to Federal Court, contending that
State Court to Federal Court where the cargo claim at
there was federal question jurisdiction under 28 U.S.C.
issue arose from intrastate transportation. The recent
§§ 1331 and 1337 because plaintiff’s complaint alleged
case of Desiree Luccio and Reed Frerichs v. UPS Co., 2017
a violation of state law which is preempted under the
WL 412126 (SD Fla. Jan. 31, 2017), clarifies that these
Federal Aviation Administration Authorization Act of
claims can be removed to Federal Court.
1994 (“FAAAA”), 49 U.S.C. §§ 14501(c)(1) and 41713(b)
Continued on Page 2
(4). Although a carrier would normally remove the case
that 49 U.S.C. § 14501 is captioned “Federal Authority
to Federal Court under the Carmack Amendment, 49
Over Intrastate Transportation,” which implies that the
U.S.C. §14706, it is clear that the Carmack Amendment
statute is meant to apply to intrastate transportation.
applies only to damages arising from the interstate
Concluding that Plaintiffs’ negligence claim against
transportation of goods. Accordingly, UPS was forced
UPS related to the price, route, or service of UPS’
to remove and argue preemption under the FAAAA.
transportation of the embryos, the Court found that
Because no federal cause of action was pled on the face
plaintiffs’ claims were preempted.
of plaintiff’s complaint, UPS also had to argue that the FAAAA completely preempted the plaintiff’s state law claims to support federal jurisdiction. Not surprisingly, plaintiffs moved to remand the case to state court, arguing that the FAAAA does not reach plaintiffs’ claims
2
The Desiree Luccio case is important because it not only holds that the FAAAA preempts claims for damages arising from intrastate transportation, but it also concludes that this preemption is broad and complete
because the shipment of embryos was intrastate.
enough to support removal to Federal Court even where
The United States District Court for the Southern District
on the face of the complaint. Because state law claims
of Florida denied plaintiffs’ motion to remand. In so
are preempted, plaintiff’s claims arising from damage
doing, the Court found that the plain text of the FAAAA
in intrastate transportation will presumably proceed in
preempts state laws that are related to price, route, or
Federal Court under the federal common law applicable
service of a carrier with respect to transportation of
to the transportation of goods, much as claims against
property without regard to whether the transportation
air carriers or claims for damage to exempt commodities
is intrastate or interstate. The Court noted that there
transported in interstate transportation do. Plaintiffs
was no exemption in the statute for the intrastate
therefore continue to enjoy an avenue of recovery
transportation of goods except for the transportation
against carriers and brokers. However, carriers can
of household goods as defined in 49 U.S.C. § 13102.
derive the benefits of defending such claims in Federal
As the Court concluded that the embryos that were
Court. Brokers, too, should be able to benefit since they
being transported were not household goods, it held
also are covered by FAAAA preemption. The decision
that the transportation of them did not fall within the
Desiree Luccio, therefore, brings clarity to the law that
statutory exemption. Furthermore, the Court noted
governs the intrastate transportation of goods.
Smith Moore Leatherwood
the plaintiff does not plead a federal cause of action
It’s in the Details: Drafting an Effective Reservation of Rights Letter Rob Green | rob.green@smithmoorelaw.com
Drafting an effective reservation
that the insurer’s reservation of
of rights letter is not as simple and
rights letter was ineffective because
straight forward as it may seem.
it was “too generic” to reasonably
A reservation of rights is a notice
inform the insured of the possible
given by an insurer that it will
grounds for denial of coverage.
defend the insured in the lawsuit but reserves all rights it has based on non-coverage under the policy. Often these letters merely set forth a brief factual summary followed by lengthy quotations of various provisions of the policy and a conclusion that the insurer reserves its right to deny coverage. However, this type of reservation letter won’t cut it anymore in most states.
The underlying lawsuits in Heritage involved
damages
arising
from
the construction defects at two condominium complexes in Myrtle Beach.
The developer was insured
under CGL policies with Harleysville. After receiving notice of the lawsuits, Harleysville
sent
the
insured
a
reservation of rights letter stating that it would provide a defense subject to a complete reservation of rights.
Case in point: Harleysville Grp. Ins.
At trial, the juries returned multi-
v. Heritage Communities, Inc., No.
million dollar verdicts against the
2013-001281, 2017 WL 105021
insured. Following the jury verdicts,
(S.C. Jan. 11, 2017).
In Heritage,
Harleysville sought a declaratory
South Carolina Supreme Court ruled
judgment on its portion of liability
under the policy for the judgments. The South Carolina Supreme Court held that Harleysville had waived the right to contest its liability for the judgments because its reservation of rights letter was “too generic” to effectively preserve its rights.
The
reservation letter included only “… general denials of coverage coupled with furnishing the insured with a verbatim recitation of all or most of the policy provision (through a cutand-paste method)...” Despite the fact that the letter included approximately 10 pages of policy excerpts, there was no discussion of the particular grounds upon which Harleysville was disputing coverage of actual damages. To read more go to www.smithmoorelaw. com/TNLApril2017-Details
Smith Moore Leatherwood
3
Not Without My Permission:
Confidentiality and Release of Information Under the DOT Drug and Alcohol Testing Process Megan Early-Soppa | megan.early@smithmoorelaw.com It is hard enough hiring a new driver
it a little easier on the paperworkload
and making sure that everything is in
(yes, that is a new word).
line with the expansive list of Federal Regulations
and
your
company
hiring requirements, but it is just as important that your safety department understand
the
issues
regarding
what is necessary to access driver “consumer reports.” Here, we will not address all of the issues presented by the Fair Credit Reporting, but if you are interested in a broader look, go to www.smithmoorelaw.com/fmcsapre-employment-screening-program-
However, a closer look at the law governing DOT drug and alcohol testing is pretty clear that a “blanket release” is prohibited. You must get the person’s written consent to seek the information from other employers; this means you need “specific written consent.” The person must list all previous and current employers within the relevant time period. The language on the release must be a specific
Joseph Rohe Receives the Certified Customs Specialist Designation Joseph Rohe has received the Certified Customs Specialist (CCS) designation from the National
Customs
Brokers
under-the-fcra.
release authorizing your company
As we all know, a DOT drug test is
a specific or current employer about
of America (NCBFAA). This
often mandatory for transportation
that specific employee. For example,
certification
program
employees,
assist
to receive testing information from
&
Forwarders
is
of
the release document should not have
designed
transportation. Typically a new hire is
multiple employers listed, it should
asked if they have been drug tested in
have one employer for one employee
professionals involved in the
the past, if they have ever failed a drug
at a specific point in time. This
test, and given a form to sign stating
consent cannot be part of another
that it is okay for this new employer to
DOT requirement like a motor vehicle
request all their test results from other
check or criminal background check.
employers. At first blush, this seems
To read more go to www.smithmoorelaw. com/TNLApril2017-Permission
across
all
modes
quite harmless and definitely makes
to
Association
trade
import industry to become experts
in
the
current
import regulations. Joseph is
also
States
licensed
United
Customs
broker.
practice
involves
Joseph’s
advising clients on import/ export loss,
compliance; theft
and
cargo
recovery;
classification and valuation; C-TPAT
certification;
drawbacks
and
duty
protests;
free trade agreements and preference programs; foreign trade zones and duty deferral programs; property
intellectual protection;
and
rules of origin and country of origin marking.
4
Smith Moore Leatherwood
Passenger Vehicles and the Internet of Things: The Tide Is Turning Marc Tucker | marc.tucker@smithmoorelaw.com been
subsequently used by attorneys in
track data similar to the ECMs found
involved in personal injury litigation
litigation to re-create an accident in
in commercial vehicles and some
know all too well the role and impact
an effort to establish the negligence
auto manufacturers offer in-vehicle
vehicle
information
of a driver or motor carrier. For many
travel assist features, such as BMW
can have in a lawsuit. Electronic
years, the advantage gained by having
ConnectedDrive or General Motors’
access to such information has, for
OnStar, which generate additional
the most part, been one sided. That is
information regarding the vehicle and
about to change.
its occupants. However, the collection
Motor
carriers
who
generated
have
Control Modules (“ECM”), standard on
commercial
vehicles,
record
information such as quick stops, hard braking events, vehicle speed and RPMs, among other data points. Other technologies, such as Qualcomm or VORAD systems, collect even more detailed information regarding the operation of a commercial vehicle. The fast approaching electronic logging device (“ELD”) mandate will only add to the plethora of information already out there. Such information
The internet of things (“IoT”) generally refers to the interconnection of everyday objects, enabling them to send and receive data; the auto industry is no stranger to this phenomenon. In order to satisfy ever increasing consumer demand for the next and best are
gadget,
auto
increasingly
manufacturers
equipping
their
vehicles with technology so that a
is critical in litigation as it represents
person’s car is merely an extension
an “unbiased” source of information;
of
as such, it is often the subject of
smartphone. Passenger vehicles are
preservation of evidence letters and
equipped with “black boxes” that
one’s
personal
computer
or
and
leveraging
of
information
generated by passenger vehicles have not been realized in litigation to the same extent as information collected from commercial vehicles. As auto manufacturers
satisfy
consumer
demand for interconnectivity, the data available regarding a passenger vehicle
operator
has
increased
exponentially and has the potential for a much broader impact on personal injury/trucking litigation. To read more go to www.smithmoorelaw. com/TNLApril2017-Tide
Smith Moore Leatherwood
5
T H E ROAD A H EAD On April 5, Fredric Marcinak and Rob Moseley will speak at TIDA Cargo Seminar in Tempe, AZ. Fredric will speak on the new changes to the Uniform Straight Bill of Lading and Food Safety. Rob will bat cleanup and talk about trends in freight claims. Rob Moseley will be in his favorite town, Las Vegas (really?), for the Transportation Intermediaries Annual Conference on April 4-6. Rob will join Steve Bryan of Vigillo on a lunch panel discussing the latest on broker liability litigation. Marc Tucker will join Rob Moseley in Greensboro on April 25 for a presentation to the NC Trucking Association regarding ELD implementation. On April 26-29, Fredric Marcinak will attend Transportation Lawyers Association Annual Conference and chair the Freight Claims Committee meeting in Santa Fe, NM.
May 23 marks a trip for Rob Moseley over the MasonDixon line to present on the Food Safety regulations at the NJ Motor Truck Association Annual Meeting. On June 8-11, Rob Moseley will attend the SC Trucking Association Annual Conference and Board of Directors meeting in Myrtle Beach, SC. Matt Stone and Rob Moseley will attend the meeting of the Georgia Motor Truck Association on June 18-20 at Hilton Head, SC. Rob will participate on a panel on the future of trucking. SMC3 will present its Connections event on June 2628 in West Palm Beach, FL. Rob Moseley will present his bi-annual contract class at the event. Registration is available at http://www.smc3connections.com/
Making Tracks Fredric Marcinak travelled to the left coast for the Conference of Freight Counsel meeting in Dana Point, CA, on January 8–9. On January 19–20, Rob Moseley and Megan EarlySoppa attended the Chicago Regional Seminar of the Transportation Lawyers Association. Rob taught sessions on the MCS-90 Endorsement and Cargo Insurance. Megan Early-Soppa attended the Meeting of the Joint Council of the SC Trucking Association on January 24 in Columbia, SC. On January 24–25, Rob Moseley, Marc Tucker and Fredric Marcinak headed to Midtown Atlanta for the SMC3 Jumpstart conference. Rob taught an 8-hour contract class. Fredric and Marc led breakout sessions on the safety fitness rating for carriers and cyber security, respectively. On January 26, Rob Moseley went to Rogers, AR and spoke to the Arkansas Trucking Association on Food Safety Modernization Regulations. Joseph Rohe attended the strategic planning conference for the National Portable Storage Association in West Palm Beach, FL on February 2-3. Fredric Marcinak attended the Specialized Carriers & Riggers Association’s Specialized Transportation Symposium in Orlando, FL on February 14-17. He participated on a panel on The Mitigation of Litigation for specialized carriers.
On February 16, SML presented a webinar for the Iowa Motor Truck Association on the drug and alcohol clearinghouse (Shawn Kalfus), EEOC issues related to drug and alcohol testing on Non-DOT testing (Alex Maultsby), and entry level driver training (Rob Green). Rob Moseley, Matt Stone, Shawn Kalfus and Bennett Crites went to Knoxville, TN for the Great West Leadership conference on March 1–2. As normal Great West put on a strong group program for educating their insureds. Kurt Rozelsky attended the Winter Meeting of the Federation of Defense and Corporate Counsel in Charleston, SC on March 6-10. Marc Tucker attended the NC Trucking Association Meeting in Raleigh, NC in March. Rob Moseley is consulting with the Legislative Committee of the NCTA on worker’s compensation and independent contractor issues. On March 29–31, Matt Stone was a co-presenter on “Trending issues and tactics in truck accident claims and litigation: Are you prepared for what’s coming down the road?” at the CLM Annual Conference in Nashville, TN. On March 30, the SC Trucking Association presented its Truckfest in Columbia, SC. Rob Moseley joined Former ATA regulations guru and current safety consultant Dave Osiecki on a panel discussing new ELD regulations.
Smith Moore Leatherwood
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Team Directory E ri k A lbri g h t
R ob M oseley
M i k e B owers
Kristen N owac k i
E mily B rid g es
B ob P ersons
R ic k C ou g h lin
M ary R amsay
B ennett C rites
Patti R amseur
M e g a n Ear ly- S oppa
J ennifer R at h man
J ulie E arp
J o h n R eis
R ob Green
J ac k R iordan
Greensboro, NC | 336.378.5368 erik.albright@smithmoorelaw.com
Charleston, SC | 843.300.6633 mike.bowers@smithmoorelaw.com
Greenville, SC | 864.751.7618 emily.bridges@smithmoorelaw.com
Greensboro, NC | 336.378.5471 rick.coughlin@smithmoorelaw.com
Charleston, SC | 843.300.6653 bennett.crites@smithmoorelaw.com
Greenville, SC | 864.751.7627 megan.early@smithmoorelaw.com
Greensboro, NC | 336.378.5256 julie.earp@smithmoorelaw.com
Greenville, SC | 864.751.7617 robert.green@smithmoorelaw.com
J ay Holland
Wilmington, NC | 910.815.7165 jay.holland@smithmoorelaw.com
*TEAM LEADER* Greenville, SC | 864.751.7643 rob.moseley@smithmoorelaw.com
Greenville, SC | 864.751.7753 kristen.nowacki@smithmoorelaw.com
Atlanta, GA | 404.962.1075 bob.persons@smithmoorelaw.com
Charleston, SC | 843.300.6659 mary.ramsay@smithmoorelaw.com
Greensboro, NC | 336.378.5304 patti.ramseur@smithmoorelaw.com
Atlanta, GA | 404.962.1074 jennifer.rathman@smithmoorelaw.com
Cybersecurity and the Transportation Industry: Beyond the Breach M ay 2 3 , 2 0 1 7
Charlotte, NC | 704.384.2693 john.reis@smithmoorelaw.com
Greenville, SC | 864.751.7638 jack.riordan@smithmoorelaw.com
J osep h R o h e
Greenville, SC | 864.751.7668 joseph.rohe@smithmoorelaw.com
Join Marc Tucker for a discussion regarding the ever increasing reliance
by
transportation
companies and practical steps to mitigate the risk of cyberrelated incidents. Transportation companies increasingly collect
M ar v is J en k ins
Atlanta, GA | 404.962.1018 marvis.jenkins@smithmoorelaw.com
Kurt R o z els k y
Greenville, SC | 864.751.7624 kurt.rozelsky@smithmoorelaw.com
and
analyze
information
in
order to increase safety and productivity; this information is
S h awn Kalfus
Atlanta, GA | 404.962.1042 shawn.kalfus@smithmoorelaw.com
F redric M arcina k
Greenville, SC | 864.751.7691 fredric.marcinak@smithmoorelaw.com
ale x maultsby
Greensboro, NC | 336.378.5331 alex.maultsby@smithmoorelaw.com
Ke v in M c C arrell
Greenville, SC | 864.751.7652 kevin.mccarrell@smithmoorelaw.com
P eter R utled g e
Greenville, SC | 864.751.7610 peter.rutledge@smithmoorelaw.com
M att S tone
Atlanta, GA | 404.962.1057 matt.stone@smithmoorelaw.com
M arc T uc k er
Raleigh, NC | 919.755.8713 marc.tucker@smithmoorelaw.com
quickly becoming a company’s most valuable asset, and one worth protecting. Learn what you should be doing today to protect such information and minimize your risk of a cyber-related incident and its consequences. Fred Marcinak will moderate. To register, go to: http://tinyurl.com/m7yybbq
Smith Moore Leatherwood LLP Attorneys at Law 2 West Washington Street Suite 1100 Greenville, SC 29601 T 864.751.7600 F 864.751.7800 www.smithmoorelaw.com
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Emergency Response Team As part of the array of transportation services provided to firm clients, our 24/7 emergency response team is standing by to serve clients with urgent needs following a catastrophic accident. The team has handled numerous night time and weekend emergencies for our clients. Members of the emergency response team take responsibility for preserving physical and electronic evidence, taking driver and witness statements, making arrangements for cargo salvage, and managing relations with law enforcement. Additionally, firm clients benefit from the team’s knowledge of substantive experts and criminal defense counsel. smithmoorelaw.com/emergencyresponseteam
Smith Moore Leatherwood
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