Transportation Industry News Summer
2017 Deregulation and Freight Charges 3 A New Trend: Recent Court Decision Shows 4 Expansion of Preemption under FAAAA Court Allows Motor Carrier to Seek Implied 5 Indemnification from Shipper Team Directory 7
South Carolina Supreme Court: Tort Reform—It Doesn’t Mean What You Think It Does Bennett Crites | bennett.crites@smithmoorelaw.com Attorneys in South Carolina have appellate guidance on an unresolved issue for the first time since the South Carolina Legislature enacted the last round of tort reform in 2005. Both plaintiff and defense lawyers argued their interpretation was correct when it came to apportionment of fault for a non-party or for a settling defendant. The position advanced by plaintiffs was that a settling defendant no longer in the case could not be placed on the verdict form for apportionment of the fault. Plaintiffs would point to the plain language of the statute, which stated that the sum of the fault of the “defendants” and any for the plaintiff must equal 100%. Conversely, defendants would take the position that because the statute allowed the defendant to argue the “empty chair” defense, and because pure joint and several liability was abolished and available only if a defendant was found to be greater than 50% at fault,
that it was necessary for a jury to apportion fault to a non-party tortfeasors. In the case of Smith v. Tiffany, Smith was injured when he was struck by Mizzell’s vehicle as Mizzell was exiting a gas station on a rural highway. Mizzell argued that a commercial vehicle parked on the shoulder of the highway obscured his view as he exited the gas station and caused him to strike Smith’s vehicle. A partial settlement between Smith and Mizzell was reached when Mizzell’s carrier tendered limits in exchange for a covenant not to execute judgment. Thereafter, Smith filed a lawsuit against the trucking company and its driver (“Defendants”). Defendants answered and filed a third-party complaint against the
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at-fault driver (Mizzell) arguing that because Mizzell was responsible for a significant portion of Smith’s injuries, Defendants were entitled to a jury determination of Mizzell’s alleged fault even though he had already settled with Smith. Mizzell filed a motion for summary judgment as to Defendants’ third-party claims alleging he neither owed nor breached any duty to Defendants. He also contended that section 15-38-50 of the Uniform Contribution Among Joint Tortfeasors Act (“the Act”) discharged him from liability for contribution to any other tortfeasor because he was a settling tortfeasor. The trial court granted summary judgment and dismissed all third-party claims against Mizzell. On direct appeal to the South Carolina Supreme Court, Defendants contended the trial court erred in failing to permit Mizzell to be named as a party and to be included on the verdict form so as to enable the jury to include Mizzell in the apportionment of fault for the accident. The Court disagreed and discussed the longstanding “plaintiff chooses” rule. It applied a strict reading of the Act, specifically as it related to the terms “defendants” and “potential tortfeasors,” and the Court found no reason to believe the use of these terms by the legislature was not deliberate or that those terms meant anything other than what they said. While the Court acknowledged that achieving a more fair apportionment of damages among joint tortfeasors was one of the policy goals underlying the legislature’s enactment of the Act, it was not the goal. The Court further stated that reading the Act as a whole evidenced the legislature’s attempt to not only protect nonsettling defendants, but “the legislature was attempting to strike a fair balance for all involved—plaintiffs and
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defendants—and to do so in a way that promotes and fosters settlements.” In this regard, the Court noted that the non-settling Defendants were not left without a remedy under the Act, as Defendants were entitled to a set-off for the settlement of Mizzell by operation of law, and Defendants were afforded the opportunity to argue the empty chair defense, which was codified in the Act. The Court noted a defense verdict under the empty chair defense was a viable option as Plaintiff was still required to carry the burden of proof as to breach of duty and proximate cause. The Court noted to have adopted the position advanced by Defendants and allowing Mizzell to be on the verdict form would create a host of concerns by requiring: (1) a plaintiff to maintain a suit against someone with whom he has already settled; (2) a settling defendant to defend a lawsuit he has already settled; (3) this Court to ignore the legislature’s express acknowledgement in section 15-38-15(D) that not all potential tortfeasors will necessarily be parties to the suit; and (4) would create a conflict with other provisions of the Act, including sections 15-38-15(E) and 15-30-50(1), which address a nonsettling defendant’s right to setoff. In sum, South Carolina Courts are going to give great deference to a plaintiff’s decision about who it decides to sue. A defendant is now restricted in its ability to third-party a settling joint tortfeasor into a lawsuit because the Act discharges the liability of that settling defendant. Most importantly, non-party tortfeasors cannot be allowed on a verdict form for purposes of apportionment of fault, although the Supreme Court has reaffirmed the empty chair defense.
DEREGULATION AND FREIGHT CHARGES Fredric MArcinak | fredric.marcinak@smithmoorelaw.com A recent case illustrates the continuing, years-long fallout from deregulation, as courts seek to reconcile the end of economic regulation of motor carriers with federal statutes that remain in force and that appear to govern carriers. This case is the unusual case that benefits carriers by, ironically, finding that federal preemption does not always apply. The intersection of carriers’ claims for freight charges, and federal law has spawned much litigation in recent years. Recent disputes have centered on whether the federal courts have federal question jurisdiction over freight charge collections cases. Although the decisions have not been entirely uniform, many courts have held that the courts lost federal question jurisdiction over freight charge collection actions with the abolition of the filed rate doctrine.
See, e.g., Gaines Motor Lines, Inc.
theories. If that’s true, though, does
v. Klaussner Furniture Indus., Inc.,
the 18-month statute of limitations
734 F.3d 296 (4th Cir. 2013).
in 49 U.S.C. § 14705 apply to limit
However,
these
decisions
have
raised additional questions. For example, if there is no federal cause of action to recover freight charges, freight
charges
are
presumably
recoverable under state common law breach of contract and related
the filing period for a state law cause of action? If not, when does it ever apply outside of the interstate, household goods context? To read more go to www.smithmoorelaw. com/TNLJuly2017-Deregulation
The Department of Labor Throws Out Guidance Documents Alex Maultsby | alex.maultsby@smithmoorelaw.com In early June, the Department of Labor
back away from what many believed
agency complains that a shop
rescinded two Guidance documents
had become a very aggressive tendency
manager has harassed her;
from the previous Administration’s
by the Department to find employment
Wage and Hour Division that had
relationships between workers and the
explained how the Division would
entities connected to their labor.
whether drivers employed by
The Joint Employer and Independent
together with freight brokers of
Contractor Debates
commonly-owned Company B for
interpret issues of joint employment and independent contractor status. The DOL did not change the law with this retraction, and the court systems in our country have the final say on any litigated claim. However, by rescinding the
Guidance
documents,
the
Department has indicated that it will
when
questions
Company
Issues about who, if anyone, is a worker’s employer can arise in many contexts. Here are a few examples: •
•
when a temporary from a staffing
should
arise be
about added
the purpose of head-count under any number of laws (Title VII, FMLA, ACA, to name a few); To read more go to www.smithmoorelaw. com/TNLJuly2017-DOL
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A New Trend: Recent Court Decision Shows Expansion of Preemption under FAAAA Megan Early-Soppa | megan.early@smithmoorelaw.com In Mark Centuori v. United Parcel Services, a homeowner brought a negligence action against UPS for injuries sustained after he moved three packages that were incorrectly delivered to his home. 2017 WL 1194497, at *1 (W.D. Wash. March 30, 2017). More specifically, Mr. Centuori asserted that UPS (1) failed to follow its policies in correcting inconsistent addresses, (2) left the packages at Mr. Centuori’s home without his consent, and (3) left the packages obstructing an entrance to Mr. Centuori’s home. Id. At *6. Thereafter, UPS moved for summary judgment and argued that it cannot be held liable for Mr. Centuori’s claims because his claims are preempted under the FAAAA. Id, at *3. In support of its argument that Mr. Centuori’s claims were expressly preempted, UPS pointed out that the language of the FAAAA expressly preempted claims that related to UPS’s services. Id. at *4. The Court conducted a thorough analysis of the history of state law preemption claims. This court determined that “these cases1 make clear that the infrequency with which the ADA and FAAAA preempt common law claims is not based on a separate line of analysis; rather, it is an effect of applying ADA and FAAAA preemption doctrine.” Id, at *5. Most significantly, the court concluded that the FAAAA preempted a theory of negligence raised by Mr. Centuori—failure to obtain consent. In making this determination, the court looked to whether imposing liability on UPS for failure to obtain consent would “drastically alter the manner in which UPS provide[d] package shipment services to and from various markets at various times.” Id., at 7. The Court noted that Mr. Centuori was not clear in the “precise contours of this theory of negligence,” but it would at least require UPS to obtain a recipient’s consent every single time a package is rerouted to them. Id. The Court recognized this is exactly the “sort of patchwork regulatory framework that Congress intended to avoid by enacting the FAAAA’s preemption provision.” Id. To read more go to www.smithmoorelaw.com/TNLJuly2017-FAAAA The Court examined the requirement that for a claim to be preempted it must be “related to” the service, prices, or routes of a motor carrier. The Court specifically looked at the holdings of American Airlines, Inc. v. Wolens, 513 US 219 (1995) (Supreme Court held that the ADA did not preempt common law contract claims); Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) (Court concluded that the ADA preempted a state ban on deceptive advertising but indicated that some state actions may have been too tenuous, remote, or peripheral a relationship to be preempted.); and Charas v. Trans World Airlines, Inc., 160 F.2d 1259 (9th Cir. 1998)
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Greenville United Way’s Hog (Hands On Greenville) Day The Greenville office participated in Greenville United Way’s HOG Day. The firm’s assigned project involved maintenance of an educational farm. We know what you are thinking—no, this was not a desperate attempt by Rob Moseley to get some help with his farmwork. T r a n s p ortat i o n T e a m m e m b e r s p a rt i c i p at i n g : • Rob Green and parents • Kurt Rozelsky and son, Eric • Rob Moseley and sons, Caleb and Adam • Kevin McCarrell • Joseph Rohe • Stephanie Flynn • Kristen Nowacki and husband, Tim, and daughters • Lori Robinson and son, Stewart
Court Allows Motor Carrier to Seek Implied Indemnification from Shipper Ron Lowell | Contributing Author, Western Express, Inc. In a recent case out of the Middle
available in cases involving joint
Coty’s representations as to value in
District
tortfeasors.
determining whether to implement
of
North
Carolina,
the
court held that a motor carrier could maintain a cause of action for indemnification against a shipper despite the fact that there was no express
indemnification
between
the shipper and the motor carrier. The dispute arose from theft of cargo being transported by Western Express
to
Macy’s.
Western
Express asserted it was entitled to indemnification because it justifiably relied upon the Shipper’s (Coty) representation that the cargo value was only $93,145. In reality, the value of the cargo exceeded $585,000.
By way of background, Western Express and Macy’s entered into an agreement in which Western Express agreed to transport cargo owned by Macy’s from Coty’s facilities in North Carolina to Macy’s facilities in Connecticut. The cargo was stolen in transit and was never recovered. Macy’s filed suit against Western Express
alleging
a
claim
under
the Carmack Amendment seeking recovery of the actual value of the cargo. According to Macy’s, the value of the cargo exceeded $585,000.
additional safety measure. Western Express also alleged it had no opportunity to inspect the cargo so as to determine its true value. Thus, Western Express asserted that if it was found liable to Macy’s, then Coty’s actions in failing to disclose the “high-value nature” of the cargo entitled it to indemnity. Despite the absence of any contractual indemnification,
Western
Express
asserted it was entitled to recover under an implied-in-law theory of indemnification. The implied-in-law theory of indemnification is based on
Although there was no contractual
After Macy’s filed suit, Western
right to indemnification between
Express filed a third-party action
Western Express and Coty, the court
against Coty asserting a claim for
held that Western Express could
indemnification.
maintain an indemnification cause of
alleged Coty represented that the
third party.
action against Coty under an implied-
value of the cargo was only $93,145
in-law theory that is generally only
and that it justifiably relied upon
To read more go to www.smithmoorelaw. com/TNLJuly2017-Lowell
Western
Express
equitable concepts where a passive tortfeasor pays the judgment owed by an active tortfeasor to the injured
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T H E ROAD A H EAD On July 11, the Transportation Team will present a Webinar on ELDs and how to manage the transition. Rob Moseley will lead the discussion moderated by Kurt Rozelsky. Jack Riordan will attend the SCDTAA Summer Meeting in Asheville, NC, from July 14–16. Jack is on the Board of Directors and was immediate past Chair of the Summer Meeting. Marc Tucker and Rob Moseley will attend the NC Trucking Association Annual Conference in Asheville, NC, on July 16-18. Marc will attend the board meeting, and Rob will present to the group on the new era of truck accident litigation. Rob Moseley is the guest speaker on July 24 at the Appalachian Hardwood Manufacturers meeting in Asheville, NC. Rob will be presenting on issues relating to transportation affecting the members. Kurt Rozelsky is attending the Federation of Defense and Corporate Counsel meeting July 24-29 in Montreux, Switzerland (after the firm really thought he was going to Montreat, North Carolina).
The Annual Meeting of the American College of Transportation Attorneys is at the Orlando Airport Hyatt on August 17–18. This meeting marks the end of Rob Moseley’s term as Chair of the organization. If the group can survive that, well… Rob Moseley is the luncheon speaker for the Arkansas Trucking Meeting, to be held September 13–14 in Rogers, Arkansas. Rob will be discussing developments in broker liability. Rob Moseley will be discussing truck underwriting concerns at the Sentry Agents Conference September 13–14 in Stevens Point, WI. The firm will host another webinar on September 19. It will likely discuss the new American Academy of Science analysis of CSA. Rob Moseley will be discussing truck accident litigation at the Kentucky Trucking Association meeting at the Belterra Casino and Resort in Florence, IN, on September 20–22.
Making Tracks On April 5, Fredric Marcinak and Rob Moseley spoke at the TIDA Cargo Seminar in Tempe, AZ. Fredric spoke on the new changes to the Uniform Straight Bill of Lading and Food Safety. Rob told a few jokes and pretended to talk about significant things. Rob Moseley was in Las Vegas, NV, at the Red Rock Casino for the Transportation Intermediaries Capital Ideas Conference on April 4–6. Steve Bryan of Vigillo led a panel and did his best to reel Rob in as he purported to opine on broker liability litigation.
Kurt Rozelsky spoke at the DRI Trucking Law Seminar on Outsmarting the Trucking Reptile on May 24 in Chicago, IL.Shawn Kalfus and Joseph Rohe were also in attendance. Fredric Marcinak presented on cargo claims in a Vertical Alliance webinar on May 25. Rob Moseley interjected with things he thought were funny. Megan Early-Soppa attended the FDCCC Deposition Bootcamp in Chicago, IL, on June 12–13.
Marc Tucker joined Rob Moseley in Greensboro, NC, on April 25 for a presentation to the NC Trucking Association regarding ELD implementation.
On June 8–11, Rob Moseley attended the SC Trucking Association Annual Conference and Board of Directors meeting in Myrtle Beach, SC.
Rob Moseley participated in an ELD implementation for the Vertical Alliance on April 20.
Matt Stone and Rob Moseley attended the meeting of the Georgia Motor Truck Association on June 18–20 in Hilton Head, SC. Rob participated on a panel on the future of trucking.
On April 26–29, Fredric Marcinak attended Transportation Lawyers Association Annual Conference and chaired the Freight Claims Committee meeting in Santa Fe, NM. May 23 marked a trip for Rob Moseley over the MasonDixon line to present on the Food Safety regulations at the NJ Motor Truck Association Safety Meeting.
SMC3 presented its Connections event on June 26–28 in West Palm Beach, FL. Rob Moseley presented the transportation contract class at the event.
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Team Directory E r i k A l b r ig h t
R o b M o seley
Mi k e B o we r s
K r iste n N o wac k i
E m ily B r idges
B o b P e rs o ns
Ric k C o u g h li n
Ma r y Ra m say
B e nn e tt C rit e s
Patti R ams e u r
Mega n E a r ly- S o ppa
J o h n R e is
J u l i e Ear p
J ac k Ri o r da n
R o b G r ee n
R o c k y R o ge r s
J ay H o lla n d
Joseph Rohe
Ma r v is J e n k i n s
K u r t R o z els k y
S h aw n Kalf u s
P ete r R u tledge
F r ed r ic Ma r ci n a k
M att S t o n e
ale x m a u lts b y
Ma r c T u c k e r
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
Wilmington, NC | 910.815.7165 jay.holland@smithmoorelaw.com
Atlanta, GA | 404.962.1018 marvis.jenkins@smithmoorelaw.com
Atlanta, GA | 404.962.1042 shawn.kalfus@smithmoorelaw.com
Greenville, SC | 864.751.7691 fredric.marcinak@smithmoorelaw.com
Greensboro, NC | 336.378.5331 alex.maultsby@smithmoorelaw.com
Ke v i n Mc C a r r ell
Greenville, SC | 864.751.7652 kevin.mccarrell@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
Charlotte, NC | 704.384.2693 john.reis@smithmoorelaw.com
Greenville, SC | 864.751.7638 jack.riordan@smithmoorelaw.com
Greenville, SC | 864.751.7610 rocky.rogers@smithmoorelaw.com
Greenville, SC | 864.751.7668 joseph.rohe@smithmoorelaw.com
Greenville, SC | 864.751.7624 kurt.rozelsky@smithmoorelaw.com
Greenville, SC | 864.751.7610 peter.rutledge@smithmoorelaw.com
Atlanta, GA | 404.962.1057 matt.stone@smithmoorelaw.com
Raleigh, NC | 919.755.8713 marc.tucker@smithmoorelaw.com
Welcome Robert “Rocky” Rogers! Rocky (yes, we recognize that he is really the fourth Robert on the team) joined us on June 20 from a regional insurance defense firm where he practiced since 2011. Rocky received a B.A. in Philosophy cum laude from Mercer University in Macon, Georgia, in 2007 and his law degree cum laude from the University of South Carolina School of Law in 2011. Rocky was on the South Carolina Law Review and was selected to the Order of the Coif and Order of the Wig & Robe. Rocky joins the Transportation and Logistics Team at SML after having spent time concentrating on tort litigation, including professional liability defense, railroad defense, and workers’ compensation. In addition, he has experience in creditors’ rights and appellate practices. Rocky and his wife Allison, also an attorney, have a rescue dog named Drake. We are excited to welcome them to the SML family.
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
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