Owner-Operator Independ. Drivers v. Arctic Express

• Decision Date: 11 July 2003
• Docket Number: No. 97-CV-750.,97-CV-750.
• Citation: 270 F.Supp.2d 990
• Parties: OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., et al., Plaintiffs, v. ARCTIC EXPRESS, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

270 F.Supp.2d 990

OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., et al., Plaintiffs, v. ARCTIC EXPRESS, INC., et al., Defendants.

No. 97-CV-750.

United States District Court, S.D. Ohio, Eastern Division.

July 11, 2003.

James Burdette Helmer, Jr., Helmer, Martins & Morgan, Cincinnati, OH, Paul D. Cullen, Sr., Gregory Michael Cork, Thomas Patrick McCann, Joyce E. Mayers, Cullen Law Firm, Washington, DC, for Plaintiffs.

Mark Alan Johnson, Thomas Leslie Long, A. Charles Tell, Baker & Hostetler, Columbus, OH, for Defendants.

OPINION AND ORDER

MARBLEY, District Judge.

I. INTRODUCTION

This matter is before the Court on the Motion of Defendants Arctic Express, Inc. ("Arctic") and D & A Associates, Ltd. ("D & A") for Partial Summary Judgment. The Defendants seek summary judgment on the claims of Plaintiff Carl Harp, individually, as well as the claims of all other class members whose claims are based on lease-purchase agreements entered into with D & A before January 1, 1996, the effective date of the Interstate Commerce Commission Termination Act. The Defendants argue that they are entitled to summary judgment because that statute may not be retroactively applied to agreements entered into before its effective date.

For the following reasons, the Court DENIES the Defendants' Motion for Partial Summary Judgment.

II. BACKGROUND¹

A. Factual Background

In June 1997, the Plaintiffs filed this action asserting, inter alia, that Arctic and D & A had violated the truth-in-leasing regulations by failing to return escrow funds collected from independent truck drivers ("owner-operators") for the sole purpose of satisfying their maintenance obligations for equipment leased from D & A. Plaintiff Carl Harp entered into a Lease Agreement and Lease/Purchase Agreement with Arctic and D & A in March 1994. He terminated his contractual relationship with the Defendants in March 1995. Plaintiff Harp and the other named Plaintiffs represent a class of owner-operators,² some of whom, like Plaintiff Harp, entered into and terminated their contracts with the Defendants prior to January 1, 1996. Other members of the class entered into their contracts prior to January 1, 1996, but terminated their contracts after that date. Still other class members entered into and terminated their contracts after January 1,1996.

This Court has already determined that the nine cents per mile collected for the purpose of maintaining leased equipment was an "escrow fund" as defined by the truth-in-leasing regulations, and that this maintenance escrow fund was subject to the requirements of the federal leasing regulations. See Owner-Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., 87 F.Supp.2d 820, 830-31 (S.D.Ohio 2000). Further, the Court has concluded that the Defendants' failure to return the maintenance escrow funds to class members whose agreements did not run full term constituted an early termination penalty in violation of 49 C.F.R. § 376.12(k). See Owner-Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., 159 F.Supp.2d 1067, 1076 (S.D.Ohio 2001) (finding that the Defendants had "absconded with the Plaintiffs' escrow funds").

B. Legal Background

In 1973, in response to a strike by the nation's owner-operators, the Interstate Commerce Commission ("ICC") began hearings, studies, and a rulemaking proceeding regarding the relationships between owner-operators and the motor carriers from whom they lease equipment. See Global Van Lines, Inc. v. Interstate Commerce Comm'n, 627 F.2d 546, 547 (D.C.Cir.1980) (setting forth the history of the truth-in-leasing regulations). Six years later, in 1979, the ICC promulgated the truth-in-leasing regulations, which still exist in substantially the same form today.³ Id. at 549. The regulations require, inter alia, that leases entered into between owner-operators and motor carriers contain certain provisions. Of particular importance to the matter now before the Court, the regulations mandate that, if escrow funds are required for the lease, the lease specify that the motor carriers are to pay interest on the escrow funds in the owner-operator's account, and that escrow funds are to be returned no later than forty-five days from the date of the termination of the lease. 49 C.F.R. § 376.12(k)(1)-(6).

Prior to 1996, the ICC had plenary power to enforce the regulations, including the authority to seek court enforcement of a carrier's obligation to safeguard, account for, pay interest on, and eventually return escrow funds. In particular, the prior version of 49 U.S.C. § 11701(a) authorized the ICC to initiate an investigation of a carrier's alleged violation either on its own authority or upon a complaint by an owner-operator, and take "appropriate action" to compel the carrier's compliance. In addition, the prior version of 49 U.S.C § 11702(a) authorized the ICC to bring civil actions to enforce its regulations.

On January 1, 1996, the Interstate Commerce Commission Termination Act ("ICCTA") went into effect, and terminated the ICC as an agency. Pub.L. No. 104-88, 109 Stat. 803 (1995), codified at 49 U.S.C. § 10101 et seq. Some of the ICC's previously held authority, including authority over the truth-in-leasing regulations, was transferred to the Department of Transportation, Federal Highway Administration. 49 U.S.C. § 13501. One of Congress's goals in enacting the ICCTA was to alleviate certain drains on government resources by taking the federal government out of the business of dispute resolution, and providing a judicial forum for the adjudication of claims arising under the motor carrier leasing regulations.⁴ Accordingly, the ICCTA authorized owneroperators to bring private causes of action against carriers for certain violations of the Motor Carrier Act and its implementing regulations. 49 U.S.C. § 14704(a); see Owner-Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., 87 F.Supp.2d 820, 825 (S.D.Ohio 2000) (citing Owner-Operator Indep. Drivers Ass'n, Inc. v. New Prime, Inc., 192 F.3d 778, 785 (8th Cir.1999), for the proposition that 49 U.S.C. § 14704(a) authorizes private actions for some violations of the Motor Carrier Leasing Act and its regulations).

As this Court has previously recognized, the Plaintiffs bring their claims against the Defendants pursuant to the ICCTA, 49 U.S.C. §§ 14101-02 and 14704. This matter is now before the Court on the Motion of Defendants Arctic and D & A for Partial Summary Judgment with respect to the claims brought by Plaintiff Harp and all other class members whose claims are based on lease-purchase agreements entered into with D & A before January 1, 1996, the date the ICCTA went into effect. The Defendants argue that partial summary judgment is warranted because the ICCTA cannot be applied retroactively to those claims.

III. STANDARD OF REVIEW

Summary judgment is appropriate "[i]f the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." FED. R.CIV.P. 56(c). The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the non-moving party lacks evidence to support an essential element of its case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Logan v. Denny's, Inc., 259 F.3d 558, 566 (6th Cir.2001). In response, the non-moving party must present "significant probative evidence" to show that "there is [more than] some metaphysical doubt as to the material facts." Moore v. Philip Morris Cos., 8 F.3d 335, 339-40 (6th Cir.1993). "[S]ummary judgment will not lie if the dispute is about a material fact that is `genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In evaluating a motion for summary judgment, the evidence must be viewed in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The non-moving party, however, "may not rest upon its mere allegations ... but ... must set forth specific facts showing that there is a genuine issue for trial." FED.R.CIV.P. 56(e); see Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Searcy v. City of Dayton, 38 F.3d 282, 286 (6th Cir.1994). The mere existence of a scintilla of evidence in support of the non-moving party's position will not be sufficient; there must be evidence on which the jury could reasonably find for the non-moving party. Anderson, 477 U.S. at 251, 106 S.Ct. 2505; Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.1995).

IV. ANALYSIS

There exists within our nation's jurisprudence a presumption against retroactive legislation. Landgraf v. USI Film Prods., 511 U.S. 244, 265, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (citing Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 842-44, 855-56, 110 S.Ct. 1570, 108 L.Ed.2d 842 (1990) (Scalia, J., concurring)). This presumption arises from the fact that "[e]lementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly; settled expectations should not be lightly disrupted." Id. (citations omitted). The presumption will be overcome, however, when Congress has clearly intended for a statute to be applied to conduct that predated its enactment. Bejjani v. Immigration & Naturalization Serv., 271 F.3d 670, 676 (6th Cir.2001) (citations omitted).

Congress has not clearly expressed an intent for the ICCTA to be applied retroactively. Nonetheless, before applying the foregoing presumption, the Court must first determine whether the provisions of the ICCTA relied upon by the Plaintiffs have any retroactive effect at all. As the...