Owner-Operator Independent Drivers v. Arctic Exp.

• Decision Date: 22 October 2003
• Docket Number: No. 97-CV-750.,97-CV-750.
• Citation: 288 F.Supp.2d 895
• 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

288 F.Supp.2d 895

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.

October 22, 2003.

COPYRIGHT MATERIAL OMITTED

Gregory Michael Cork, Paul D. Cullen, Sr., The Cullen Law Firm, Washington, DC, James Burdette Helmer, Jr., Paul Bryan Martins, Helmer Martins & Morgan, Cincinnati, OH, Joyce E. Mayers, Cullen Law Firm, Washington, DC, for Plaintiffs/Counter Defendants.

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

OPINION AND ORDER

MARBLEY, District Judge.

I. INTRODUCTION

This case is a class action involving escrow funds that violated the truth-in-leasing regulations. This matter is before the Court on three Motions filed by the Defendants Arctic Express, Inc. ("Arctic") and D & A Associates, Ltd. ("D & A") and one Motion filed by the Plaintiffs. The Defendants' Motions are (1) a Motion for Reconsideration of the Court's July 11, 2003, Order Denying Defendants' Motion for Partial Summary Judgment; (2) a Motion to Decertify the Class; and (3) a Motion to Strike the Supplemental Declaration of Timothy Brickell. The Plaintiffs' Motion is for Summary Judgment on Damages.

For the following reasons, the Court DENIES the Defendants' Motion for Reconsideration; DENIES the Defendants' Motion to Decertify the Class; DENIES the Defendants' Motion to Strike; and DENIES the Plaintiff's Motion for Summary Judgment on Damages.

II. BACKGROUND¹

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. On September 4, 2001, the Court certified a class, defined as follows:

All independent truck owner-operators who have (1) entered agreements with Defendant D & A Associates, Ltd., which purport to lease, with the option to purchase, trucking equipment under the terms of D & A's equipment lease/purchase agreement, and (2) leased that equipment to Defendant Arctic Express, Inc. under the terms of Arctic's federally-regulated motor carrier lease agreement.

Owner-Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., Case No. C2: 97-CV-00750, 2001 U.S. Dist. LEXIS 24963, at *16 (S.D.Ohio. Sept. 4, 2001).

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 Arctic Express, 159 F.Supp.2d at 1076 (finding that the Defendants had "absconded with the Plaintiffs' escrow funds"). Having thus granted summary judgment to the Plaintiffs on the issue of liability, the sole issue remaining for trial is damages.²

On August 21, 2003, the Eighth Circuit issued an opinion, Owner-Operator Independent Drivers Ass'n, Inc. v. New Prime, Inc., 339 F.3d 1001 (8th Cir.2003). The Eighth Circuit made two holdings that are relevant here. First, the court held that the Interstate Commerce Commission Termination Act ("ICCTA"), 49 U.S.C. §§ 14101-02 and 14704, under which the Plaintiffs bring their claims, may not be retroactively applied to agreements entered into before its effective date of January 1, 1996. Id. at 1007. Second, the court affirmed the denial of class certification in that case, finding that class issues did not predominate where each individual class member's account would need to be examined to determine damages, including set-offs. Id. at 1012.

In its March 3, 2000, Opinion and Order,³ this Court relied on a previous Eighth Circuit decision in the New Prime case. Arctic Express, 87 F.Supp.2d at 824-25, 831-32 (relying on Owner-Operator Indep. Drivers Ass'n, Inc. v. New Prime, Inc., 192 F.3d 778 (8th Cir.1999)). The Court specifically noted that both the legal issues and the facts of the two cases were similar. Id. at 824-25.

The Defendants now seek to have this Court revisit two of its previous decisions on the basis of the new opinion in the New Prime case. First, the Defendants seek reconsideration of the Court's July 11, 2003, Opinion and Order denying the Defendants' Motion for Partial Summary Judgment. In that Motion, the Defendants sought summary judgment on the claims of all class members, including class representative Carl Harp, whose claims were based on lease-purchase agreements entered into with D & A before January 1, 1996. The Court denied the Defendants' Motion, holding that the provisions of the ICCTA relied upon by the Plaintiffs have no retroactive effect. The Court's reasoning, in essence, was that the ICCTA did not take away nor impair a vested right, nor create a new obligation or duty, nor attach a new disability, since it merely created a private right of action for violations that could already have been enforced in court by the Interstate Commerce Commission ("ICC"). This holding is contrary to the August 21, 2003, holding of the Eighth Circuit Court of Appeals that the ICCTA, by expanding the class of plaintiffs who may bring claims, altered the motor carriers' substantive rights, thereby having a retroactive effect.

The second decision that the Defendants seek to change is the Court's September 4, 2001, Opinion and Order granting the Plaintiffs' Renewed Motion for Certification of Class. The Defendants argue that the Eighth Circuit's decision upholding denial of class certification in a very similar case is directly on point and requires this Court to decertify the class here. The Defendants contend that here, as in New Prime, the existence of individual issues regarding proof of the Plaintiffs' damages, including determination of the balance of escrow accounts after offsets, establishes that common issues do not predominate within the meaning of Rule 23(b)(3).

Also before the Court is the Plaintiffs' Motion for Summary Judgment on the issue of damages. The Plaintiffs argue that they are entitled, as a matter of law, to recover the full amount deposited by class members in their maintenance escrow funds because the Defendants failed to comply with the regulatory requirement that they account for expenses deducted from those funds. The Plaintiffs contend that, as a result of the Defendants' wrong-doing, they are incapable of proving the amount of their damages with certainty. They argue that the Defendants must bear the burden of this uncertainty.

In the Plaintiffs' Motion for Summary Judgment on Damages, the Plaintiffs sought judgment against the Defendants in the amount of $16,805,388 plus interest of $6,035,196, for a total of $22,840,584. In submitting their Reply to Defendants' Opposition to Motion for Summary Judgment on Damages, the Plaintiffs amended their requested recovery to $16,464,876, with interest of $5,922,386, for a total of $22,387,262. In support of this emendation, the Plaintiffs submitted a Supplemental Declaration of Timothy Brickell. The Court, in its April 28, 2003, Order, had set July 31, 2003, as the deadline for class members to opt out of participation in this case. According to Brickell's Supplemental Declaration, the Plaintiffs' counsel, as of August 7, 2003, had received 13 executed exclusion forms. Brickell computed the total maintenance contribution of those 13 class members, which he then deducted from the original figure of $16,805,388 to arrive at $16,464,876. The Plaintiffs' Reply, filed on August 11, 2003, was the Plaintiffs' first submission to the Court following the July 31, 2003, deadline.

After receiving the Plaintiffs' Reply to Defendants' Opposition to Motion for Summary Judgment on Damages, the Defendants filed a Motion to Strike the Supplemental Declaration of Timothy Brickell. In support of that Motion, the Defendants argue that Local Rule 7.2(E) and Rule 6 of the Federal Rules of Civil Procedure require that any affidavit in support of a motion be submitted with the party's primary memorandum in support of that motion. The Defendants contend that affidavits attached to a reply memorandum are only permissible to the extent they rebut issues raised in opposition to the motion. Since the Supplemental Declaration of Timothy Brickell raised new issues, the Defendants argue, it should be struck.

III. ANALYSIS

A. Motion for Reconsideration

1. Standard of Review

As a general principle, motions for reconsideration are granted if the moving party demonstrates: (1) a clear error of law; (2) newly discovered evidence that was not previously available to the parties; or (3) an intervening change in controlling law. GenCorp., Inc. v. Am. Int'l Underwriters, 178 F.3d 804, 834 (6th Cir.1999). Motions for reconsideration do not allow the losing party to "repeat arguments previously considered and rejected, or to raise new legal theories that should have been raised earlier." Nat'l Metal Finishing Co. v. BarclaysAmerican/ Commercial, Inc., 899 F.2d 119, 123 (1st Cir.1990); see also Am. Marietta Corp. v. Essroc Cement Corp., Case No. 01-3752, 59 Fed.Appx. 668, 671-72, 2003 U.S.App. Lexis 3211, at *9 (6th Cir. Feb. 19, 2003) (motion for reconsideration "should not be used to relitigate issues previously considered").

2. Analysis

The Defendants argue that the August 21, 2003, Eighth Circuit decision establishes both a "clear error of law" and an "intervening change in controlling law." When ...