OWNER-OPERATOR INDEPENDENT DRIVERS ASS’N v. MAYFLOWER TRANSIT (August 9, 2010)

Mayflower Transit is in the business of transporting household goods from one location to another. It frequently provides this service by leasing equipment. Mayflower pays the truck's owner-operator a per-mile fee. Federal regulations require Mayflower's trucks to be insured. Mayflower acquires insurance and deducts its cost from the fees it pays the owner-operators. A group of drivers and their trade association filed suit against Mayflower under 49 U.S.C. § 14704(a)(2), contending that Mayflower’s practice violates a federal regulation that prohibits a motor carrier from requiring its drivers to purchase any product or service from it as a condition of its lease. Judge Baker (S.D. Ind.) dismissed some claims on statute of limitations grounds and dismissed the insurance claims on the ground that the deduction did not violate the regulation. The owner-operators appeal.

In their opinion, Chief Judge Easterbrook and Judges Williams and Tinder affirmed and remanded. First addressing the limitations issue, the Court noted that § 14705(c) contains a two-year statute of limitations applicable to the administrative proceedings referenced in § 14704(b) but does not mention § 14704(a)(2). The district court applied the two-year statute anyway, concluding that a scrivener's error was responsible for the omission. The Court disagreed. It conceded that the text of the statute was inconsistent with the legislative history and that Congress may have intended a two-year limitations period. Nevertheless, the unambiguous text governs. Since the statute therefore contains no internal statute of limitations, the court concluded that the residual four-year limitations period applies. On the merits, the Court agreed with the district court. The federal regulation requires a motor carrier to purchase insurance -- the regulation is silent on who pays for it. Furthermore, the regulation relied on by the owner-operators only prohibits the lessor from requiring the purchase of a good or service from it. Since Mayflower does not and cannot sell insurance, the insurance deduction cannot be the purchase of a good or service from Mayflower. Finally, another section of the same regulation requires a lessor to specify in its lease the amount of any insurance chargeback. Although the plaintiffs suggest a convoluted reading of that section, the plain meaning of the section is inconsistent with the notion that Mayflower's charge for insurance is prohibited.