Randall Larramore of the Law Offices of Paty, Rymer & Ulin, P.C., recently won a Plaintiff’s verdict for three violations of the Federal Truth in Leasing Regulations.

    The Federal Truth in Leasing Regulations are a set of regulations promulgated by the Department of Transportation which govern the leasing arrangements between owner-operators and commercial carriers. Among other provisions, the Regulations prohibit a carrier from forcing or mandating that the owner-operator lease equipment, such as a satellite system, from the carrier. In addition to the prohibition on forced rentals, the Regulations also require that this prohibition be explicitly stated within the written lease between the parties.

    The Regulations prohibit the imposition of charge backs or surcharges, such as for insurance, unless the charge is explicitly identified within the lease. This situation often arises when a carrier increases its insurance deductions from its owner-operators without receiving written consent. The Regulations also prohibit “charging-back”, (deducting from a drivers compensation) for loss of cargo unless the carrier provides a written itemization, explanation and method of calculation prior to the deductions.

    In the case of Walden v. Great Southern Xpress, 4:03-CV-053 – HLM, the Plaintiff received a directed verdict against the carrier because of its failure to comply with the above provisions. In Walden, the Great Southern Xpress’ written lease mandated that the driver rent a satellite system from the carrier itself. Also, during the term of the lease, Great Southern Xpress unilaterally implemented a 3% surcharge against the driver allegedly because of insurance premium increases. The Defendant unilaterally implemented this policy with no negotiations with, or with no signed consent of, the owner-operator.

    After the close of evidence, the United States District Court for the Northern District of Georgia at Rome, the Honorable Robert L. Vinning presiding, awarded a directed verdict for the Plaintiff for all three causes of actions for violations of the Regulations. With regard to the satellite system and insurance purchase, the Court awarded the return of any monies wrongfully withheld.

    The Court also awarded the Plaintiff a verdict for violations of the Regulations with regard to the wrongful deductions for cargo loss. The Court, however, then applied the Georgia state law concept of off-set to those monies wrongfully deducted for the loss of cargo. This aspect of the Court’s opinion is currently subject to the Plaintiff’s Motion for Reconsideration, in which Plaintiff argues that the state law theory of off-set is preempted by the Federal regulatory scheme. The Court’s Order with regard to this issue will be posted on this site.