TLA TTL October 2021

The

Transportation Lawyer A Comprehensive Journal of Developments in Transportation Law

October 2021 Volume 23 Number 2

translaw.org

A Joint Publication of the Transportation Lawyers Association and the Canadian Transport Lawyers Association

ctla.ca

Transportation Lawyers Association 2021–2022 Executive Committee Members President Steven M. Canty Orleans Canty Novy LLC 65 E. Wacker Pl., Ste. 1220 Chicago, IL 60601 (847) 625-8200 scanty@ocnlaw.com President-Elect Christopher M. Kelly Gallivan, White & Boyd, P.A. 6805 Morrison Blvd., Ste. 200 One Morrocroft Centre Charlotte, NC 28211 (704) 227-1940 ckelly@gwblawfirm.com

Representatives-At-Large Peggy Smith Bush Term 7/21 – 5/22 Marshall Dennehey 315 E. Robinson St., Suite 550 Orlando, FL 32801 (407) 420-4380 psbush@mdwcg.com Jeffrey E. Cox Term: 6/21 – 5/23 Law Office of Seaton & Husk, LP 2240 Gallows Rd. Vienna, VA 22182 (703) 573-0700 jeffcox@transportationlaw.net

First Vice President Eric R. Benton Lorance Thompson, PC 2900 N. Loop W., Ste. 500 Houston, TX 77092 (713) 863-2781 erb@lorancethompson.com

Beth Anne Lashuk Term: 6/21 – 5/23 Jurca & Lashuk, LLC 141 East Town St., Ste. 202 Columbus, OH 43215 (614) 846-9137 blashuk@jurcalashuk.com

Second Vice President Katherine T. Garber Clark Hill Strasburger 909 Fannin St., Ste. 2300 Houston, TX 77010 (713) 951-5665 kgarber@clarkhill.com

Thomas C. Martin Term: 07/21 – 05/22 Price, Meese, Shulman & D'Arminio, P.C. 50 Tice Blvd.

Woodcliff Lake, NJ 07677 (201) 391-3737 tmartin@pricemeese.com

Secretary/Treasurer Louis Amato-Gauci Miller Thomson LLP Scotia Plaza 40 King St., Ste. 5800 PO Box 1011 Toronto, ON M5H 3S1 Canada (416) 595-8551 lamatogauci@millerthomson.com

Paul B. Mello Term: 5/20 – 5/22 Hanson Bridgett, LLP 6689 Skyline Bridge Oakland, CA 94611 (925) 746-8460 pmello@hansonbridgett.com

Immediate Past President John F. Wilcox, Jr. Dysart Taylor Cotter McMonigle & Brumitt, P.C. 4420 Madison Ave. Kansas City, MO 64111 (816) 931-2700 jwilcox@dysarttaylor.com Voting Past Presidents Dirk H. Beckwith Foster, Swift, Collins & Smith, PC 28411 Northwestern Hwy., Ste. 500 Southfield, MI 48034 (248) 539-9918 dbeckwith@fosterswift.com Frank Botta The Lynch Law Group, LLC 375 Southpointe Blvd., Ste. 100 Canonsburg, PA 16066 (724) 776-8000 fbotta@lynchlaw-group.com Steven B. Novy Orleans Canty Novy LLC 65 E. Wacker Pl., Ste. 1220 Chicago, IL 60601 (847) 625-8200 snovy@ocnlaw.com Greg E. Summy 101 W. Main St., 500 World Trade Center Norfolk, VA 23510 (757) 408-1038 gsummy@vanblacklaw.com Richard A. Westley Blitch Westley Barrette, S.C. 7633 Ganser Way, Ste. 100 Madison, WI 53719 (608) 829-2981 rwestley@bwesq.com

Jason Orleans Term: 6/21 – 5/23 Orleans Canty Novy LLC 65 E. Wacker Pl., Ste. 1200 Chicago, IL 60601 (847) 625-8200 jorleans@ocnlaw.com Melissa T. Richardson Term: 5/20 – 5/22 Walters Meadows Richardson LLC 771 Corporate Drive, Ste. 900 Lexington, KY 40503 (859) 219-9090 melissa@wmrdefense.com Kim E. Stoll Term: 6/21 – 5/23 Fernandes Hearn, LLP 155 University Ave., Ste. 700 Toronto, ON M5H 3B7 Canada (416) 203-9509 kim@fernandeshearn.com CTLA Representative-At-Large Heather C. Devine Alexander Holburn Beaudin + Lang LLP 2700 – 161 Bay St. Toronto, ON M5J 2S1 Canada (416) 575-2365 hdevine@ahbl.ca TLA EXECUTIVE OFFICE 111 West Jackson Blvd., Ste. 1412 Chicago, IL 60604 (913) 222-8652; Fax: (913) 222-8606 Email: tla-info@kellencompany.com Website: www.translaw.org

Canadian Transport Lawyers Association 2020–2021 Officers and Directors President/Président Jean-Francois Bilodeau Borden Ladner Gervais LLP 1000 Rue De La Gauchetière Ouest, Ste. 900 Montreal, Quebec H3B 5H4 (514) 878-2631 jbilodeau@blg.com

Directors/Administrateurs Pui Hong Trimac Transportation 3215 - 12 St. Calgary, AB T2E7S9 (403) 298-5140 phong@trimac.com

Vice President & Secretary/ Vice-président et secrétaire Carole McAfee Wallace Fernandes Hearn LLP 155 University Ave., Ste. 700 Toronto, Ontario M5H 3B7 (416) 203-9551 carole@fhllp.ca

Jason Lattanzio Alexander Holburn Beaudin & Lang LLP 2700 -700 West Georgia St. Vancouver, BC V7Y 1B8 (604) 484-1747 jlattanzio@ahbl.ca

Treasurer/Trésorier Robin Squires Borden Ladner Gervais LLP 27 Adelaide St. W Toronto, Ontario M5H 4E3 (416) 367-6595 rsquires@blg.com Director of Communications/ Directeur des communications Elizabeth Fashler Fasken Martineau DuMoulin LLP 3400, 350 - 7 Ave. SW Calgary, AB T2P 3N9 (403) 261-6153 efashler@fasken.com

Orvel Currie DD West LLP 300-305 Broadway Winnipeg, MB R3C 3J7 (204) 957-6401 ocurrie@ddwestllp.com Eric Machum Metcalf & Co 1459 Hollis St. Halifax, Nova Scotia B3J 1V1 (902) 420-1990 ericmachum@metcalf.ns.ca Jaclyne Reive Miller Thomson LLP 5800 - 40 King St. W Box 1101 Toronto, ON M5H3S1 (647) 457-1437 jaclyne.reive@gmail.com Sarah Routhier Stein Monast 97 Quai St-Andre Quebec, QC G1K 3Y3 (418) 640-4414 sarah.routhier@steinmonast.ca Past President/Ancien président Heather C. Devine Alexander Holburn Beaudin & Lang LLP 161 Bay St., 27th Floor, PO Box 508 Toronto, Ontario M5J2S1 (416) 572-2363 hdevine@ahbl.ca CTLA Website: www.ctla.ca

The Transportation Lawyer Copyright © 2021. TLA and CTLA. All rights reserved.

Publication Schedule Submission Deadlines November 16, 2021 February 3, 2022 PLEASE submit material by email in time to meet these deadlines to TLA Editor, Eric R. Benton (see address above).

You can also call or email either editor with questions.

The Transportation Lawyer (ISSN 1533 6018) is published five times per year (Feb., April, July, Oct. and Dec.) It is published by the Transportation Lawyers Association. POSTMASTER: Send address change to The Transportation Lawyer, 111 West Jackson Blvd., Ste. 1412, Chicago, IL 60604, email: TLA-info@kellencompany.com.

October

Contents

Association Business

TLA Feature Articles

Messages from the Presidents TLA – Steve Canty ............................................................................................. 2

Sudden Medical Emergencies in the Trucking Industry: Federal Motor Carrier Safety Regulations to the Rescue – Chris Cotter ................................................ 29

Steve Canty Bio – Tricia Canty........................................................................... 4

Voting Trusts: Like Cicadas, They’re Back Again – Greg E. Summy.................... 32

President’s Acceptance Speech – Steve Canty................................................. 6

Autonomous and Electric Cars and Trucks: Did They Survive COVID-19? – Arthur D. Spratlin Jr. ............................................................................................ 36

CTLA — Jean-Francois Bilodeau ....................................................................... 8

Editors’ Columns TLA — Eric R. Benton ....................................................................................... 10 CTLA — Elizabeth Fashler ................................................................................. 11 TLA Secretary/Treasurer’s Report – Louis Amato-Gauci..................................

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The Bull Shipper’s Award–the Highest Honor TLA Bestows? – Kathleen C. Jeffries .......................................................................................

14

2021 Lifetime Achievement Award Presented to Steven Novy – Richard Westley .............................................................................................

16

Letter of Appreciation – Steven Novy ............................................................

17

2021 Distinguished Service Award Presented to Patrick E. Foppe – Fritz R. Damm.................................................................................................

18

Letter of Appreciation – Patrick E. Foppe .......................................................

19

2021 Distinguished Service Award Presented to Stephanie Penninger – J. Allen Jones III............................................................................................. 20 Letter of Appreciation – Stephanie Penninger...............................................

21

54th Annual Transportation Law Institute: Cleveland, OH – Stevan R. Baxter and J. Allen Jones III, 2021 TLI Program Chairs................. 22

Personal Injury Fraud in the Transportation Industry – Campbell T. Roper ......

41

Revisiting the Limitation of Liability in Cargo Claims Under the Carmack Amendment – Steven B. Belgrade and Adam H. McCabe ............................... 44 So What Happened on the Roads During the Pandemic? – Tammy J. Meyer ................................................................................................. 48

TLA Case Note MCS-90 Case Law Update: Indiana’s Expansion of MCS-90 Requirement to Intrastate Transport—Progressive Southeastern Insurance Co. v. B&T Bulk, LLC, et al. – Christopher R. Whitten, Michael T. Terwilliger, and Matthew K. Phillips... 50

CTLA Feature Articles Friendly Skies No More: The Effort to Combat Coronavirus and Air Rage – Jason Lattanzio and Nicolas Pimentel................................................................ 52 Application of statutory limitations of liability in the face of silence by shippers and carriers for carriage of goods within Canada – Eric Machum and Luke Hunter, Metcalf & Company, Halifax, NS................................................... 56 Autonomous Vehicles and the Trucking Industry in Canada – Pui Hong ......... 60

Membership Section

TLA Annual Conference Sponsors.................................................................. 24

In Memoriam TLA – Kenneth E. Siegel .......................................................... 64

TLA Annual Conference Photos ..................................................................... 25

Calendar – The Year Ahead ............................................................................ 65

TLA Committee Report Annual Membership Report – Fritz R. Damm and Patrick E. Foppe ............... 27

TLA Membership Application ........................................................................ 66 TLA Committees Application Form .................................................................67 CTLA Membership Application ...................................................................... 68

Association Business

TLA

President’s Message

W

e are full swing into fall. The arrival of cooler weather brings artists ranging from Louis Armstrong to Black Sabbath to Public activities that many people look forward to this time of year. Enemy to Whitney Houston.2 Accordingly, this notable site has Certainly there is the welcome of college football, changes in something for everyone. the colors of leaves and the approach of various holidays. From a For those of you who did not enjoy Headbangers Ball on MTV, Transportation Lawyers Association (“TLA”) perspective, however, the city of Cleveland has lots more to offer.3 The city is famous fall means the anticipation of the Transportation Law Institute for its sports teams, including the Cleveland Indians, Cleveland (“TLI”). In fact, for the last 52 years, the TLA has hosted its annual Cavaliers and Cleveland Browns. Beyond sports, it is culturally rich TLI event at outstanding venues all across North America. Most and historically significant. In fact, John D. Rockefeller founded recently, however, the 2020 installment of the TLI was held “vir- Standard Oil in Cleveland long before the successor companies, tually.” Originally planned as a “Cajun” version of the TLI event Amoco Corporation and British Petroleum, were recognizable. set for New Orleans, Louisiana, TLA had to adapt Nonetheless, for others, Cleveland will always be quickly to make the TLI a remote event in order to associated with the sitcom The Drew Carey Show. accommodate the response to the health crisis. A The program, which aired from 1995–2004, was quick note of thanks to Charles Riley and Clark based on Cleveland native Drew Carey and his Monroe for their efforts surrounding the 2020 common man-themed interactions with work, TLI. Hopefully, TLA can make a return visit to New friends and life in Cleveland.4 As a matter of fact, Orleans sometime soon in the future. As successful the musical intro to the show adopted the song as the virtual seminars have been in the past year, “Cleveland Rocks,” which was originally performed as anyone who has ever been to a concert knows,

by Ian Hunter and later covered by the band The there is nothing quite like a live event. Fortunately, Presidents of the United States. The song title now it looks like the 2021 TLI will be live and in person. serves as a slogan for the town. Regardless, get As such, saddle up for a “rock and roll” version of your bandmates together and we will see you in the TLI on November 12, 2021, at the Metropolitan Ohio.

Steve Canty at The 9 Hotel in Cleveland, Ohio.

On a business note, a quick shout of praise to TLI Committee Co-Chairs Stevan Baxter and our Young/New Lawyers Committee for involving Allen Jones are the promoters of the show this year and will all of the latest inductees to our organization. Thanks also to all ensure that “Cleveland Rocks.” In addition to an outstanding the Committee Co-Chairs for promoting the committee operaeducational program, the Committee Co-Chairs have enlisted tions with the TLA. As a theme throughout 2021-2022, we are local talent to allow for the exploration of the sights, sounds and welcoming all members (new and aged) to become active in the tastes of the “Forest City.” Indeed, be sure to check out the dining TLA. Sitting on the proverbial sidelines is not encouraged. Rather, and entertainment activities planned to guarantee total emersion spectating is more appropriate for Professional Bull Riding.5 On into what the town has to offer. “Simply put, this is not a one-note the contrary, we encourage the membership to actively particitown, but a place rich in diversity and depth.”1 pate and seek a role in the association.

For a city that is the home of the Rock & Roll Hall of Fame, On a personal note, I would like to express my continuing correlation between “forests” and the city of Cleveland is a little gratitude for the opportunity to serve as an officer of the TLA. I unclear. It is a little clearer, however, how Cleveland became asso- thank the Past Presidents who previously provided the encourciated with rock music. As history goes, a local disc jockey named agement to be active and involved in this organization. Moreover, Alan Freed on WJW (am) promoted jazzy and bluesy music in the my ongoing appreciation is extended for the work and efforts of early 1950s. He is credited during his tenure of spinning records TLA’s Representatives-at-Large Paul Mello, Melissa Thompson with coining the phrase “rock and roll.” A full examination of the Richardson, Jeff Cox, Kim Stoll, Jason Orleans, Beth Lashuk, rock genre can be conducted at the Rock & Roll Hall of Fame, with Peggy Bush, and Tom Martin, as well as current officers a complete accounting of the origins of the music, as well as the Chris Kelly, President-Elect; Eric Benton, First Vice President; artists who made the music famous. A visit to the musical gallery Kathy Garber, Second Vice President; and Louis Amato-Gauci, will also provide some insight into the eclectic inductees now Secretary/Treasurer. Their behind the scene work and commitenshrined in the annals of history. Indeed, past honorees include ment truly make them the “roadies” of TLA.

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1

https://thefirsttenwords.wordpress.com/2017/07/03/cleveland-rocks/.

Based on an unscientific poll, no person has ever admitted to having been to a Black Sabbath concert and a Whitney Houston concert within the same lifetime.

3 This would include people who did not know, at one point in time, MTV actually played music.

4 Although Drew Carey was engaging in his own sitcom, by this author’s standards, he is not a substitute for the irreplaceable Bob Barker as host of The Price is Right.

5 If anyone thinks that TLA members should be actively riding bulls, please see video of Tuff Hedeman unsuccessfully ride the famous bull Bodacious.

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TLA Mission Statement The Transportation Lawyers Association (“TLA”) is an independent bar association, comprised of in-house, government and private practice attorneys. Its members assist providers and commercial users of domestic and international logistics and transportation services, in all modes. TLA is dedicated to keeping its members ahead of the constant changes in the specialized legal environment governing all aspects of the supply chain and passenger travel. With commitment to excellence in continuing legal education, and a long tradition of collegiality and exchange of ideas, TLA is a collaborative resource for lawyers seeking to maximize the quality of the legal services they provide and enhance their professional lives.

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Association Business

TLA President Biography: Steven M. Canty Tricia Canty

“Whatever you are, be a good one.”—origin disputed

H

ow do you write about someone with whom you live without coming across as too biased? Is it possible to be “fact-checked” when trying to write a biography about your spouse? Regardless, this is my best nonpartisan account of the incoming Transportation Lawyers Association (“TLA”) President, and my husband, Steven Canty. I will try to refrain from teasing and ribbing. Likewise, I will also try to refrain from being gushy and syrupy. In light of the fact that my background is in nursing, and certainly not literature, what follows may turn into a mush of unpoetic garble.

Regardless, in trying to get some historical context for this biography, I noticed that Steve, although not born in Illinois, shared some characteristics of two fellow Illinois transplants. When the State of Illinois is mentioned, it is tough not to think of the 16th President of the United States, Abraham Lincoln. It is alleged that Lincoln once said, “Whatever you are, be a good one.” Whether he actually did, it does sound like something that Lincoln would say. Of course, I do not pretend that Steve is the equivalent of the “Great Emancipator” or the leader who preserved the Union of the United States.1 Nonetheless, a lawyer himself, Lincoln was a dedicated family man and has been described as “guarded, patient, energetic and easygoing” by the Lincoln Institute. He was contemplated as a “simple, pure and sincere” man.2 Those qualities I can certainly ascribe to Steve.

Unfortunately, Steve’s ability to grow a beard or fashionably wear a stovepipe hat fails miserably.

A second person of comparison is Cyrus McCormick. Although maybe not famous outside of Chicago, McCormick was the founder of the McCormick Harvesting Machine Company, which ultimately became part of the International Harvester Company.

As a hardworking industrialist, Mr. McCormick’s dying words were “Work, work, work.” Certainly, many wives consider their husbands to be hardworking. My comment on Steve’s work ethic is premised on the births of our three children. Because of his efforts to “squeeze” a little more work in, I had to track Steve down in Rockford, Illinois; Evansville, Indiana; and somewhere near the Wisconsin border for each child, respectively.

Who is Steve Canty? Steve was born in the autumn of 1970 in Boston, Massachusetts. He grew up in the town of East Walpole, Norfolk County, Massachusetts (pop. 18,149).3 Walpole is located about 13 miles south of downtown Boston and was known for little with the exception of being the location of the state prison. Although now a suburb of Boston, the town was a little edgier in the 1970s with a good portion of the population working for a large company that manufactured roofing shingles.

Steve is the youngest of three sons born to two schoolteachers. Along with his two brothers, the boys would create memories on their dead-end street, consisting of small houses with big backyards and lots of woods. Running the neighborhood, the kids would build forts in any available tree, play every sport depending on the season, shoot baskets on a backboard that was hammered to a utility pole, make up games that spilled over into neighboring yards, pick fruit from local trees (some for eating, most for throwing), and creatively wrap any type of ball with fluorescent tape to try to keep a competition going beyond dark. It was a neighborhood where you knew who lived in every house, and also knew that every elderly person would report on your conduct.

Despite not having lived in Massachusetts for many years, Steve still visits his childhood next-door neighbor every year, who was one of the locals always looking out for the boys and who probably had the largest vegetable garden one could ever imagine in her backyard . . . and still does. Steve attended Old Post Road School and then Bird Middle School (fifth grade only). Both schools required walking paths through the woods in order to get there. Curiously, he and his brothers for some unknown reason began collecting steel beer cans while walking home from school, cans that to this day consume a good portion of the crawl space in our home. One man’s trash . . .

Steve’s first job was in kindergarten delivering The Boston Globe newspaper after school with his brothers. He ultimately got his own route delivering The Patriot Ledger, a job that gave insight into providing customer service and at the same time dealing with patrons who did not pay, all the while trying to avoid roaming dogs (during a time before leash laws). In particular, it was a daily battle of evasion with the Razwell family’s German mutt/Shepard that barked and scowled constantly—a battle that was successful, until it was not. In fact, Steve still has scars from many dog encounters from his youth.4 At age eleven, Steve’s family moved closer to his grandparents in Woodstock, McHenry County, Illinois. An area that was originally dairy farms, it is now in essence a suburb of Chicago. The downtown includes a historic, turn-of-the-century square, which is anchored by the landmark Woodstock Opera House. Woodstock was named one of the nation’s Dozen Distinctive

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Destinations in 2007 by the National Trust for Historic Preservation.5 Some famous notables who graced the stage of the Opera House include Paul Newman, Tom Bosley (aka Mr. C from Happy Days), and Orson Welles, who also attended school locally. The town served as the setting for the movies Planes, Trains and Automobiles and Groundhog Day. Bill Murray recently returned to Woodstock to film the 2020 Superbowl LIV halftime Jeep commercial.

Adapting to the local surroundings, Steve’s youthful employment migrated to agricultural pursuits, including detasseling corn and bailing straw on local farms. I am guessing that there is nothing quite like spending an August day in a haymow to change your perspective on work. By the time Steve turned sixteen, he was in a union, making union scale with benefits at a grocery store maintaining the dairy department and unloading trucks. It was an education for a youngster working with grizzled adults when the lights in the store went down, the customers were gone and the trucks arrived at the loading dock.

Steve attended Olson Middle School where he met a group of friends that he has remained close to for his entire life. In fact, there is a reference in the 1986 movie Stand by Me where the star, Richard Dreyfuss, makes a comment about never having friends quite like the ones you had when you were twelve. That fairly sums up a group of seven or eight guys Steve still stays in touch with on a regular basis.

Secondary education would be completed at Woodstock High School (“WHS”) where he played golf and baseball and was captain of the swim team. It was during Steve’s freshman year in high school when he realized he wanted to become an attorney.

The exact moment can be remembered clearly when Steve ran into one of his teachers at the local library. Ironically, when Steve indicated that he wanted to become a lawyer, the teacher suggested he try something different that might prove easier to get a job. This advice did not matter much to Steve. He graduated from WHS in 1989 as an Illinois State Scholar and would start his path to become an attorney anyway.

Steve’s journey took him to the University of Illinois Urbana-Champaign (“UIUC”) where he studied political science. He worked his way through undergrad on campus slinging pizza at Bub’s Pub.6 He spent summers as a lifeguard and working on a tractor crew mowing highway ditches.7 After graduation, Steve attended DePaul University College of Law (“DePaul”) in Chicago, Illinois. His big treat was to walk to the corner store to grab a Mountain Dew and the newspaper. If anyone knows Steve, he can often be seen with a newspaper spread open wide, reading every word. During his time at DePaul, Steve would intern at the McHenry County State’s Attorney’s office. In addition to interning, during the summers he also worked at a lumberyard at night and on weekends.8 In 1994, he met his future wife, me, at a July 4th celebration. Oddly, for his own entertainment, Steve struck up a conversation with me telling fibs about being in dental school and offering to remove my incisors at a reasonable rate. It is difficult to explain how a silly and clearly ridiculous conversation sparked any interest. Eventually, I would start to visit him at DePaul on my weekends away from studying nursing at Northern Illinois University. Our “dates” consisted of grocery shopping, walking to the corner store for a Mountain Dew and a newspaper (of course), or eating at the Potbelly’s across the street from his apartment, perfect for two busy students. After many late nights studying at the library, Steve finally graduated with Honors and Order of the Coif in 1996.

In 1996, Steve landed an associate position at McKenna, Storer, Rowe, White & Farrug, joining the ranks of Steven Novy.

Novy would teach him everything he knew about defense litigation and the art of making the client happy. Eventually, they continued with Johnson & Bell, where they met Jason Orleans. Ultimately, they would branch out on their own to create Orleans Canty Novy, LLC on January 1, 2017.

Steve and I have been married since 2001. We have three teenaged sons, Jacob, Jackson and J.D.9 We are proud that Jacob will also attend UIUC in the fall. As busy as Steve can be with the firm, TLA, and clients, he always makes time for me and our sons. He has coached our boys in baseball, basketball, and soccer, watched as many of their games as possible, taught them how to hunt and fish, and has taken us on adventures across the United States that have created lasting memories for us all. Whatever Steve is, he is a good one.

1

A lthough not as famous as the Emancipation Proclamation, Steve did write a compelling paper on “Severe and Unusual Weather” for a geography course as an undergraduate student.

2 https://www.reference.com/history/character-traits-abraham-lincoln-c78f7e5507eb0915.

3 According to the 1970 Census.

4 T hings were evened out after the Razwell’s dog met its demise while chasing traffic.

5 https://en.wikipedia.org/wiki/Woodstock,_Illinois.

6 T he benefit of $.25 drinks was worth more than the wages actually earned.

7 T his job provided an appreciation of dealing with commercial traffic at highway speeds.

8 Steve knew the lumber company was in trouble when he was told that he, a law student, was their best salesman.

9 John David, because I know you were curious.

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TLA

President's Acceptance Speech

I

am going to let you in on a little secret. In 1998, I ghost drafted a paper that was presented at the Chicago Regional Seminar.

Why is that significant? Was it significant because of the outstanding legal content in the paper? I’m sure. For me personally, it was significant because it was my first exposure ever to the Transportation Lawyers Association. When I got home from the event, I told my wife a little bit about the organization and the seminar itself. In turn, she cocked her head and said, “People sitting around talking about transportation? What kind of organization is this?” I could tell by the look on her face that she had a firmly held belief that I spent the day playing cards.

So how do you explain the TLA to someone? I have heard a senior member of this organization describe the TLA as the “aristocracy of legal organizations.” Based on the outstanding legal minds that are in this group, this is probably an accurate statement. I also have heard another member of this organization describe the TLA as the closest thing to a fraternity/sorority a person will ever encounter in a professional group. Based on the lifetime relationships that TLA fosters, this is an accurate statement as well. I can certainly say from my mother’s perspective that she is glad I did not have to get a tattoo upon my initiation.

Nonetheless, I think there is more to the TLA than those two descriptions. Several years ago I was at a Continuing Legal Education event. During the afternoon break, I encountered another TLA member. We decided to grab lunch together. Initially there was two of us, and then there was three, and then five, and then eight of us getting together for lunch. How is it that eight TLA members who are at a non-TLA event, and who are all from different cities, end up having lunch together? How do you explain that? I can say one thing for certain, it was not because somebody was magnanimously picking up the lunch tab.

Additionally, how do you explain the reverence that TLA as an organization has for its members? Everyone is aware of TLA’s publication, The Transportation Lawyer. It has timely and relevant articles.

Significantly, however, in the back of the journal, the TLA publishes a notice any time a member of the organization passes away. The note identifies the person’s contributions to the TLA as well as their successes in life. Does the TLA recognize longstanding members? It certainly does, but more importantly, every single member in this room will one day “sooner or later” be remembered in TTL. Actually, from the Membership Committee’s perspective it should be “later rather than sooner.” Regardless, how do you explain this? What other organization does this?

Also, how do you explain the opportunity for young and new members to get involved in the organization? I recall going to my second or third TLA event. As I was walking out the door, my wife asked me what I had going on that day. In response, I told her that I

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was going to a TLA event and that I was actually going to be speaking. She cocked her head and looked at me and said, “What kind of organization is this?” Unfortunately for me she was no longer concerned that I would be spending the day playing cards. In actuality, she had serious concerns about any organization that would allow me to speak at one of its functions. As such, I would like to give a shout-out to Michael Spurlock and his committee, who had more confidence in me as a young attorney than the woman whom I have known for 27 years.

Much of my involvement in the TLA has been related to cochairing and assisting with various seminars. I recall the first time that I was appointed as a Co-Chair to the Chicago Regional Seminar.

Upon receiving the letter of notification, I was flattered to receive the position. Quite frankly, I was excited as well. Although this might be an old reference, for anyone who has seen the movie The Jerk with Steve Martin, there is the scene where Martin’s character finds out that he is published in the phone book for the first time.

Yeah, that is probably a good way to describe my excitement. So I would like to give a special thanks to past President Pat McMonigle for that opportunity. I also would like to thank the other past Presidents who have given me the chance to participate in a small part during their respective terms, including Gordon Hearn, Mark Blubaugh, Steve Novy, Dick Westley, and Dirk Beckwith. They did not micromanage. Rather, they just had the expectation that the job would get done. Thank you for the confidence. Thank you for the opportunity.

I have been asked several times what my goals and ambitions are for the organization in taking on this position. I must acknowledge that my ambitions were tempered somewhat once I learned that the TLA does not have a military or the ability to print money.

All teasing aside, the first goal is to do no harm. Is that a slogan taken from another industry? Perhaps. Nonetheless, it has application to the TLA. This is a beautiful organization, and its history and traditions should be respected. The second goal is to involve new and younger members within this group. Over the last year and a half, I was moved by the passing of several longtime members of this organization. Can they be replaced? No they can’t, but they can be complimented by cultivating a new group of members who are passionate about the TLA. In this regard, we do not have to look any further than our Young Lawyers Committee. In fact, based on the work of the two outgoing Chairs and the two incoming Chairs, we are going to hear a lot from that committee in the future. The third goal is to have active and engaged committees. We all know that TLA has outstanding seminars. What happens, however, when we do not have events? Additionally, what happens during the time between events? This is where our committees need to keep our membership active. With the help of the incoming President-elect, the goal is to have all committees and committee chairs active,

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involved and engaged. Indeed, committees that are active, involved and engaged will serve as a member benefit and contribute to the strength of our organization.

You know, I have referenced my wife, Tricia, probably two or three times during this monologue. I would probably be remiss if I did not introduce her. I met her as a 20-year-old student going into nursing school. She is a Registered Nurse who has worked in Infectious Disease and Cardiac Monitored Care. She has taken care of people on the worst days and the last days of their lives. I have come to find out that through her assistance with the Chicago Regional Seminar, assistance with TTL, and from attending TLA events, she is Facebook friends, Twitter partners and text buddies with more than 50 people in this organization. I have to concede, I am not sure if I should be worried about that.

Tricia and I have three boys together. It might be more appropriate to say that we have three guys who live with us, consume a lot of food and have done some serious damage to drywall. All kidding aside, we are very proud of our boys. Our oldest son, Jake, just graduated from high school. He had an outstanding youth and high school athletic career. He has always been passionate about sports. When he was about 7 years old, I came home from work on a Friday night and caught him sneaking out of bed at about 11 o’clock to watch San Jose State play Hawaii in football. We thought we had a degenerate gambler on our hands. Jake is a good student and will be attending the University of Illinois in the fall. Our middle

boy is Jackson. Engineering is his game. He took an engineering caseload during his freshman year in high school. Curiously, he recently said that he might be interested in becoming a police officer. Premed, prelaw, what’s the difference, right? Jack plays football and baseball, and he is truly a kid who has never had a bad day. Our youngest boy is J.D. If anybody is looking for an accountant, I think I have found your man. For a kid who just finished eighth grade, he’s got an outstanding sense of fiscal responsibility and a nose for business. He plays basketball, football and baseball, and he’s never met a box of cereal that he did not like.

Thank you for indulging me in this home movie. I also would like to thank the members of this organization who have taken these kids hunting and fishing, and to basketball games, football games and baseball games. I cannot explain why you did it. From my wife’s perspective, she cannot explain why you invited them back.

So how do you explain the TLA? It is an organization that is made up of some of the finest minds in the transportation industry.

It is an organization that has a reverence for its longtime members and embraces its new and young members. It is an organization that fosters friendships and relationships that last a lifetime. How do you explain all of this to someone? Well, fortunately you are all here. You all know this. Accordingly, no explanation is needed. I thank you for this assignment and will work as TLA’s humble and unworthy servant.

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CTLA

President’s Message

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• The Canada Labour Code and the administrative monetary penalear TLA and CTLA Readers, ties by Rosalind Cooper; I commenced my term as president of the CTLA in the COVID19 pandemic and will be terminating the presidency in the same • The termination clauses under the Canada Labour Code by Tim health and restricted environmental conditions. Our members and Lawson, Ben Aberant and Meghan Hillstrom; partners have had to contend with new ways of conducting business • The environmental, social, and governance issues facing the rail remotely and we have, for the most part, succeeded in maintaining transportation sector by Ray Chartier and Naba Shirazi; our business activities.

• Maritime demurrage recent case law by Robin Squires; The transportation business has continued to deliver goods • The considerations arising when buying a trucking throughout Canada and North America unhampered but with a shortcompany in Canada by Jaclyne Reive; and age of personnel and restricted capacity within the supply chain. The • A review of recent Transportation Safety Board challenges have been numerous for our members but of Canada finding in a recent incident involving solutions were found to maintain the transportation the Island Queen III in British Columbia by Saran flow of goods.

Sweet.

The CTLA has been conscious of its members This brief review of the articles featured in 2021 and our annual conference taking place virtually on reveal that our association caters to all modes of transOctober 22, 2021, will provide informative information to our members in areas such as the latest railway portation and offer a wide variety of subjects to our transactions involving Canadian and American carrimembers and followers which justifies the memberers, the topic of carbon transfers and its impact on the ship benefits of belonging to the CTLA. transportation industry, the latest developments in I sincerely hope that the COVID-19 situation will transportation labour-related issues, the latest develimprove with the vaccination which will allow us to opments pertaining to the Coastal Trade Act case law safely meet in person in 2022. The pandemic has on the use of foreign vessels in Canadian waters to allowed us to become more tech savvy and the develJean-François Bilodeau install underwater cables, the dramatic changes that opment of virtual conferences and presentation will took place in our courtrooms, and, to add some local remain a feature of professional organizations such as flavour, on the particularities of doing business in the CTLA to promote professional developments between live meetQuebec. ings and conference allowing members to maintain contact with one A new board will be elected at the Annual General Meeting that another throughout the year. will follow the annual conference and Carole McAfee Wallace will lead In closing, I wish to express my thanks and appreciation to the our association as its president in 2021-2022. I will continue serving CTLA board members for their support, encouragement, and innovathe association as Past-President for this term. tive thinking in promoting the association despite difficult times.

Our association is strong and its members are active in sup- Those individual contributed time and efforts for the association porting our activities but we need to increase our membership and despite busy schedules and need to be recognized: provide more activities to the community. We need the support of our members and followers to write articles to promote the transportation • Carole McAfee Wallace, Vice-President; • Robin Squires, Treasurer; chain and its stakeholders.

I invite you to visit our improved website to browse and read- our • Elizabeth Fashler, Director of Communications featured articles, of particular interest are articles published in 2021 on: • Heather C. Devine, Past-President; • The transport and trade between the United States, Mexico, and • Jason Lattanzio, Director of British Columbia; Canada by Martin Abadi and Sam Levy; • Pui Hong, Director of Alberta; • The striking of jury notices impacted by COVID-19 by Michael • Orvel Currie, Director of Manitoba and Saskatchewan; Furyk; • Jaclyne Reive, Director of Ontario; • The constitutional qualification of a Quebec School Transport Company under federal or provincial rules by Sarah Routier and • Sarah Routhier, Director of Quebec; and • Eric Machum, Director of the Maritimes.

Pierre-Olivier Ménard Dumas; Finally, I wish again to thank our members for their support • Drones and commercial confidentiality by Grace Shaw, Johanne through this trying year in furthering our organization.

Dawson, and Julia Loney;

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TLA Website: www.translaw.org Members Only area: User Name: First initial + last name + the Zip code where you receive TLA mail, i.e., jbrown66061. (Canadian members—please note that your postal code may include a space which counts as a character.)

Password: translaw1 If you wish, you can personalize your user name and password using the ID & Password link in the members services area of the TLA website.

Are you receiving emails from TLA? If not, your spam blocker may be preventing you from receiving important updates about TLA events and developments in transportation law. To ensure that you will receive updates, be sure that your system will accept emails from TLA-info@kellencompany.com.

CTLA Website: www.ctla.ca User Name: Transport Members Only Password: ship

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TLA

Editor’s Column

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e did it! Thanks to the strong leadership of President John This year the Executive Committee meeting was held in Milwaukee.

Wilcox and conference Co-Chairs Jeff Pincus and Bridgette I had never been to Milwaukee but came away quite impressed.

Blitch, the Annual Conference was held live and was a great sucIn addition to the photographic memories from this summer’s cess. Blazing a trail back to normalcy, the membership reopened meetings, this issue contains some very timely articles for those of the beautiful surroundings of Lake Tahoe as tourists and confer- us in the trenches fighting the good fight for our clients every day. ence attendees alike. Restaurants may not have yet opened; Tammy Meyer looks at what happened when COVID-19 changed shuttle buses were sporadic and rental cars scarce, but none of traffic patterns and usage of the roads and highways. Art Spratlin’s that stopped a great time with a very big dose of education. The article on autonomous vehicles provides an update on where and one trait that transportation attorneys have, in addition to learn- when artificial intelligence will be taking on the responsibilities of ing, improving, and passing down the knowledge our drivers. Steven Belgrade and Adam McCabe of a unique but historical area of the law, is we are revisit the Carmack Amendment. Greg Summy usually very skilled in the ability to navigate the follows up on Jameson Rice’s presentation at the airports and highways of the world. This trait was Annual Conference on consolidation of the railcalled upon by all as we traveled to beautiful Lake roads. Chris Cotter looks at the medical emergency Tahoe and Squaw Creek in Olympic Valley. defense and whether the driver’s medical certificate is sufficient to relieve the driver or the employee A return to pre-pandemic normalcy appeared when an accident results from a driver’s medical to have finally arrived; however, many of us in condition. Campbell Roper looks at investigating the South and Gulf Coast are once again caught fraudulent truck accidents and ways to combat those in the riptide of another COVID-19 wave. If you that stage accidents with the hope of getting a large have not read the collection of articles in the July settlement. Chris Whitten looks at a recent case issue, it is not too late. I was concerned that the in Indiana that addressed whether the motor cartiming between writing the articles, getting them Eric R. Benton rier’s MCS-90 endorsement is available for intrastate published and then into the hands of the members moves. Finally, on a lighter note, Kathleen Jeffries would result in the articles being stale. That worry reviews the history behind the prestigious Bull Shipper’s Award. did not come to pass as the Delta variant of COVID-19 has the world reexamining vaccination policies. These articles address whether I would like to thank all of the authors for their hard work in employers can force their employees to get vaccinated. putting these articles together. If you get a chance, please let them In this issue of The Transportation Lawyer, we have the always know that you have read their articles. Please consider writing an popular photographs from the Annual Conference. I also have article yourself for a future edition. Not only does it look good on included some photographs from the summer Executive Committee your curriculum vitae, you might just learn something too. meeting held each year to review the budget and association issues.

TTL Call for Articles We are looking for more featured articles and/or case notes for upcoming issues. This is an opportunity for TLA and CTLA members to write on timely issues which will allow greater exposure among our memberships. This will give you nationwide recognition and is a great way to expand your networking abilities as part of a well-respected and widely read industry publication.

The submission deadline for the next publication is November 16, 2021.

Please direct any questions and submissions to TTL Editor Eric R. Benton at erb@lorancethompson.com.

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Editor’s Column The Elements of Style

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A sonnet is built on a fourteen-line frame, each line ur chief role as lawyers is to communicate effectively, orally containing five feet. Hence, sonneteers know exactly and in writing. This is easier said than done. Good writing is where they are headed, although they may not know how a skill that we practice, and improve upon, over the course of our to get there. Most forms of composition are less clearly lives. While I most certainly fail to achieve the goal I set for myself defined, more flexible, but all have skeletons to which the in terms of proficiency, the important thing is to continue striving writer will bring the flesh and the blood. The more clearly towards improvement. the writer perceives the shape, the better are the I spend a good amount of time every year chances of success. inducting my juniors into the cult of good writing.

On the active voice, which brings us right back to It is a benevolent cult, with the aim of elevating the brevity:3 writing of those with whom I work. Our holy book is “The Elements of Style” by William Strunk Jr. and Use the active voice.

E. B. White of “Charlotte’s Webb” fame. I buy extra The active voice is usually more direct and vigorous copies to distribute. “The Elements of Style” is a than the passive: precious tome of only a hundred pages. However, packed within these few pages is the foundation of I shall always remember my first visit to clear and persuasive writing.

Boston.

I wish to share a smattering of helpful gems This is much better than from “The Elements of Style”, which are applicable My first visit to Boston will always be rememto our daily practices whether we are drafting argubered by me. ment or an email to a client.

Elizabeth Fashler […]

1 On brevity, a struggle for most lawyers: The habitual use of the active voice, however, Vigorous writing is concise. A sentence makes for forcible writing. This is true not only in should contain no unnecessary words, a paragraph no narrative concerned principally with action but in writing unnecessary sentences, for the same reason that a drawof any kind. Many a tame sentence of description or expoing should have no unnecessary lines and a machine no sition can be made lively and emphatic by substituting a unnecessary parts. This requires not that the writer make transitive in the active voice for some such perfunctory all sentences short or avoid all detail and treat subjects expression as there is or could be heard. only in outline, but that every word tell.

Dead leaves covered the There were a great number On structure:2 ground. of dead leaves lying on the Choose a suitable design and hold to it. ground.

A basic structural design underlies every kind of writing. Writers will in part follow this design, in part deviAt dawn the crowing of a The cock’s crow came with ate from it, according to their skills, their needs, and the rooster could be heard. dawn. unexpected events that accompany the act of composition.

Writing, to be effective, must follow closely the thoughts Failing health compelled The reason he left college of the writer, but not necessarily in the order in which him to leave college. was that his health became those thoughts occur. This calls for a scheme of procedure. impaired.

In some cases, the best design is no design, as with a love Note, in the examples above, that when a sentence is letter, which is simply an outpouring, or with a casual made stronger, it usually becomes shorter. Thus, brevity is essay, which is a ramble. But in most cases, planning a by-product of vigor. must be a deliberate prelude to writing. The first principle of composition, therefore, is to foresee or determine the shape of what is to come and pursue that shape.

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Association Business TTL Canadian Content

Our Canadian contributions in this issue of TTL exemplify good writing, although I can’t say for sure if they own copies of “The Elements of Style”. Canadian content for this issue of includes an article by Jason Lattanzio and Nicolas Pimentel entitled “Friendly Skies No More: The Effort to Combat Coronavirus and Air Rage”, which canvasses mask mandates and civility in the realm of air travel. Eric Machum and Luke Hunter have contributed an article entitled “You say it best, when you say nothing at all: Application of statutory limitations of liability in the face of silence by shippers and carriers for carriage of goods within Canada” which, as the byline indicates, discusses the application of statutory limitations of liability in the face of silence by shippers and carriers for carriage of goods within Canada. Finally, Pui Hong has contributed an article entitled “Autonomous Vehicles and the Trucking Industry in Canada” which canvasses the main issues connected with the emergence of autonomous vehicle technologies.

CTLA Communications Corner

Membership Are you thinking of joining the CTLA? Has your membership lapsed? Do you have colleagues or friends who might be interested?

Wait no longer! A CTLA membership offers access to continuing legal education and social networking opportunities, most notably at the AGM and Annual Conference held each Fall, as well as receipt of five issues per year of The Transportation Lawyer.

Visit https://ctla.ca/join and click “JOIN OR RENEW” to join CTLA for the first time or renew your membership.

February TTL We are currently soliciting article contributions for the February 2022 edition of TTL. If you are interested in submitting an article for publication in the TTL or on the CTLA website, please contact me at efashler@fasken.com or through the CTLA LinkedIn page.

Endnotes 1 Strunk, William and White, E. B., The Elements of Style, 4th Ed., Allyn & Bacon, 2000, at page 10.

2 Ibid, at page 26.

3 Ibid, at pages 28-29.

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Secretary/Treasurer’s Report

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would like to thank you for entrusting me with the duties of the infinite patience and a great sense of humor. They also actively Secretary/Treasurer of the Transportation Lawyers Association. I and repeatedly reached out and encouraged me to get involved, am honored to serve the TLA and its members and look forward participate, and contribute to the TLA, and I am grateful that they to working with my fellow officers Steve Canty, Chris Kelly, Eric did. The investment of a few hours here and there to write an Benton, and Kathy Garber, Immediate Past-President John article for The Transportation Lawyer, prepare a presentation for Wilcox, and all the members of the Executive Committee. an upcoming meeting, or join in a discussion on the future of the The first TLA event I ever attended was the 2003 Annual TLA is a small price to pay in exchange for the valuable educational Conference at the Wailea Beach Resort – Marriott on Maui, pre- and social benefits that this association provides to its members. I hope you will join me in “paying it back” by inviting sided over by then-President Bob McFarland. At colleagues and other practitioners to become memthat time, I was serving on the Board of Directors bers of the TLA, reaching out to those new members of the Canadian Transport Lawyers Association and could not quite believe my luck that our midyear to ensure that they feel welcome, and looking out meeting was taking place in that special corner of for opportunities to become more involved with TLA paradise. Not really knowing anyone at TLA other Committees and events. than my fellow CTLA Officers and Directors, I disAnd of course, if you have not done so already, tinctly recall feeling somewhat intimidated by the please pay your annual dues! prospect of walking into the Welcome Reception This past year has been anything but normal, at the Maui Ocean Center. As it turns out, there and as I write this we are not yet certain that the was nothing to worry about: TLA members were as worst is behind us, or if it is, whether we are headed warm and welcoming back then as they are today. back to business as usual or into some uncharted At that event and so many others that followed, I form of a new normal. Accordingly, at the recent had the good fortune of meeting some of the finLouis Amato-Gauci Executive Committee meeting held in Milwaukee, est lawyers in our area of practice, many of whom Wisconsin, we once again developed a very conserhave provided much-needed mentoring at various stages of my vative budget as a precaution in the event that the lingering effects career, and all of whom I am pleased to think of today as my good of COVID-19 continue to have an impact on law firm budgets and, friends. in turn, on the TLA. A short while later, in what was possibly the greatest leap Despite these challenges, TLA remains on solid financial of faith in the history of this organization, Kathleen Jeffries ground.

As of June 30, 2021, the association had cash assets of and Wes Chused asked me to participate in a panel discussion on border security issues at the 2005 TLA Annual Conference in $599,655, of which $135,967 constituted restricted funds. Of the Indian Wells, California. After that performance, I was fairly cer- $599,655, current assets of $123,717 are in certificates of deposit tain that I would be shown the door and never invited back, but I while the remainder is in business checking or money market was wrong. I have since had the pleasure of speaking or moderat- accounts. The association began the fiscal year with accumulated ing at many other TLA events, serving as an at-large Executive net assets of $295,142, and the year-to-date gain is $114,513. Total Committee member for a few years and as program chair for year-to-date revenue is $449,294, which is 77% of the 2021 budthe 2016 TLA Annual Conference in Destin, Florida, during Dick geted amount. Total year-to-date expenses are $324,331, which is Westley’s presidency. Leaders within the TLA apparently have 50% of the 2021 budgeted amount.

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The Bull Shipper’s Award — the Highest Honor TLA Bestows?

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welve years ago, Fritz Damm regaled our readers with the female recipient in recent times.6 Nevertheless, the award retains history of the Transportation Lawyers Association’s beloved its glory as the highly coveted symbol of the artful gift of gab, the Bull Shipper’s Award.1 That is the award to which I referred in combination of verbal skill, imagination and occasionally even wit, my recent presentation to our latest deserving recipient, Gordon traits we transportation lawyers highly regard in one another—or, McAuley, as the highest honor our organization has to bestow. quite frankly, whatever other characteristics the holder of the award Fritz suggested2 that it’s time for an update to his composition chooses to focus on in selecting his or her successor. and, after much nudging, I acceded to his request.

Who are the fortunate TLA members whose names have been etched into the splendid black name plaques on the trophy? The The Bull Shipper’s Award was established in roughly 1951 to Millennium History lists the following recipients recognize “the biggest and best bull thrower of the and years of presentation appearing on the current year.”3 The award was presented each year through trophy: 1968 at the Annual Conference in what former TLA President Dick Champlin described as one of the 1988: Richard H. Champlin highlights of the event. Trouble for the award began 1989: Mike J. Ogborn brewing in the mid-1960s, starting with a motion by 1990: Leonard R. Kofkin a member of the organization that the presentation 1991: Miles L. Kavaller be discontinued because “it was beneath the dignity of the Association.” The motion narrowly failed, but 1992: Michael L. Harvey within the next few years the award indeed met its 1994: Jeremy Kahn demise for over 20 years.

1996: James F. Flint In 1988, then-President Mike Ogborn reestab1997: David R. Parker lished what he referred to in his excellent article on 1998: Kim D. Mann how and why the Motor Carrier Lawyers Association Kathleen C. Jeffries* transitioned to the current TLA in the 1980s,4 subFritz Damm’s 2009 article picked up from the mitted as part of Dick Westley’s decades-later series end of that list, identifying the next seven names on the history of TLA and regulation of the motor carrier industry, as on the face of the trophy: “the most sought-after, prestigious award in the history of the asso2000: David B. Schneider ciation.” He stated that the renewed annual award was intended for 2001: W. Robert Alderson “the person deemed best deipnosophist.”5 The decision to revive 2003: Brian J. Smith the award was among those lofty objectives that he explained “were made in order to meet the changing times and achieve the goals set 2005: Gordon M. Hearn forth by the association to keep it viable, relevant and of value to the 2006: Eric L. Zalud existing and future members.”

2007: William D. Bierman Notwithstanding (or perhaps as a reflection of) the prestige 2008: Fritz R. Damm associated with the award, the current Bull Shipper’s Award troSince 2009, the following names have been added to the treaphy—topped with a human figure throwing a bull over his shoulder and bearing the names of the (mostly) worthy recipients from 1988 sured accolade: through today—is somewhat of an ostentatious display of bravado. It 2010: Greg E. Summy is impressive in its size and marble and brass composition, though 2011: Donald J. Vogel somewhat bedraggled from years of being shipped, hand-carried 2012: Kenny Ray Hoffman and otherwise moved from conference to proud office display to 2014: Carlos Sesma, Sr. conference. The bull is missing at least one hoof, the plaque containing the name of the award is bent and scratched, the marble 2016: Rick Kissinger is abraded in numerous places and one of the handles of the urn 2017: Pat McMonigle on which the bull shipper himself stands is held on by Scotch Tape.

2018: Roger Watts For the two most recent years, the human figure even wore a bright 2019: Kathleen Jeffries pink cocktail umbrella as a skirt in honor of yours truly, the first 2021: Gordon McAuley * Scopelitis, Garvin, Light, Hanson & Feary, LLP (Pasadena, CA) The Bull Shipper’s Award represents the brightest and best

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of TLA, those of us whose names adorn the trophy would like to believe. The highest honor our organization has to bestow?

Some might question that description—though a shout-out is well-deserved by Steve Novy for adopting my reference to the award as such in his gracious comments delivered in acceptance of the 2021 Lifetime Achievement Award at our recent conference.

What it does undoubtedly represent are the sense of humor and friendship network that members of TLA enjoy, the real essence of our organization that has long existed and will endure for many years, reflected, no doubt, in many more names etched on the Bull Shipper’s Award trophy.

Endnotes 1 “TLA History - The Bull Shipper Award aka The Special Award, aka Big Trophy or Oscar - Who Won in 2009?” by Fritz R. Damm, The Transportation Lawyer, July 2009.

2 Anyone who has not timely paid his or her TLA dues knows what Fritz Damm’s “suggestions” can be like. I’m proud to say that I have not been on the receiving end of one of those “suggestions.”

3 “1937-2000, The Millennium History of The Transportation Lawyers Association” by Richard A. Champlin, containing a reproduction of a 1967 article by Louis Smith entitled, “A Brief(?), Inaccurate and Incomplete History of the MCLA.” The Millennium History is available on TLA’s website through a link at the bottom of the “Who We Are” page.

4 “MCLA to TLA – A Transition Whose Time Had Come” by Michael J. Ogborn, The Transportation Lawyer, February 2016.

5 To save you the trouble, a “deipnosophist” is a person skilled in table talk.

6 The Millennium History tells us that a female nonmember, nonlawyer (Barbara Bruemmer, the wife of TLA’s President from 1968 to 1969, John Bruemmer) received the award for which she was “undoubtedly well qualified.”

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2021 TLA Lifetime Achievement Award Presented to Steven B. Novy Presentation by Richard Westley It is a privilege and an honor to be called upon to present the Transportation Lawyers Association’s Lifetime Achievement Award. It is TLA’s highest honor and gives special recognition to a member who has devoted so much of his/her energy, talent and enthusiasm to the organization, not just once or twice, but repeatedly over a long period of time. Tonight’s honoree embraces those traditions and humbly served TLA on numerous capacities for over 30 years.

Many past award winners have made special contributions to the Association but, for reasons I will explain, this year’s honoree has brought a very special dimension that reflects not only on him and his family, but also TLA’s members. But first I will begin with a few obscure details of our honoree’s life.

He was born in Manitowoc, Wisconsin, in December of 1947, and spent his high school years in Woodstock, Illinois, where he was an all-star linebacker at Marion Central High School. He started his working life picking beans for 3 cents a pound, and in high school he worked at a well-known men’s clothing store that was frequented over the years by luminaries like Orson Welles and Paul Newman.

During his high school years, he drove a motorcycle not noted for having a working muffler, which prompted a cat and mouse game with a local police officer who was determined to nail him but never did. He obtained his undergraduate degree from the University of Illinois and his law degree from Notre Dame, at which time he graduated to a Corvette. Just 15 months later he became a married man living in the suburbs with three young kids.

At this point I’m going to have to depart from tradition and tell you things about tonight’s honoree that will reveal his identity.

His mentor was Attorney John Storer, a longtime TLA member who played an unheralded but important role in TLA’s rebirth in the years following deregulation of the motor carrier industry. Some of you may remember former President Mike Ogborn’s description of the regional seminars at the 2015 conference in Sandestin. John

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Storer decided that whatever else happened, there would always be a TLA Regional Seminar in Chicago in January. He called upon our honoree to handle the nuts and bolts of the program by arranging for the facilities, support staff, agenda, speakers, refreshments and the all-important wine and cheese reception.

After John Storer left Chicago for warmer climates, our award winner, along with Don Vogel, took the Regional Seminar to the next level, moving from a law office conference room to the Chicago Athletic Association and then later to the Fairmont Hotel. As word spread among TLA members about the quality of the program and how much fun everyone had, attendance grew from 12-20 in the early 90s to over 100 in 2001 and eventually well over 200 by 2010.

As the size of the program grew, our award winner’s responsibilities increased dramatically until it became almost a full-time job from Christmas to the date of the event. I know Mike Ogborn was very proud at the spectacular success of the Chicago program and the vital role it played in the reinvigoration of TLA. Meanwhile something very special was going on with our award winner’s family, as he began bringing his son Michael to TLA events. He and Michael have become legendary in TLA for their hunting and fishing expeditions, including trips to Africa and South America. Many TLA members also enjoy these activities and bonded with our award winner and Michael over these adventures as well as their golfing prowess. Michael received a special award at the annual banquet at the Santa Fe conference, and it was so appropriate and well deserved.

I haven’t said much about our award winner’s many accomplishments as a distinguished attorney and as President of TLA. I’ve already said too much, and his accomplishments speak for themselves. In closing I would like to share a quote from Dirk Beckwith’s biography of our award winner, written in 2016: “He has your back, he trusts the abilities of his fellow attorneys and those he has graciously selected to work with him. His attitude and solid, evenhanded demeanor [are] instilled in those he has mentored over the years. [They are] at the heart of his success and ability to lead people and organizations.”

So, at this time I am pleased to present TLA’s 2021 Lifetime Achievement Award to Steve Novy.

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2021 TLA Distinguished Service Award Presented to Patrick E. Foppe Presentation by Fritz R. Damm

This Distinguished Service Award has a long and storied history. Tonight I want to tell you about some of that history and why this year’s awardee is the best choice possible. Please know that the eight pages I have in my hand are not part of my presentation but are rather the recipient’s firm bio.

Let me start by introducing past winners attending this very conference, starting in 1983: Mark Andrews, Bill Taylor, Kenny Ray Hoffman, Greg Summy, Brian Smith, Pat McMonigle, Kathleen Jeffries, Steve Novy, Don Vogel, Eric Zalud, Wes Chused, Gordon McAuley, Dick Westley, Frank Botta, Marc Blubaugh, Carlos Sesma Sr., Gordon Hearn, Hillary Booth, Brian Del Gatto, Sam Hallman, Jeff Simmons, Steve Canty, Louis Amato-Gauci, Dirk Beckwith, Eric Benton, Katherine Garber, Chris Kelly, Allen Jones, John Wilcox, Bridgette Blitch, Gene Zipperle, and Steve Uthoff. These members have and continue to set excellent examples of outstanding “active” membership with the Transportation Lawyers Association. Learn from them as they are proven winners.

Many of you know these past “winners” and why they were so nicely recognized. However, for those of you here tonight—and those members who will read about it in the next issue of The Transportation Lawyer—who do not know what it takes to get involved within our beloved TLA, I will give you my fast “take” on what it could involve.

As so many of you have learned either from me on our “welcome calls” or from other mentors, TLA is wide open to getting all members involved. One must only raise your hand to do committee work, to work on seminars/webinars, and/or to write for TTL. Please do not be bashful. For example, I first met Jeremy Handschuh about 10 years ago in Atlanta, and it took him less than 5 years to become co-chair of the litigation committee. Patrick Foppe joined TLA in 2013 and very soon thereafter became stellar Vice-Chair of

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Membership and Recruiting. Bridgette Blitch raised her hand early on to get involved in various aspects of TLA, including her continued work on student scholarships. These are good examples of how to enjoy, appreciate, and make the most of your membership. We all know that we get out of any endeavor what we put into it, and TLA is no exception. Use all of these folks as great examples of how to make TLA a better place for all members.

This year, it is my privilege and honor to tell you about a true winner.

This person exemplifies getting involved by initially signing up in 2013 for three committees of interest. While participating in two of the three, the third was a starring role! When asked to do a task, the answer was always “sure.” Success came about through strong participation that resulted in learning about how TLA “works.” Being innovative came easy once the knowledge was there to assist in the committee’s mission.

The saying “If you want to get something done, ask a busy person” truly applies to this Distinguished Service Award winner.

This litigator works with an outstanding Midwest firm in a very busy practice, but if you ask for any task within their territory, rest assured it will be taken care of by the recipient. This person is a prime example of being a business getter because of doing a great job on non-billable endeavors, which are many in addition to TLA and include strong and active involvement in DRI’s Trucking Law Committee. A prime example of this hard work is the setting up of special invitations (hundreds) to other similar organizations to attend our TLIs and the Chicago Regional Seminar.

What does our winner do in possible spare time besides hike, cook Easter carrot cake, workout, do Bible study and be the best dad possible to seven great children ranging from Caroline, who just turned 16, to last but certainly not least Veronica? We are indeed lucky that Father’s Day was last weekend so our winner is with us tonight with his wonderful wife, Katie. If I had my way, all of his children would be here to help us celebrate giving the Distinguished Service Award to my super pal, Vice-Chair of the Membership and Recruiting Committee, and super TLA member Patrick Foppe!

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2021 TLA Distinguished Service Award Presented to Stephanie Penninger Presentation by J. Allen Jones III

I am honored to present one of this year’s Distinguished Service Awards. The Distinguished Service Award was created to honor and recognize TLA members for extraordinary contribution to the organization. When John Wilcox asked me to present this award, he remarked that he couldn’t believe this honoree had not already been recognized. I completely agree. I’m going to do my best to conceal the identity of the award recipient for a few more moments, but I doubt I’ll be too successful.

I tried to come up with a single word to describe our award recipient, and though a few that came to mind were pretty ornery, I landed on the word “connector.” I hope when the recipient’s identity becomes apparent that this word choice will make sense because the recipient goes out of the way to meet people, bring new members to TLA, get people involved, and integrate them into the organization (or any organization for that matter). On a personal note, the recipient went out of the way to make me feel welcome and part of a new place the year before the recipient joined TLA. Simply put, networking and connecting with people is as much a part of the recipient’s being as the recipient’s eyes or mind or heart.

This year’s recipient joined TLA in 2013 and hit the ground running. The recipient promptly became involved in TLA Committees, like the Webinar Committee, Freight Claims, Casualty Litigation, Commercial & Business Litigation, and others. The recipient has presented or moderated at several TLA events, has served on the Executive Committee as a Representative at Large, has served

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as a co-chair of the Chicago Regional Seminar and on an Annual Meeting Program Committee, and has authored or co-authored a number of articles for The Transportation Lawyer. It should be no surprise that our recipient has also received TLA’s Iron Man Award.

Now, in accordance with TLA custom, I could have reached out to a number of people for dirt on our recipient, but loose lips sink ships.

Besides, I have enough dirt on our recipient to fill Lake Tahoe.

Regardless, I’m a black hole, so inquiring minds needn’t bother.

Of course, I’m only joking. There’s really only one thing I can say that’s negative about our recipient, and that’s where she (yes, I said she) chose to go to college. You see, she was a varsity field hockey player for That School Up North. She also attended law school at another Big Ten school in That State Up North, so I guess that’s two negative things.

If you’re still wondering who we’re honoring this evening, this should make it clearer. In 2012, I was working on a long-term project in the former Indianapolis office of Benesch Friedlander where our recipient was also practicing at the time. We became fast friends and she did what she does—helped me feel at home there and become connected to the other lawyers in that office. Fastforward. Our recipient moved to Benesch Friedlander’s Chicago office and I left the firm and went in-house at XPO Logistics. A few years later, I was thrilled when our recipient moved to Charlotte, North Carolina, with her husband Jason and joined the team at XPO. It’s fun to be together again. Even though we do bicker at one another like brother and sister, I attribute that to the strength of our friendship, for which I am most sincerely appreciative.

With that, I hope you’ll help me congratulate our recipient, because I am honored to present TLA’s Distinguished Service Award to my dear friend Stephanie Penninger.

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The 54th Transportation Law Institute Friday, November 12, 2021 Metropolitan at the 9 – Cleveland, OH Stevan R. Baxter and J. Allen Jones III, 2021 TLI Program Chairs The Transportation Lawyers Association 54th Transportation Law Institute is scheduled for Friday, November 12 at the Metropolitan at the 9 in Cleveland, Ohio. The educational pro- gram will cover a discussion led by the international trade and transportation committee, a discussion on cargo led by the e-logistics and commerce committee, a casualty update, a cross- border ethics discussion to rival all ethics panels, a panel geared toward corporate issues in aviation and OTR cargo, and a labor and employment discussion.

Each panel will provide legal and industry perspectives on the topics covered.

The TLA has contracted a room rate of $215* per night for our members at the Metropolitan at the 9. (*plus applicable taxes and fees) Deadline to book your reservations and take advantage of this room rate is Oct. 20, 2021.

Make your reservations online today.

Nestled amidst the excitement of downtown Cleveland, the luxury Metropolitan at the 9 features 156 beautifully appointed hotel rooms designed to engage and inspire. Enjoy dining at Adega, voted Best Downtown Cleveland Restaurant in 2015 and 2016, or unwind with a handcrafted cocktail at Azure Rooftop Lounge (open seasonally) while enjoying views of Lake Erie and the local cityscape.

Tucked above the hotel lobby, Ledger Bar is made for conversation and people watching while sipping a refreshing beverage. The century-old bank vaults beneath the Cleveland Trust Rotunda are home to a luxury cocktail lounge, Vault, where you can enjoy a small plate menu and over 30 arti- sanal, hand-crafted libations fashioned by resident mixologists. Visit Alex Theater at The 9 to enjoy live performances featuring Cleveland’s finest local entertainment.

Who Can Attend?

TLI is open to attorneys with an interest in transportation law, practice, or procedure.

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Registration The registration fee for the TLI includes attendance at the program sessions, the comprehensive program materials, continental breakfast on Friday morning, lunch on Friday, refreshments at each break, and the Friday evening reception.

Pre-Registration Register prior to Oct. 20, 2021 Registration coming soon!

Available presentations and pre-registered attendee list will be distributed online approximately one week prior to the TLI and at the event upon registration/check-in Friday morning.

Activities Thursday Evening Reception A reception will be held at the Metropolitan at the 9.

Friday Evening Dine Around For those of you who plan to stay into the weekend, we will be arranging a Dine Around on Friday evening. Further information will be distributed to registered attendees as we approach the event.

Saturday Event This event is in the planning stages, and more information will be available closer to the TLI.

Continuing Legal Education (CLE) Accreditation will be requested for the 54th Transportation Law Institute from every state from which participants indicate they will require CLE credit. As you are likely aware, each state has its own rules and regulations regarding program approval and attendance reporting, as well as its own definition of CLE. Certificates of attendance will be available on-site.

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Questions Questions pertaining to the program agenda, registration, or continuing legal education accreditation should be directed to the TLA Executive Office at TLA-info@kellencompany.com.

Program agenda 1. The mega-container ship Ever Given’s blockage of the Suez Canal is a case study on the chain liability issues flowing from an international trade disaster. The International Trade and Transportation Committee will lead a discussion on responding to government civil and criminal investigations into the disaster; strategies and defenses against claims for damages brought by governments, private third-parties and subrogated insurers; potentially liable parties (including cargo owners under “general average” maritime principles); and employing crisis management measures to avoid reputational harm. This program will be presented by a panel including an in-house attorney, an outside attorney, an insurance professional, and a moderator. Each perspective will help our members to be better prepared to address and advise clients on any type of high-profile transportation disaster that occurs, whether it be international or domestic.

2. The E-Commerce and Logistics Committee will provide a brief review of cargo claim liability and preemption (under Carmack and FAAAA), including case law updates. The panel will also focus on various claims often asserted in conjunction with cargo claim, but which fall outside the traditional scope of those claims, such as damages for delay and consequential damages. The panel will discuss the liability of different parties in cargo claims, including shippers, brokers, and motor carriers, and strategies for responding to such claims.

3. The Casualty Litigation Committee will lead a discussion on avoiding nuclear verdicts. The presenters will discuss strategies to defeat the plaintiff’s playbook of driving up the value

on any case. In many instances, the plaintiffs’ bar is outworking the defense bar. It is critical to spot the weaknesses in your case at a very early stage, such as a bad venue, spoliation issues, DOT compliance problems, a lax safety program, post-accident driver discipline, bad witnesses, etc. The panel will offer critical insight on how to develop the right strategy to combat these problems using the best resources available.

4. This year’s ethics presentation will feature something a little different! Our multinational panel will focus on a variety of the practice issues facing lawyers today, and some prime examples of what not to do. In addition to canvassing ethics issues around modern practice in the COVID-19 era, the panel will also discuss ethics and practice issues from each of their national perspectives – including some of the more infamous stories to come out of each one! Join us for what should be an interesting take on professional ethics – or, as we’ll see, the lack thereof.

5. The Corporate Committee will discuss considerations in the post-COVID-19 shutdown world. Vaccinated business travelers who want to Fly Away (Lenny Kravitz) will have to evaluate business travel. Companies, executives, and those who seek to grow their business will have to evaluate the low percentage threat of COVID-19 against the benefits of personal interactions and networking. The question will be: Should I stay, or should I go? (The Clash). Will profitable business travel resume to pre-COVID-19 levels? How can suppliers, air carriers (air cargo, commercial and general aviation), and investors in the industry, and its suppliers, adapt to the post-COVID-19 era?

6. The Biden Administration has made several changes to labor and employment laws that impact the transportation industry. The Labor and Human Resources Committee will lead a fast-paced discussion reviewing the many changes already implemented, changes to look for in the future, and how these changes will impact employers and employees in our field.

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TLA Annual Conference Sponsors

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TLA Annual Conference Photos

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TLA Annual Conference Photos

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TLA Committee Report

TLA Annual Membership Report Fritz R. Damm and Patrick E. Foppe TLA Membership Chair and Vice Chair

TLA continues to attract the best transportation lawyers from diverse practices with in-depth knowledge and expertise to share.

The Membership Committee promotes diversity in order create an inclusive and welcoming environment where talented attorneys can succeed and differing perspectives are encouraged as a means of strengthening collaboration and client service. Every member brings a unique perspective and value to TLA from which we all benefit.

As of August 1, 2021, TLA has 852 active members. Since August 1, 2020, TLA has gained 78 new members. TLA’s corporate counsel membership continues to see significant growth, which we view as very good for our membership as a whole. The Membership Committee has been active with seeking help recruiting from committee chairs, bolstering TLA’s international membership, inviting attorneys to join through LinkedIn, student membership and other endeavors.

We wish to welcome all the new members who joined TLA in 2020/2021!

New Members • Kristian Alfonso, New York, NY • Shawn Applegate, Murfreesboro, TN • Caroline Barrineau, Charlotte, NC • Elizabeth Bass, Hendersonville, TN • Daniel Bristol, Denver, CO • Mark Brown, Minneapolis, MN • Ian Brown, Washington DC • Phillip Bryant, St. Louis, MO • Emily Chiarizia, Charlotte, NC • Brent Cole, Atlanta, GA • Davin Curtiss, Dubuque, IA • William Davis, Atlanta, GA • Aleksandar Djuricic, Carmel, IN • John Donovan, Austin, TX • Amanda Elliot, Dunwoody, GA • Elizabeth Fashler, Calgary, AB • Clayton Fielder, Overland Park, KS

• John Franklin, Rome, GA • Jill Gerdrum, Missoula, MT • Derek Goodman, Minneapolis, MN • Laura Gordon, Chicago, IL • Christopher Grassi, Easton, PA • Allison Haedt, Westerville, OH • Chris Hansen, Boise, ID • Blake Hanson, Des Moines, IA • Ali Heidari Saeid, Carson, CA • Kevin Hidas, Westerville, OH • Emileigh Hubbard, Dallas, TX • Madeline Hughes, Birmingham, AL • Jeffrey Hunt, Indianapolis, IN • Lee Hurwitz, Chicago, IL • Kenderick Jordan, Chicago, IL • Alexander Karcher, Columbus, OH • Rubina Khaleel, Omaha, NE • Marcos Kropf, Sacramento, CA

• Michael Lateef, San Rafael, CA • Bridget Liccardo, Carteret, NJ • Yixing Liu, Schaumburg, IL • Gary Luke, Boise, ID • Heather Lunn, Woodland Hills, CA • Jennifer Maloney, St. Louis, MO • Mark Mangini, Olive Branch, MS • Paul Marron, Long Beach, CA • Quin Martin, Hampton, NJ • Josh Mathews, Austin, TX • Ryan Mau, San Francisco, CA • Brandon Maxey, Dallas, TX • Gregory Melick, Columbus, OH • Charles Mellor, Sacramento, CA • Tammy Meyer, Noblesville, IN • Lee Miller, Minneapolis, MN

• Matthew Moeller, New Orleans, LA • Harold Moroknek, Purchase, NY • Ashleigh Morpeau, Chicago, IL • Joelle Nelson, Houston, TX • Edward Nicklaus, Miami, FL • Casey O’Brien, New York, NY • John O’Donnell, Chicago, IL • Carrie Palmer, Charleston, SC • Jason Pfeffer, San Antonio, TX • Rafael Pignataro, Erie, PA • Alan Polivnick, Klong Yoei, Bangkok • Katherine Powell, Houston, TX • Caroline Pratt, Chicago, IL • Judson Price, San Diego, CA • Timothy Raimey, Alpharetta, GA • Campbell Roper, Houston, TX

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TLA Committee Report New Members (continued) • Allison Samulon, Gross Pointe Farms, MI • Elizabeth Sawyer, Chicago, IL • Mitchell Shadowitz, Boca Raton, FL

• Zach Shook, Chicago, IL • Jol Silversmith, Washington DC • Tonya Trumm, Dubuque, IA

Membership takes a team-effort. We are happy to report that 61 members of TLA helped recruit new members! Every new member is asked on “Line 8” of his/her application to TLA to identify a current TLA member who encouraged him/her to join TLA. We wish

• Nicholas Tselepis, Grosse Pointe, MI • Brendan Vandor, Seattle, WA • Bobbi-Ann Wallace, Toronto, ON

• Alecia Walters-Hinds, New York, NY • Peter Westhoff, St. Louis, MO

to thank and recognize the following members who heard our call for help and invited so many new members the second half of the 2020/2021 fiscal year:

Line 8 Recipients • Jonathan Abramson • John L. Alden • Louis Amato-Gauci • Mark Barber • Steven B. Belgrade • Eric R. Benton • Bridgette Blitch • Marc Blubaugh • James A. Calderwood • Steven Canty • Michael J Case • John M. Coleman • Christy Comstock • Eric Conn • Jeff Cox • Newt Cummingham

• Fritz Damm • Brian Del Gatto • Nicholas DiMichael • Tom Evans • Robert R Foos, Jr • Patrick Foppe • Regan Furcolo • Kurt Gerstner • Timothy S. Groustra • Tyler Hayes • David Hendel • Vic Henry • Michael Huber • Allen Jones • Alexander C. Karcher • Christopher Kelly

Now is a great time to get your name entered into the annual membership recruiting lottery, which started again on August 1, 2021. Remember that each time your name is identified on “line 8” of a new member’s application; you will be entered into an annual lottery to win one of three prizes. Congratulations to the following winners for 2020/2021: • $500 off the 2022 Annual Conference registration: Brian K Mathis, Mathis Law Group, Stuart, FL; • One year complimentary membership dues: Eric Zalud, Benesch, Friedlander, Coplan & Aronoff, Cleveland, OH; and

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• Virginia Price • Robert Reeb • Melissa Richardson • Daniel Sbanotto • William Taylor • Al Teel • Archena Titus • Rodney Umberger • Katherine L. Vaughn • Robert Whipple • Todd Wolfe • Paul Yarbrough • Eric Zalud

• Paul Kozacky • Leonard Leicht, Esq. • Nathan Leming • Brian K Mathis • Julie E. Maurer • Charles Mellor • Eric J. Meyers • Gary Miller • Lee Miller • Ed Nicklaus • John A. O’Donnell • Justin Olsen, Esq. • Jason Orleans • Jason Palmer • Stephanie Penninger • William Pentecost

• One complimentary registration to the Chicago Regional Seminar or the Transportation Law Institute (TLI): Ed Nicklaus, Nicklaus & Associates, Miami, FL. Membership renewals have been in your mailbox for over 90 days! If you haven’t already done so, please make it a top priority to renew your TLA membership so you can continue to receive the many benefits of TLA and the organization can continue to be strong. Please pay your 2021/2022 dues NOW and everyone benefits!

With your help, the Membership Committee is optimistic that we can return to being a 1,000 member strong

organization in 2021/2022! As always, if you know someone who you think might enjoy joining TLA, please invite them or simply send the person’s name and contact information to Fritz Damm (fdamm@ scopelitis.com) or Patrick Foppe (pfoppe@ lashlybaer.com).

Looking ahead, we expect the 2021 Transportation Law Institute in Cleveland, Ohio on November 12, 2021 to be another great event for our ongoing efforts to recruit and invite attorneys to join TLA. Thank you for being a TLA Member!

Fritz Damm and Patrick Foppe TLA Membership Chair and Vice Chair

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TLA Feature Articles and Case Notes

Sudden Medical Emergencies in the Trucking Industry: Federal Motor Carrier Safety Regulations to the Rescue Chris Cotter* Sometimes a motor vehicle accident is not the fault of the truck driver nor of other motorists. In some instances, an accident is precipitated by an unexpected medical event, such as a heart attack, a stroke, or passing out due to a sudden drop in blood pressure, experienced by one of the drivers. In such situations, the law in many states provides a defense to the driver who experienced the sudden medical event and thereby lost control of the vehicle. So long as the medical event was not reasonably foreseeable, the driver is not responsible for the ensuing accident.

Lawsuits that arise under these sets of facts present questions as to whether the driver had a genuine medical event and whether the medical event was foreseeable.

Often these questions are not as straightforward as one might expect. And if the driver who experienced the medical event was in the course and scope of his employment at the time of the accident, an additional question is whether the employer had reason to believe the driver was susceptible to the medical event.

Fortunately for motor carriers, the Federal Motor Carrier Safety Regulations (“FMCSRs”) provide added protection to motor carriers when confronted with claims arising out of a motor vehicle accident precipitated by a sudden medical event experienced by its truck driver.

Regardless of the lawsuit’s venue, all U.S. motor carriers are required to have their truck drivers obtain a medical examination before being permitted to drive a commercial vehicle. The motor carrier can then rely on this medical certificate to * Roetzel & Andress, LPA (Akron, OH)

conclude the truck driver is medically clear to drive, absent specific knowledge of a medical issue at some point later. While the plaintiffs bar so often attempts to use the FMCSRs against the trucking industry, this FMCSR requirement is one area in which a motor carrier’s compliance with the regulations can be used as an affirmative defense to a personal injury or wrongful death lawsuit.

The Scenario A good case analogy for this theory of defense is found in Cline v. Dart Transit Co.1 The lawsuit arose out of a motor vehicle accident that occurred on December 21, 2016, between two commercial motor vehicles: one operated by the plaintiff and the other operated by a truck driver as an independent contractor of a motor carrier. The truck driver sustained a heart attack while driving, which caused his vehicle to cross the highway median and strike the plaintiff’s vehicle.

Four months prior to his fatal heart attack, the truck driver had a medical issue that was reported to the motor carrier as a heart attack. The motor carrier placed him on a Safety Hold during his period of recovery, which lasted several weeks. Before he could resume operation of a vehicle under the motor carrier’s authority, the motor carrier required the truck driver to undergo a new Department of Transportation (“U.S. DOT”) physical with a nationally registered medical examiner of his choice.

During his October 2016 physical, the medical examiner medically certified the truck driver to drive commercial motor vehicles for one year, believing he had fully recovered from his heart attack. As such, at the time of the fatal accident, the truck

driver was medically certified to operate a commercial motor vehicle.

During the lawsuit, the plaintiff’s attorney took the deposition of a corporate representative for the motor carrier.

Explaining the medical certification process during his deposition, the corporate representative explained that it sent the truck driver to a medical examination because “we knew that there was something there.

We’re not doctors. You know, we don’t – we can’t diagnose. We can’t prescribe.”

Rather, the U.S. DOT medical examiners “are the medical experts. They can do the assessment."2 After the truck driver obtained his medical clearance, the motor carrier had no notice of any specific issues concerning the truck driver’s health or ability to perform his job. This remained the case until the fatal heart attack occurred two months later.

The Sudden Medical Emergency Defense In Cline, Ohio law was the substantive state law that governed the claim. And yet the FMCSRs also came to bear on the affirmative defense of sudden medical emergency. This means that while the law on the sudden medical emergency may vary from state to state, the federal regulations concerning medical certification of truck drivers could play an important role in

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TLA Feature Articles and Case Notes any case arising out of a truck driver’s sudden medical event.

In Ohio, when the driver of an automobile is suddenly stricken by a period of unconsciousness that he has no reason to anticipate, he is not chargeable with negligence for his inability to control his vehicle.3 A sudden medical emergency is a complete defense to a negligence claim.4 In Roman, the Supreme Court of Ohio rejected a narrow interpretation of the sudden medical emergency doctrine that would have limited the defense to only those drivers with no history whatsoever of the illness that caused the unconsciousness, meaning “all drivers with any history of illness [would be] unable as a matter of law to prevail on a sudden medical emergency defense.”5 Instead, the Roman Court established a broad view of the doctrine, explaining the defense is a simple inquiry into “whether the defendant driver should have been driving at all."6 Other states have also adopted a similar form of the sudden medical emergency defense.7

FMCSRs In Ohio and other jurisdictions, the test is essentially an inquiry into whether the defendant driver should have been driving at all. Whether a commercial truck driver should be driving at all “falls within the province of the U.S. DOT."8 Congress delegated to the Secretary of Transportation the authority to prescribe driver qualifications for commercial truck drivers.9 Pursuant to this authority, the U.S. DOT promulgated the FMCSRs under which a person “shall not drive a commercial motor vehicle” without a “medical examiner’s certificate that [the person] is physically qualified.”10 Specifically, “the medical examiner is required to certify that the driver does not have any physical, mental, or organic condition that might affect the driver’s ability to operate a commercial motor vehicle safely.”11 A driver is physically qualified if, among other things, he has “no current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to

be accompanied by syncope, dyspnea, collapse, or congestive cardiac failure.”12 When motor carriers need to determine whether a driver is physically qualified to operate a commercial motor vehicle, they are “entitled to rely on medical determinations made by medical professionals[.]”13 In fact, motor carriers who secondguess the medical examiner’s certification, or who otherwise require certain drivers to undergo additional medical testing, potentially violate the Americans with Disabilities Act (“ADA”). Absent “‘evidence of current performance problems or observable evidence suggesting that a particular employee will pose a direct threat,’ employers can require periodic medical examinations of employees in only two instances: (1) where the employees are in positions affecting public safety (e.g., police officers and firefighters); or (2) where the medical examinations are required or necessitated by other law or regulation (e.g., Federal Aviation Administration and Department of Transportation medical certifications, Occupational Safety and Health Act standards).”14 This means a motor carrier’s reliance on the opinions of the DOT medical professional is a sound practice not only because the DOT-certified physician is authorized and qualified to make such determinations, but also because it allows the motor carrier to comply with the ADA and to avoid potentially discriminating against its drivers on the basis of a medical disability. In other words, the medical certification process established by the DOT allows motor carriers to simultaneously ensure their drivers are physically qualified to drive and stay within the bounds of the ADA.15

Application of These Principles in Cline v. Dart In the Cline case, it was undisputed that the truck driver was medically certified to drive on the date of the accident.

The truck driver had obtained his medical certification in October 2016 and he was not required to obtain another certification until October 2017. Consistent with the regulations and the applicable case law, the motor carrier appropriately relied on the informed

results of the DOT medical examination to determine that the truck driver was physically qualified to drive. After the truck driver resumed operation in October 2016, there was no evidence that either the truck driver or the motor carrier was aware of any medical issues that would have prompted the need for additional medical testing. Thus, had the motor carrier required the truck driver to undergo additional medical testing or monitoring, this potentially could have been in violation of the ADA. In any event, neither had any reason to believe on the date of the fatal accident that a heart attack was imminent.

The U.S. District Court for the Northern District of Ohio agreed and granted summary judgment in favor of the motor carrier and the truck driver’s estate.16 The Court reasoned that the truck driver “was medically certified by the DOT – the body vested with authority to determine whether a commercial driver is fit to drive – at the time of the fatal accident.”17 The Court explained that the motor carrier “was entitled to rely on that certification and [that this] reliance . . . was reasonable.”18 In fact, the motor carrier “might have violated the ADA had [it] subjected [the truck driver] to restrictions or further testing.”19 The Court added that “[n] o one, including the DOT-certified medical examiner who cleared [the truck driver] to drive commercial motor vehicles, predicted a heart attack was imminent[.]”20

Final Thoughts When defending against a lawsuit arising out of a truck accident precipitated by a sudden medical event experienced by the defendant truck driver, the FMCSRs can provide a shield for the motor carrier and the truck driver. So long as the motor carrier and truck driver have no actual knowledge of a specific medical condition that would suggest it is unsafe to drive, the medical clearance given by the medical examiner is a key fact that establishes the truck driver was permitted to drive commercial motor vehicles on the date in question. This key fact can exonerate the motor carrier and truck driver from liability for an accident that was not the truck driver’s fault.

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TLA Feature Articles and Case Notes Endnotes

1

2021 WL 1697913 (N.D. Ohio Apr. 29, 2021).

Cline, 2021 WL 1697913 at *2.

3 Roman v. Est. of Gobbo, 99 Ohio St. 3d 260, 791 N.E.2d 422 (Ohio).

4 Id. at ¶ 1.

5 Id. at ¶ 52.

6 Id. at ¶ 51.

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See, e.g., Jones v. Cobbs, No. 1045 WDA 2020, 2021 WL 2399779 (Pa. Super. Ct. June 11, 2021) (the sudden medical emergency defense “negates negligence and precludes liability where a motor vehicle accident is caused by the defendant’s sudden and unforeseeable incapacitation or loss of consciousness”); Cottrell v. Laidley, No. 2018-02994, 2021 WL 1398909 (Mass. Super. Mar. 11, 2021) (foreseeability “arises when the operator suffers warning symptoms of a physical failure during the actual operation, but neglects to heed such warnings and continues to operate the vehicle or when the operator suffers from a condition which indicates, from a medical viewpoint, a fairly immediate likelihood that it will result in an attack rendering him unconscious.”); Tanner v. Sherwood, 98 Mass. App. Ct. 1112, 155 N.E.3d 766 (2020) (“a sudden and unforeseeable physical seizure rendering an operator unable to control [her] motor vehicle cannot be termed negligence.”); Hernandez v. Mishali, No. 3D19-1544, 2021 WL 1773834 (Fla. Dist. Ct. App. May 5, 2021).

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Hensley v. United Parcel Service, Inc., 2014 WL 903166 1, 3 (W.D.N.C. Mar. 7, 2014); see also Harris v. P.A.M. Transport, Inc., 339 F.3d 635, 638 (8th Cir. 2003) (“[D]river fitness falls squarely within the regulatory scheme (and substantive expertise) of DOT.”) (internal quotations omitted); Prado v. Continental Air Transport Co., 982 F.Supp. 1304, 1308 (N.D. Ill. 1997) (“The court will not abrogate clear congressional intent which vests driver fitness issues in the Secretary of Transportation.”); Mead v. Lattimore Materials Co., 2018 WL 807032, *1 (N.D. Tex. Feb. 9, 2018) (medical certification in accordance with the DOT regulations ensures the driver’s continuing ability to safely operate a commercial motor vehicle).

9

See 49 U.S.C. § 31102(b)(1).

10 49 C.F.R. § 391.41(a).

11 49 C.F.R. § 391.43(f).

12 49 C.F.R. § 391.41(b)(4).

13 Green v. Pace Suburban Bus, 2004 WL 1574246 (N.D. Ill. Jul. 12, 2004); Michael v. City of Troy Police Dept., 808 F.3d 304, 307 (6th Cir. 2015) (“An employer’s determination that a person cannot safely perform his job functions is objectively reasonable when the employer relies upon a medical opinion that is itself objectively reasonable.”); Campbell v. Fed. Exp. Corp., 918 F. Supp. 912, 918 (D. Md. 1996) (motor carriers are entitled to rely on medical professionals’ determinations).

14 Jackson v. Regal Beloit America, Inc., 2018 WL 3078760, *8 (E.D. Ky. Jun. 21, 2018) (quoting EEOC Guidance, Part D.18, 21); see also Nichols v. City of Mitchell, 914 F. Supp. 2d 1052, 1061 (D.S.D. 2012) (“where an employer develops a suspicion regarding the employee’s health, but has no justified concern about employee’s ability to perform her job, the ADA prevents the employer from requiring the employee to submit to a medical examination”).

15 See Albertson’s, Inc. v. Kirkingburg, 527 U.S. 555, 119 S. Ct. 2162, 144 L. Ed. 2d 518 (1999) (summary judgment for motor carrier employer was appropriate in ADA case where the motor carrier relied on truck driver’s failure to obtain a DOT medical card in its decision to fire the truck driver).

16 Cline, 2021 WL 1697913 at *8.

17 Id. at *5.

18 Id. 19 Id. 20 Id. at *8.

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TLA Feature Articles and Case Notes

Voting Trusts: Like Cicadas, They’re Back Again Greg E. Summy*

The history is familiar even to the most casual observer of the railroad industry. Beginning after the end of World War II and continuing for the next 35 years, railroads were in a state of decline. As Ernest Hemingway’s character Mike Campbell famously stated in The Sun Also Rises, when asked about how he went bankrupt, he stated “Two ways . . . gradually and then suddenly.” The same was true for the railroads during these dark years.

After experiencing a couple of decades of parallel mergers,1 matters in the industry became desperate.2 Railroad bankruptcies, large and small, became commonplace. Track and roadbed conditions deteriorated. Purchases of new rolling stock were few and far between.

The disastrous merger between two of the largest eastern railroads, the Pennsylvania and the New York Central into the Penn Central, fell into bankruptcy less than 30 months after its creation. As a result, the federal government created Conrail out of seven bankrupt eastern railroads, beginning operations on April 1, 1976.

Realizing that the railroad industry was vital to commerce in the United States, Congress threw the industry and the country a lifeline when it passed the Staggers Act of 1980. One of the stated purposes of the law was to “ensure the development and continuation of a sound railroad transportation system with effective competition among rail carriers and * Vandeventer Black LLP (Norfolk, VA)

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with other modes . . . .”3 As it turned out, however, the continuation of consolidation in the rail industry wasn’t finished, and in the two decades following the passage of Staggers, there were several railroad consolidations, including: • CSX, created from the combination of the Chessie System, Seaboard Coast Lines and the “Family Lines”4; • Norfolk Southern, created from the merger of Norfolk & Western and the Southern; • BNSF, created from the merger of Burlington Northern and Santa Fe; • Union Pacific, created by UP’s acquisition of several fallen flags, including the Western Pacific, the Katy, Missouri Pacific, Chicago & Northwestern and the Southern Pacific (which previously had absorbed the Cotton Belt and the Rio Grande); and • The Conrail Transaction, which was the division of Conrail between Norfolk Southern and CSX, effective June 1, 1999.

By 2000, only seven Class I railroads were left, with KCS being the smallest.5 As a reaction to the perceived consolidation of many significant railroads into a few larger ones, the Surface Transportation Board6 (“STB”) initiated a Notice of Proposed Rulemaking in the late 1990s, culminating in the promulgation of new regulations governing the STB’s approach to review of proposed mergers or acquisitions of control between the Class I railroads. STB Ex Parte No. 582 (Sub-No. 1), Major Rail Consolidation Procedures, 5 S.T.B. 539 (2001) (“Rulemaking”). The New Rules are found at 49 C.F.R. Part 1180. Differences between the New Rules and the rules previously in effect (“Old Rules”) are significant in certain

respects, including the STB’s statement in the Rulemaking that any further merger proposals must “enhance, not merely preserve, competition, in order to secure our approval.”7 Interestingly, reacting to a Comment filed by KCS in the Rulemaking, the STB included the potential exception for a transaction involving KCS, stating that an applicant could request a waiver from the application of the New Rules for such a transaction, and if granted, the STB would review the consolidation application under the Old Rules. For purposes of this article, the key aspect of the Old Rules is that the application would be considered under an “adverse effect upon competition” standard, rather than the requirement under the New Rules that “merger applications should include provisions for enhanced competition.”8 The subject of voting trusts was also addressed in the STB’s Rulemaking, providing a specific procedural section governing the administrative review of requests for approval of a voting trust and requiring applicants to “demonstrate in a public filing that their contemplated use of a trust would not result in unlawful control and would be consistent with the public interest.”9 Considering all this history, we return to the present. Transportation Lawyers Association Rail Chair Jameson Rice presented an excellent lecture at the June 2021 Annual Conference entitled, The $33.7 Billion Question: Who will acquire Kansas City Southern and will it pass regulatory muster? Jameson thoroughly yet concisely outlined the battle for KCS, culminating with the richer bid of Canadian National (“CN”) winning the approval of the KCS Board of Directors over the competing offer of Canadian Pacific (“CP”).10 In anticipation that KCS would accept

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TLA Feature Articles and Case Notes its offer, CP quickly filed a request for approval of its voting trust and additionally requested that the STB apply the KCS exception and review the application under the Old Rules. When CN filed its request for a voting trust, CN did not request that its application be considered under the Old Rules and affirmatively stated that the New Rules should apply. Before the KCS Board rendered the filings in the CP docket moot, the STB approved use of the KCS exception and also approved the CP voting trust. As of this writing, however, the STB has not yet decided whether CN should be allowed to use a voting trust.

What is a voting trust? A voting trust is a vehicle that has been used frequently (according to CN) or perhaps rarely (according to the STB) wherein the shares of the target company will be conveyed into a trust. This practice allows the shareholders of the target company to be paid in accordance with the terms of the transaction between the acquiror and the target with the trustee essentially running the target company during the pendency of the STB approval process. If the transaction is approved, then the voting trust ends and the acquiror is in legal and actual control of the target. If the transaction isn’t approved, then the acquiror and the trustee will have to engage in a divestiture process for the shares of the target.

The CN/KCS merger is the first case to be filed under the New Rules.

Several observations come to mind with respect to this transaction and any future transactions.

1. Every transaction is different, even though a party may say otherwise.

CN and CP have each tried to label their transaction as, colloquially, important, but not a big deal. CP is smaller than CN, and CP argues, in essence, that a CP/KCS transaction should not be viewed by customers, railroads or regulators as anything other than a classic end-to-end merger. For its part, CN recognizes that KCS’s parallel line between Baton Rouge and New Orleans would have to be divested, but after that divestiture, the CN/KCS proposal is also nothing more than an end-to-end

merger. Nevertheless, the STB has hinted that it views a CN/KCS merger as having a much greater impact on the railroad industry and shipping community than the CP/KCS proposal. Consider also that CN is significantly larger than CP, and that a combined CN/KCS would be perceived to be a more powerful carrier than CP/KCS. 2. What do the New Rules really mean?

In the public comments leading up to the Rulemaking establishing the New Rules, many parties expressed diverging views about whether “enhanced competition” was an appropriate standard, and if so, what exactly did it mean. Anecdotally, the New Rules have inhibited railroads from attempting a merger. With two large eastern railroads, two large western railroads, one large north-south railroad (CN) and the remaining two relatively small Class I railroads, it would take a creative and unconventional mind to imagine how, for example, an east-west merger would enhance competition, unless the merging companies were willing to grant access over one’s tracks to others. Willingly allowing competitors to use your assets, even for a price, isn’t something that would seem to be immediately attractive. Perhaps railroads not involved in the CN/KCS transaction are interested in having someone else initiate the test case.

Also, might a party unhappy about an STB decision citing “not enough enhanced competition” be willing to take the STB to court about the New Rules? The underlying statute governing the conditions of approval for mergers and control applications specifically states that “the Board shall consider at least . . . whether the proposed transaction would have an adverse effect on competition among rail carriers . . . .”11 The New Rules go further. In the Rulemaking announcing the New Rules, the STB justified the “enhanced competition” requirement as being related to the standard in 49 U.S.C. 11324(c), which states that “[t] he Board shall approve and authorize a transaction under this section when it

finds the transaction is consistent with the public interest.” Following through on this observation, in the New Rules, 49 C.F.R. 1180.1(c) indicates that the Board believes that the “public benefits” component of the law includes the necessity for enhanced competition, and further concludes that due to the small number of Class I railroads that could be the subject of future mergers, any further consolidation in the industry is “likely to result in a number of anticompetitive effects.”12 Did this conclusion improperly veer from the underlying statute? An applicant whose transaction was denied by the STB might make such an argument.

3. Should consideration of a voting trust include an analysis of the underlying application for approval? It isn’t the same thing, but the argument for doing so is similar to the standards for injunctive relief—likelihood of success on the merits and significant harm if the relief (in this case, a voting trust) is not approved. CN has stated that it is not necessary to file the full application before approving a voting trust, but for good measure argues that the CN/ KCS transaction (and voting trust) is in the public interest. First, CN notes that the STB, and its predecessor the ICC, frequently approved voting trusts in railroad acquisitions so that railroads wishing to acquire another railroad could compete fairly with non-railroad acquirors that don’t have to go through the lengthy and complex STB approval process.13 If the STB inhibits the use of voting trusts, then, according to CN, a railroad wishing to sell would always prefer the quicker and easier transaction with a non-railroad. A differing view comes from opponents of the CN/KCS voting trust, such as the National Industrial Traffic League and The Fertilizer Institute. They argue that the public interest component should be considered in evaluating the voting trust; and since the underlying application and evidence hasn’t been filed, it’s too soon to determine if a voting trust is in the public interest. In essence, the implication is that a voting trust should

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TLA Feature Articles and Case Notes almost never be approved before the underlying case is decided. Perhaps this was what the STB was indicating when it established the New Rules.

Simply put, the approach of the New Rules to voting trusts is a gamechanger that hasn’t been tested. CN’s arguments about approval of voting trusts in the past may be discounted by the STB, based on establishment of the New Rules.

4. What is the implication of the STB’s quick action on the CP voting trust?

The STB approved the CP voting trust and granted CP’s request for judging the case under the Old Rules in a matter of weeks after the request was filed, but it has been more cautious with respect to the CN/KCS proceeding. CN correctly notes that the language of the CN/KCS voting trust is substantially the same as the CP/KCS voting trust previously approved by the STB. But that argument misses the point made by the STB, which is that the underlying transaction will be evaluated under the New Rules, not the Old Rules. The STB has concluded that its prompt action on the CP/KCS case has no bearing on the CN/ KCS proceeding, because the underlying transactions are different, will be evaluated under different standards, and could result in different outcomes.14 5. Arguments for greater competition in the railroad industry. It’s clear that there will be policy headwinds for

any merger of railroads. Consider the following: a. Department of Justice. DOJ is limited to advisory input in railroad mergers, as contrasted to its greater power for mergers involving other industries. DOJ believes that CN/KCS has greater competitive difficulties than CP/KCS, but goes further to say that even with the constraints in the language of the voting trust document, the unity of ownership interest diminishes incentives for the beneficial owner and the trustee to aggressively compete for traffic during the time the voting trust is in effect. Further, DOJ expresses concern about competition among railroads for moving the same commodities from different origins to the same destination. Pricing of transportation can often be a significant cost component of the delivered price of the commodity.

As such, even though a merger might be end-to-end on the map, there may be a diminution in competition if after the merger, the same railroad would serve both potential origins.15 Because of this and other subtleties, DOJ recommends not approving the voting trust at this time. b.

President Biden’s Executive Order. On July 9, 2021, President

Biden issued the Executive Order on Promoting Competition in the American Economy. While not specifically addressing railroad mergers except with respect to performance for passenger railroad trains, the order generally notes that the policy of the United States is to combat excessive concentration of industry. c. STB Chairman Martin Oberman’s statement with respect to the Executive Order. Chairman Oberman issued his own statement the same day as the executive order indicating his concern with “sufficient competition in the rail industry.”

In conclusion, the STB has executive (policy) duties, quasi-judicial (deciding complaints brought under applicable laws) duties, as well as duties that can turn into a mix of the two (such as railroad mergers).

The STB must fulfill what it is authorized to do under its enabling legislation, but it does have discretion in how it does so. As a result, for railroad mergers, the STB has guardrails created by the law but also has to consider the public interest in making its decisions.

All in all, it can make for an interesting ride for the parties and interested observers, and deciding the voting trust issue is just the first step. Open up the throttle but be prepared to drop it down a couple of notches. The track to completion of the deal could have some slow orders along the way.

Endnotes 1 A parallel merger is one between two railroads whose lines roughly serve the same markets. In the 1950s and 1960s, mergers like these were favored because excess capacity would be eliminated, and the surviving railroad would be stronger and better able to serve the public.

2 Gradually, then suddenly . . .

3 49 U.S.C. 10101(4).

4 The Louisville & Nashville was the best known of the Family Lines.

5 The six others are Union Pacific, BNSF, CSX, Norfolk Southern, Canadian National and Canadian Pacific.

6 The Surface Transportation Board (“STB”) is the independent federal agency charged with the economic regulation of railroads.

7 Rulemaking at 546. Perhaps not coincidentally, the last control application approved by the STB prior to establishment of the New Rules was the Conrail Transaction, and in that case, Norfolk Southern and CSX touted as a benefit that many markets served solely by Conrail would, upon approval, have each railroad serving those markets. The phrase used by the parties was “inject competition” into the market. Very importantly, Conrail was a unique railroad, created out of seven bankrupted railroads, and was structured in such a way as to prevent what had formerly been destructive competition, and which would preserve railroad to markets in the Northeast. In the 20-plus years since its creation, Conrail had turned itself into a self-sustaining, profitable railroad, partially due to the Staggers Act, partially due to an aggressive rationalization program, and partially due to the will of its employees.

8 49 C.F.R. 1180.1(c).

9 49 C.F.R. 1180.4(b)(4)(iv).

10 However, on August 10, 2021, The Wall Street Journal reported that CP was preparing to increase its bid for KCS to $300/share. This would still be less than CN’s bid.

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TLA Feature Articles and Case Notes 11 U.S.C. 11324(b)(5).

12 Id. 13 49 U.S.C. 11321 through 11328 only apply to combinations involving rail carriers. Purchase of a railroad by a non-railroad doesn’t invoke the jurisdiction of the STB. 14 The STB issued a press release on August 10, 2021, stating that it will issue a ruling on the CN/KCS voting trust by August 31, 2021.

15 Although DOJ very openly acknowledges product and geographic competition, the STB has consistently refused to recognize this competition with respect to rate cases. See EP No. 627, Market Dominance Determination—Product and Geographic Competition (decision date April 2, 2001).

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TLA Feature Articles and Case Notes

Autonomous and Electric Cars and Trucks: Did They Survive COVID-19?

Arthur D. Spratlin Jr.*

2020 had more than its share of disasters and distractions. The COVID-19 pandemic, working from home, floods, hurricanes, and the election took up much of our capacity to think about anything else.

So, what happened in the ongoing development of autonomous and electric vehicles (“AVs/EVs”) while we weren’t looking?

Where Are We? Where Are We Headed?

Level 5 full autonomy is where we are trying to go. That is the goal of most everyone in the business. We will talk more about that below, but if you have ever read an article or heard a presentation on this topic before, you know where it starts—safety.

If you’re afraid of robot cars, you should be terrified of human drivers. In the U.S. alone, there are about 6 million crashes, 2.5 million injuries, and 37,000 deaths per year.1 That is about 100 deaths per day coming from the automotive space, with an estimated 94% caused by human error.

So, the goal is “to get the humans out from behind the wheel of the car.” Ironically, while Americans drove some 13% fewer miles during 2020 due to lockdowns and working from home, the pandemic created some bad driving behavior, including excessive speeding and drug and alcohol use. Early estimates for 2020 show an 8% increase in fatalities, with about 42,060 * Butler Snow LLP (Ridgeland, MS)

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deaths on our roadways.2 Until we get to Level 5, the industry will continue to roll out new safety features, such as automatic emergency braking, front-collision warnings, lanekeeping assist, adaptive cruise control, and blind-spot detection, commonly referred to as advanced driver-assistance system (“ADAS”) technology. You will hear new terms in the next few years, such as CASE mobility (connected, autonomous, shared, and electric). That is the direction we are headed with cars and trucks as we enter the “autonomapocalypse.”

This life-changing description of the future of mobility encompasses not only the AVs/EVs that are forthcoming, but also the change in human behavior that will occur along with their arrival. Autonomy is freedom, the age of the passenger is now, and the age of the driver is over—as reflected in the current statistics showing young people not getting (or in no hurry to get) their driver’s licenses.3 Sixteen-year-olds are not eager to get their licenses like they used to be because they don’t want to be the ones stuck driving; they want to be free to use their cell phones to text or monitor social media.

If you remain skeptical, “follow the money.” The recent mergers and partnerships in this industry have been simply astounding. Collaboration between companies that were once bitter rivals is now commonplace. Recently, Amazon bought Zoox, a California-based “ride-hailing” business, for a reported $1.2 billion.4 Amazon has also invested in Rivian (electric pickup trucks and SUVs) and Aurora, another selfdriving technology company.5 GM is trying to catch up in the EV race, investing in self-driving startup Cruise and reintroducing an all-electric Hummer for 2022. Ford

introduced an all-electric F-150 “Lightning” for 2022, which will include “bi-directional” charging, so that your home can charge your pickup or your pickup can supply electricity your home. The long-awaited Rivian electric pickup started deliveries to customers in September 2021. Lucid, TuSimple, Lyft, Uber, Nikola, Lordstown, Li Auto, Nio, XPeng, and Fisker recently went public, so there is an incredible amount of money changing hands in the AV/EV industry. Case in point: Tesla’s market capitalization was recently worth more than the nine largest car companies combined, even though it only accounts for about 1% of global vehicle sales.6

Electric Cars Electrification and autonomy are two different technologies. Some companies are focusing on one or the other, while others are focusing on both. But both technologies are headed along the same trajectory and will impact mobility in the next three to five years and beyond. China is the world leader in EVs, but Europe hit a milestone last year when 500,000 EVs were sold in the first half of 2020—thereby surpassing China.7 There are two primary forces moving these numbers overseas: financial incentives (tax credits) and the deadlines set by many European countries over the next decade for when they plan to go electric (zero-emission) and eliminate fossil fuels.

On August 5, 2021, President Biden signed an Executive Order setting a new national target to make half of all new vehicles sold in 2030 zero-emissions vehicles.

President Biden has made boosting EVs a top priority and has pledged to support a massive build-out of EV charging stations. It is also likely that he will support new tax credits and other incentives for

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TLA Feature Articles and Case Notes consumers to encourage growth and development in the EV sector. In California, Gov. Gavin Newsom signed an executive order on September 23, 2020, declaring that all new passenger cars sold in California will be zero-emission by 2035. GM recently became the first major U.S. automaker to commit to phasing out all gas and diesel vehicles by 2035 and will offer 30 new EVs globally by 2025. Ford has committed to having 40% of its fleet electric by 2030.

Autonomous Cars There are a number of new startups fighting for the lead in this space, while the legacy manufacturers are playing catch up.

There are five levels along the way to Level 5 full autonomy, with Levels 0, 1, and 2 comprising most of the cars on the market today, and which require significant amounts of human interaction. As we move up to Levels 3, 4, and 5, there is less human involvement and increasingly more technology. At full Level 5 self-driving, the human does not have any ability to take over the car. It is completely self-driving—meaning no steering wheel or brake pedal. Levels 3 and 4 still contemplate minimal human intervention, when needed.

Some of the leading AV car companies include Waymo, Cruise, Zoox, Aurora, Aptiv, Motional, and Argo AI, with Apple reportedly developing an AV behind the scenes.

Waymo is the leader of the pack when it comes to testing its Waymo Driver platform.

Waymo One was the first publicly available, paid ride-hailing service operating on a pilot basis and boasts over 20 million miles of testing via actual driving on public roads (and more than 15 billion miles in simulated testing).8 What does it intend to do with all this testing and technology it has amassed?

There are four ways it plans to make a profit: 1) ride-hailing robotaxis, 2) urban delivery, 3) long-haul AV trucking, and 4) selling the technology to various automakers.9 Meanwhile, Hyundai and Aptiv joined forces to form Motional, which will partner with Lyft to provide robotaxis across the U.S., similar to Ford’s partnership with Argo AI and Lyft to dispatch 1,000 robotaxis in six U.S. cities in the next few years. In December 2020, Aurora acquired Uber’s self-driving unit, Advanced Technologies

Group, giving it an even stronger platform as a leader in both the light passenger and heavy-duty truck space.10

Electric Trucks In August 2020, a study predicted there would be 54,000 electric trucks on the road by 2025.11 The two main technologies in play are the traditional battery pack (Tesla) and hydrogen fuel cells (Nikola).

Interestingly, back in July 2020, and within 24 hours of each other, Tesla and Nikola announced that they were both building new factories to make battery-powered heavy trucks.12 Curious timing? Perhaps it had something to do with the California Air Resources Board’s June announcement of its Advanced Clean Trucks rule, the first limitations on how many diesel-powered vehicles can be sold in California starting in 2024.13 These limitations will increase until 2045, when all new class 2 through 8 vehicles must be zero-emission. Over the next 25 years, California is going to be mandating or limiting how many diesel vehicles can be sold in the state, eventually eliminating them. Fifteen other states have signed some sort of agreement to follow suit to eliminate gasoline and diesel engines by 2050.14 XOS Trucks (formerly known as Thor Trucks) is another traditional BEV truck manufacturer, based in Hollywood, California, that is developing both heavy-duty and “last-mile” medium-duty electric trucks with plans to go public in 2021.

Autonomous/Self-Driving Trucks Are there any problems with trucking? Safety, accidents, fuel economy, traffic congestion, asset utilization (approximately 50%), maintenance costs, driver shortages, and the variety of issues associated with human drivers, just to name a few.

Humans need sleep and restroom breaks, want air-conditioning and salaries with benefits, need training and coaching, get sick, and sometimes they just don’t show up or quit. These are just some of the problems that stand to be corrected with AV truck technology.

Truck driving is one of the most dangerous jobs in the U.S., as evidenced by the 4,415 large-truck-related fatalities in 2018.15 Driver error is to blame for about

90% of those crashes. At the same time, there is a 60,000-person driver shortage in long-haul trucking. AV is a clear solution for both problems because the software doesn’t tire or become distracted; it has a superhuman level of awareness, with the ability to see up to a mile ahead with 360-degree vision; and it can learn. Yes, the trucks will constantly learn from every other truck on the road and will thereby amass much more knowledge than a human driver who drives their entire life. Looking at the numbers from an accident reconstruction standpoint, a human truck driver’s perception-reaction time is generally two seconds, whereas the AV truck reaction time is less than 100 milliseconds—and the truck can see a mile ahead.

There has been a recent shift in focus among many AV industry leaders, who now realize there may be a quicker pathway to market—and a more immediate economic benefit—in the AV trucking space than in the AV car market. The obvious reason is that the trucks are being trained to drive on rural interstate highways, which is relatively easy compared to urban driving. Hence, AV technology is likely quicker to market and more likely to provide an economic benefit in the trucking industry before it pays off in the AV car industry.

There are several major players here, including Waymo Via, TuSimple, Kodiak Robotics, Embark, Aurora, and Plus. TuSimple went public in April 2021, becoming the first public driverless vehicle company. Embark, Aurora, and Plus are expected to go public via a special purpose acquisition company this year. Waymo Via, TuSimple, Kodiak, and Aurora are all currently hauling loads in Texas. In fact, the “Texas Triangle” is the new hot spot for AV truck testing, which includes the five largest cities in Texas. There are numerous partnerships and alliances forming between the new AV truck startups and established trucking companies, such as Waymo Via hauling loads for J.B. Hunt and TuSimple partnering with Ryder to use its national network of fleet maintenance facilities for terminals.

As for traditional truck manufacturers, Daimler offers a Detroit Assistance 5.0

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TLA Feature Articles and Case Notes package, featuring a suite of ADAS safety systems and active brake assists, available now on its 2021 Freightliner Cascadia. So far, 90% of its customers have ordered the package, which provides for Level 2 autonomy. Daimler acquired Torc Robotics in 2019 and has been testing in Virginia, while recently announcing the opening of a new test center in Albuquerque, with a goal to bring Level 4 trucking to the road within the decade.

The business case for AV trucks is simple when considering the salary and expense of hiring a driver, the hours-ofservice restrictions and corresponding restrictions on asset utilization, and the cost of liability insurance. It is a no-brainer for trucking company executives who have the option to buy an “add-on” piece of selfdriving equipment for $5,000, or the option to buy a new truck that comes fully loaded with AV technology, allowing the truck to operate longer hours, alleviate the driver shortage, and take human error out of the equation.

Driver Training/Coaching Another benefit of the latest truck technology and ADAS is the enhanced availability for driver coaching. Several companies are developing tools that will use video telematics and dashcams to coach drivers. The technology can alert drivers to the fact that a particular intersection, at a certain time of day, is registering an unusual number of “near misses” or collisions at the same spot for multiple drivers.

Armed with this information, drivers know to adjust their route to avoid the intersection during high-risk time periods, reducing their exposure to and possibly avoiding future accidents.

Nearly 25% of fatalities and 50% of injuries occur at intersections, many of which involve rolling stops.16 Lytx, a San Diego-based telematics company, is combining its machine vision and artificial intelligence (“AI”) technology to trigger rolling stops. Using the machine vision as the eyes (to recognize a stop sign) and the AI as the brain (to assess the speed), the system can flag a rolling stop that can be used for training purposes.

Bendix Wingman has the Fusion

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system, which can slow trucks down by up to 50 miles per hour, eliminating 70% of rear-end crashes.17 Bendix also offers Safety Direct, a program that can identify good and bad driving behavior to see what is causing “near misses” to coach drivers and prevent future catastrophic events.

Truck Driving Jobs?

In addition to being one of the most dangerous jobs in the U.S., truck driving is also one of the most common. In 2019, there was an estimated 3.5 million truck driving jobs in the U.S.18 So, what happens to all the truck driving jobs when AV trucks reach universal acceptance and are produced at scale? There is a big debate, with proemployee groups arguing that the “robot trucks” will eliminate most if not all truck driving jobs in the future.19 On the other hand, the trucking industry and AV developers argue that there is a 60,000-person driver shortage now, which is projected to get worse in the next few years. They argue that the ADAS technology will (at least in the short term) act only as a “driving assistant” and human operators are still needed; AV/ ADAS technology will make the job less stressful, thereby making it easier and more desirable; the corresponding increase in talent among new job applicants will help get better truck drivers; and the AV technology will apply primarily to long-haul operations using an exit-to-exit strategy, which will get the long-haul drivers home more often and create an offsetting number of “last-mile” local delivery jobs to replace any loss in “long-haul” jobs.20

Insurance and Liability If there is no driver in the car, or if there is a driver but no steering wheel, how can there be any driver negligence? If there is an accident, then there must be a product liability claim. The expectation is that there will be fewer accidents caused by human drivers (resulting in fewer traditional negligence claims) and more liability shifted to the car itself. It follows then that there will be less traditional auto insurance purchased by the driver, and more product liability coverage purchased by the manufacturer.

Is this the end of personal auto insurance as we know it? Several car

manufacturers have stated publicly that they will be responsible for accidents that occur if their vehicle is in self-driving mode.

Inquiries into who or what is responsible for an accident will consist of determining who owns the operating system, whether a software failure caused the accident, and who owned the software, which may or may not be the manufacturer of the car. Do you treat the AV like a human, under traditional negligence principles, or do you treat it like a piece of equipment, under product liability law? For now, even if you are in selfdriving mode, there is a gray area where warning systems alert the driver to take control of the car in certain situations. Did the human driver take control of the car within a reasonable time after being warned, or did the human fail to acknowledge the warning altogether? To develop AV technology faster, there have been theoretical discussions of a national workers’ compensation–type system, known as a manufacturers’ enterprise responsibility fund, that will assist with accidents involving AVs.

A New Theory of Liability?

The advancements in truck technology are already leading to the creation of new theories of liability from the plaintiffs’ bar. Should the truck have been equipped with the latest technology or ADAS, which would have prevented the accident? Was the trucking company negligent for failing to properly equip its fleet?

How do you defend this? Obviously, every truck on the road today is not going to get the latest technology upgrade overnight. First, you rely on the National Highway Traffic Safety Administration (“NHTSA”) and show that the ADAS technology is not required by NHTSA, is not yet approved by NHTSA for heavy trucks, or may not be commercially available from the manufacturer. The ADAS technology may still be in the testing phase, may not be sufficiently validated, or may not be sufficiently reliable at this time. Further, the plaintiff would have to prove that the specific technology would have prevented or mitigated the accident.

Other questions to consider: When does the trucking company’s obligation to

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TLA Feature Articles and Case Notes add this new technology ripen? What is the cost of the new technology? Can the carrier reasonably afford to install the new technology across the entire fleet at once? There are very few carriers, even major carriers, who could afford to do that. Even if they did, it would be an investment in ADAS knowing that it will likely be outdated soon, leading to a circular argument and begging the question of “when do you pull the trigger?”

If this “failure to use the latest technology” theory is raised, the trucking company must show it is using reasonable efforts to stay abreast and considering new technology as it is introduced, perhaps choosing to install it on a limited or trial basis until it is thoroughly vetted and accepted in the scientific community, and until it is reasonably affordable. Consider the small mom-and-pop trucking company versus a major national carrier and their relative economic wherewithal to experiment with new technology, purchase add-on equipment, or afford to purchase new high-tech tractors for their fleets. As Level 2 (and above) tractors with ADAS technology become more readily available and the pricing levels out, there will be a closer question of “if affordable, should the company have ordered the Detroit Assistance 5.0 package that was available at the time?” There will always be a cost-benefit analysis of whether the savings created by the reduction of accidents makes up for the cost of the additional safety features, bearing in mind that avoiding one catastrophic crash or one nuclear verdict could cover the cost of the new technology.

As fleets age and new smart trucks

come to market, we will gradually see older trucks rotate out of the fleet as the technology evolves to a point where things like automatic emergency braking are the new standard, and likely required by NHTSA. NHTSA is presently conducting tests on heavy trucks and is now in Phase 2 of field studies to determine whether, when, and what new ADAS technology it will mandate on heavy trucks. Meanwhile, the Federal Motor Carrier Safety Administration (“FMCSA”) launched its Tech-Celerate Now program in February 2020 to explore and understand the adoption of current ADAS technology and assess future ADAS technologies, all with the goal of accelerating adoption, reducing crashes, saving lives, and realizing substantial return on investment through increased safety and other long-term benefits. On the flipside, all this technology may lead to the odd result of lawsuits claiming the truck had too much technology that caused an accident!

Crash investigations will likewise hinge on a determination of traditional driver error versus a software failure. The new ADAS technology and crash prevention systems will lead to the creation of a new breed of expert engineers who will use the software to recreate the accidents and determine the causes without traditional investigations. These new AV trucks will be data hogs, chock-full of useful information for accident reconstruction. While we currently rely on accident scene investigations, drone photos, measurements, and ECM data for speed and braking, in the future engineers and accident reconstructionists will likely be able to fully recreate the accident without ever leaving their desks.

The Effect of COVID-19?

Did the pandemic accelerate or postpone the adoption of AVs? From a production standpoint, the new normal of working from home affected the industry, and there were surely supply chain issues; but from a broader perspective, the new opportunities created by the coronavirus served to accelerate the overall public adoption of AVs. While hunkered down at home, the public realized the importance of having delivery drivers who do not get sick.

Even the naysayers realized “contactless delivery” was a keen idea during a pandemic. The pandemic highlighted the many issues that AV technology can help solve.

But the big winner in the post-COVID-19 AV space may be the increase in consumer acceptance and adoption.

Conclusion As the public consumes a steady dose of AV news on social media, flashy product launches, and public stock offerings, and gets used to the ADAS technology in their new passenger cars, the question continues to be, “when will the AVs take over?” Many AV companies have already set a target—and missed it. We have already sped past several projected timelines, such as the supposed mass deployment of self-driving taxis by 2019, so the sprint to develop self-driving cars has become more of a marathon. Regardless, the future of AVs remains bright and the roadmap to our AV future continues to be drawn, but with a few new caution lights, yield signs, and detours added here and there.

Endnotes 1 Facts + Statistics: Highway Safety, Ins. Info. Inst., www.iii.org/fact-statistic/facts-statistics-highway-safety (last visited Jan. 19, 2021).

A ssociated Press, Traffic deaths rose 8% in 2020, even as Americans drove fewer miles during pandemic, USA Today (March 5, 2021), 2 www.usatoday.com/story/money/cars/2021/03/05/pandemic-travel-traffic-deaths-up-8-2020-despite-driving-less/4590942001/.

Nathan Boney, Millennials Spurn Driver’s Licenses, Study Finds, USA Today (Jan. 19, 2016), 3 www.usatoday.com/story/money/cars/2016/01/19/drivers-licenses-uber-lyft/78994526.

Darrell Etherington, Amazon to Acquire Autonomous Driving Startup Zoox, TechCrunch (June 26, 2020), 4 https://techcrunch.com/2020/06/26/amazon-to-acquire-autonomous-driving-startup-zoox.

Neal E. Boudette, Amazon Invests in Rivian, a Tesla Rival in Electric Vehicles, N.Y. Times (Feb. 15, 2019), 5 www.nytimes.com/2019/02/15/business/rivian-amazon.html.

Michael Wayland & Lora Kolodny, Tesla’s Market Cap Tops the 9 Largest Automakers Combined—Experts Disagree about If That Can Last, CNBC (Dec. 14, 2020), 6 www.cnbc.com/2020/12/14/tesla-valuation-more-than-nine-largest-carmakers-combined-why.html.

Jasper Jolly, More Than 500,000 Full Electric Cars Sold So Far This Year in Europe, The Guardian (Dec. 3, 2020), 7 www.theguardian.com/business/2020/dec/03/more-than-500000-full-electric-cars-sold-in-europe-in-10-months.

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TLA Feature Articles and Case Notes 8 O ff Road, but Not Offline: How Simulation Helps Advance Our Waymo Driver, Waymo Blog (Apr. 28, 2020), https://blog.waymo.com/2020/04/off-road-but-not-offline--simulation27.html.

9 Waymo Tests “Rider Only” Service and Looks Beyond Robo-Taxis, Reuters (Oct. 28, 2019), www.reuters.com/article/us-autos-selfdriving-waymo/waymo-tests-rider-only-service-and-looks-beyond-robo-taxis-idUSKBN1X71U7.

10 Aurora Is Acquiring Uber’s Self-Driving Unit, Advanced Technologies Group, Accelerating Development of the Aurora Driver, Uber Inv. (Dec. 7, 2020), https://investor.uber.com/news-events/news/press-release-details/2020/Aurora-is-acquiring-Ubers-self-driving-unit-Advanced-Technologies-Group-acceleratingdevelopment-of-the-Aurora-Driver/default.aspx.

11 US Electric Truck Sales Set to Increase Exponentially by 2025, Wood Mackenzie (Aug. 10, 2020), www.woodmac.com/press-releases/us-electric-truck-sales-set-to-increase-exponentially-by-2025.

12 Kirsten Korosec, Tesla Picks Austin for Its Next US Factory to Build Cybertruck, Semi Truck, Model Y, TechCrunch (July 22, 2020), https://techcrunch.com/2020/07/22/tesla-picks-austin-for-its-next-u-s-factory-to-build-cybertruck-semi-truck-model-y; Nikola Corporation Breaks Ground on Coolidge Multi-Product Factory 4.0 Manufacturing Facility, Nikola Motor (July 23, 2020), https://nikolamotor.com/press_releases/nikola-corporation-breaks-ground-on-coolidge-multi-product-factory-4-0-manufacturing-facility-86.

13 See supra note 8.

14 Peter A. Tomasi et al., California’s Drive for Zero-Emission Vehicles Continues, Nat’l L. Rev. (Oct. 6, 2020), www.natlawreview.com/article/california-s-drive-zero-emission-vehicles-continues.

15 Large Truck and Bus Crash Facts 2018, Fed. Motor Carrier Safety Admin., www.fmcsa.dot.gov/safety/data-and-statistics/large-truck-and-bus-crash-facts-2018 (last visited Jan. 19, 2021).

16 Nat’l Highway Traffic Safety Admin., Analysis of Fatal Motor Vehicle Traffic Crashes and Fatalities at Intersections, 1997 to 2004 (2007).

17 Fusion, Bendix, www.safertrucks.com/fusion (last visited Jan. 19, 2021).

18 Jennifer Cheeseman Day & Andrew W. Hait, Number of Truckers at All-Time High, United States Census Bureau (June 6, 2019), https://www.census.gov/library/stories/2019/06/america-keeps-on-trucking.html.

19 Aarian Marshall, The Human-Robocar War for Jobs Is Finally On, Wired (Sept. 29, 2017), www.wired.com/story/trucks-robocar-senate-war.

20 Michael Jaeger et al., Challenges for the Autonomous Trucking Industry: Part 1, Law360 (Dec. 3, 2020), www.law360.com/articles/1334034/challenges-for-the-autonomous-trucking-industry-part-1.

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TLA Feature Articles and Case Notes

Personal Injury Fraud in the Transportation Industry Campbell T. Roper*

Insurance fraud is defined as deliberate deception against an insurance company or agent for the purpose of financial gain.1 Insurance fraud costs American consumers an estimated $80 billion per year2 with auto insurers losing at least $29 billion per year to these scams.3 The result? Everyday consumers are forced to cover for these losses, which account for 14% of all personal auto premiums.4 Our firm retained fraud expert Dennis Pompa to better understand the insurance fraud phenomenon and the best practices for defending against fraudulent schemes.5 Pompa has provided invaluable insight into common themes and red flags of personal injury fraud in the transportation industry.

He has helped us understand the evidence needed to report fraud, has guided us through the ethical obligations in reporting fraud, and has informed us on specific strategies to combat insurance fraud. I had the honor of interviewing Pompa to further explore such topics in personal injury insurance fraud. This article, which highlights portions of the interview, explores questions and provides insight to transportation lawyers in the fight against the billion-dollar scam industry.

I. Identifying Fraud Cases While some insurance fraud claims are unmistakably apparent, many—if not most—walk a gray line. According to Pompa, most insurance fraud cases arise from a confusing collision that results in a swearing match between the claimant and the victim-driver. As such, knowing common characteristics and red flags is a necessary first step in identifying which cases emanate from fraud.

The National Insurance Crime Bureau * Lorance Thompson, PC (Houston, TX)

describes the most common types of staged vehicle accidents: the “swoop and squat” or “panic stop,” which involve an intentional brake to cause a rear end collision; the “drive-down” or “wave-on” where a suspect “waves” the victim to proceed and then intentionally causes a collision; and the “sideswipe,” where a suspect drifts into the victim’s lane, “swipes” the victim’s vehicle, and then blames the victim for causing the contact.6 Additional types of staged accidents include: the classic “hit and run” or “phantom vehicle” accident, where the suspect blames the accident on an unknown vehicle or object; “backing” accidents, where the suspect causes a collision backing out of a driveway or parking space; and “paper” accidents, where the suspect fabricates an accident report for pre-existing damage.7 When asked which type of staged accident is most prevalent in the transportation industry, Pompa reported that the “sideswipe” is likely the most frequent culprit in his investigations, although the “drivedown” and “swoop and squat” are also regulars in fraud reports. Pompa explained that these types of staged accidents are popular because a fraudster can intentionally cause an accident in such a way that controverting evidence is essentially unavailable, and “it is your word against theirs when they file injury claims.”

Pompa’s explanation is illustrated well by the recent New Orleans fraud scandal.

Plaintiff’s Attorney Danny Keating, Jr. plead guilty in June 2021 to wire fraud and mail fraud conspiracy, admitting that he helped orchestrate numerous vehicle crashes into “big rigs.”8 As of June 17, 2021, the investigation has resulted in charges against thirty-three defendants, but Keating is the only lawyer to be charged thus far in

this “brazen scheme” whereby passengers willingly ram into tractor trailers.9 Keating admitted to carefully planning each staged crash, stating that he and Damian Labeaud, the so-called “slammer” responsible for carrying out the crash, would discuss how to limit evidence by changing locations of the staged accidents, varying the number of passengers, avoiding police investigations, and avoiding cameras.10 While Keating’s strategies align with Pompa’s experiences, Pompa further explained that uncovering fraud is still very much an oftentimes difficult case-by-case analysis. Red flags that may indicate insurance fraud, according to Pompa, include accidents that occur in larger metropolitan areas during the least trafficked time of day, which decreases the chance that there will be witnesses. Additionally, “there is usually an increase in cases during economic tough times, the suspect will rarely be driving a new car, and there will typically be numerous people in the car—sometimes people will even jump into the car after the accident. In sideswipe cases, the truck is almost always in the far right-hand lane because this prevents the truck from having any ability to avoid a collision,” Pompa said.

“You really have to do your homework on each suspect,” Pompa said, narrowing his focus. “Claim history is often the biggest indicator. Multiple claims, especially in a short period of time, is telling. Then you ask, does that person have financial problems?

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TLA Feature Articles and Case Notes Is that person unemployed? Have they declared bankruptcy? Are they indebted or have any liens? What I often do is then look at close associations of any of the other people involved in the claim. Do they have any background? Did they know each other? But the main thing is you want to do a claim history.”

Pompa continued: “you want to do a thorough investigation and evaluation of the damage in the accident. Could these types of injuries really result from the damage that was incurred? Investigating and gathering evidence before the car is repaired is key. That way, you can recruit accident reconstruction or biomechanical experts down the road to say, ‘those injuries could not have occurred from this collision.’”

Intuitively, Pompa recommends that claims adjusters and attorneys obtain as much evidence as possible as early as possible to contradict the suspect’s testimony, which is always at the heart of a fraudster’s claim.

II. Combating Insurance Fraud One of the best ways to combat the estimated loss of $80 billion per year due to fraud is to report any suspected fraudulent activity, according to Pompa. While it appears that most types of fraud are widely reported throughout the United States,11 Pompa believes that fraud reports in the transportation industry are generally lacking: “I imagine that most of the cases are paid out versus going through litigation. Many are ripe for a couple thousand bucks here and there, and usually you can’t prove one way or the other so it’s easier for companies to pay out the claim. It’s often a business decision to avoid litigation expenses.”

When asked about how settlement impacts criminal proceedings against fraud suspects, Pompa explained that settling diminishes the potential for finding fraud because payment is essentially acknowledgment of the claim’s legitimacy. A jury will not convict someone when the victim insurance company pays the suspect for the allegedly fraudulent claim. In Pompa’s experience, the Texas Fraud Unit, or even a Prosecutor, will drop an investigation or proceeding if a case has settled.

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Pompa’s opinion supports the statistics. In Texas alone, there were 14,180 cases of fraud reported to the Texas Department of Insurance in 2020, yet only 240 cases were opened for investigation, and only 65 were referred for prosecution.12 “Settling with a fraudster is essentially the same thing as condoning the fraudulent act, even if [the decision to settle was made because it was] the more cost-effective business decision,” Pompa said. “And unfortunately, the people out there committing the fraud know that they will settle. And so, it keeps on happening.”

Still, Pompa’s opinion and the statistics pose a problem for insurance companies and practicing attorneys: what about ambiguous cases where the suspected fraud is not so cut and dry? At what point should a potential victim of a fraudulent claim come forward and make the report? The answer, according to Pompa, is that insurance companies must feel confident in the information from the insured, and this confidence typically arrives with the clear and convincing evidentiary standard.

Pompa emphasized that even if nothing comes out of the reported fraud, it may pay off for other companies down the road.

It at least puts the name of the claimant into the fraud unit’s database so that the department can make a reasonable assessment as to whether the claimant is a habitual offender. “Often, investigations are not opened with a single report, but when multiple reports come in—an investigator might say, ‘hey, this guy is in here four times. The first three times we couldn’t prove anything but now this time we have more evidence.

When you report the fraudulent information, this information is made available to all insurance fraud units across the country to investigate suspected fraud. Remember, suspected fraud costs consumers billions of dollars a year, with 10% of all claims having some element of suspected insurance fraud. It costs you; it costs me; it costs the manufacturers [and the] transportation companies. Rates are increased—everyone is impacted,” Pompa explained.

III. Reluctant to Report?

While reporting fraud seems logical for building a defensive network against

fraud in the transportation industry, most states require insurance companies, agents, and/or professionals to report suspected fraud to state insurance departments. To note, forty-three states and the District of Columbia now require insurers to report suspected fraud to the state fraud bureau or other authorized agencies.13 Adjusters, however, are still reluctant to report fraud in ongoing investigations because they do not want to be sued for bad faith. But at least forty-eight states now have statutes in place that provide immunity to the person or entity that reports the fraud to the authorized department or agency, so long as the report was made with a good faith belief.14 The balance set by most state legislatures weighs in favor of reporting fraud so that potentially fraudulent activity is deterred or can be prosecuted.15 Still, Pompa said, “I’ve heard it before from companies, ‘yeah, well that’s not going to stop someone from bringing a claim.’ But the statute as it is written does provide protection.”16 “Keep in mind that when you make a report to a department, they are obligated to maintain the confidentiality of who made the report,” he continued. “So that information will not be revealed unless the case goes to trial.” Pompa further noted that “there is consistency with immunity provisions with reporting insurance fraud across states that have insurance fraud departments; states are trying to encourage individuals to report suspected fraud.

I mean $80 billion a year—so yes, states are encouraged to provide that immunity.”17 While state laws promote and even require reporting fraud, practicing attorneys must tread carefully when reporting fraud within the scope of a civil dispute.

Many states have retained a version of a Rule from the original ABA Model Rules of Professional Conduct, which holds that “A lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter.”18 In other words it is unethical in some jurisdictions to report fraud for the purposes of leveraging a favorable outcome in a civil dispute.

Other states, however, have adopted Formal Opinion 92-363 of the American Bar

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TLA Feature Articles and Case Notes Association, concluding: The Model Rules do not prohibit a lawyer from presenting criminal charges against the opposing party in a civil matter to gain relief for her client, provided that the criminal matter is related to the civil claim, the lawyer has a well-founded belief that both the civil claim and the possible criminal charges are warranted by the law and the facts, and the lawyer does not attempt to exert or suggest improper influence over the criminal process.19 On the one hand, attorneys can avoid violating any ethical rules by simply reporting the fraud to the authorized agency without mention to the opposing party.

Indeed, Pompa instructs that reporting may be done confidentially while engaged in a civil dispute. On the other hand, however, attorneys might gain a great advantage in threatening criminal prosecution if the state permits such an action. Regardless, attorneys, along with insurers, must proceed with caution in reporting fraud to ensure they are abiding by each state’s ethical rules.

IV. Final Thoughts When it comes to advice for the transportation industry in fighting insurance fraud, Pompa encourages companies to be proactive by training drivers on what to look for to avoid fraud and by teaching them how to report the suspected fraud back to the insurance company, including what they observed and what precautions they took

to minimize the damage. He also highly recommends dashcam videos in trucks, as video evidence is the best way to win a swearing match. As attorneys, we can do our part by communicating this information to our clients, when appropriate.

As the U.S. continues to fight against the massive insurance fraud industry, it is my hope that Pompa’s insights will encourage attorneys, transportation companies, and insurance entities alike to educate themselves about the issues inherent in auto insurance fraud, to be on the lookout for red flags suggesting the existence of fraud, and to take the steps necessary to report suspected fraud when the evidence so demands.

Endnotes 1 Background on: Insurance Fraud, INSURANCE INFORMATION INSTITUTE (Nov. 18, 2020), https://www.iii.org/article/background-on-insurance-fraud.

2 Fraud Stats, COALITION AGAINST INSURANCE FRAUD, https://insurancefraud.org/fraud-stats/ (last visited July 21, 2021).

3 S teve Leakas, Auto Insurance Premium Leakage: A $29B Problem for the Industry, VERISK ANALYTICS, March 7, 2017, www.verisk.com/insurance/visualize/auto-insurance-premium-leakage-a-29b-problem-for-the-industry/.

4 Fraud Stats, COALITION AGAINST INSURANCE FRAUD, https://insurancefraud.org/fraud-stats/ (last visited July 21, 2021).

5 Dennis Pompa began his career as an investigator for the Travis County District Attorney’s office in Texas, and later worked for the Texas Department of Insurance Fraud Unit, where he specialized in financial fraud investigations. Pompa was then appointed Associate Commissioner and Chief Investigator of the Texas Insurance Fraud Unit, where he conducted and/or managed more than 3,000 investigations of financial fraud during his eleven years of service. Notably, Pompa served as Chair of the National Association of Insurance Commissioners (NAIC) Anti-Fraud Task Force and assisted in the development and implementation of NAIC’s Automated Fraud Reporting System. Pompa also served as the Chair of the Agents and Entities Unlawful Working Group. Pompa currently engages in consulting work for the insurance industry by developing and reviewing insurer anti-fraud plans, analyzing suspected fraud matters, compiling data for compliance reports, and providing litigation assistance.

6 Staged Automobile Accident Fraud, NATIONAL INSURANCE CRIME BUREAU, https://www.nicb.org/sites/files/2017-10/StagedAccident.pdf (last visited July 21, 2021).

7 Types of Fraud, TEXAS DEPARTMENT OF INSURANCE FRAUD UNIT, https://www.tdi.texas.gov/fraud/types-of-fraud.html (last visited July 21, 2021).

8 John Simerman, In scheme to crash cars into big rigs, New Orleans lawyer Danny Keating Jr. pleads guilty, NOLA.COM, June 17, 2021, https://www.nola.com/news/courts/article_9656c8e0-cf7a-11eb-8b76-37da3607bf14.html?utm_medium=social&utm_source=nolafb&utm_campaign=snd.

9 Id. 10 Id. 11 The Federal Trade Commission alone reported more than 2.2 million reports of fraud in 2020. See New Data Shows FTC Received 2.2 Million Fraud Reports from Consumers in 2020, FEDERAL TRADE COMMISSION CONSUMER INFORMATION, Feb. 4, 2021, https://www.ftc.gov/news-events/press-releases/2021/02/new-data-shows-ftc-received-2-2-million-fraud-reports-consumers.

12 Fast Facts and FAQ, TEXAS DEPARTMENT OF INSURANCE, https://www.tdi.texas.gov/fraud/facts.html (2020).

13 Fraud Stats, COALITION AGAINST INSURANCE FRAUD, https://insurancefraud.org/fraud-stats/ (last visited July 21, 2021).

14 Insurance Fraud Prevention, 0110 Surveys 14, 50 State Statutory Surveys, THOMAS REUTERS, Dec. 2020.

15 Johnny Parker, Detecting and Preventing Insurance Fraud: State of the Nation in Review, 52 Creighton L. Rev. 293 (2019).

16 Pompa was referring to: 2 TEX. INS. CODE § 34.002. Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1, 1999.

17 To find out more about your state’s anti-fraud legislation, visit https://insurancefraud.org/government-law/.

18 DR 7-105(a) of the ABA Model Code of Professional Responsibility, superseded by the Rules of Professional Conduct in 1985; see also Peter H Geraghty, Making Threats. AMERICAN BAR ASSOCIATION, Oct. 2008, www.americanbar.org/content/dam/aba/publications/YourABA/201108makingthreats.authcheckdam.pdf.

19 Formal Opinion 92-363, Use of Threats of Prosecution in Connection with a Civil Matter, AMERICAN BAR ASSOCIATION, STANDING COMMITTEE ON ETHICS AND PROFESSIONAL RESPONSIBILITY, July 6, 1992, www.americanbar.org/content/dam/aba/publications/YourABA/11_92_363.authcheckdam.pdf.

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TLA Feature Articles and Case Notes

Revisiting the Limitation of Liability in Cargo Claims Under the Carmack Amendment Steven B. Belgrade and Adam H. McCabe*

I. Introduction The Carmack Amendment makes the carrier of goods, in most instances, strictly responsible for any loss of or damage to a shipper’s cargo during interstate transportation. Thus, the carrier effectively becomes the “insurer” of the cargo and is generally liable for the actual loss of or damage to the property. To reduce its financial exposure under Carmack, however, a carrier can limit the amount of damages for which it can be found liable to a far lesser amount.

Unfortunately, many carriers fail to even consider using a limitation of liability or, more often, when they do, they fail to take the necessary steps to adopt and implement an effective limitation of liability. This article discusses the essential requirements to limit liability in order to remind carriers what must be done so that courts will enforce the limitation if challenged by the shipper.

II. Re-Examining the Requirements Court precedent establishing requirements that the carrier must meet in order to effectively limit its liability under the Carmack Amendment is found in Hughes v.

United Van Lines, Inc.1 The court in Hughes declared that in order to limit its liability a carrier must: (1) maintain a tariff within the prescribed guidelines of the Interstate Commerce Commission; (2) obtain the * Cassiday Schade, LLP (Chicago, IL)

shipper’s agreement as to its choice of liability; (3) give the shipper a reasonable opportunity to choose between two or more levels of liability; and (4) issue a receipt or Bill of Lading prior to moving the shipment.2 These requirements have generally been adopted by courts throughout the country.3 Importantly, understanding these requirements in the limitation context is critical to ensuring the best chance to enforce a limitation of liability provision.

More specifically, in order to implement a valid limitation, a carrier must do the following: a) Obtain the Shipper’s Written Agreement of Its Choice of Liability The Carmack Amendment obligates the carrier to obtain the shipper’s written agreement to the limitation of liability. This involves the carrier providing notice of the limitation to the shipper while also offering the shipper a meaningful choice as to the amount of liability the carrier will be facing. For example, the shipper can decide to ship its goods knowing there is an existing limitation of liability should loss or damage occur or, alternatively, can declare the dollar value of the goods with the understanding that any loss or damage will be paid based upon that declaration. Of course, this choice of liability, in particular the selection of a declared value, will typically govern the rate the carrier will pay to transport the goods.

Put simply, the greater the liability the carrier faces, the higher the cost will be for the carrier to transport the cargo.

Providing an opportunity for the shipper to choose between levels of liability can be accomplished by the carrier issuing a bill of lading that reflects differing liability

damage amounts depending on the liability level chosen (e.g., electing to avoid limitation of liability by declaring the value of the cargo). Thus, several courts have held that a shipper who signs a bill of lading with multiple levels of liability available (e.g., offering the right to declare the value of the cargo or indicating that liability will otherwise be limited) binds the shipper. Notably, while the shipper’s agreement to the limitation can still be demonstrated in the absence of a signed bill of lading, the carrier stands a much better chance of enforcing its limitation if it obtains a signature on the bill of lading or other shipping receipt prior to shipment. b) Give the Shipper a Reasonable and Fair Opportunity to Choose A “fair opportunity” means that the shipper had both reasonable notice of the liability limitation and the necessary information to make a deliberate and well-informed choice as to how it wants its cargo transported (i.e., with or without the limitation of liability).4 The core of the analysis is whether the shipper was adequately made aware of the limitation and had a fair chance to agree to it or otherwise avoid the liability limit.

Even a written agreement to be bound by a limitation of liability that is signed by the shipper can be undone if the shipper was not provided with an alternative rate applicable to the shipment apart from the rate applied to the limitation.5

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TLA Feature Articles and Case Notes c) Issue a Receipt or Bill of Lading Prior to Moving the Shipment The final requirement a carrier must meet is to provide the shipper with a bill of lading or receipt reflecting the necessary information to support a limitation. As noted above, one way for a carrier to meet this requirements is for the carrier’s bill of lading to set forth the limits of the carrier’s liability (either a specified dollar amount or a per pound amount) while also giving the shipper the opportunity to declare a value of the cargo to nullify the application of the limitation. In this regard, it is important that the carrier issues the bill of lading prior to transporting the cargo because this document will normally serve as the contract terms that will apply to that cargo load and bind the parties.

It should be noted that in many instances, shippers, rather than carriers, will prepare the bill of lading. The contents of a shipper’s bill of lading will often be quite different from the terms of a carrier’s bill of lading. Consequently, this could affect whether a carrier’s limitation applies. To prevent this from becoming a problem, the carrier should separately publish terms and conditions that set out its limitations and the options the carrier gives to shippers.

These should be posted on the carrier’s website or provided in writing directly to the shipper. Moreover, these terms and conditions should state that all services provided by the carrier are subject to the carrier’s terms and conditions regardless of what the shipper-prepared bill of lading states. In addition, it is the best practice for the carrier to prepare and obtain a pricing agreement or written understanding of the limitation that is signed by the shipper and references or incorporates the carrier’s terms and conditions.

III. Strict Compliance with the Carmack Amendment is Required for a Carrier to Limit Its Liability While the requirements in Hughes are well known and generally accepted principles in the transportation community, carriers do not always strictly apply them when attempting to limit their liability.

Reference to case decisions in which courts have discussed these requirements in the context of analyzing the enforceability of such liability limitations provides the best refresher as to how a carrier can successfully adopt and implement a limitation of liability consistent with these requirements.

Strict adherence to these Carmack requirements is essential, and numerous court decisions have emphasized that “a carrier cannot limit its liability automatically or by implication.”6 Rather, “actual notice is necessary for a limitation of liability to be enforced.”7 Thus, noncompliance with even one of the Carmack Amendment requirements will result in the carrier being unable to limit its liability.

For a carrier to fulfill its obligations with respect to these requirements, courts throughout the country have repeatedly held that the plain language of the Carmack Amendment requires that any agreement that allows a carrier to limit its liability must be in writing.8 Although such written agreements often are reflected in the governing bill of lading, as noted above, other written agreements between the parties or terms and conditions clearly referenced and incorporated in the bill of lading and to which the shipper is expressly directed and given notice can also satisfy the requirements under the Carmack Amendment.

Just as important, case law emphasizes that the key time element involved in the limitation process is before the shipment.

Thus, the carrier must make plain to the shipper the choices of levels of liability and rates available prior to the shipment, and the carrier must secure the agreement of the shipper to one of those rates and levels of liability prior to the shipment. As court decisions have made clear, “any limitation of liability must be brought to the attention of the shipper before the contract is signed, and the shipper must be given a choice to contract, with or without, the limitation of liability in the movement of his goods.”9 Moreover, even if the agreed terms and conditions have remained the same as they had been in prior years and past shipments, most courts still hold that such a past course of dealing alone does not

provide the necessary notice and opportunity of choice that is required under the Carmack Amendment for a new shipment.10 For example, the court in Tempel Steel rejected the carrier’s argument that strict observance of the limitation requirements should be restricted to situations in which the shippers are “amateurs,” while constructive notice should be sufficient when more sophisticated businesses are involved.

The court declared that no language in the Carmack Amendment supported such a conclusion or required businesses “to scrounge for limitations that have not been flagged by the carrier.”11 In short, the court concluded that “motor carriers can’t just cancel the Carmack Amendment by their say-so.”12 Other courts have echoed this same conclusion. For example, in ABB Inc. v. CSX Transp. Inc. the court stated: Our conclusion that the parties did not agree to a liability limitation is not altered by [carrier’s] reliance on its past course of dealing with [shipper].

[Carmack’s] requirement of a written agreement undermines [carrier]’s argument that the parties’ alleged course of dealing can serve as a substitute for a written limitation of liability for a particular shipment.13 In sum, the majority of courts have mandated that the requirements of the Carmack Amendment are to be strictly enforced with respect to each individual shipment and past course of dealing has no bearing on this analysis.

The Hillenbrand case best illustrates these principles. There, the carrier gave the shipper a receipt with respect to transportation of the shipper’s cargo.14 The receipt incorporated a limited liability provision by reference. Upon delivery, a portion of the shipment was missing. The shipper claimed that the replacement value of the lost goods was approximately $400,000, whereas the carrier claimed its liability was limited to 10 cents per pound of the total weight of the goods, which amounted to $130.

Despite the fact that the limitation was incorporated in the receipt for the goods by reference, the court held that the shipper did not have “actual notice” of the liability

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TLA Feature Articles and Case Notes limitation prior to shipment and therefore refused to enforce the limitation of liability.

In this regard, the court found that while the shipper and the carrier had a previous written Transportation Agreement setting forth terms for shipments and applicable tariffs with respect to prior shipments, it had expired and a new agreement was not entered until after the shipment in question. It also gave no consideration to the fact that the shipper and carrier had done considerable business together prior to the shipment.

Similarly, in Fubon Ins. Co. v. Travelers Transp. Servs.,15 the court refused to enforce a limitation of liability. In Fubon, the shipper arranged to ship cargo with a logistics broker, who then made arrangements with the carrier to transport the goods. When the cargo failed to arrive, the parties disagreed as to whether an agreement between the shipper and the broker that contained a per pound carrier liability clause was valid as to the carrier, where the carrier also had an agreement with the broker wherein the carrier’s liability was subject to limitation.

In finding for the shipper, the court noted that the Carmack Amendment requires evidence that the carrier provided the shipper with a reasonable opportunity to choose between multiple levels of liability prior to shipping the cargo in question, thereby obtaining the shipper’s written

consent to the limited liability. It did not matter that the carrier had a past course of dealing with the broker to transport other shipments for this shipper, or that the broker was aware that it could pay an additional fee to opt out of the limited liability but chose not to do so. The court concluded that there was no evidence proving that the carrier gave the shipper, as opposed to the broker, such a choice for the subject shipment or that the shipper agreed in writing to the carrier’s liability cap prior to the atissue shipment.

In contrast, the court in CorTrans Logistics v. Landstar Ligon found that the shipper there was given a fair opportunity to choose between two or more levels of liability where its contract with the carrier contained a $100,000 limitation of liability clause and an amendment to that contract afforded the shipper the opportunity to increase the maximum liability to $250,000 for specified shipments at the shipper’s request and upon payment of an increased rate.16 As both the contract and the amendment provided the procedure for increasing the maximum limit of liability, the CorTrans court found that the shipper had both reasonable notice of the limitation and “the opportunity to obtain information necessary to make a deliberate and well-informed choice.”17 Thus, a clear procedure for choosing between two levels of liability, captured in writing, and proof

of the shipper’s selection between those levels will almost certainly ensure that the carrier’s liability will be limited in case the cargo is lost or damaged.

IV. Conclusion As the above case decisions remind us, a carrier must strictly comply with the requirements under Carmack to successfully enforce a limitation of liability provision governing its transportation of goods. In meeting these requirements, carriers should always consider a variety of procedures and practices that can be implemented, including developing and posting terms and conditions that clearly state any limitations of liability on the carrier’s website and then incorporating those terms and conditions into the carrier’s agreements with shippers and/or its bill of lading, establishing differing rates for different liability options, and including a declared value option on the bill of lading with a separate corresponding rate for such declaration.

In conclusion, prior to shipment and despite any past dealings, carriers should be open and upfront with shippers when agreeing to carry their freight. Revisiting the above requirements mandated by the Carmack Amendment makes clear that if the carrier’s communication with the shipper is clear and the above steps are done properly, a carrier’s liability can be effectively limited.

Endnotes 1 829 F.2d 1407 (7th Cir. 1987). ue to legislative changes to the controlling statutes made since the Hughes decision, the ICC no longer requires that a public tariff be maintained, so this first 2 D requirement has become moot and no longer has to be met by the carrier. See Nipponkoa Ins. Co. v. Atlas Van Lines, Inc. 687 F.3d 780, 782 (7th Cir. 2012).

3 See, e.g., Emerson Elec. Supply Co. v. Estes Express Lines Corp., 451 F.3d 179, 184-85 (3d Cir. 2006); Toledo Ticket Co. v. Roadway Express, 133 F.3d 439, 442 (6th Cir. 1998); Certain Lloyds Underwriters Subscribing to Policy No. MC-13159 v. Baldwin Distrib. Servs., 540 Fed. Appx. 579, 580 (9th Cir. 2013); Rohner Gehrig Co. v. Tri-State Motor Transit, 923 F.2d 1118, 1121 (5th Cir. 1991); Norton v. Jim Phillips Horse Transp., Inc., 901 F.2d 821, 827 (10th Cir. 1990).

4 Hughes, 829 F.2d 1407, 1419; see also ABB Inc. v. CSX Transp. Inc., 721 F.3d 135, 142 (4th Cir. 2013); Hoskins v. Bekins Van Lines, 343 F.3d 769, 779 (5th Cir. 2003); Norton, 901 F.2d at 829.

5 See, e.g., Exel, Inc. v. S. Refrigerated Transp., Inc., 905 F.3d 455, 462-63 (6th Cir. 2018); Emerson, 451 F.3d 179.

6 See, e.g., Co-Operative Shippers, Inc. v. The Atchison, Topeka and Santa Fe Railway Co., 613 F. Supp. 788, 794 (N.D. Ill. 1985).

7 Tempel Steel Corp. v. Landstar, Inc., 211 F.3d 1029 (7th Cir. 2000).

8 See, e.g., Nipponkoa Ins. Co. v. Atlas Van Lines, Inc., 2011 U.S. Dist. LEXIS 94384* (S.D. Ind. 2011) (The shipper must expressly agree “in writing to a limitation in exchange for lower freight rates before shipment.”) (rev’d on other grounds); ABB Inc., 721 F.3d at 142 (“The plain language of the statute provides that in the absence of a clear, written agreement by the shipper, the carrier is subject to full liability for actual losses.”); Exel, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 150 (6th Cir. 2015) (“The Carmack Amendment preempts state common law, and, as just noted, prevents the carrier from limiting its liability without the express written consent of the shipper.”).

9 Hughes, 829 F.2d at 1419-20 (emphasis added); see also Emerson, 451 F.3d at 187.

10 See, e.g., Hillenbrand Indus., Inc. v. Con-Way Transp. Servs., Inc., 2002 U.S. Dist. LEXIS 12417 *19 (S.D. Ind. June 19, 2002).

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TLA Feature Articles and Case Notes 11 Id. at 1031.

12 Id.; see also Just Take Action, Inc. v. GST Ams., Inc., 2996 U.S. Dist. LEXIS 106942 (Dist. Minn. 2006) (“actual notice is necessary for a limitation to be enforced”).

13 7 21 F.3d at 144; see also Mooney v. Farrell Lines, Inc., 616 F.2d 619, 626 (2d Cir. 1980) (declining to limit a carrier’s liability by evidence of the parties’ course of dealing when the liability limits were not included in the Bill of Lading or other written agreement).

14 Hillenbrand, 2002 U.S. Dist. LEXIS 12417 at *5-6.

15 2015 U.S. Dist. LEXIS 2978, 2015 WL 156807 (N.D. Ill. Jan. 12, 2015).

16 CorTrans, 489 F. Supp. 3d 824, 832-33 (S.D. Ind. 2020).

17 Id. at *16 (citing Hughes, 829 F.2d at 1419).

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TLA Feature Articles and Case Notes

So What Happened on the Roads During the Pandemic?

Tammy J. Meyer*

When the global pandemic began and businesses closed to the public, many industries were negatively affected.

Airlines, hotels, restaurants, gyms, and movie theaters were among the hardest hit.

While most industries suffered, many in the transportation industry prospered.1 In fact, on March 20, 2020, CBS News reported that the transportation industry was “saving lives.”2 When the toilet paper at your local grocery store was sold out, a freight truck was on its way to restock the supply. News outlets and magazines even categorized truck drivers as “frontline responders” and “essential workers” as they delivered medical supplies and equipment to hospitals.3 The transportation industry—and truck drivers especially—helped keep people alive during the hardest phases of the pandemic.

Now, more than a year after the start of the pandemic, public opinion has shifted, and the transportation industry is experiencing criticism. The National Highway Traffic Safety Administration (“NHTSA”) released statistics of driver safety in 2020.

These statistics show an increase in accidents in 2020, even with less passenger vehicles on the roads. Some argue that with businesses reopening and more individuals going back to work, the roads and highways are becoming more congested. As a result, commercial vehicles and tractor-trailers that have grown accustomed to having the roads to themselves are now going to have to * Metzger Rosta (Noblesville, IN)

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adjust to an increase in passenger vehicles joining them on the roads. Statistics from the NHTSA, however, showed that there were more accidents in 2020 than in the previous 13 years.4 Even though less people were driving during the pandemic, the number of accidents was still higher than in 2019. With this in mind, experts and traffic professionals have expressed their concern with tractor-trailers causing even more accidents as roads continue to grow more congested.5 Even though more passenger cars are undoubtedly going to be present on the roads and highways where tractor-trailers are also present, this does not necessarily mean that accidents will increase more than in 2020. In fact, the main causes for the most serious accidents in 2020 were not tractor-trailers. The most serious of the 2020 accidents involved: • Lack of seat belt use, • Speeding, and/or • Impaired driving.6 These causes are not exclusive to tractor-trailers. Based on the same statistics, researchers could not determine if the increase in accidents was caused by more tractor-trailers on the road.7 They even admit that the 2020 statistics come from a different set of circumstances and the accidents were not due to collisions with tractor-trailers.8 The statistics also examined the severity of injuries from the accidents in 2020.9 It was determined that the accidents were not only more frequent, but they also resulted in the gravest injuries and/or damage. But, once again, the cause of these dangerous accidents could not directly be related to tractor-trailers or their respective drivers. So, despite having more tractor-trailers and less passenger cars on the road during the pandemic and despite

the increase in accidents, it does not seem that tractor-trailers are the root cause.

As the country starts to reopen, the demand for transportation continues to increase. In fact, the trucking industry is even experiencing labor shortages. There are not enough drivers to fulfill the growing demand for consumer goods.10 At the beginning of the pandemic, transportation providers struggled to keep up with the demand for truck drivers.11 Many drivers had to take overtime to complete shipments, and the late hours began to take a toll on the drivers. In response to the heightened responsibility and stress, trucking companies started to provide hotlines to assist drivers with any health and wellness issues drivers may experience—whether on the road or at home.12 This way, drivers are able to efficiently complete and fulfill orders and maintain their health and the safety of other drivers. This is yet another positive step for transportation providers.

Traffic safety is a common and undoubtedly important topic in the scope of the transportation industry and the pandemic.

Although freight trucks and semis tend to take the most criticism for an increase in accidents on highways, recent data identifies individuals’ lack of seat belt use, speeding, and/or impaired driving as the most common causes of accidents in 2020, and these behaviors are not directly related to larger vehicles on the road. While the transportation industry saw great demand during the pandemic, it overcame major safety concerns relating to their drivers.

Even though the number of passenger vehicles on the roads decreased and accidents increased in 2020, the increase in accidents does not appear to be related to careless or reckless driving by truck drivers.

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TLA Feature Articles and Case Notes Endnotes 1 C levenger, S. (2021, June 18). Trucking Turns from Pandemic to Prosperity. Transport Topics. https://www.ttnews.com/articles/trucking-enjoys-strong-freight-rebound-2021.

2 C apatides, C. (2020, March 20). Truck drivers, grocery store workers and more unsung heroes of the coronavirus pandemic. CBS News. https://www.cbsnews.com/news/coronavirus-heroes-covid-19-truck-drivers-sanitation-/.

3 C apatides, 2020.

4 Office of Behavioral Safety Research. (2021, June). Update to special reports on traffic safety during the COVID-19 public health emergency: Fourth quarter data (Report No. DOT HS 813 135). National Highway Traffic Safety Administration.

5 Office of Behavioral Safety Research, 2021.

6 NHTSA. (2021, June 3). 2020 Fatality Data Show Increased Traffic Fatalities During Pandemic. NHTSA. https://www.nhtsa.gov/press-releases/2020-fatality-data-show-increased-traffic-fatalities-during-pandemic.

7 Wolf, C. D. (2021, May 20). Roads busy again after pandemic bring risk, experts say. Transport Topics. https://www.ttnews.com/articles/roads-busy-again-after-pandemic-bring-risk-experts-say.

8 Wolf, 2021.

9 Office of Behavioral Safety Research, 2021.

10 Clevenger, 2021.

11 Del Gatto, B. (2021, July 29). COVID-19: Symptoms Felt Across the Trucking Industry. The National Law Review. https://www.natlawreview.com/article/covid-19-symptoms-felt-across-trucking-industry.

12 Del Gatto, 2021.

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TLA Feature Articles and Case Notes

MCS-90 Case Law Update: Indiana’s Expansion of MCS-90 Requirement to Intrastate Transport—Progressive Southeastern Insurance Co. v. B&T Bulk, LLC, et al.

Christopher R. Whitten (spr.)*

The case of Progressive Southeastern Insurance Co. v. B&T Bulk, LLC, et al.1 has drawn significant attention from the transportation and insurance industries following the Indiana Court of Appeals ruling issued on May 4, 2021. In sum, the Court held that because an Indiana statute provides that financial responsibility requirements from the Federal Motor Carrier Safety Regulations “must be complied with by an interstate and intrastate motor carrier of persons or property throughout Indiana,” the MCS-90 endorsement applies to a carrier who was traveling intrastate.2 We examine the case below in more detail, outline the issues now before the Indiana Supreme Court after Progressive Southeastern Insurance Company (“Progressive”) sought review, and assess the potential legal implications should the ruling be upheld.

Underlying Facts and Trial Court Ruling B&T Bulk, LLC (“B&T”) is a motor carrier that was insured under a commercial * Whitten Law Office (Indianapolis, IN)

Michael T. Terwilliger*

motor vehicle policy issued by Progressive that covered specifically listed vehicles in its fleet, and the policy included an MCS90 endorsement. Bruce Brown, a driver for B&T, drove an unloaded semi-tractor trailer from Logansport to South Bend (both Indiana cities) to pick up a load of cement.

The vehicle was owned by B&T but not listed on the policy. Brown was involved in an accident with a car driven by Dona Johnson, and Johnson died from injuries she sustained. After suit was filed, B&T requested a defense and indemnity from Progressive, and Progressive filed a declaratory judgment action seeking a declaration (1) that it had no duty to defend or indemnify B&T because the equipment was not listed on the policy, and (2) that Progressive’s exposure was limited to the extent the MCS-90 endorsement applied to the accident. Crossmotions for summary judgment were filed, and the trial court ruled that (1) Progressive had no duty to defend or indemnify B&T but that (2) the MCS-90 endorsement applied to the accident. Progressive appealed the latter determination.

Matthew K. Phillips*

Indiana Court of Appeals Decision Progressive first argued that the MCS90 endorsement did not apply because it only applies to interstate transportation and Brown was on an intrastate trip. The Indiana Court of Appeals noted the plain language of 49 U.S.C. § 31139 and 49 C.F.R. § 387.3(a), both of which apply the financial responsibility requirements to equipment traveling in interstate or foreign commerce.

The Court then noted that several jurisdictions have held, using the trip-specific approach, that the MCS-90 endorsement covers vehicles only when they are presently engaged in interstate transportation.3 The appellees argued that the Indiana Legislature had specifically applied the minimum financial responsibility levels to intrastate transportation through Indiana Code § 8-2.1-24-18(a). The Court held that the legislature’s intent was to apply the minimum levels of financial responsibility in 49 C.F.R. § 387 to intrastate motor carriers given the explicit inclusion of “intrastate” in Indiana Code § 8-2.1-24-18(a).

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TLA Feature Articles and Case Notes As to its second argument on appeal, Progressive contended that the MCS-90 endorsement did not apply because B&T was not “transporting property” at the time of the accident. The Court held that although Brown’s trailer was not loaded at the time of the accident, “travel from a trucking facility to a customer location to pick up a load is a ‘service related to’ the transportation of property,” and therefore, the MCS-90 endorsement applied because Brown was “engaged in the transportation of property.” Progressive has sought review by the Indiana Supreme Court.

Implications of the Progressive Holding and TIDA’s Amicus Curiae Position The expansion of the scope of the United States Department of Transportation’s

MCS-90 endorsement will impact the entire transportation industry. Insurers in other states will be unable to predict whether other jurisdictions may expand the scope of federal law as it relates to MCS-90 surety obligations. This could likely result in unknown exposure for the insurance industry, higher insurance premiums for motor carriers, higher prices for goods transported by trucks throughout the U.S., and a negative impact for the overall economy.

To this end, the Trucking Industry Defense Association (“TIDA”) has submitted its Brief of Amicus Curiae to the Indiana Supreme Court, and the brief can be accessed at: TIDA-Amicus-Brief.pdf (indycounsel.com) In its Brief, TIDA notes that Congress properly required that the MCS-90 endorsement be made explicit and in writing

because it changes the typical relationship between an insurer and an insured and the MCS-90 form explicitly states that its purpose is to ensure compliance with federal law. Moreover, the opinion of the Indiana Court of Appeals effectively amends a contract of insurance between an insurer and insured by creating a new suretyship obligation on the part of insurers for intrastate shipments. Given that a substantial portion of freight is moved on an intrastate basis, this new suretyship obligation that the Indiana Court of Appeals has created increases risk, which will increase costs to motor carriers and insurers, impacting the economy at large.

Endnotes 1 Progressive Se. Ins. Co. v. B&T Bulk, LLC, et al., Case No. 20A-CT-OI765.

2 I ndiana Code § 8-2.1-24-18(a) incorporates 49 C.F.R. Parts 40, 375, 380, 382 through 387, 390 through 393, and 395 through 398.

3 See Canal Ins. Co. v. Coleman, 625 F.3d 244, 249 (5th Cir. 2010); Lyons v. Lancer Ins. Co., 681 F.3d 50, 60 (2d Cir. 2012); Martinez v. Empire Fire & Marine Ins. Co., 139 A.3d 611, 619 (Conn. 2016). The trip-specific approach examines whether a specific trip was wholly intrastate, and if so, then the MCS-90 endorsement does not apply.

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CTLA Feature Articles and Case Notes

Friendly Skies No More: The Effort to Combat Coronavirus and Air Rage Jason Lattanzio and Nicolas Pimentel*

There have been few more polarizing issues arising from the COVID-19 pandemic than the enforcement of mask wearing as a mechanism to prevent the transmission of the virus.

While there has been no shortage of reported incidents involving arguments or violence between those trying to enforce a mask mandate and consumers unwilling to comply, there are unique risks when these incidents occur in the context of air travel.

The confined nature of an aircraft in flight poses an extreme safety risk to passengers and crew if a passenger becomes unruly or is unable/unwilling to behave or follow the instructions of the flight crew.

Below, we attempt to highlight some of the legal and monetary ramifications a passenger may face due to failure to comply with flight crew and airline directions to follow COVID-19 mask mandates.

As was aptly noted by Justice Brown in a 2016 decision of the United States Court of Appeals for the District of Columbia Circuit, “In the catalog of human endeavors, few activities are as fragile as flight. The air offers no mercy for mistakes and no second chances. In that unforgiving environment, otherwise minor disruptions may threaten major damage”.1

Mask Requirements in Canada In Canada, the Federal government

implemented a mask mandate for airlines shortly after the announcement by the World Health Organization of COVID19 as a worldwide pandemic in March 2020.2 On April 20, 2020, the Minister of Transport, pursuant to its authority under the Aeronautics Act 3, made Interim Order to Prevent Certain Persons from Boarding Flights in Canada due to COVID-19, No. 34 and Interim Order to Prevent Certain Persons from Boarding Flights to Canada due to COVID-19, No. 6.5 The respective Interim Orders apply to airlines operating flights leaving Canadian aerodromes and airlines operating flights destined for Canada, respectively. The Interim Orders include the requirement that air carriers notify every person boarding a flight that they must be in possession of a face mask, that they must wear it at all times, and that they must comply with instructions given by flight crew members regarding wearing a face mask. The flight crew must also visually verify that each passenger is in possession of a face mask and must require passengers to wear a face mask at all times during the flight with some specific exceptions.6 If any passenger refuses to comply with instructions, the air carrier is required to keep a record of that passenger’s information and inform the Minister of Transport as soon as feasible. The Interim Orders also make certain sections “designated provisions”, the violation of which is punishable by $5,000 for an individual and $25,000 for a corporation.7 It is possible that the broadly worded exceptions contained in the Interim Orders could make them difficult to observe and enforce. The current Interim Order No. 35 contains exceptions for when a passenger

* Alexander Holburn Beaudin + Lang LLP (Vancouver, BC)

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must wear a mask during boarding or while in-flight. These exceptions include when a person is drinking or eating, unless a crew member instructs the person to wear a face mask.8 There have been news reports noting incidents where passengers have abused this exception by eating food constantly over the duration of the flight or pantomiming drinking from an empty plastic cup.9

Incidents in Canada In September 2020, Transport Canada announced that it had issued its first fines in Canada for contraventions of the Interim Orders. Two individuals were fined $1,000 each for refusing to follow the directions of flight crew to wear face coverings during domestic flights in June and July 2020. Transport Canada reported that in both incidents, the individuals were asked repeatedly by the flight crew to wear masks and refused.10 On December 22, 2020, the Canadian Broadcasting Corporation reported that Transport Canada had issued warning letters or administrative monetary penalties with respect to 72 incidents related to passenger refusals to wear masks onboard flights. Transport Canada issued two fines between $100 and $500, five fines between $500 and $1000, and two fines between $1000 and $2000.

Transport Canada also sent warning letters to another 63 passengers. Through these letters, Transport Canada warned that

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CTLA Feature Articles and Case Notes a second offence could result in higher fines.11

Other Canadian Legislation While the available administrative monetary penalties under the Interim Orders are relatively small, further regulatory punishments are available for more serious incidents.

Section 7.41 of the Aeronautics Act provides that no person shall engage in any behaviour that endangers the safety or security of an aircraft in flight, or of persons onboard an aircraft in flight, by intentionally interfering with the performance of the duties of any crew member, lessening the ability of any crew member to perform duties, or interfering with any person who is following the instructions of a crew member.12 The provision further provides that a person who commits an offence under this section is liable on indictable conviction to a fine of not more than $100,000 or to imprisonment for a term of not more than five years (or both). A person is liable under summary conviction to a fine of not more than $25,000 or to imprisonment for a term of not more than eighteen months (or both).13 In a few reported decisions involving individuals charged under section 7.41 of the Aeronautics Act, courts have emphasized the vulnerable nature of an in-flight aircraft and the risk to both passengers and crew in the face of non-compliant, abusive, or aggressive conduct.14 In both cases, flights had to be diverted from their original destinations.15 Courts have determined that for an offense under this section of the Aeronautics Act, it is not necessary for the Crown to prove that a flight was actually endangered. It is sufficient for the Crown to only prove deliberate conduct which created a situation that had the potential to endanger the safety and security of an aircraft.16 In one case, the passenger was sentenced to time served and a $10,000 fine.

He was also ordered to pay restitution to the airline in recognition of the additional

cost of the diversion.17 The deliberate refusal of a passenger to wear a mask while onboard an aircraft or aggressive and non-compliant conduct towards flight crew or other passengers could constitute an offence under this section of the Aeronautics Act.

Mask Requirements in the US Mask mandates were initially implemented by many major US airlines in Spring 2020 before any Federal rules were in place.

In December 2020, the Federal Aviation Administration (“FAA”) proposed penalties of $7,500 to $15,000 to two airline passengers who allegedly assaulted and interfered with flight attendants who instructed them to wear face coverings.18 The FAA noted that while the failure to wear a face covering was not in itself a Federal violation, civil penalties for interference with flight crew members were available under Federal law.19 The Federal Aviation Regulations prohibit interfering with aircraft crew or physically assaulting or threatening crew on an aircraft. Passengers are subject to civil penalties for misconduct, which can threaten the safety of the flight by distracting cabin crew from their safetyrelated duties. Additionally, Federal law provides for fines and imprisonment of passengers who interfere with the performance of a crewmember’s duties by assaulting or intimidating a crewmember or passenger.20 On January 13, 2021, the FAA signed an Order effecting a “Zero Tolerance” enforcement policy against unruly airline passengers in light of recent incidents stemming, in part, from passengers’ refusal to wear masks and threatening or violent behaviour.21 On January 21, 2021, President Biden signed the Executive Order on Promoting COVID-19 Safety in Domestic and International Travel, requiring masks to be worn in compliance with CDC guidelines in airports or on commercial aircraft.22 On January 29, 2021, the CDC made an Order effective February 1, 2021, requiring persons to wear masks over their mouth and nose when travelling

on aircraft into and within the United States, and at airports.23 The Order also obligated airlines to use best efforts to ensure that all persons travelling on aircraft wear a mask by only allowing those passengers wearing masks to board, instructing passengers that failure to comply constitutes a violation of Federal law, monitoring passengers while onboard, and disembarking those passengers who refuse to comply.24 The face mask requirement currently remains in place across all transportation networks in the United States until September 13, 2021.25

Incidents in the US In tracking unruly passenger incidents, the FAA has reported that such incidents are on the rise.26 As of August 1, 2021, the FAA had received 3,715 unruly passenger reports in 2021, 2,729 of which were mask-related incidents.27 The FAA initiated 146 investigations into unruly passenger incidents in 2019 and 183 in 2020. In 2021, just over halfway through the year, the FAA has already initiated 628 investigations, 99 of which have resulted in enforcement action being taken.28 As of July 6, 2021 the FAA, had fined unruly passengers $682,000.29

The Burden of Measures on Airline Employees A variety of measures have been taken by, and are available to, airlines aside from the penalties imposed by regulation.

Airlines can suspend the travel privileges of a passenger for a period of time or indeterminately. Several US airlines have taken the step of suspending alcohol sales on flights.30 It remains to be seen whether fines, penalties, or other punishments handed out by government authorities and airlines will slow the increase in passenger incidents and lighten the burden on an already burdened industry In Canada, one complicating factor is the fact that the Interim Orders and other recent regulations increase and prolong the potential interactions between airline employees and passengers.

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CTLA Feature Articles and Case Notes Interim Order No. 35 requires airlines to notify every person boarding an aircraft that they may be subject to various measures to prevent the spread of COVID-19 that have been imposed by the Provincial or Territorial government of the destination airport in Canada. The Interim Order also requires any air carrier operating a flight to Canada to notify passengers before boarding that they may be required to produce evidence prior to entry into Canada of COVID-19 vaccination status and inform passengers of the potential monetary penalties for providing false or misleading information.31 Airlines are also required to conduct a health check of every passenger before boarding and must review documentation provided by passengers of a negative COVID-19 molecular test performed no more than 72 hours prior to scheduled departure.32 Further, the Air Passenger Protection Regulations, which came into force in 2019, mandate a number of additional informational obligations that airlines and their employees must meet in dealing with passengers at the gate and onboard the aircraft.33 All of these obligations are being imposed on customer service agents and other personnel who are already responsible for a number of significant duties.

This would include customer service agents who are required to verify that passengers are in possession of the correct identification or other documentation that will permit travel to a foreign country, or the documentation required for domestic travel pursuant to the Secure Air Travel Act and Regulations.34 They are also often responsible for screening passengers who may not be suitable for transportation for safety purposes on account of intoxication or other condition. Flight attendants, who are already responsible for a number of safety and consumer related duties while onboard the aircraft including safety briefings, stowage of baggage, food and beverage service, and cabin checks, are now also required to monitor every passenger on the aircraft for mask compliance or risk exposing their employer to an administrative monetary penalty.

As noted above, these additional obligations on agents and flight crew members not only increase the risk to airline staff by lengthening the time spent dealing with passengers, they further increase the potential for negative interactions with unruly and/or unhappy passengers who may be opposed to current mask mandates.

Moving Forward

strain worldwide35, suggests that measures including the mask mandate could remain in place for the foreseeable future.

In the meantime, the current regulatory regime means that airlines and their employees will be obligated to continue to enforce these measures. The recent incidents reported by both Transport Canada and the FAA suggest that flight crew members and other personnel continue to be at risk of interactions or altercations with passengers who refuse to comply.

With the heightened risk presented by unruly behaviour or noncompliance in the context of air travel, we can only hope that the fines and other penalties imposed by our regulators will have a chilling effect on this behaviour. We certainly hope that passengers will continue to respect customer service agents, flight crew members, and other airline employees in the performance of their job duties.

Perhaps air passengers who take issue with the mask requirement can take a lesson from British Columbia’s Provincial Health Officer Bonnie Henry, who has encouraged throughout this pandemic to “be calm, be kind, and be safe”. Your airline staff and fellow passengers will appreciate it.

The rise of the COVID-19 Delta variant, which has now become the dominant

Endnotes 1 Wallaesa v. Federal Aviation Administration, 824 F.3d 1071 (D.C. Cir. 2016) 2 WHO Director-General’s opening remarks at the media briefing on COVID-19 – 11 March 2020, online: https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020.

3 Aeronautics Act, R.S.C. 1985, c. A-2 4 Interim Order to Prevent Certain Persons from Boarding Flights in Canada due to COVID-19, No. 3 (2020), C Gaz I, 1229.

5 Interim Order to Prevent Certain Persons from Boarding Flights to Canada due to COVID-19, No. 6 (2020), C Gaz I, 1246.

6 Supra notes iv and v 7 Ibid.

8 Transport Canada, “Interim Order Respecting Certain Requirements for Civil Aviation Due to COVID-19, No. 35” (29 July 2021), online: <https://tc.canada.ca/en/ministerial-orders-interim-orders-directives-directions-response-letters/interim-order-respecting-certain-requirements-civil-aviationdue-covid-19-no-35> 9 “Sneezed on, cussed at, ignored: Airline workers battle mask resistance with scant government backup”, Washington Post (1 January 2021), online: <washingpost.com> [https://www.washingtonpost.com/local/trafficandcommuting/coronavirus-mask-airplanes/2020/12/31/09c12d52-4565-11eb-975cd17b8815a66d_story.html] 10 Transport Canada, News Release, “Transport Canada fines two individuals for failing to follow direction from the flight crew to wear face coverings during flight” (4 September 2020), online: <https://www.canada.ca/en/transport-canada/news/2020/09/transport-canada-fines-two-individuals-for-failing-to-follow-directionfrom-the-flight-crew-to-wear-face-coverings-during-flight.html>.

11 “ Dozens of airline passengers in Canada hit with fines, warning letters for refusing to wear a mask”, CBC (22 December 2020), online: <cbc.ca> [https://www. cbc.ca/news/politics/airline-passengers-masks-fines-covid-1.5850825].

12 Supra note iii

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Supra note iii.

Minot v. Canada (Attorney General), 2011 NLCA 7, R. v. Moustakas, 2018 NSPC 80 15 Ibid.

16 Minot v. Canada (Attorney General), 2011 NLCA 7 17 Ibid.

18 Federal Aviation Administration, Press Release, “FAA Proposes Civil Penalties Against Passengers for Allegedly Interfering with and Assaulting Flight Attendants” (18 December 2020) , online: <https://www.faa.gov/news/press_releases/news_story.cfm?newsId=25500>.

19 Ibid.

20 Eg. 14 C.F.R. § 91.11, 14 C.F.R. § 121.580, 14 C.F.R. § 135.120, 14 C.F.R. § 13.14, 49 U.S.C. § 46504, 49 U.S.C. § 46318 21 Federal Aviation Administration, Press Release, “Federal Aviation Administration Adopts Stricter Unruly Passenger Policy” (13 January 2021), online: <https:// www.faa.gov/news/press_releases/news_story.cfm?newsId=25621>.

22 The White House, Briefing Room, “Executive Order on Promoting COVID-19 Safety in Domestic and International Travel” (21 January 2021), online: <https:// www.whitehouse.gov/briefing-room/presidential-actions/2021/01/21/executive-order-promoting-covid-19-safety-in-domestic-and-international-travel/>.

23 Centers for Disease Control and Prevention, “Requirement for Persons to Wear Masks While on Conveyances and at Transportation Hubs” (29 January 2021), online: <https://www.cdc.gov/quarantine/pdf/Mask-Order-CDC_GMTF_01-29-21-p.pdf>.

24 Ibid.

25 Transportation Security Administration, National Press Release, “TSA extends face mask requirement at airports and throughout the transportation network” (30 April 2021), online: <https://www.tsa.gov/news/press/releases/2021/04/30/tsa-extends-face-mask-requirement-airports-and-throughout>.

26 Supra note xxi 27 Federal Aviation Administration, “Unruly Passengers” (2 August 2021), online: <https://www.faa.gov/data_research/passengers_cargo/unruly_passengers/>.

28 Ibid.

29 CNBC, “Disputes over mask mandates comprise 75% of FAA’s unruly-passenger complaints on planes” (6 July 2021), online: <cnbc.com> [https://www.cnbc. com/2021/07/06/disputes-over-mask-mandates-comprise-75percent-of-faas-unruly-passenger-complaints-on-planes-.html].

30 CNBC, “AIRLINES American, Southwest put off plans to serve alcohol after passenger disruptions, assault on board” (29 May 2021), online: <cnbc.com> [https:// www.cnbc.com/2021/05/29/southwest-pauses-plan-to-resume-alcohol-sales-after-flight-attendant-assault.html].

31 Supra note viii 32 Ibid.

33 Air Passenger Protection Regulations, SOR/2019-150 34 Secure Air Travel Act, S.C. 2015, c. 20, s. 11, Secure Air Travel Regulations, SOR/2015-181 35 C TV News, “Delta COVID-19 variant now dominant strain worldwide; U.S. deaths surge” (16 July 2021), online: <ctvnews.ca> [https://www.ctvnews.ca/health/ coronavirus/delta-covid-19-variant-now-dominant-strain-worldwide-u-s-deaths-surge-1.5512008].

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CTLA Feature Articles and Case Notes

You Say it Best, When You Say Nothing at All…

Application of statutory limitations of liability in the face of silence by shippers and carriers for carriage of goods within Canada Eric Machum and Luke Hunter*

Introduction What happens when the parties to a contract for the carriage of goods don’t stipulate any liability terms and something goes wrong? Statutory liability provisions ride to the rescue (sometimes). In this article we examine such terms and conditions, primarily in the marine and road transport context. The terms of rail carriage in Canada have in the past been subject to considerable regulatory supervision but are now largely a matter of freedom of contract. Air cargo, while subject to standard terms for international transport, is also a matter for freedom of contract in the domestic context.

The default conditions for carriage of goods by water in Canada are the HagueVisby Rules [Rules] as incorporated into law by the Marine Liability Act, S.C. 2001, c. 6 [MLA]. In general, the Rules will apply unless the parties specifically turn their minds to excluding them, though there are potential applicability questions such as whether the contract in question is for the “carriage of goods” as that term has been judicially interpreted, or similarly whether particular cargo will be considered “goods” under the definitions contained in the Rules themselves. Some *Metcalf & Company (Halifax, NS)

of these questions will be explored below.

For road carriage, all Provinces except Newfoundland & Labrador have legislated uniform conditions of carriage. The conditions themselves are very similar across the provinces – e.g., regarding the $2.00/ lb limit of liability, but there are legislative variations with respect to how the conditions of carriage apply or are incorporated into the contract of carriage, and around bill of lading issuing requirements. In accordance with the federal Conditions of Carriage Regulations, SOR/2005-404, extra-provincial trucking is subject to the conditions of carriage and limitations of liability set out in the laws of the province in which the transport originates. As will be seen, courts have wrestled with deciding whether to allow carriers to rely on the limitation of liability provisions in the uniform conditions in the absence of a bill of lading or other evidence about the carriage contract’s terms.

The courts in different provinces have at times gone in different directions on the applicability of the limitation of liability. This is largely based (ostensibly) on a nuanced reading of the different legislative language used, but it is clear too that different judges have simply brought different approaches and values to this problem. In response, some provinces, including Ontario, have legislated to try to settle the debate, but the issue likely remains live in other jurisdictions.

Marine For carriage of goods by water the Hague-Visby Rules apply in accordance with subsections 43(1) and (2) of the MLA

which state as follows: 43 (1) The Hague-Visby Rules have the force of law in Canada in respect of contracts for the carriage of goods by water between different states as described in Article X of those Rules.

(2) The Hague-Visby Rules also apply in respect of contracts for the carriage of goods by water from one place in Canada to another place in Canada, either directly or by way of a place outside Canada, unless there is no bill of lading and the contract stipulates that those Rules do not apply.

Applying the Rules by default to Canadian domestic shipping provides the obvious benefit of a uniform set of conditions for all water transport and also takes advantage of the balance struck between cargo and ship owning interests in the original negotiation of the Rules.

Furthermore, given the widespread use of the Rules around the world, there is a large body of case law to which Canadian courts can turn when faced with cargo claims.

The basic bargain is that the carrier cannot completely excuse itself from all liability for loss or damage to “goods”, but in exchange it can limit its liability to a predictable measure, in the case of the Rules “666.67 units of account per package or unit or 2 units of account per

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CTLA Feature Articles and Case Notes kilogramme of gross weight of the goods lost or damaged, whichever is the higher” (Article IV(5)(a)).

While the Rules normally only apply between states party, s. 43(2) of the MLA extends the application to purely domestic carriage if three conditions are met: 1. there is a “contract for the carriage of goods by water”; 2. there is no bill of lading; and 3. the contract stipulates that the Rules do not apply.

As a result, even a simple oral contract for marine transportation that is silent about the Rules may be subject to the standard conditions, including the limitation of liability in Article IV. As early as 1959 the Supreme Court of Canada had held in Anticosti Shipping Co. v. St-Amand, [1959] S.C.R. 372 that a contract for the carriage of goods was “covered” by a bill of lading and therefore subject to the Hague Rules, even though the bill of lading was not issued at the time of the loss.

However, s. 43(2) of MLA was more squarely addressed by the Federal Court of Appeal in Mercury XII (Ship) v. MLT-3 (Belle Copper No. 3), 2013 FCA 96 [Mercury].

The case involved an oral contract to transport a truck loaded with building materials by tug and barge to an island near Vancouver. On the final return voyage, the barge swung while the truck was attempting to drive onto the barge and fell into the water. Crucially, as it turns out, the parties agreed the barge owner would be paid on an hourly basis for the use of the tug and barge and the truck operator remained on board the truck.

The barge owner, Mercury, sought to rely on the Hague-Visby Rules to take advantage of the one-year limitation period prescribed by the Rules. The truck owner argued that the Rules did not apply.

The trial judge linked the defined term, “contract for the carriage of goods” in s. 43(2) of the MLA to the term “contract of carriage” in the Rules and held that because the Rules require a contract “covered by a bill of lading or similar document of title”, the Rules could not

apply domestically to an oral contract.

However, this conclusion was overruled by the Federal Court of Appeal, which undertook a more thorough examination of s.

43(2) of the MLA. The Federal Court of Appeal held that as it was faced with an oral contract, there was obviously no bill of lading, but as noted above, s. 43(2) of the MLA further requires that the contract between the parties stipulate that the Rules do not apply if those Rules are to be ousted. In the case, the oral contract made no reference at all to the Rules. The court accepted that an oral contract with no bill of lading that is silent on the Rules is therefore subject to them.

However, on the issue of whether the contract was a “contract for the carriage of goods by water”, the court held that in this case it was not. The court found that the contract was a time charterparty because the invoice for Mercury’s services was based on an hourly rate for the use of the tug and barge. The court then followed its earlier decision in Canada Moon Shipping Co. Ltd. v. Companhia Siderurgica PaulistaCosipa, 2012 FCA 284 [The Federal EMS], which had held that the term “contract for the carriage of goods by water” does not apply to charterparties, i.e., contracts for vessel hire.

In short, the scope of application of the Rules under s. 43(2) of the MLA is broader than that of the Rules themselves. In the domestic context, the Rules apply to all contracts of carriage, including those covered by waybills, non-negotiable receipts, or nothing at all. Merely overlooking or deciding not to issue a bill of lading will not oust the Rules.

Further interesting questions were raised in the Mercury case, but did not require a decision given the court’s determination that the contract was not a “contract for the carriage of goods by water”. For example, the “difficult” question whether the truck was “goods” within the meaning of s. 43(2) of the Act was left unanswered. It appears an argument was advanced before the court that the truck was not goods because it was only equipment used to load and unload the building

materials. In our view, it is not clear why the use given the “goods” would be particularly relevant from the point of view of the carrier, the Rules, or s. 43(2) of the Act. A further question, yet unanswered, is whether s. 43(2) of the MLA is concerned at all with undeclared deck cargo. If the definition of contract of carriage is broader under s. 43(2) of the MLA, then it is not clear why the definition of “goods” would not also be the same or broader than under the Rules.

Road The application of statutory carriage conditions to informal contracts, or contracts without a bill of lading has also come up in the context of carriage of goods by road.

As noted above, the statutory uniform conditions of carriage are largely similar across Canada, but the bill of lading issuing requirements and the language used to apply the conditions to the contract vary. On that basis, and interpretive differences, the courts have also differed on whether a carrier can rely on the statutory limitation of liability in the absence of a bill of lading.

One of the early court of appeal cases on the issue of applying the statutory conditions to a carriage contract with no bill of lading is Corcoran v. Ehrlick Transport Ltd. et al., [1984] 46 O.R. (2d) 225 (O.N. C.A.) [Corcoran]. The contract was concluded orally for the carriage of a horse, and though a bill of lading was subsequently drawn up, it was never given to the shipper. The court held that the carrier could not rely on the limitation of liability, reasoning that allowing the carrier to do so would frustrate the statutory scheme by depriving the shipper of the opportunity to declare on the bill of lading the full value of the cargo and thus take the limitation of liability out of operation (this is the same mechanism that operates under Article IV(5)(a) of the Hague-Visby Rules cited above).

This finding was made notwithstanding that the Ontario act in force at the time stated that: 12(3) The conditions set out in Schedule A [i.e., the standard

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CTLA Feature Articles and Case Notes conditions including the limitation of liability] shall be deemed to be a part of every contract for the transportation of goods for compensation other than a contract for transportation for compensation between a freight forwarder and a shipper.

The equivalent of this clause in the Alberta legislation was given thorough consideration a few years later by the Alberta Court of Appeal in Hoskin v. West (Alta. C.A.), [1988] A.J. No. 1140 [Hoskin].

Like Corcoran, there was no bill of lading issued for the carriage and no indication that the parties had discussed the application of the uniform conditions or limitation of liability. The court in Hoskin, however, reached the opposite conclusion from the Ontario Court of Appeal and allowed the carrier to rely on the limitation of liability in the uniform conditions.

The court distinguished Corcoran on the basis that the relevant Alberta legislation placed the obligation to issue a bill of lading on either the shipper or the carrier, which the court found to be akin to the situation in Anticosti where the carrier was only required to issue a bill of lading on demand of the shipper.

However, what appears really to have persuaded the Alberta Court of Appeal was the language in the Alberta legislation which stated that: 5(1) Every agreement for the transportation of goods to which section 3 applies is deemed to include those terms and conditions contained in the conditions of carriage set out in Schedule 3 [i.e., the uniform conditions of carriage including limitation of liability].

This is basically the same language as in the Ontario legislation, but was given interpretive primacy on the basis that the contract of carriage will always be concluded before the bill of lading is issued, and that the bill of lading is really just evidence of the contract’s terms – a point which was set out in Pyrene v. Scindia Navigation Company, [1954] 2 Q.B. 402 at 419, the case on which the Supreme Court of Canada relied in Anticosti.

Cases that have sought to reconcile

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these decisions have pointed to the variation in statutory language (see e.g., Byers v. United Parcel Service Canada Ltd., [2004] S.J. No. 411 (S.K. Prov. Ct.), but what really appears to have driven the decision in Hoskin is the mandatory deeming language being applicable to the contract, and placing less significance on what may in some cases be the formality of issuing the bill of lading, regardless of the regulatory directive to do so.

In B.C., prior to regulatory reform, the general rule was that the carrier would be denied the benefit of the limitation of liability in the uniform conditions where the requirements pertaining to issuance of the bill of lading were not strictly complied with, unless the parties agreed to other terms for their contract, either expressly, by course of dealings or industry practice (Paine Machine Tool Inc. v. Can-Am West Carriers Inc. (2003), 177 B.C.A.C. 142 (CA) at para. 25; in Valmet Paper Machinery Inc. v. Hapag-Lloyd AG, [2004] B.C.J. No. 2085 and Arnold Bros. v Western Greenhouse Growers Coop. Assn. (1992) 14 B.C.A.C. 220 (CA)). Similarly, in Hydro-Québec c.

Grant Float Services Inc. (C.A.Q.), [1991] J.Q. no 2237, the Quebec Court of Appeal affirmed the lower court’s holding that the carrier could not rely on art. 12(1) in the uniform conditions where the carrier failed to issue a bill of lading.

Other provinces have similar language to the Alberta and Ontario statutes in Hoskin and Corcoran. For example, s.

7 of Nova Scotia’s Carriage of Freight by Vehicle Regulations, NS Reg 24/95 states: 7 Except as otherwise provided by or under these regulations, the following clauses are prescribed as uniform conditions of carriage of freight by a motor carrier and are deemed to be part of every contract for the carriage of freight by a motor carrier and shall be contained or incorporated by reference in every bill of lading relating to the carriage of freight by a motor carrier: A recent small claims decision in Nova Scotia, Flying Fresh Air Freight (c.o.b. FFAF Cargo) v. Connors Transfer Ltd., [2020] N.S.J. No. 419 (N.S. Small Claims) [Flying

Fresh] denied the carrier the right to limit liability under the statutory conditions as there was no bill of lading issued, nor did the contract mention the application of the uniform conditions. The parties did however have a long-standing commercial relationship which had its own terms limiting liability and which the adjudicator ultimately applied. The adjudicator referred to the Anticosti decision, but not to Corcoran or Hoskin so it is difficult to predict whether future cases in Nova Scotia will follow the same path as Flying Fresh.

Indeed, in Newfoundland an identical provision in s. 44 of its Regulations (now repealed) was held to apply and give the carrier the benefit of a limitation of liability regardless of the fact that no bill of lading was issued (Port Enterprises Ltd. v. Parsons Trucking Ltd., [1985] N.J. No. 300).

A legislative aspect that does not appear to have been raised before the adjudicator in Flying Fresh was the possible interaction between the federal Conditions of Carriage Regulations, SOR/2005-404 and the Nova Scotia Carriage of Freight by Vehicle Regulations, NS Reg 24/95.

Subsection 1(1) of the federal regulations state: 1 (1) Subject to subsection (2), the conditions of carriage and limitations of liability that apply to transport by an extra-provincial truck undertaking are those set out in the laws of the province in which the transport originates, as amended from time to time, that are applicable to transport by a motor carrier undertaking within that province.

It appears the shipments at issue in Flying Fresh were interprovincial, therefore, assuming the carriage in Flying Fresh was an “extra-provincial truck undertaking”, the transport at issue would be subject to “the conditions of carriage and limitations of liability … set out in the laws of the province in which the transport originates”, i.e., Nova Scotia.

The question is whether the federal legislation applies the whole of the Nova Scotia regulations or only the uniform conditions of carriage, which are just the

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CTLA Feature Articles and Case Notes subparagraphs of s. 7.

If it is only the uniform conditions of carriage that apply, then the requirement to issue a bill of lading no longer appears to be an obstacle to the application of the limitation of liability contained in the uniform conditions and thus the $2.00/lb limit set out at s. 7(k) of the Nova Scotia regulations should have applied by operation of s. 1(1) of the federal provisions (though they may have been ousted by the parties’ existing agreement). This is the view set out by John S. McNeil, Q.C. in his Motor Carrier Cargo Claims, 5th ed.

(2007), p. 48-49.

Some provinces, including Ontario, B.C. and Manitoba have responded to the Corcoran decision and those following it by amending the legislation to resolve the question in favour of the application of the uniform conditions, regardless of the issuance or not of a bill of lading. This is unsurprising given that the purpose of having uniform conditions is to encourage predictability in contractual relationships, and may also accord better with commercial practice in the trucking industry where it is unreasonable to expect bills of lading to be ‘issued’ for every shipment.

Thus, s. 191.0.1(2) of Ontario’s Highway Traffic Act, R.S.O. 1990, c. H.8 reads: (2) Where a person is hired for compensation to carry the goods of another person by commercial motor vehicle in

circumstances where no contract of carriage has been entered into, then a contract of carriage shall be deemed to have been entered into, and the terms and conditions of the deemed contract of carriage shall be as set out in, and shall apply to such persons as are set out in, the regulations.

Another instance is s.2(2) of Manitoba’s Bills of Lading and Uniform Conditions of Carriage Regulation, Man Reg 16/2019: 2(2) The uniform conditions of carriage set out in Schedule A are deemed to be incorporated into any contract of carriage for the transportation of general freight by means of a vehicle on a highway, regardless of whether a bill of lading is issued as required under subsection (1).

In B.C., pursuant to s. 37.45 Motor Vehicle Act Regulations, BC Reg 26/58, as amended by B.C. Regulation 135/2003, a carrier need not issue a paper bill of lading if it issues electronic bills of lading and obtains a “letter of exemption” from the requirement to do so.

The Ontario and Manitoba amendments are wholly consistent with Anticosti and the underlying Pyrene v. Scindia Navigation Company judgment which gave precedence to the intentions of the parties and commercial practice – in which the contract of carriage is always concluded prior to drawing up and issuing the bill of

lading – rather than the strictest compliance with regulatory requirements.

The conclusion is that for some provinces and probably inter-provincial road transport, the uniform carriage conditions will apply, including the limitations of liability, regardless of whether a bill of lading has been issued or whether the contract between the parties mentions the standard terms.

Furthermore, the legislative momentum appears to be towards ensuring that the uniform conditions apply in all cases unless the parties clearly agree otherwise.

However, certain provinces, such as British Columbia and Quebec still place great emphasis on carrier compliance with the regulatory rules regarding issuance of bills of lading in order to access the limitation of liability in the uniform conditions.

Rail Federally-regulated Canadian railways are now free to contract with individual shippers or groups of shippers, including on matters of limitation of liability, rather than being subject to regulated conditions of carriage and freight tariffs. See e.g., Canada Transportation Act, S.C. 1996, c.

10, s. 137.

Air International cargo is subject to international conventions but liability for domestic cargo shipments is determined by the parties’ contract.

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CTLA Feature Articles and Case Notes

Autonomous Vehicles and the Trucking Industry in Canada Pui Hong*

Someone asked me at the beginning of 2020 what I thought would be the next big disruptor in the motor carrier business.

I knew it had something to do with the two buzzwords “technology” and “innovation” but I couldn’t pinpoint anything in particular. Would it be highly advanced sensors and cameras that would significantly decrease safety incidents? Would the industry move towards vehicles that reduce greenhouse gas emissions? Would there be some kind of technological advancement that would help alleviate driver shortages plaguing the industry? Fast forward twenty months and there seems to be one technological innovation that covers all three – autonomous vehicles.

Autonomous vehicles (“AV”) have been on the mind of those in the automotive industry and governments for a number of years. In 2015, CAVCOE (formerly the Canadian Automated Vehicles Centre of Excellence) prepared an unsolicited white paper for the Government of Canada describing the opportunities and challenges in incorporating AVs into Canadian society as well as providing recommendations on implementation and incorporation1. In 2016, the province of Ontario launched a ten-year pilot program to allow the testing of AVs on Ontario’s roads. On September 13, 2017, the American Trucking Associations, Inc. (“ATA”) testified before the Senate Commerce Hearing on Transportation * Trimac Transportation, Calgary

Innovation: Automated Trucks and our Nation’s Highways regarding, among other things, the positive impact AVs will have on the trucking industry2. The following month, the ATA issued its first Automated Truck Policy for the development of automated trucks3. Additionally, the provinces of Ontario and Alberta launched cooperative truck platooning pilot programs (January 1, 2019, and March 1, 2021, respectively) to test vehicle-to-vehicle communication technology under specific conditions along specified routes. While fully autonomous trucks (SAE Level 5 tech) will likely not be a reality on public roadways for a while, the use of AVs with SAE Level 3 and lower automation4 will support drivers by improving safety, lowering fuel burn and emissions, and reducing traffic congestion5. Increased use of AVs will also help with the issues of increased insurance costs and driver shortages.

Insurance Costs and Liability

Truck insurance in Canada has continued to rise over the past few years.

According to the Traffic Injury Research Foundation, more than 90% of road crashes are a result of human error or condition6. In 2018, the number of motor vehicle fatalities in Canada was 1,922, up 3.6% from 20177. Todd MacGillivray, Northbridge Insurance Vice President of Transportation and Logistics was quoted as saying that the “[trucking] business has been unprofitable for an extended period of time”8. The increasing cost of claims is a major contributing factor to this reality. In Canada in 2018, the average claim for property damage alone was $20,917. Where injuries were involved, the amount rose to $270,222, and where there was a fatality, it rose to almost $5 million9. The cost to run cross-border

further increases insurance costs especially with the nuclear verdicts juries are awarding to plaintiffs in U.S. courts.

To combat increasing insurance costs, carriers are looking to technology to decrease safety incidents. The most common safety features of commercial vehicles today include forward collision warning, lane departure warning, and blind spot monitoring. Many carriers are also utilising fleet safety and risk management systems including outward facing cameras that record footage for a period of time before and after a recordable incident such as hard braking, hard turns, and speeding. In using available technology, carriers hope to decrease the number of traffic accidents and the cost of any damage sustained in addition to decreasing the severity of injuries sustained. This technology is a precursor to the development of semi and full AV. With changes to technology and driving behaviour come changes to liability frameworks. Auto insurance in Canada is provincially/territorially regulated in Canada; accordingly, any changes to the way insurance is provided in Canada will require changes to the legislation of each province and territory10. There will be different challenges in determining liability and fault at different stages of AV deployment: (1) SAE Level 2 and 3 vehicles sharing the road with conventional vehicles; (2) SAE Level 4 and 5 vehicles sharing the road with conventional vehicles; and (3) Level 4 and 5 vehicles dominating the roads11. In the first stage where SAE Level 2 and 3 vehicles are sharing the road with conventional vehicles, the challenge will be in distinguishing between driver liability and vehicle liability12. Additionally, it is unclear how liability and fault will be shared in situations where both driver error and vehicle technology

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CTLA Feature Articles and Case Notes contribute to an incident13. As the industry moves towards more automation, liability will start to resemble product liability shifting liability to vehicle manufacturers, software developers, third party service providers such as GPS and weather service providers, and infrastructure developers and operators14. An alternative approach to liability is the single policy approach. This approach was implemented by the United Kingdom in 2018 and recommended by the Insurance Bureau of Canada15. Under the single policy approach the “automated vehicle’s insurer would compensate injured people if the automated vehicle caused a collision, regardless of whether the human operator or automated technology was in control.”16 Canada’s current liability framework is adept at dealing with claims associated with SAE Level 2 and 3 automation but is not equipped to deal with novel situations brought about by SAE Level 4 and 5 automation, especially in common law jurisdictions where liability is decided by case law rather than statute17.

As AVs are tested in various situations and environments, some provinces have made small changes to legislation and regulations to govern AV pilot projects. In Ontario, the Ontario Highway Traffic Act was amended to permit AVs on roads for pilot projects and sets out the minimum required insurance for vehicles with different seating capacities18. Quebec amended its Automobile Insurance Act which requires AVs to hold minimum liability coverage for property damage of $1 million as well as the standard no-fault coverage required under that Act19. While Canada’s current liability structure would be able to deal with claims caused by SAE Level 2 and 3 vehicles, as AV use increases and AVs move to SAE Level 4 and 5 automation, jurisdictions will need to revise and update laws and regulations on liability and fault determination in vehicle collisions20.

Driver Shortage

Another issue plaguing the trucking industry is the shortage of drivers across North America. In 2019, Canada trucking industry faced an average job vacancy rate of 6.8% with long haul drivers facing a 9.4% average vacancy rate21. According to the

FMCSA, in the U.S. turnover rates are over 90% for large, long haul carriers and over 70% for small carriers22. Canada is expected to be short 25,000 truck drivers by 202323.

In the U.S., it is estimated that the industry will need to hire 1.1 million drivers over the next decade (110,000 drivers per year) to meet demand in light of drivers retiring. Factors behind the shortage include an aging workforce, misconceptions about the industry among women and younger individuals, and a high turnover rate24.

Additionally, it takes time to properly train new, inexperienced drivers entering the industry before they can drive on their own.

The use of AVs could help with the driver shortage problem as there are a number of benefits to using AVs. A few examples include minimizing the stresses of driving (e.g. lane changes, merging, etc.); attracting drivers from non-traditional driver candidate pools (e.g. younger individuals and women); and altering the role of the driver in a manner that help minimize fatigue and support alternative arrangements such as job sharing. Additionally, increased use will undoubtedly impact the labour market and the driver’s role.

While some driving jobs may be significantly decreased or eliminated in some industries (e.g., taxis, ridesharing, and haul truck drivers for oil and gas mining sites), that will likely not be the case for the trucking industry - at least for the foreseeable future. Automating the driving function will assist drivers by decreasing the stresses of driving and improving safety while on the road. As well, the use of technology may attract younger drivers and other demographics who are used to or are interested in working with the latest technology. It will also decrease the amount of training required before an individual is able to drive independently.

While AVs may not completely solve the driver shortage problem, it may help to alleviate it by enlarging the pool of potential drivers into those demographics that have traditionally shied away from careers in trucking as well as shortening the amount of time it takes to train new drivers.

Cybersecurity and Privacy

What discussion about new technology

would be complete without a discussion about cybersecurity and privacy? With the advent of technological advances came an increase in cyberattacks. In 2007, a study found that hackers were attacking computers and networks at a rate of one attack every 39 seconds25. In 2020, the Internet Crime Complaint Center found that the rate of attacks was about one successful attack every 1.12 seconds26. In 2020, 86% of data breaches were financially motivated, 10% were motivated by espionage. Overall, 45% of breaches occurred by hacking, 17% involved malware, and 22% involved phishing27. These statistics are troubling in and of themselves but are even more so considering the recent high-profile attacks on SolarWinds and Colonial Pipeline. In order for AVs to work optimally, current infrastructure must support communication between vehicles, external communication devices, and infrastructure28. This connectivity results in a direct correlation between the risk and severity of cyberattacks and AV usage. In March 2020, Transport Canada published its Vehicle Cyber Security Strategy29. The Strategy “identifies overarching priorities with a view to strengthen the cyber security resilience of vehicles and the supporting road transportation infrastructure in Canada.”30 The 3 overarching cyber security goals for AVs in Canada are: (1) incorporating vehicle cyber security considerations into policy and regulatory frameworks; (2) promoting awareness and fostering a modernized, innovative approach to vehicle cyber security; and (3) addressing emerging and adjacent issues in the vehicle cyber security landscape31.

As important as it is for governments to implement strategies and legislation to combat the novel risks posed by AVs and the corresponding technological advances, it is also imperative that companies implement policies and practices to protect not only the stream of data flowing from AVs but also the security and privacy of personally identifiable information collected from its personnel and customers. In preparation for the increased use of AVs, companies should take steps to include AVs in its governance framework and cyber security preparedness. Additionally, companies should be mindful of the way vendors intend to use

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CTLA Feature Articles and Case Notes the data they access and negotiate contract terms accordingly.

As our society relies more and more on technology, cyber security risks and privacy concerns continue to be near the top of the list for many compliance and risk management departments. In 2018, the federal privacy commissioner highlighted to the industry that the privacy watchdog was concerned about the data generated by connected and autonomous vehicles and the need for transparency and improving consent around that data32. While the use of AVs decreases safety risks in one area, it increases safety risks in another area.

Autonomous Vehicle Use in Canada’s Trucking Industry

While widespread AV use in the trucking industry is not yet occurring in Canada, it is a matter of time before they will be used. The likelihood of seeing SAE Level 5 trucks being used in the near future is slim as such fully automated vehicles require more sophisticated infrastructure and connectivity, however, AVs providing assistance to human drivers will be more and more prevalent as governments and society embrace the use of AVs. Of course, how quickly AVs will be used and to what extent

will depend on infrastructure support and public opinion of AVs. That being said, AVs have been shown to reduce crashes and assist drivers by utilising a combination of hardware (cameras, sensors, and radar) and software to help identify safety risks. This could lead to a decrease in insurance costs and change the perception of the trucking industry making it more appealing to a new demographic of workers such as younger individuals and women. Are AVs the solution to the trucking industries insurance and driver shortage problem? Possibly.

Endnotes 1 Preparing for Autonomous Vehicles in Canada: A White Paper Prepared for the Government of Canada, Canadian Automated Vehicles Centre of Excellence, December 16, 2015.

2 Transcript of Statement of Chris Spear, President and CEO on behalf of American Trucking Associations, Inc. (ATA), September 13, 2017, Senate Committee on Commerce, Science, and Transportation – Transportation Innovation: Automated Trucks and our Nation’s Highways, at https://www.commerce.senate.gov/services/files/7333E8F5-4577-41BF-91CB-DB08E3A146AE. See Automated Truck Policy, October 24, 2017, at https://www.trucking.org/news-insights/ata-board-endorses-comprehensive-automated-truck-policy.

3 4 There are 5 levels of automation in a vehicle. SAE Level 1 is full human control. SAE Level 2 entails a automated driving system (“ADS”) assisting the driver with either steering or braking and is engaged at the driver’s request. SAE Level 3 involves an ADS performing the dynamic driving task in certain conditions, but the expectation is that the driver is ready and available to intervene at the ADS’ request or in the event of failures in other vehicle systems. SAE Level 4 involves an ADS performing the dynamic driving task where the human driver becomes a driver when the system is engaged. SAE Level 5 involves full automation of the entire driving task and the human driver is a passenger with no expectation that the human driver will need to intervene in the driving task.

5 Transcript of Statement of Chris Spear, President and CEO on behalf of American Trucking Associations, Inc. (“ATA”), September 13, 2017, Senate Committee on Commerce, Science, and Transportation – Transportation Innovation: Automated Trucks and our Nation’s Highways, at https://www.commerce.senate.gov/services/files/7333E8F5-4577-41BF-91CB-DB08E3A146AE p. 3.

6 Robyn D. Robertson, Shawna R. Meister and Ward G.M. Vanlaar, September 2016. Traffic Injury Research Foundation; Automated Vehicles: Driver Knowledge, Attitudes, & Practices, Executive Summary p. i.

7 https://tc.canada.ca/en/road-transportation/motor-vehicle-safety/canadian-motor-vehicle-traffic-collision-statistics-2018.

8 Smith, John G., October 2, 2020, at https://www.trucknews.com/transportation/hard-market-continues-to-drive-truck-insurance-costs-higher/1003145228/.

9 Id. 10 Council of Canadian Academies, 2021. Choosing Canada’s Automotive Future, Ottawa (ON). The Expert Panel on Connected and Autonomous Vehicles and Shared Mobility, Council of Canadian Academies p. 58.

11 Id. at p. 58.

12 Id. 13 Id. at p. 59 14 Id. at p. 60.

15 Id. at p. 62.

16 Id. at p. 62.

17 Id. at p. 62.

18 O. Reg. 306/15, s. 2.2.

19 Council of Canadian Academies, 2021. Choosing Canada’s Automotive Future, Ottawa (ON). The Expert Panel on Connected and Autonomous Vehicles and Shared Mobility, Council of Canadian Academies p. 61.

20 Id. p. 60.

21 Smith, John G., March 11, 2020, at https://www.trucknews.com/transportation/canada-short-25000-truck-drivers-by-2023 report/1003137725/#:~:text=”The%20truck%20driver%20occupation%20in%20report%20concludes.

22 Heavy Duty Trucking Staff, July 8, 2021, at https://www.truckinginfo.com/10146957/ata-usdot-officials-discuss-truck-driver-retention-challenges.

23 Id. 24 Smith, John G., March 11, 2020, at https://www.trucknews.com/transportation/canada-short-25000-truck-drivers-by-2023 report/1003137725/#:~:text=”The%20truck%20driver%20occupation%20in%20report%20concludes.

25 See https://www.comparitech.com/vpn/cybersecurity-cyber-crime-statistics-facts-trends/.

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Id. https://www.varonis.com/blog/cybersecurity-statistics/.

28 Jarvie, Max and Nagy, Andy, June 2020, at https://www.blg.com/en/insights/2020/06/the-sensor_-_legal-insights-into-autonomous-vehicles-june2020.

29 See https://tc.canada.ca/en/road-transportation/innovative-technologies/connected-automated-vehicles/transport-canada-s-vehicle-cyber-security-strategy.

30 Id. 31 Id. 32 Love, Robert L. and Vila, Edona C., January 31, 2019, at https://www.blg.com/en/insights/2019/01/the-sensor--the-legal-crystal-ball-autonomous-vehicles-developments-to-watch-for-in-2019.

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Association Business

In Memoriam

Kenneth E. Siegel (1947-2021) The Transportation Lawyers Association is shocked and saddened to learn that our good friend and longtime member Ken Siegel and his wife of 50 years, Maryann, lost their battles with COVID19 on two successive days in February 2021. They had retired to Yorktown, Virginia, after residing for many years in the Virginia suburbs of Washington, D.C. Ken and Maryann met at their alma mater, Duquesne University in Pittsburgh.

Ken received his law degree from Temple University in Philadelphia and spent a long and illustrious career practicing federal transportation law in Washington. He was a staff attorney with the former Interstate Commerce Commission between 1972 and 1976 and then with the General Accounting Office in 1976 and 1977.

Putting his federal government experience to work, Ken joined the legal staff of the American Trucking Associations (“ATA”) in 1977 and became its acknowledged expert on a variety of regulatory, trade and legislative issues as the motor carrier industry transitioned to economic deregulation.

He rose to become ATA’s Vice President of Law and Deputy General Counsel before entering private law practice in 2000.

Ken was Of Counsel to the Washington offices of Barnes & Thornburg and then Strasburger & Price, LLP until his retirement in 2012. He generously shared his expertise in numerous presentations at TLA and Canadian Transport Lawyers Association conferences throughout his years in Washington.

Ken and Maryann were proud products of the Keystone State and avid sports fans. They are survived by three children, two daughters-in-law and three grandchildren. In lieu of flowers, the family suggested a memorial donation to the Down Syndrome Association of Greater Richmond at https://dsagr.org/donate-to-dsagr-2/.

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Association Business

TLA Career Center Looking for a job or to fill a position at your firm? The TLA Career Center is open and ready for your postings. The TLA Career Center is connected to a larger attorney network, so your posting will get maximum exposure in the legal community.

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