Transportation Industry News Winter
2018 Wholesale Baker Owes Mixed-Fleet Drivers Overtime Wages 3 A Trailer is Not a Warehouse 4 Are Unmanned “Ghost” Ships the 5 Future of International Trade? Team Directory 7
FMCSA Responds to the Opioid Epidemic Rocky Rogers | rocky.rogers@smithmoorelaw.com This should come as no surprise to anyone that follows
over the past twenty years. While that study did not
local or national news with any sort of frequency—
directly relate the presence of opioids as a cause of the
America is in the grips of an opioid epidemic. In fact,
fatal crashes, it is commonly understood that opioids
most local and national television outlets have recurring stories on the problem. While overdoses are the most frequent topic of conversation, and understandably so with close to 50,000 opioid-related overdose deaths reported in 2016, the epidemic presents another safety issue—impaired drivers behind the wheel. One recent
can slow reaction time, increase drowsiness, and impair thinking and motor skills, all of which can contribute to fatal accidents. The Federal Motor Carrier Safety Administration, like many other federal, state, and local agencies, is responding to the epidemic. Effective January 1, 2018,
study from researchers at Columbia University found,
the Department of Transportation (“DOT”) drug-testing
now more than ever before, individuals killed in motor
program detailed in 49 C.F.R. Part 40 will include
vehicle accidents are testing positive for opioids, with
screening for four semi-synthetic opioids: hydrocodone,
one population segment exhibiting a seven-fold increase
Continued on Page 2
hydromorphone,
oxymorphone,
drug-testing program. The FMCSA
continuing with his duties poses
and
This
change
clarified the definition of prescription
a significant safety risk. In those
mirrors those made recently by the
for purposes of several sections
limited circumstances, the employee
Department of Health and Human
addressing medical review officer
now has five business days after the
Services (“HHS”) to the federal
(“MRO”) verification determinations
reporting of a verified negative result
workplace
program.
and MRO reporting to third-parties,
to have the prescribing physician
While under the 1991 Omnibus
including employers. “Prescription” is
contact the MRO to determine if the
Transportation
Act,
now defined to only include “a legally
medication(s) can be changed to one
the FMCSA is required to look to
valid prescription consistent with the
that does not make the employee
HHS for scientific and technical
Controlled Substance Act (“CSA”).”
medically unqualified or that does
guidelines regarding drug-testing,
The FMCSA took the opportunity to
not pose a significant safety risk If
the FMCSA specifically explained
again clarify that because marijuana
the MRO does not receive such
the changes to the DOT drug-testing
is not a prescription consistent with
additional information, the MRO
oxycodone.
drug-testing
Employee
program were meant “as a response to national problem that can affect transportation safety.” Elsewhere, in its explanation of the new final rule, the FMCSA stated “[i]nclusion of these four semi-synthetic opioids is intended to help address the nationwide epidemic of opioid abuse. . . . This will enhance the safety of the transportation industries and the public they serve.” Accordingly, the FMCSA sees this as a necessary
2
the CSA, state medical marijuana laws “do not have validity for purposes of the DOT program.” The final rule also permits MROs to order additional certain, specified tests without DOT consent if the additional testing is necessary to verify a result. The final rule makes another change to the MRO reporting procedure where a positive test result is downgraded to negative on account of the employee having a valid prescription, but where
would then report the safety concern to third parties. Under the new final rule, the employer will receive the verified negative test result first and medical information, if necessary, later.
While noting alternatives to
urine testing, for now the FMCSA continues to only recognize urine testing under the DOT drug-testing program. Last, the final rule eliminates the blind testing requirement.
response to the national epidemic.
in the MRO’s medical judgment the
The full-text of the final rule can
employee is medically unqualified
be
The new final rule also makes several
under the applicable DOT regulation
gov/fdsys/pkg/FR-2017-11-13/
other important changes to the DOT
(e.g., fitness for duty) or the employee
pdf/2017-24397.pdf
Smith Moore Leatherwood
viewed
at
https://www.gpo.
Top 5 Trucking Movies as Ranked by the SML Transportation Team
1
Wholesale Baker Owes MixedFleet Drivers Overtime Wages Megan Early-Soppa | megan.early@smithmoorelaw.com On November 17, 2017, the U.S. Fourth Circuit Court of Appeals ruled that Schmidt Baking Company in Baltimore owed
“Jack Burton’s in for some serious trouble and you’re in for some serious fun.”
B i g T r o u b l e i n L i tt l e C h i n a
overtime wages to workers who delivered goods in both large commercial trucks and smaller personal vehicles. The Fourth Circuit was asked to consider whether the district court erred in dismissing a complaint filed by three former employees of Schmidt Baking Company Inc., under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., the Maryland Wage and Hour Law, Md. Code ann., Lab & Empl.
2
Art. § 3-401 et seq., and the Maryland Wage Payment and “What we have here is a total lack of respect for the law!”
Smokey and the Bandit
3
The plaintiffs, Ronald Schilling, Russell Dolan, and Jonathan Hecker, (collectively, the “Plaintiffs”) worked as district sales managers for the defendant, Schmidt Baking Company, Inc. (“Schmidt”). Id at * 1. The Plaintiffs were non-exempt, salaried, not paid overtime. During their employment, the Plaintiffs
“Ain’t nothin’ gonna get in their way!”
spent between 65% and 85% of their time each week making deliveries. The Plaintiffs would use their personal vehicles between 70% and 90% of the time. Each of the Plaintiffs’ personal vehicles weighed less than 10,000 pounds. Id. The FLSA exempts certain classes of employees from its overtime protections. See 29 U.S.C. § 213. The Motor Carrier Act (MCA) Exemption provides that the FLSA’s overtime-wage requirements do not apply to “any employee with respect to
“The most bizarre murder weapon ever used!”
whom the Secretary of Transportation [DOT] has the power to establish qualifications and maximum hours of service,” meaning, any employee subject to the MCA. Schmidt Baking Co., 2017 WL 5711240 at *2; See 29 U.S.C. § 213 (b)(1). In 2005, Congress amended the MCA to apply only to carries
Duel
5
seq. Schmidt Baking Co, 2017 WL 5711240 at *1.
frequently worked more than 40 hours per week, and were
Co n voy
4
Collection Law, Md. Code Ann., Lab. & Empl. Art. § 3-501 et
using “commercial motor vehicles,” that is, vehicles weighing at least 10,0001 pounds. See SAFETEA-LU § 4142(a), 119 Stat. at 1747. As a result of this amendment, the DOT no longer “The maximum force of the future.”
had regulatory authority over those persons or entities that operated vehicles weighing 10,000 pounds or less. Further the MCA Exemption no longer applied to those parties. That is, those carriers were now subject to the FLSA’s overtime requirements. Schmidt Baking Co., 2017 WL 5711240 at *3.
Mad Max
To read more go to www.smithmoorelaw.com/TNLBaker
Smith Moore Leatherwood
3
A TRAILER IS NOT A WAREHOUSE Rob Green | rob.green@smithmoorelaw.com
FMCSA Announces ELD Transition Guidance On November 20, 2017 the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (“FMCSA”) made available
its
ELD
Transition
Guidance. An excerpt from the announcement states, “The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) today In the fall of last year, the U.S. Second Circuit Court of Appeals issued a summary order holding that a trailer could not constitute a “warehouse” with the terms of a logistics company’s cargo policy. This case shows the potential pitfalls of insurance coverage when engaging in temporary activities outside of your normal day to day operations. The case is LaptopPlaza, Inc. v. Starr Indem. & Liab. Co., 697 F. App’x 20 (2d Cir. 2017). LaptopPlaza sought coverage under its cargo policy for the theft of over $700,000 in goods that were in a trailer being used as temporary storage. The trailer was stolen sometime on December 15, 2013, when two women asked the security guard for help with a car. While the guard was assisting the women, someone attached the LaptopPlaza trailer to a tractor and towed the trailer away. LaptopPlaza asserted that it was using trailers as a temporary measure to get the company through warehouse renovations. It claimed that the trailers were unquestionably being used in a warehousing capacity to store goods that would normally have been stored in the warehouse under renovation. LaptopPlaza also noted that the trailers were more permanent than an ordinary trailer in that there were heavy metal structures leading to and from the trailer to allow forklifts to access the trailers. The trailer was also watched by a security guard. The insurer, Starr Indemnity & Liability Co, denied coverage under the policy contending that the policy’s definition of “warehouse” didn’t apply to the trailer. LaptopPlaza’s policy covered “goods and merchandise … while temporarily detained in warehouses.” However, the policy’s terms did not define what constitutes a warehouse. To read more go to www.smithmoorelaw.com/TNLTrailerWarehouse
4
Smith Moore Leatherwood
announced that in advance of the Dec. 18, 2017 implementation of the
Congressionally-mandated
electronic logging device (ELD) rule, and to further facilitate transition to the rule by motor carriers, the Agency will be providing to
guidance
enforcement
during
the
ELD
related
procedures transition.
These will include a 90-day temporary waiver from the ELD requirement for transporters of agricultural commodities, formal guidance specifically pertaining to the existing Hours-of-Service exemption for the agricultural industry, and guidance on the ‘personal conveyance’ provision.” To read the full announcement from FMCSA, go to https:// www.fmcsa.dot.gov/newsroom/ fmcsa-announce-additional-eldtransition-guidance.
Are Unmanned “Ghost” Ships the Future of International Trade? Joseph Rohe | joseph.rohe@smithmoorelaw.com If you ask Rolls-Royce, the answer is a resounding “YES!” According to the president of Rolls-Royce Maritime, Mikael Mäkinen, “[a]utonomous shipping is the future of the maritime industry. As disruptive as the smartphone, the smart ship will revolutionise the landscape of ship design and operations.” Others, however, are less certain of the reality of the “smart ship revolution.” Key concerns among the skeptics include regulatory hurdles (current international shipping laws do not permit for unmanned vessels) and the ability to address and protect against cybersecurity threats. Alongside the legal and technological aspects of autonomous shipping are unanswered questions regarding the safety and economics of large-scale implementation of unmanned ships on the world’s navigable waters. Technology and the C u r r e n t S tat e o f Autonomous Ships Autonomous vessels are not a thing of the future—they are already here. In April 2016, the U.S. Navy launched
Sea Hunter, an autonomous, unmanned surface vehicle (“USV”) developed under a DARPA antisubmarine warfare program, which is currently undergoing performance trials. In June 2017, Rolls-Royce, in partnership with global towage operator Svitzer, successfully tested a remotely operated commercial vessel in waters off Copenhagen. Rolls-Royce has signed agreements with Svitzer, Google, and the European Space Agency (“ESA”), and has recently revealed plans to develop and build a 60m autonomous naval vessel. In September, the Norwegian government awarded a grant to begin construction of the Yara Birkeland, an 80m electric autonomous vessel designed to transport chemicals and fertilizer between three Norwegian ports. The ship is planned to have a capacity of 120 TEU and is slated to enter service—initially as a manned vessel—in 2019. Current plans are to begin operating the ship remotely sometime in 2019 and then in fully autonomous function by 2020.
Safety Concerns Proponents of autonomous shipping claim as a key benefit the reduction of maritime incidents, citing studies finding that the human element accounts for the majority of maritime collisions and groundings. A 2016 review conducted by the European Maritime Safety Agency found that 62% of maritime accidents between 2011 and 2015 were caused by “human erroneous action.” Another March 2017 study found that the risk of collisions and groundings might be “decreased significantly” if the vessels involved had been unmanned. The same study, however, also cautioned that, when incidents do occur, they may be more severe onboard an autonomous vessel where there is no crew to take action, such as suppressing shipboard fires. Also falling under the category of safety are concerns over the threat of cyberterrorism to autonomous shipping. To read more go to www. smithmoorelaw.com/TNLGhostship
Smith Moore Leatherwood
5
T H E ROAD A H EAD Rob Moseley will attend the Conference of Freight Counsel meeting in Tucson , AZ, January 6–8. Since it hasn’t been cold enough for them down South, Rocky Rogers, David Lin, and Megan Early will attend the TLA Chicago Regional Seminar on January 19. Rob Moseley will lead an insurance coverage seminar. Rob Moseley will present his contract and freight claims full day seminar as part of the SMC3 Jump Start in Atlanta, GA, on January 22. To register, go to http://www. smc3jumpstart.com/
Rob Moseley will present on liability and contract issues during the South Carolina Timber Producers Association Annual Meeting in Myrtle Beach, SC, on February 9–11. Fredric Marcinak will speak during the Specialized Transportation Symposium on February 27–March 2 in St. Louis, MO. This meeting focuses on bringing together members and regulatory officials to promote uniformity in regulatory policy. Several members of the team are headed to the Great West Leadership Conference in Knoxville, TN, on March 7–8. Rob Moseley will take part in a mock trial.
Making Tracks Rob Moseley discussed litigation and regulatory trends at the Marsh Fleet Solutions Risk Control Workshop in Jupiter, FL on October 3–4. On October 25–27, Kurt Rozelsky was back in Vegas for the annual TIDA Conference. Marc Tucker participated in a panel discussing telematics in the trucking industry at the 2017 NCTA Councils Annual Conference in Myrtle Beach, SC on September 28–October 1. Rob Moseley joined our friend Tommy Ruke at the Motor Carrier Insurance Educational Foundation Annual Conference in Orlando, FL on October 5-6. Rob updated the group on accident litigation, coverage issues, and regulatory changes. Rob Moseley presented at the SCTA Board Retreat October 9–10 in Columbia, SC.
Jack Riordan attended the 50th Anniversary Annual Meeting for the SCDTAA at Sea Island, GA, on November 9–12. Rob Moseley was a panelist at the SCTA ELD Workshop in Columbia, SC on October 18. On October 22–25, Rob Moseley was in Orlando, FL, at the American Trucking Association’s Management Conference and Exhibition. Rob presented on accident litigation to the National Accounting and Finance Council. On November 8–9, Rob Moseley spoke at the Georgia Motor Trucking Association’s Fall Leadership Conference in Marietta, GA. Fredric Marcinak and Rob Moseley presented at the ATA Safety and HR Conference in Memphis, TN on November 14–16. Fredric provided a cargo claims update and Rob discussed broker liability.
Smith Moore Leatherwood
6
Team Directory Eri k A l brig h t
a l e x mau ltsb y
Emi ly B ridg e s
K e v in M c C arr e l l
R ic k C oug h l in
R ob M os e l e y
Greensboro, NC | 336.378.5368 erik.albright@smithmoorelaw.com
Greenville, SC | 864.751.7618 emily.bridges@smithmoorelaw.com
Greensboro, NC | 336.378.5471 rick.coughlin@smithmoorelaw.com
M e g a n E a r ly- S o p pa
Greenville, SC | 864.751.7627 megan.early@smithmoorelaw.com
Greensboro, NC | 336.378.5331 alex.maultsby@smithmoorelaw.com
Greenville, SC | 864.751.7652 kevin.mccarrell@smithmoorelaw.com
*TEAM LEADER* Greenville, SC | 864.751.7643 rob.moseley@smithmoorelaw.com
B ob P e rsons
Atlanta, GA | 404.962.1075 bob.persons@smithmoorelaw.com
J u l i e Ear p
Patti R ams e ur
J e ss e E l ison
J o h n R e is
Greensboro, NC | 336.378.5256 julie.earp@smithmoorelaw.com
Atlanta, GA | 404.962.1024 jesse.elison@smithmoorelaw.com
Greensboro, NC | 336.378.5304 patti.ramseur@smithmoorelaw.com
Charlotte, NC | 704.384.2693 john.reis@smithmoorelaw.com
J e ss G r e e n
J ac k R iordan
R ob G r e e n
R oc k y R og e rs
J ay Ho l l and
J os e p h R o h e
D av id Lin
Kurt R o z e l s k y
Raleigh, NC | 919.755.8763 jess.green@smithmoorelaw.com
Greenville, SC | 864.751.7617 robert.green@smithmoorelaw.com
Wilmington, NC | 910.815.7165 jay.holland@smithmoorelaw.com
Atlanta, GA | 404.962.1041 david.lin@smithmoorelaw.com
F r e dric M arcina k
Greenville, SC | 864.751.7691 fredric.marcinak@smithmoorelaw.com
Greenville, SC | 864.751.7638 jack.riordan@smithmoorelaw.com
Greenville, SC | 864.751.7610 rocky.rogers@smithmoorelaw.com
Greenville, SC | 864.751.7668 joseph.rohe@smithmoorelaw.com
Greenville, SC | 864.751.7624 kurt.rozelsky@smithmoorelaw.com
M arc T uc k e r
Raleigh, NC | 919.755.8713 marc.tucker@smithmoorelaw.com
Welcome Jess Green! Jess joined our Raleigh office in September as a recent graduate of the University of North Carolina School of Law. In law school, Jess served as Holderness Moot Court treasurer and on the Graduate and Professional Attorney General’s staff. She received her undergraduate degree, summa cum laude, from North Carolina State University. We are excited to welcome Jess to the Transportation team and SML family!
Smith Moore Leatherwood LLP Attorneys at Law 2 West Washington Street Suite 1100 Greenville, SC 29601 T 864.751.7600 F 864.751.7800 www.smithmoorelaw.com
Go Green
Sign up to recieve the digital version of the Transporation Industry Newsletter today! www.surveymonkey.com/r/TNLVersion
Emergency Response Team As part of the array of transportation services provided to firm clients, our 24/7 emergency response team is standing by to serve clients with urgent needs following a catastrophic accident. The team has handled numerous night time and weekend emergencies for our clients. Members of the emergency response team take responsibility for preserving physical and electronic evidence, taking driver and witness statements, making arrangements for cargo salvage, and managing relations with law enforcement. Additionally, firm clients benefit from the team’s knowledge of substantive experts and criminal defense counsel. smithmoorelaw.com/emergencyresponseteam
Smith Moore Leatherwood
8