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TRANSPORTATION NEWSLETTER WINTER 2012 ® Attorneys at Law CONTINUED ON PAGE 7>> Medicare News FMCSA Bans Handheld Mobile Devices CONTINUED ON PAGE 2 >> According to a case recently issued by the 6th ircuit Dedicare s right to recoǀer condiƟonal Ɖayŵents Ĩroŵ seƩleŵent Ɖroceeds is not limited by the degree of legal liability of the torƞeasor maŬing the seƩlement Ɖayment /n ,adden ǀ h^ Eo ϬϵͲ6ϬϳϮ ϮϬϬϭ t> ϱϴϮϴϵϯϭ ;Eoǀember Ϯϭ ϮϬϭϭͿ WlainƟī aƉƉealed Dedicare s asserƟon that Dedicare ǁas enƟtled to be comƉensated for the full amount of the condiƟonal Ɖayments it made as a result of inũuries WlainƟī suīered aŌer being stucŬ by a ǀehicle oǁned by Wennyrile Zural lectric ooƉeraƟǀe orƉoraƟon WlainƟī argued that since Wennyrile ǁas only ϭϬй resƉonsible for WlainƟī s inũuries and an unidenƟĮed driǀer ǁho caused the Wennyrile trucŬ to ǀeer into him ǁas the Ɖrimary torƞeasor dherefore WlainƟī argued that the seƩlement Ɖroceeds from Wennyrile need only be aƉƉlied to reimburse ϭϬй of the condiƟonal Ɖayments made by Dedicare dhe 6th ircuit edžƉlained that under ϰϮ h^ Αϭϯϵϱy;bͿ;ϮͿ;Ϳ;iiͿ Dedicare s right to recoǀery of the full amount of its condiƟonal Ɖayments is determined by the “responsibility” of the torƞeasorprimary plan as “responsibility” is deĮned in the statute ǁhich states A primary plan and an enƟty that receiǀes payment from a primary plan, shall reimburse the appropriate d rust &und for any payment made by the ^ecretary under this subchapter ǁith respect to an item or serǀice if it is demonstrated that such primary plan has or had a responsibility to maŬe payment ǁith respect to such item or serǀice A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment condiƟoned upon the recipient’s compromise, ǁaiǀer, or release ;ǁhether or not there is a determinaƟon or admission of liabilityͿ of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means dhus, as stated by the 6th ircuit, based on the language of the statute above, if a “claim” is made against a primary plan, and the Dedicare beneĮciary receives a “payment condiƟoned upon” a “release” of the claim, then the primary plan is deemed to have “responsibility for items or services included in the claim dhus, the 6th ircuit held P. 2 Yes, You Need a Tariff Inside This Issue P. 4 Team Updates P. 6 How an MCS-150 Can Affect Your CSA Score P. 6 New Standards for Cargo Security P. 7 Marso Vs. UPS Transportation News: Now Available Online Zemember to visit smlperspecƟves com, ^mith Doore >eatherǁood’s online legal magazine that presents maƩers of laǁ as they relate to you All arƟcles contained ǁithin our Ƌuarterly transportaƟon neǁsleƩers are posted online, and you are liŬely to Įnd an arƟcle or tǁo not contained ǁithin the neǁsleƩer as ǁell ;on’t ǁorry, ǁe’re sƟll prinƟng hardcopiesͿ You can also subscribe to our d ransportaƟon Z^^ feed to receive upͲtoͲtheͲminute neǁs from our d ransportaƟon team betǁeen neǁsleƩers te encourage you to leave your thoughts and comments on the arƟcles te love to hear from you Kn ecember Ϯ, ϮϬϭϭ, the &D^A and W,D^A ;Wipeline and ,azardous Daterials ^afety AdministraƟonͿ published their &inal Zule to restrict the use of handͲheld cellular phones by commercial motor vehicles ;DssͿ, violaƟon of ǁhich ǁill subject drivers and carriers to sƟī Įnes and penalƟes dhis &inal Zule, ǁhich goes into eīect :anuary Ϯ, ϮϬϭϮ, operates to amend both the &ederal Dotor arrier ^afety ZegulaƟons ;&D^ZsͿ and the ,azardous Daterials ZegulaƟons ;,DZsͿ dhis is on the heels of &D^A’s :anuary ϮϬϭϬ announcement of a 'uidance to ϰϵ &Z Α ϯϵϬϭϳ ǁhich purported to ban tedžting as an agency interpretation of a regulation governing eƋuipment brought into the vehicle and last ^eptember’s rule banning of tedžƟng by Ds drivers /mmediately aŌer the announcement of the &D^ A’s final rule, the E ational dransportation ^afety oard called for a nationǁide ban on all cell phone use in all vehicles

Transportation Newsletter

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Smith Moore Leatherwood's quarterly transportation newsletter is targeted to trucking and logistic companies, trucking insurance companies, accident reconstructionists, transportation association members and other organizations impacted by legal developments within the industry.

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Page 1: Transportation Newsletter

TRANSPORTATION NEWSLETTER

WINTER 2012

®Attorneys at Law

CONTINUED ON PAGE 7>>

Medicare News

FMCSA Bans Handheld Mobile Devices

CONTINUED ON PAGE 2 >>

According to a case recently issued by the 6th ircuit edicare s right to reco er condi onal ay ents ro se le ent roceeds is not

limited by the degree of legal liability of the tor easor ma ing the se lement ayment n

adden o 6 o ember lain a ealed edicare s asser on that edicare as

en tled to be com ensated for the full amount of the condi onal ayments it made as a result of in uries lain su ered a er being stuc by a ehicle o ned by ennyrile ural lectric

oo era e or ora on lain argued that since ennyrile as only res onsible for

lain s in uries and an uniden ed dri er ho caused the ennyrile truc to eer into

him as the rimary tor easor herefore lain argued that the se lement roceeds

from ennyrile need only be a lied to reimburse of the condi onal ayments made by edicare

he 6th ircuit e lained that under y b ii edicare s right to reco ery

of the full amount of its condi onal ayments is determined by the “responsibility” of the tor easor primary plan as “responsibility” is

de ned in the statute hich statesA primary plan and an en ty that recei es payment from a primary plan, shall reimburse the appropriate rust und for any payment made by the ecretary under this subchapter

ith respect to an item or ser ice if it is demonstrated that such primary plan has or had a responsibility to ma e payment ith respect to such item or ser ice A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment condi oned upon the recipient’s compromise,

ai er, or release hether or not there is a determina on or admission of liability of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means

hus, as stated by the 6th ircuit, based on the language of the statute above, if a “claim” is made against a primary plan, and the edicare bene ciary receives a “payment condi oned upon” a “release” of the claim, then the primary plan is deemed to have “responsibility for items or services included in the claim ” hus, the 6th ircuit held

P. 2 Yes, You Need a Tariff

Inside This Issue

P. 4 Team Updates

P. 6

How an MCS-150 Can Affect Your CSA Score

P. 6 New Standards for Cargo Security

P. 7

Marso Vs. UPS

Transportation News: Now Available Online

emember to visit smlperspec vescom, mith oore eather ood’s online legal magazine that presents ma ers of la as they relate to you

All ar cles contained ithin our uarterly transporta on ne sle ers

are posted online, and you are li ely to nd an ar cle or t o not contained

ithin the ne sle er as ell on’t orry, e’re s ll prin ng hardcopies

You can also subscribe to our ransporta on feed to receive

up to the minute ne s from our ransporta on team bet een

ne sle ers

e encourage you to leave your thoughts and comments on the ar cles e love to hear from you

n ecember , , the A and A ipeline and azardous aterials afety Administra on published their inal ule to restrict the use of hand held cellular phones by commercial motor vehicles s , viola on of hich ill subject drivers and carriers to s nes

and penal es his inal ule, hich goes into e ect anuary , , operates to amend both the ederal otor arrier afety egula ons

s and the azardous aterials egula ons s his is on the heels of A’s anuary announcement of a uidance to hich purported to ban te ting

as an agency interpretation of a regulation governing e uipment brought into the vehicle and last eptember’s

rule banning of te ng by drivers mmediately a er the announcement of the A’s final rule, the ational ransportation afety oard called for a nation ide ban on all

cell phone use in all vehicles

Page 2: Transportation Newsletter

Yes, You Need a Tariff

What activities are actually prohibited? he rule restricts drivers from holding,

dialing or “reaching” for a hand held mobile device, to include devices ith a “push to tal ” func on he rule a ects all devices that “use commercial mobile radio services to transmit and receive voice communica ons ” hus, “push to tal ” devices fall under the restric on even though they are similar in func on to t o

ay or radios hich are not restricted mportantly, this rule does not restrict the use of

hands free devices ith “one touch” capability A driver may ini ate, ans er or terminate a call via such mobile device provided it can be done ith “one touch” of a headset or the mobile device itself he inal ule recognizes that “ m ost mobile telephones have a spea er phone func on and one touch dialing and thus

ould be complaint ith this rule ” nder the “reaching” requirement, the driver must be able to perform this “one touch” func on hile in the normal seated posi on and restrained in the driver’s seat hus, the device must be

ithin comfortable arms reach pro imity to the driver, preferably mounted in a ed loca on or a device ith a “ luetooth” style headset

ne ould e pect developments from vehicle manufacturers to include built in communica on systems hich meet the ne regula ons

he rule does not currently a ect the use of radios, systems or eet management

systems, although the A is considering e tending the scope of future rulema ings to target addi onal electronic devices urther, the design of the interior cab may be outside the scope of A’s jurisdic on and more in the heelhouse of one or more other agencies

o ever, as ecretary a ood has announced that he ill not be serving an addi onal term, it is e pected that any push for these addi onal rulema ings may lose some momentum Addi onally, the rule does not apply hen the is not being driven nder the rules, “driving” means opera ng a on a high ay, and including hile temporarily stopped because of tra c, tra c control devices, or other momentary delays o ever, it does not include opera ng a hen the vehicle has been moved to the side or o of a high ay and has been stopped in a loca on here the vehicle can safely remain sta onary hus, the use of a hand held mobile telephone is permissible

under the rule provided the driver has pulled o of the road ay and stopped the vehicle here is no speci c requirement that the igni on be o

in fact, language hich ould have prohibited phone use “ ith or ithout the motor running”

as removed from the inal ule

To whom does the rule apply? n short, almost everyone he rule ill

apply, as do all s, to drivers of s in the employ of interstate motor carriers and intrastate hazmat carriers o ever, the rule

ill also apply to “both school bus opera ons by private operators in interstate commerce and small passenger carrying vehicles not for direct compensa on,” though they ill con nue to be e empt from other s Addi onally, the rule requires state adop on no later than anuary , as a condi on for receiving funding under the Motor Carrier

afety Assistance rogram MC A pon adop on by the individual states, the rule ill li e ise become applicable to non hazmat intrastate CM drivers t is important to note that some states adopt federal regula ons by reference C, for e ample, C Code Ann

6 and, therefore, the rule may be enforceable against intrastate motor carriers as early as anuary ,

What are the consequences of violation?Any viola on of the hand held restric on may result in a civil penalty imposed on the driver in an amount not to e ceed , or most drivers, a civil penalty of that magnitude is a defacto suspension and li ely end of a career Addi onally, the motor carrier may be sanc oned up to , per viola on As indicated, these are “sliding scale” penal es and the actual amount of the ne ill be dictated by the facts and circumstances surrounding the viola on ecent developments have restricted

MC A state administrator discre on in reducing nes, and hile a motor carrier could count on substan al discounts in civil penal es in the past, those days are overMul ple viola ons carry addi onal penal es against drivers t o viola ons in a three year period ill saddle a driver ith a mandatory 6 day C disquali ca on hree or more viola ons in a three year period land a driver a mandatory day disquali ca on o ever, in the event a driver receives a “le er of

disquali ca on” for viola ng the restric ons, the driver may pe on for a revie ithin 6 days As noted, a motor carrier that allo s or requires their drivers to use hand held devices ill also be held liable for the driver’s viola on and subjected to civil penal es up to

, mportantly and although the A A and other groups vigorously lobbied for such a requirement to be included in the inal ule, there is not a requirement that the carrier be a are of the viola on in order for liability to be imposed As a nal ma er, MC A ill be adding handheld mobile device usage to the river itness

A C ithin the C A system hile MC A has yet to release the details, e ould not be surprised to see points a arded for this viola on in a range bet een and

How Should Carriers Adapt? hus, motor carriers should implement company

policies, prac ces and training programs to clearly establish zero tolerance for viola ons of this rule o ever, regardless of company policy, a carrier ill be held liable for driver viola ons here the driver as or ing in the course of employment, carrying out company business, or other ise ac ng on the carrier’s behalf hen the viola on occurred

ConclusionClearly, MC A is ta ing broad steps to decrease distracted driving in CM s iven the nes and penal es at sta e, as ell as the looming C A implica ons, both carriers and drivers should ta e appropriate steps to bring themselves and their opera ons into compliance ith the rule before the e Year hile larger opera ons may opt to implement integrated, mulfunc on systems, compliance ith the rule can be as simple as adding a “ luetooth” headset and phone cradle f you have addi onal speci c ques ons

regarding the ne regula on, please feel free to contact any of our ransporta on ndustry

roup a orneys

hen e men on the ord “tari ” to motor carriers, the most common reac on is, “ hy do need a tari ari s ent out ith the CC ”

hile it is true that tari s are no longer led, motor carriers s ll have the ability to dra and post tari s, and doing so provides great bene ts

hen freight claims arise or this reason, e o en say that every motor carrier needs a tari A recent case from the nited tates Court

of Appeals for the ourth Circuit illustrates this point n ogis cs, nc v ominion

esources ervices, nc , the carrier’s tari as the central factor in the Court’s decision he shipper contracted ith the bro er for

the transporta on of t o tube bundles from a arehouse in Chambersburg, ennsylvania to the shipper s facility in usby, Maryland

he bro er, in turn, contracted ith the motor

carrier to transport the cargo o bills of lading ere issued to govern the shipment,

hich incorporated the terms and condi ons set forth in the motor carriers published tari

hat tari contained requirements that any claim for damage to cargo be led ithin nine

months of delivery and that any la suit for cargo damage be led ithin t o years of the ri en denial of the claim

_________ egula ons o en have unintended

consequences, and it is possible that accidentsinvolving crashes ith truc s stopped to ma ephone calls ill increase

Page 3: Transportation Newsletter

hile enroute, one of the tube bundles fell onto the road ay and as damaged he consignee refused to accept delivery of the bundle, and a cargo claim as subsequently

led he cargo claim as ini ated hen the shipper presented the bro er ith a claim for

, for damage to the tube bundle he bro er in turn, placed the motor carrier

on no ce that it ould see to recover any amounts paid on the claim to the shipper n response, on ovember , 6, the motor carrier informed the bro er that any claim submi ed “ ill be denied ” n May , , appro imately t o years and nine months a er the accident, the shipper led suit against the bro er in ederal Court in irginia, and four months later – or three years and one month a er the accident – the bro er led its Ans er and hird arty Complaint against the motor carrier l mately, the istrict Court held that the bro er as liable to the shipper for breach of contract in the amount of , and fees and costs in the amount of , n a third party ac on bet een the bro er and

the motor carrier, the court ruled in favor of the bro er, holding that the bro er had never

led a formal claim against the motor carrier as required by the Carmac Amendment and that the limita ons period for bringing the la suit against the motor carrier therefore never began to run he istrict Court further concluded that the bro er could not have led a claim for indemnity and contribu on against the motor carrier un l the bro er s liability to the shipper had been established, so the limita ons period could not apply to that claim herefore, the court determined that the bro er s claims

ere not me barred and that the bro er as en tled to recover from the motor carrier the

, for cargo loss and the , in fees and costs

n appeal, the ourth Circuit rst noted that the Carmac Amendment governs the liability of the motor carrier for the shipment he Court then noted that under the Carmac Amendment, carriers are permi ed to impose contractual me limits for bringing suit, subject only to the statutory minimum of “nine months for ling a claim” and “t o years for bringing a civil ac on ” C 6 e his serves to “ensure that the carrier may promptly inves gate claims,” and ard are and

upply Company v Yello ransport, nc , d , rd Cir , hile s ll preserving

an adequate minimum me for shippers to see recompense for damaged cargo As the Court noted, “the Carmac Amendment thus contemplates that limita on periods are terms to be bargained over bet een the shipper and carrier” hao v in Cargo ai an imited,

6 d , th Cir

he Court then held that “it is undisputed that the motor carriers’ tari contained the statutory permissible, contractually nego able minimum me limita on for a cargo damage

claim nine months to le the claim and t o years from denial of that claim to bring suit ”

he Court noted that it as also undisputed that the so called “claim” led by the bro er

ith the motor carrier as merely a no ce of inten on to le a claim rather than the claim itself his as so because the le er from the bro er to the motor carrier did not clearly assert present liability nor did it ma e a claim for payment hus, the motor carrier argued that no claim had been led by the bro er

ithin nine months of the date of loss n order to escape its failure to le a claim

ith the motor carrier ithin nine months of the date of loss, the bro er argued that it could not have led a claim ithin the

me period because it could not iden fy its loss ith speci city un l it had been found liable to the shipper he Court rejected

this argument, holding that the bro er as ell a are of the dollar amount of the damage to the cargo and could have led a claim for that amount prior to the me that it as held liable to the shipper he Court further held that even if the le er sent by the bro er to the motor carrier cons tuted a claim, the bro er ould nonetheless be barred from recovery he motor carriers’ prompt denial of any claims presented by the bro er triggered the t oyear limita on on the ling of suit ecause the bro er did not comply ith the t o year limita on period, its suit as li e ise me barred

inally, the Court concluded that the claim for hich the bro er sought indemni ca on – namely its obliga on to pay the shipper for the cargo loss and the fees and costs incurred by the shipper – is not a Carmac Amendment claim under the bill of lading issued by the motor carrier but is a claim for breach of the contract bet een the shipper and the bro er

he Court noted that the contract bet een the shipper and the bro er is a separate bargain

to hich the motor carrier is not a party he Court pointed out that the shipper as able to bring suit against the bro er only because the bro er failed to incorporate any me limita ons into its contract ith the shipper

hus, the Court observed that the bro er had every opportunity to protect itself by dra ing the terms of its contracts ith both the shipper and the motor carrier or e ample, it could have ensured adequate me to protect its legal rights in either agreement r, it could have nego ated for terms in its contract ith the shipper assigning any claims the shipper

ould have under the Carmac Amendment, leaving the dispute bet een the shipper and the bro er as a breach of contract ac on, hich is not preempted by the Carmac Amendment inasmuch as the bro er is a bro er, not a carrier Addi onally, the bro er could have put me limita ons into its agreement ith the shipper, requiring the shipper to bring any claim in less than nine months, a ording the bro er the opportunity to turn around and le a mely third party claim against the motor carrier he Court also noted that as far as the do nstream contract, the bro er could have nego ated for longer me periods to be included in the bill of lading issued by the motor carrier, and it also could have led a protec ve claim ith the motor carrier ithin the claim’s limita ons period aving failed to avail itself of these op ons to protect itself, the bro er as in no posi on to as the Court to undo the contracts or the applicable la s that govern its liability or these reasons, the Court reversed the

judgment entered by the istrict Court and remanded for dismissal of the case against the motor carrier

his case again demonstrates the importance of having good ri en contracts, bills of lading, and tari s n the one hand, the bro er had every opportunity to dra strong contracts ith both the shipper and the carrier to protect itself from being caught in the middle and e posed to liability ith no recourse against the carrier n the other hand, the motor carrier had a tari that too advantage of the Carmac Amendment’s provisions allo ing the carrier to restrict the period for ling claims to nine months and the period for ling suit to t o years from the date of denial of the claim he bill of lading also included crucial language incorpora ng the tari provisions into the agreement bet een the par es hus, to ans er the ques on posed at the beginning of this ar cle, although tari s are no longer led, they can serve as important tools in protec ng carriers hen freight claims occur specially in situa ons that arise li e the one in the present case, here the ul mate liability of the carrier could be far higher than its limit of cargo insurance, the tari can serve as an important document that either eliminates liability for the freight claim en rely or provides for a limita on of liability or these reasons,

e con nue to say “ Y M CA A A ”

Page 4: Transportation Newsletter

Peter RutledgeGreenville, SC

Joseph RoheGreenville, SC

Zandra JohnsonGreenville, SC

Georgia | North Carolina | South Carolina

Eric AlbrightGreensboro, NC

Jon BerkelhammerGreensboro, NC

Mike BowersCharleston, SC

Manning ConnorGreensboro, NC

Rick CoughlinGreensboro, NC

Steve FarrarGreenville, SC

Jay HollandWilmington, NC

Jason MaertensGreenville, SC

Fredric MarcinakGreenville, SC

Kevin McCarrellGreenville, SC

Rob MoseleyGreenville, SC

Bob PersonsAtlanta, GA

Jack RiordanGreenville, SC

Kurt RozelskyGreenville, SC

Julie TheallGreensboro, NC

Marc TuckerRaleigh, NC

Neil ThomsonCharleston, SC

TeamLeader

Wishing you and your families a safe,

happy, and prosperous 2012

SMITH MOORE LEATHERWOOD TRANSPORTATION TEAM

Page 5: Transportation Newsletter

ob Moseley a ended the Char s ransporta on Advisory oard Mee ng on ct in e Yor City e taught on developments in truc ing coverages A er the mee ng, he as immediately depoted bac to the outh

Marc uc er and urt ozels y a ended the A annual conference in as egas ctober urt presented ho s Your ealer nvolving the Corporate itness on itness prepara on Marc as there to eep urt out of trouble

ob Moseley a ending the C ruc ing Associa on oard of irectors Mee ng in Columbia on ct , and the C A oard of irectors Mee ng in Columbia on ecember

ctober mar ed the fall luncheon of the C ransporta on and ogis cs eague in reensboro ob Moseley as the luncheon spea er discussing real life li ga on and results

ob Moseley a ended the American ruc ing Associa on Management Conference and hibi on in allas on ctober ob presented on pressing issues facing truc ing companies in today s environment

ob Moseley travelled to enver to spea at the American Associa on of Managing eneral Agents on ctober ob Moseley presented a seminar on managing independent contractors in Charleston sponsored by the C A on

ovember urt ozels y, as Chair of the ruc ing a Commi ee, led the ruc ing a brea out and business mee ng at the

Annual Mee ng in ashington, C ctober 6 , ob Moseley a ended the Commercial Carrier ournal ymposium in A ov and presented on transparency

issues in the ne orld of truc ing ob Moseley a ended the ecember mee ng of the C A yla s commi ee in aleigh ob Moseley led a ebinar sponsored by the C A on the ne regula ons governing cell phone regula ons on

ecember urt ozels y spo e on ocus roups arly e lement and he volu on of ac Claims at the ruc ing oot Camp

in enver, C on ovember th urt as also a itness to the beginning of ebo mania in enver as the roncos beat that ets that night

Marc uc er a ends the regular monthly mee ngs of the C A afety Council, o n ast Chapter

urt ozels y is beginning his second year as Chair of the member ruc ing a Commi ee he Commi ee s signature event is the bi annual ruc ing a eminar to be held ebruary 6 at the es n ierland esort, co sdale, Arizona uring his tenure as Chair, urt

has been responsible for the implementa on of several ne pecialized i ga on roups s for Accident econstruc on iomechanics, Cargo, nsurance Coverage, ogis cs, and egulatory

overnmental ela ons ith the idea that can provide a place for these prac oners to share ideas and get more involved in n addi on, urt is a regular contributor to the oday log on ruc ing ssues and recently authored a piece in the ruc ing a edi on of or he efense, s monthly ne s magazineKURT

ROZELSKYGreenville, SC

DRI Trucking Seminar

The Road Ahead

Making Tracks

redric Marcina and ob Moseley ill be a ending the Conference of reight Counsel in e rleans anuary 6 and presen ng on recent developments on freight claims

oseph ohe and ob Moseley ill be a ending the ransporta on a yers Associa on egional Mee ng in Chicago on anuary

Mar uc er and urt ozels y ill a end the ruc ing a eminar in co sdale, A ebruary 6 ob Moseley ill be su ering in Miami ebruary 6 at the inancial ervices Conference ob Moseley has been invited to lead a session at the ida Cargo Claims or shop March in empe, A urt ozels y ill be presen ng at ruc ing oot Camp on May in Atlanta, A, on May 6 in allas, , on une

6 in rlando and une in Chicago ob Moseley ill be seen on ne episodes of ig ruc , coming soon to a computer near you

ht Counsel in e rleans anuary

yers Associa on egional Mee ng in

co sdale, A ebruary 6al ervices Conferenceor shop March in empe, Ata, A, on May 6 in allas, , on une

Page 6: Transportation Newsletter

6

Cargo security is increasingly becoming a hot topic issue for a number of shippers and carriers as cargo the is on the rise – par cularly in cases of igh alue he argeted assets According to reight atch nterna onal, there has been a nearly three fold increase in cargo the s since 6 ith high value loads such as electronics, chemicals and pharmaceu cals, a number of the s surpass the million dollar mar han fully, domes cally e have not seen the level of violence associated ith cargo the s in some other regions of the orld

n the a e of this rise in cargo the s, the ransported Asset rotec on Associa on A A

has developed ne cargo security standards

New Standards for Cargo Security and is implemen ng a revised truc ing security cer ca on program aimed at countering highvalue cargo the hile the program is en rely voluntary, e e pect that a number of shippers and bro ers of high value goods may begin to require carrier cer ca on

nder the program, A A has developed “ ruc ing ecurity equirements” ith three levels of security compliance – , and

f note, these requirements may be u lized in addi on to A A’s “ reight ecurity

equirements ” – the highest compliance level requires sa sfac on of security requirements ranging from immobiliza on devices to loc ing fuel caps on tractors,

and is intended for the highest value loads requires an minimum score and

sa sfac on of all mandatory security measures for the par cular compliance level imilarly,

– the lo est security compliance level – requires a 6 minimum score and sa sfac on of ’s mandatory security measures he necessary compliance level is typically dictated by the value of the load and the shipper’s individual requirements

A recent case decided by the orth Carolina Court of Appeals rea rms the importance of follo ing your company’s policies and procedures for documen ng contract terms

ith shippers in order to bene t from the terms of your tari n Marso v nited arcel ervice, nc ,

d C App , haun Marso placed an adver sement in a local ne spaper to sell a ladies diamond engagement ring Marso as contacted by a man iden fying himself as arl

hompson, ho agreed to purchase the ring from Marso for , ecause Mr hompson

as located in afaye e, ouisiana, Marso contacted to ma e shipping arrangements Marso called and, according to him, veri ed that they ould ship the engagement ring and ould accept only cash from the consignee Marso then visited a customer center in oldsboro, orth Carolina to arrange for shipment of the ring Marso tes ed that the agent in the customer center again informed him that ould accept only cash from the consignee and ould then for ard a chec from to Marso Marso accordingly arranged for shipment of the ring ith , and the pac age as shipped C by

delivered the ring to the consignee in afaye e, ouisiana, and the consignee tendered a cashier’s chec to in payment

then sent the cashier’s chec to Marso by regular mail o ever, hen Marso presented the chec to his ban to be cashed, the ban sought to verify the chec ’s validity and discovered that the chec as a fraudulent instrument Marso accordingly led suit against

for breach of contract maintains a tari that provides

All chec s or other nego able instruments

including cashier’s chec s, o cial ban chec s, money orders and other similar instruments tendered in payment of C ’s ill be accepted by based solely upon the shipper assuming all ris s rela ng thereto including, but not limited to, ris of non payment, insu cient funds, and forgery, and shall not be liable upon any such instrument

n order to ensure a customer’s a areness of its tari provisions, maintains computer

ios s in its customer centers here customers are required to input certain informa on regarding their shipments rior to comple ng that process, customers are presented ith a screen ith the heading “terms of service” and a display that reads as follo s

y clic ing on “print” and tendering your pac age for shipment, you agree to, for yourself and as agent for and on behalf of any other person having interest in this pac age, erms of ervice speci ed by on any applicable

aybill, tari or service guide, including terms hich may limit the liability of erms

of ervice and ari nforma on is vie able at ups com or may be obtained from the

counter a endant upon request

herefore, on its face, ’ tari appears to relieve from liability as alleged by Marso Addi onally, the computer screen informing the customer of ’ tari and elici ng his acceptance of tari provisions ould appear to ma e the tari legally binding ee, e g ,

ogers, nc v nited arcel ervice, nc , upp d nd am Majors

e elers v A , nc , d th Cir o ever, in this case, Marso led an

a davit sta ng that he had not been presented ith the computer screen incorpora ng ’

tari provisions because the employee

at the customer center had entered the informa on into the computer screen for him

ithout informing him of the tari provisions or his acceptance of them

ased on these facts, the Court of Appeals reversed summary judgment that had been entered in favor of he Court noted that there as a dispute as to hether the claim against arose under, and as governed by, federal la or as saved from federal preemp on by virtue of the fact that it sounded in contract he court, of course, as mista en on this point, since it as relying on American Airlines, nc v olens, ,

hich deals ith AAAA preemp on and not Carmac preemp on l mately, the court held that it made no di erence hether the claim as governed by federal or state la , since the failure to inform the plain of the terms and condi ons of tari as fatal to

claim that summary judgment should be entered based on the terms and condi ons of the tari

he Marso case again demonstrates the importance of follo ing your company’s procedures hen interac ng ith shippers, for arders, bro ers, and other par es ad the company required the customer’s input into its computer system, the customer ould have been informed of the terms and condi ons of the tari , and li ely ould have prevailed on summary judgment he lesson is that having the tari in place is not su cient in and of itself nstead, the company must ta e steps to incorporate that tari into its shipping paper or and procedures and then follo those procedures his also goes to sho ho di cult it is to in the case against the occasional shipper

Marso Vs. UPS

Page 7: Transportation Newsletter

he MC , Motor Carrier den ca on eport, is not only the form used to inventory

vehicles and miles for motor carriers, but also and more importantly , it is a means by hich a carrier may “update” its previous MC and poten ally impact its C A score

hile an updated MC must be led every t o years, one may be led at any me o chec the status of your MC , vie the

MC A Company napshot at h p safersysorg companysnapshot asp

Any par cular carrier’s C A score is comprised of si A Cs – nsafe riving, a gued riving

ours of ervice , river itness, Controlled ubstance Alcohol, ehicle Maintenance, and

Cargo related – along ith the carrier’s Crash ndicator Measure he calcula ons used to

determine scores di er for any given A C and for the Crash ndicator he formulas used are also fairly complicated o ever, the nsafe

riving A C and the Crash ndicator Measure are directly impacted by the number of po er units in opera on, the number of vehicle miles

How An MCS-150 Can Affect Your CSA Score

traveled “ M ” , and the Carrier egment “combo” or “straight” into hich the carrier

is categorized rimary in the nsafe riving A C and the

Crash ndicator Measure calcula ons are t o gures – the “Average ” – hich is a calcula on of the average number of po er units in opera on over an month span – and the “ liza on actor” – hich is determined by the Carrier egment and the M per Average

or instance, in the “combo” segment, a carrier ith 6 , , M per Average

has a u liza on factor of 6 f the M per Average e ceeds , , then the u liza on factor drops to i e ise, in the “straight” segment, a carrier ith a M per Average of 6 , , has a u liza on factor of , but that same factor drops to

hen the mileage e ceeds , ecause the u liza on factor and Average s directly impact the score calcula on, upda ng the number of po er units, the M , and the Carrier egment ill a ect the outcome

ecause of the comple ity of the equa ons used in the calcula ons, hether upda ng the MC

ill produce a posi ve or nega ve result on a carrier’s C A score must be determined on a case by case basis o ever, generally spea ing, the score ill be posi vely impacted as the Average and liza on actor increase n short, as these gures increase, the

eight of viola ons or crashes is diluted

Accordingly, as the economy returns and miles and eet size increase, a carrier ould be ise to le this form on a regular basis to obtain the most accurate scores for your company

CONTINUED FROM PAGE 1 >> that the “responsibility” of the primary plan tor easor is not limited by the degree of its

liability under the la , and that to the e tent lain ma es a claim against the primary

plan for all damages, then, the primary plan is deemed to have full “responsibility” as that term is used in the statute “ hus a bene ciary cannot tell a third party that it is responsible for all of his medical e penses, on the one hand, and later tell Medicare that the same party

as responsible for only of them, on the other” nder this ra onale, the Court found that lain as obligated to reimburse all of the condi onal payments hich ere less than the full se lement amount he Court put no preceden al value in Medicaid statutes that provide that “the government is en tled to recover only its propor onate share of a discounted se lement ”

udge elene hite dissented from the majority on the grounds that under the majority’s de ni on of “responsibility,” Medicare’s recovery of its condi onal payments could e ceed the se lement amount and the primary plan ould be liable for the full amount of the condi onal payments once any “responsibility” is established

he majority concludes that if it is demonstrated

that the primary plan had a responsibility to ma e payment ith respect to an item or service paid for by Medicare, then the primary plan or an en ty receiving payment from the primary plan is liable to the ecretary for the full amount the ecretary paid ith respect to the item or service, ithout regard to the e tent of the primary plan’s liability or the amount paid to the en ty receiving payment from the primary plan aving so found, the majority does not e plain the statutory basis for limi ng the ecretary’s recovery to the se lement amount paid to the recipient by the tor easor f the provision means hat the majority says it means, i e , responsibility means full responsibility for the item or service, then a tor easor ho se les for less than the amount paid by Medicare is liable to the

ecretary for the di erence, regardless of the e tent of the torfeasor’s liability for the injuries

ith respect to hich the medical e penses ere incurred Consequently, if ennyrile had

paid adden , , it ould s ll be liable to the ecretary for the remaining 6 , And, if Medicare had paid , in medical costs,

ennyrile ould be liable to the ecretary for the full amount And, in this case, the ecretary

could have sued ennyrile for the balance of its condi onal payments as ell as adden

Take Away Pointshe dissent raises an alarming point, and the

majority’s interpreta on of “responsibility” could fairly be said to result in deeming the primary plan responsible for condi onal payments above and beyond a poten al se lement amount e ling ith Medicare bene ciaries ith signi cant condi onal payment obliga ons is fraught ith uncertainty Condi onal payment obliga ons are o en used in se lement nego a ons as a star ng point under the asser on that lain s must reimburse Medicare for the full amount of the condi onal payments ndisturbed, this case merely cements that asser on, and it

ill be more di cult to nego ate reasonable se lements in cases here the condi onal payments are high (usually as a result of the ini al acuity of the injuries , but the lain is fully recovered

Contact mith Moore eather ood’s ransporta on ndustry roup a orneys for more informa on or to discuss the details of the cer ca on process

Page 8: Transportation Newsletter

Smith Moore Leatherwood LLPA orneys at a

he eather ood laza ast Mc ee Avenue, uite

reenville, C 6

( 6 6 ( 6

smithmoorela com

e represent both large and small truc ing companies as insureds on behalf of numerous na onal insurance companies and as self insureds n addi on, the rm has served for many years as outside eneral Counsel for a na onally recognized commercial vehicle insurer and is e perienced in all aspects of transporta on la including issues involving federal and state statutes and regula ons promulgated by the former nterstate Commerce Commission ( CC , the successor urface ransporta on oard, the epartment of ransporta on and the ublic ervice Commission As part of the array of transporta on services provided to rm clients, an a er hours emergency response team is standing by to service clients ith urgent needs follo ing a catastrophic accident

Georgia | North Carolina | South Carolina

Smith Moore Leatherwood LLP | Attorneys at Law | www.smithmoorelaw.com

Transportation Industry Team