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OWNER-OPERATOR INDEPENDENT DRIVERS ASS'N v. BULKMATIC TRAN.

April 29, 2004.

OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., et al Plaintiffs,
v.
BULKMATIC TRANSPORT CO., Defendant



The opinion of the court was delivered by: DAVID COAR, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Owner-Operator Independent Drivers Association, Inc., et al. filed a three-count complaint against defendant Bulkmatic Transport Co. pursuant to 49 U.S.C. § 14102 and 14704, et seq. In their complaint, plaintiffs allege that defendant violated the federal Truth-in-Leasing regulations, 49 C.F.R. Part 376, which govern the leases between defendant and individuals who lease their trucking equipment to defendant. Defendant's Fed.R.Civ.P. Rule 12(b)(6) motion to dismiss is now before the court. For the reasons set forth below, the motion is denied.

I. Motion to Dismiss Standard

  In its Rule 12(b)(6) motion, defendant asserts that plaintiffs have failed to state claims upon which relief may be granted. In reviewing such a motion, the court accepts as true all well-pleaded facts in the complaint and draws all reasonable inferences in favor of the plaintiffs. See Ameritech Corp. v. McCann, 297 F.3d 582, 585 (7th Cir. 2002). A complaint should be dismissed only if there is no set of facts in support of the claim that would entitle the plaintiffs to relief. See Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir. 1997).

 II. Background

  The Interstate Commerce Commission Termination Act of 1995, 49 U.S.C. § 10101, et seq. ("ICCTA"), transferred the motor carrier regulatory functions previously vested in the Interstate Commerce Commission to the Department of Transportation ("DOT") and the Surface Transportation Board, See 49 U.S.C. § 13501. The federal Truth-in-Leasing regulations, 49 C.F.R. Part 376, govern the leases between motor carriers and owner-operators of trucks. These regulations were initially promulgated pursuant to 49 U.S.C. § 13301 and 14102. With the Motor Carrier Safety Improvement Act of 1999, Congress transferred to the new Federal Motor Carrier Safety Administration ("FMCSA") all "duties and powers related to motor carriers or motor carrier safety vested in the Secretary [of Transportation] by chapters . . . 133 through 149. . . ." 49 U.S.C. § H3(f)(1). The Secretary thereby, in relevant part, delegated his authority over the federal leasing regulations to FMCSA. See 49 C.F.R. § 1.73(a)(2), (&), (8).

  Defendant is a regulated motor carrier that transports property in interstate commerce under authority issued by DOT. It does so utilizing tractors and driving services leased from owner-operators (i.e., independent truckers). Plaintiff Owner-Operator Independent Drivers Association, Inc. ("OOIDA") is an association, some of whose owner-operator members (including the individual plaintiffs) have leased their trucking equipment, with a driver, to defendant, In that connection, defendant has entered into lease agreements with the individual plaintiffs, as well as with potential class members.*fn1

  In Count 1 of the complaint, plaintiffs allege that the subject lease agreements do not contain all of the provisions, or the precise wording, required by the applicable leasing regulations. See 49 C.F.R. § 376.12. In Count II of the complaint, they allege that defendant failed to provide rated freight bills to owner-operators on request, in violation of 49 C.F.R. § 376.12(g), Plaintiffs allege in Count III that defendant understated its gross revenue before calculating plaintiffs' percentage-of-revenue compensation, thus underpaying them, in violation of 49 C.F.R. § 376.12(d),(g).

  Plaintiffs seek declaratory and injunctive relief, restitution, disgorgement, monetary damages, and attorneys' fees.

 III. Analysis

  A. Section 14704(a) Creates Private Rights of Action.

  Defendant argues foremost that plaintiffs' claims for declaratory and injunctive relief and damages must be dismissed because section 14704*fn2 does not confer upon plaintiffs a private right of action to seek such relief. As plaintiffs point out in their opposition brief, the Eighth Circuit Court of Appeals squarely rejected the position now advanced by defendant — and did so in an opinion that this court finds thoroughly explained and soundly reasoned. See Owner-Operator Indep, Drivers Ass'n v. New Prime, Inc., 192 F.3d 778 (8th Cir. 1999), cert. den., New Prime v. Owner-Operators Indep. Drivers Ass'n, Inc., 529 U.S. 1066 (2000) (holding that section 14704(a)(2) creates a private right of action for injunctive relief and damages for violations of the federal Truth-in-Leasing regulations).*fn3 This court finds more persuasive the reasoning of the courts that have rejected, rather than embraced, the arguments now advanced by defendant in this vein.

  Defendant contends first that the plain language of section 14704(a)(1) establishes that it authorizes private suits to enforce only an "order" of the Secretary of Transportation relating to the federal leasing regulations, and not the regulations, themselves. Defendant contends that the second sentence, with its reference to "injunctive relief," merely provides an additional "fencing-in" form of relief in an action to enforce an order of the Secretary, and not a stand-alone right to sue a carrier directly for injunctive relief. Moreover, defendant contends that allowing owner-operators to bring individual claims for injunctive relief would be inconsistent with the general statutory scheme for enforcing the federal leasing regulations. See 49 U.S.C. § 14701(a) & 14702(a); see also 49 U.S.C. § 14703. On this basis, defendant contends that Congress vested the FMCSA with exclusive authority to seek injunctive relief for regulatory violations.

  In line with the plain language of sub-section (a)(1), this court must reject defendant's arguments. In New Prime, the court of appeals determined that the first sentence of sub-section (a)(1), with its use of the word "order," by its terms creates a private right of action limited to the enforcement of agency orders. New Prime, 192 F.3d at 783, The court further found, however, that by its plain language, the last sentence of section 14704(a)(1) is not so limited and instead creates a private right of action for injunctive relief, including for violations of section 14102 and of the leasing regulations promulgated under that section (which, itself, merely authorizes the adoption of leasing regulations). Id. at 783-84.*fn4 This court ...


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