United States District Court, N.D. Illinois
Thomas Mervyn, on behalf of himself and all others similarly situated, Plaintiffs,
Atlas Van Lines, Inc. and Ace World Wide Moving & Storage Co., Inc., individually and on behalf of all others similarly situated, Defendants.
MEMORANDUM OPINION AND ORDER 1REDACTED1
A. Guzman, United States District Judge.
reasons stated below, Defendants' motion for summary
judgment as to Thomas Mervyn  is granted. All pending
motions are denied as moot. Civil case terminated.
case involves a compensation dispute between truck
owner-operators and the agents who hire them to transport
household goods. Thomas Mervyn seeks relief both on his own
behalf as well as others similarly situated; however, no
class has been certified.
relevant regulatory background is as follows, as set forth in
the parties' briefs. The federal Motor Carrier Act
authorizes the Department of Transportation to regulate
trucking companies, known as Carriers, that transport
household goods across state lines. 49 U.S.C. § 14104.
Carriers often contract with Agents, who then contract with
truck owners, known as Owner-Operators, to transport the
goods. Id. § 13907. The services are provided
by the Owner-Operators pursuant to the terms of lease
agreements, which are governed by federal Truth in Leasing
regulations. Id. § 14102; 49 C.F.R. § 376.
As is relevant here, the regulations provide that the lease
must "clearly state" "[t]he amount to be
paid by the authorized carrier for equipment and driver's
services." 49 C.F.R. 376.12(d). The amount "may be
expressed as a percentage of gross revenue ... or by any
other method of compensation mutually agreed upon by the
parties to the lease." Id.
an Atlas Agent and leases the trucks and driving services of
Owner-Operators to haul certain Atlas shipments. (PL's
Resp. Defs.' Stmt. Facts, Dkt. # 254, ¶¶ 3, 4.)
Thomas Mervyn is an individual Owner-Operator who leased his
truck and driving services to several of Ace's separate
corporations at different times. (Id. ¶ 6.)
Federal law requires that Atlas publish tariffs showing the
rates for each task in a move. (Id. ¶ 15.) One
rate is for "linehaul, " which is based on the
weight of the goods and the distance they are shipped.
(Id. ¶ 16.) Other rates cover fuel surcharge,
full value protection for goods, packing and unpacking,
storage, and other tasks, not all of which apply on every
shipment. (Id. ¶ 17.) Because the tariff rates
are only a ceiling on what may be charged, Atlas, like other
Carriers, often negotiates significant discounts off tariff
rates to win customers' business. (Id.
¶¶ 18, 19.) The discounts vary by amount and type
from shipment to shipment, and may include an
across-the-board discount on all tariff items or a discount
on a particular item, such as linehaul. (Id.
¶¶ 20-22.) In addition to the discounts, Atlas
might provide a service for free. (Id. ¶ 23.)
The discounts and free services may be mixed and matched in a
single shipment. (Id. ¶ 24.) After a shipment
is completed, Atlas collects money from the customer and
distributes that revenue among the various Agents involved in
the shipment, retaining a portion of it where applicable.
(Id. ¶ 25.) If the hauling agent used an
Owner-Operator to haul the goods, the hauling agent pays the
Owner-Operator under the terms of the hauling agent's
lease with the Owner-Operator. (Id. ¶ 26.) An
Agent's share of the revenue is based on the services it
performed. (Id. ¶ 27.)
to Atlas, because it needed a way to distribute the costs of
providing discounts across the various Agents involved in a
shipment, it instituted the "effective bottom line
discount" (or "EBLD") policy to distribute the
costs of providing discounts across all participants in the
shipment. (Id. ¶ 29.) Plaintiff contends that
"Atlas used 'freebies' and rebates, neither of
which are discounts, to siphon revenue to itself at the
expense of owner-operators." (Id.) In other
words, Plaintiff does not contest the application of the EBLD
method to allocate the costs of discounts across all
participants in a shipment; he asserts that the inclusion by
Atlas of services it provided for free (i.e., 100%
discount) was both a breach of the Lease and a violation of
the federal Truth in Leasing regulations.
also uses a "predetermined effective bottom line
discount" (or "PBLD"), which is as an estimate
of what the EBLD will be for a given customer over a series
of shipments. (Id. ¶ 30.) Under the EBLD
policy, Atlas divides the total dollar value of the discounts
provided to the customer by the total maximum dollar value of
that particular shipment using tariff rates, and Atlas
multiplies that EBLD percentage by the tariff charges for
each Agent to determine how much that Agent should receive.
(Id. ¶ 31.) The "bottom line
discount" is the percentage discount from the tariff
rate, referred to in some documents as "BLD, " and
is distinct from the effective bottom line discount, which is
the ultimate financial result of a shipment after taking into
account all discounts, rebates, free services, and other
unbilled expenses (like credit card fees). (Id.
¶ 32.) Atlas does not specify how Agents are to pay
Owner-Operators. (Id. ¶ 33.)
set forth the following example. In the ___shipment that
Mervyn hauled for Ace 1547, Atlas gave the customer a ___
across-the-board, bottom line discount. The gross amount of
___for the shipment was thus billed to the customer ___.
(Id. ¶ 38.) There were certain line items,
however, for which Atlas did not allocate a charge to the
customer: in the___shipment it was for moving "bulky
articles." (Id. ¶ 39.) The customer
received a 100% discount for that service. (Id.) If
an Agent's compensation depended solely on what Atlas
allocated to a particular service on the client invoice,
Atlas would not have distributed any money to the Agent for
those services for which no charge was allocated.
(Id. ¶ 40.) By instead applying EBLD, and
spreading the cost of this and other discounts across all
participants, Atlas allocated some of the revenue to bulky
articles and paid all of that to Ace; Ace, in turn, paid
Mervyn his contractual share, ___ for the bulky article.
(Id. ¶ 41.) Had Atlas not applied EBLD, the
Agent and Mervyn would have received nothing for that
service. (Id. ¶ 42.)
documents the customer's payments, the discounts applied,
and the amounts to be distributed to Agents in a computer
system, which during the time at issue, produced the Rating
Invoice and Distribution System (or "RTDS"), an
electronic document displaying the amounts billed to the
customer and the amounts distributable from the shipment
after application of the EBLD method. (Id.
¶¶ 43-44.) The information in the RTDS screen was
used to generate a document called the "Financial
Result, " which is an internal Atlas document that
contains tables called "Invoice Distribution" and
"Payable Distribution." (Id. ¶ 45.)
The Invoice Distribution lists the charges made to
Atlas's customers before certain unbilled amounts, such
as rebates or credit card fees, were applied and before Atlas
applied the EBLD method to account for all unbilled amounts.
(Id. ¶ 46.) The Payable Distribution lists the
charges after the application of the EBLD calculation.
(Id. ¶ 47.)
lease with Ace World Wide Moving, Inc.
("Lease") stated that Plaintiff "shall earn
compensation as provided in the schedule of compensation
included in Schedule B" attached to the Lease.
(Id. ¶ 50.) Plaintiff hauled interstate
shipments of household goods, which are governed by Schedule
B-l. (Id. ¶ 53.) On Schedule B-l, included
under a heading entitled "Payments to Contractor, "
it states that "[t]he following definitions and general
rules are applicable to the determination of
compensation." (Id. ¶ 53.) The
"general rules" listed under "Payments to
Contractor" state, in part: "Linehaul and
accessorial service charges shall be determined by applying
the applicable effective or predetermined effective bottom
line discount (determined under Atlas' rules) to the
transportation and accessorial charges for each
shipment." (Id. ¶ 54.) Below the
"general rules, " Schedule B-l stated that
Plaintiff was entitled to "Linehaul 58%."
(Id. ¶ 56.) The Lease provided that Ace would
pay Plaintiff " 100%" of the "Fuel
Surcharge." (Id. ¶ 57.) Atlas's
various customer contracts permitted it to charge customers a
fuel surcharge for rising fuel prices. (Id. ¶
the customer contracts set out the tariff rate applicable to
a shipment, including the fuel surcharge, customers often
negotiated with Atlas to discount the fuel surcharge below
the tariff rate. (Id. ¶ 59.) Atlas negotiated
this discount separately with each customer and reflected the
discount in each customer's unique contract.
(Id. ¶ 60.) Whatever amount the customer paid