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Fox v. Transam Leasing, Inc.

United States District Court, D. Kansas

April 27, 2015

CANDACE FOX, et al., Plaintiffs,
v.
TRANSAM LEASING, INC., et al., Defendants

Page 1067

For Candace Fox, Individually and on Behalf of a Class of All Others Similarly Situated, Anthony Gillespie, Individually and on Behalf of a Class of All Others Similarly Situated, Charles Schreckenbach, Individually and on Behalf of a Class of All Others Similarly Situated, Plaintiffs, Counter Defendants: Anne E. Smith, Daniel M. Runion, Gregory P. Forney, Richard F. Lombardo, LEAD ATTORNEYS, Shaffer Lombardo Shurin PC - KC, Kansas City, MO USA; Gregory Leyh, LEAD ATTORNEY, Gregory Leyh, PC, Gladstone, MO USA.

For Transam Leasing, Inc., Defendant, Counter Claimant: Christopher Marshall McHugh, Gregory S. Gerstner, Rachel H. Baker, Shannon Cohorst Johnson, LEAD ATTORNEYS, Seigfreid Bingham PC, Kansas City, MO USA; James C. Sullivan, LEAD ATTORNEY, Kansas City, MO USA.

For Transam Trucking, Inc., Defendant, Counter Claimant: Christopher Marshall McHugh, Gregory S. Gerstner, Rachel H. Baker, Shannon Cohorst Johnson, LEAD ATTORNEYS, Seigfreid Bingham PC, Kansas City, MO USA; James C. Sullivan, LEAD ATTORNEY, Kansas City, MO USA.

Page 1068

MEMORANDUM AND ORDER

CARLOS MURGUIA, United States District Judge.

Named plaintiffs Candace Fox, Anthony Gillespie, and Charles Schreckenbach, individually and on behalf of others similarly situated, brought this action alleging that TransAm Leasing, Inc. and TransAm Trucking, Inc. (collectively referred to as " TransAm" ) violated various federal and state laws. Plaintiffs moved to certify three of their fifteen claims--two under the Kansas Consumer Protection Act (" KCPA" ), Kan. Stat. Ann. § § 50-626, -627,[1] and one under truth-in-leasing regulation 49 C.F.R. § 376.12(i).

On June 11, 2014, this court declined to certify plaintiffs' KCPA claims, concluding that individual inquiries would be necessary to establish liability. (Doc. 80 at 13.) However, the court certified plaintiffs' claim under 49 C.F.R. § 376.12(i), concluding that the issue of whether TransAm's weekly charge for a satellite communications service was unlawful involved common proof. (Doc. 80 at 14.) The court approved class notice for the following class:

All persons, including entities, who operated under an Independent Contractor Agreement that included a satellite communications system usage fee with TransAm Trucking, Inc. between November 2, 2008, through the present.

(Doc. 89 at 5.)

Before the court are competing motions for summary judgment: Plaintiffs' Motion for Partial Summary Judgment on Liability (Doc. 121) and TransAm's Motion for Summary Judgment (Doc. 123). Plaintiffs argue that the satellite communications fee is a forced purchase in violation of 49 C.F.R. § 376.12(i). (Doc. 121.) TransAm argues that the satellite communications fee does not violate § 376.12(i) because it is a permissible chargeback under § 376.12(h). (Doc. 123.) TransAm also seeks summary judgment on plaintiffs' individual claims related to bobtail insurance, physical damage insurance, breakdown insurance, buy-down insurance, rider insurance, pre-pass, fuel optimizer, handloading, and false advertising. ( Id. )

I. Facts

TransAm is a federally regulated motor carrier engaged in the business of over-the-road

Page 1069

transport of goods. Plaintiffs and the class members are independent truck drivers, each of whom signed largely identical Independent Contractor Agreements (" ICA" ).[2] TransAm drafted the ICA, which is a standard form and is provided to all persons seeking to become independent contractor drivers. As a general rule, the ICAs are nonnegotiable, although there are some options an independent contractor may chose or decline. Pertinent to the instant motions, the ICA contains the following provision relating to a weekly fee for satellite communications services (the " Satellite Fee" ):

[R]egardless of whether the Contractor furnishes a compatible satellite communications unit in the Equipment or borrows a compatible unit from Carrier hereunder, Contractor shall pay to Carrier a satellite communications system usage fee in the amount of $15 per week. Carrier may deduct any and all such amounts payable by Contractor under this subparagraph 1(b) from the compensation otherwise payable to Contractor hereunder.

(Doc. 122 ¶ 5.) TransAm does not dispute that the Satellite Fee is required for those wanting to drive as an independent contractor. (Doc. 127 at 3 (" [I]f someone wished to drive for TransAm Trucking under an ICA, he or she would need to agree to the charge." ).) TransAm offers drivers the option to drive as an employee, and TransAm employees do not pay a Satellite Fee. ( Id. ) However, in order to drive for TransAm as an independent contractor, plaintiffs and class members had no choice but to authorize the weekly deduction of fifteen dollars for the Satellite Fee.

TransAm asserts the satellite communications system is used to more effectively and efficiently plan routes; automate fuel tax reporting; monitor the temperature of refrigerated loads; and communicate with dispatch to verify compliance with regulations regarding, among other things, hours of service. TransAm claims that the actual cost to TransAm is approximately twenty-five dollars or more per week for each driver, and that it decided to charge fifteen dollars per week based on market conditions, not its costs. TransAm claims it has paid and ...


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