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Fox v. Transam Leasing, Inc.

United States District Court, D. Kansas

May 15, 2017

CANDACE FOX, ANTHONY GILLESPIE, and CHARLES SCHRECKENBACH, Individually and on behalf of a class of all others similarly situated, Plaintiffs,



         This matter is before the court on plaintiffs' motion for summary judgment (Dkt. 178). The motion argues plaintiffs are entitled to a declaratory judgment stating that the defendants violated a Department of Transportation “Truth-in-Leasing” regulation. Defendants oppose the motion. For the reasons stated herein, the court finds that the motion should be granted.

         I. Background.

         Plaintiffs are three “owner-operator” truck drivers who represent a class of similarly-situated persons on Count III of the amended complaint (Dkt. 90).[1]Defendants are federally regulated motor carriers. Count III alleges that defendants violated 49 C.F.R. § 376.12(i), a regulation applicable to motor carriers who lease trucks and other transportation equipment. The regulation provides that lessors (i.e., truck owners) shall not be required to purchase or rent any equipment or services from a carrier as a condition of entering into a lease agreement. Count III alleges that defendants violated the regulation by requiring plaintiffs and others to pay a $15 weekly fee to use defendants' satellite communications system. Count III prayed for damages for violation of the regulation as well as declaratory and injunctive relief.

         In April of 2015, Judge Murguia granted plaintiffs' motion for partial summary judgment as to Count III, finding defendants' imposition of the satellite fee was a forced purchase prohibited by the regulation. Dkt. 134. Although plaintiffs failed to cite any evidence of damages resulting from the practice, Judge Murguia concluded that proof of actual damages was not an essential element of the claim, and he denied defendants' competing motion for summary judgment as to that issue.

         In an interlocutory appeal, the Tenth Circuit affirmed the finding that the $15 usage fee was a violation of 49 C.F.R. § 376.12(i). Fox v. TransAm Leasing, Inc., 839 F.3d 1209 (10th Cir. 2016). The court stated that this finding “will support the truckers' requests for injunctive and declaratory relief.” Id. at 1211. But the court also found that plaintiffs' failure to present any evidence of damages meant the district court should have entered summary judgment for defendants on plaintiffs' damage claim. Id. at 1219. The case was remanded for further proceedings consistent with the Tenth Circuit's opinion. Id. at 1220.

         II. Motion for Summary Judgment.

         Plaintiffs move for summary judgment, arguing they are entitled to a declaratory judgment stating that defendants' forced purchase of satellite communication services violated 49 C.F.R. § 376.12(i). Dkt. 178 at 1. They argue a declaratory judgment will provide a definitive ruling and prevent such illegal conduct in the future. They argue defendants' cessation of the practice does not eliminate the need for declaratory relief, asserting that defendants deliberately charged the fees for years, they did not remove the fees until after suit was filed, and defendants maintained that the fees were lawful until the Tenth Circuit ruled otherwise.

         Defendants argue there is no actual controversy to support a declaratory judgment, because defendants stopped charging the fee in April 2014, they removed the fee from its leases, and they have no intention of re-imposing the fee. They contend a declaratory judgment would thus have no impact on the parties' behavior. Dkt. 184 at 11. Defendants also point out that declaratory relief is discretionary and contend that the factors in State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979 (10th Cir. 1994), as well as plaintiffs' delay in moving for a declaratory judgment, weigh against such relief. Finally, defendants argue that the statute creating a private right of action for violation of the regulations does not authorize declaratory relief. Dkt. 184 at 17.[2]

         Summary judgment is appropriate if the moving party demonstrates that there is no genuine dispute as to any material fact, and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A fact is “material” when it is essential to the claim, and the issues of fact are “genuine” if the proffered evidence permits a reasonable jury to decide the issue in either party's favor. Haynes v. Level 3 Communs., 456 F.3d 1215, 1219 (10th Cir. 2006). The movant bears the initial burden of proof and must show the lack of evidence on an essential element of the claim. Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2004) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). The nonmovant must then bring forth specific facts showing a genuine issue for trial. Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). The court views all evidence and reasonable inferences in the light most favorable to the non-moving party. LifeWise Master Funding v. Telebank, 374 F.3d 917, 927 (10th Cir. 2004).

         For purposes of the motion, the court finds the following facts to be uncontroverted. Plaintiffs filed this action in November of 2012. The complaint included a class action claim alleging defendants were violating 49 C.F.R. § 376.12(i) by requiring forced purchases of satellite communication services. Plaintiffs moved for class certification in December of 2013. In April of 2014, defendants stopped charging truckers the $15 satellite fee. Since that time, defendants' contracts have not included a satellite communication fee or anything similar to it. The President of TransAm Trucking, Russ McElliott, testified that the decision to remove the fee is permanent. Defendants continued to assert on appeal that the $15 satellite communication fee was lawful. The mandate of the Tenth Circuit affirming Judge Murguia's finding that imposition of the fee was unlawful was entered on November 9, 2016.

         None of the named plaintiffs have driven for defendants since 2012, although members of the plaintiff class who were charged the fee in the past continue to drive for defendants.

         III. Discussion.

         Section 14704(a)(2) of Title 49, U.S. Code, provides a private right of action for damages caused by a motor carrier's violation of federal transportation statutes and regulations. Section 14704(a) authorizes an action for injunctive relief for certain violations. These remedies are in addition to ...

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