Fox v. Transam Leasing, Inc. ( 2016 )

FILED
United States Court of Appeals
Tenth Circuit
PUBLISH October 18, 2016
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
FOR THE TENTH CIRCUIT
_________________________________
CANDACE FOX; ANTHONY
GILLESPIE; CHARLES
SCHRECKENBACH,
Plaintiffs Counter Defendants –
Appellees,
v. No. 15-3203
TRANSAM LEASING, INC.; TRANSAM
TRUCKING, INC.,
Defendants Counterclaimants –
Appellants.
_________________________________
Appeal from the United States District Court
for the District of Kansas
(D.C. No. 2:12-CV-02706-CM-GLR)
_________________________________
Christopher M. McHugh (Shannon D. Johnson and Kendra D. Hanson with him on the
briefs), Seigfreid Bingham, P.C., Kansas City, Missouri, for Defendants
Counterclaimants-Appellants.
Gregory Leyh, Law Office of Gregory Leyh, P.C., Gladstone, Missouri (Richard F.
Lombardo, Kathleen K. Woods, Gregory P. Forney, and Daniel M. Runion, Shaffer
Lombardo Shurin, Kansas City, Missouri, with him on the brief), for Plaintiffs Counter
Defendants-Appellees.
_________________________________
Before BRISCOE, EBEL, and BACHARACH, Circuit Judges.
_________________________________
EBEL, Circuit Judge.
_________________________________
Plaintiffs, three independent truckers representing themselves and a class of
similarly situated truck drivers (“truckers”), contend that Defendants TransAm
Trucking, Inc. and TransAm Leasing, Inc. (collectively “TransAm”) violated the
Department of Transportation’s truth-in-leasing regulations by requiring the truckers,
who lease their trucks and driving services to TransAm, to pay TransAm $15 each
week to use TransAm’s satellite communications system. This $15 usage fee violates
49 C.F.R. § 376.12(i), which precludes a motor carrier like TransAm from requiring a
trucker “to purchase or rent any products, equipment, or services from the authorized
carrier as a condition of entering into the lease arrangement.” We, therefore, affirm
partial summary judgment for the truckers. That ruling will support the truckers’
requests for injunctive and declaratory relief. But the truckers also asserted a claim
for damages, which the district court certified as a class action. Because the truckers
failed to present any evidence of their damages resulting from the unlawful usage fee,
however, the district court should have entered summary judgment for TransAm on
that damages claim. Having jurisdiction under 28 U.S.C. § 1292(b), therefore, we
AFFIRM the district court in part and REVERSE in part.
I. BACKGROUND
A. Department of Transportation’s truth-in-leasing regulations
Congress regulates leases between independent truckers and federally
regulated motor carriers like TransAm, requiring, among other things, that the leases
2
be in writing and specify their duration and the compensation that the carrier will pay
the trucker. See 49 U.S.C. § 14102(a); see also Owner-Operator Indep. Drivers
Ass’n, Inc. v. Swift Transp. Co., 632 F.3d 1111, 1113 (9th Cir. 2011). Congress has
tasked the Department of Transportation (“DOT”) with further regulating these
leases; the DOT does so through its Federal Motor Carrier Safety Administration and
its truth-in-leasing regulations, 49 C.F.R. Pt. 376. See Swift Transp., 632 F.3d at
1113.1
The truth-in-leasing regulations protect independent truckers from motor
carriers’ abusive leasing practices. See Owner-Operator Indep. Drivers Ass’n, Inc. v.
Comerica Bank (In re Arctic Express Inc.), 636 F.3d 781, 795 (6th Cir. 2011); Global
Van Lines, Inc. v. ICC, 627 F.2d 546, 547-48 (D.C. Cir. 1980); Lease and
Interchange of Vehicles, 42 Fed. Reg. 59,984 (Nov. 23, 1977). Thus, the objectives
of the regulations are
to promote truth-in-leasing—a full disclosure between the carrier and
the owner-operator of the elements, obligations, and benefits of leasing
contracts signed by both parties; . . . to eliminate or reduce opportunities
for skimming and other illegal or inequitable practices by motor
carriers; and . . . to promote the stability and economic welfare of the
independent trucker segment of the motor carrier industry.
1
Congress initially regulated leases between independent truckers and motor carriers
through the Interstate Commerce Commission (“ICC”) until 1996, when Congress
abolished that agency, see Rivas v. Rail Delivery Serv., Inc., 423 F.3d 1079, 1082
(9th Cir. 2005), and transferred the responsibility for regulating these leases to the
DOT, see Owner-Operator Indep. Drivers Ass’n, Inc. v. New Prime, Inc., 339 F.3d
1001, 1006 (8th Cir. 2003). While the ICC originally enforced the truth-in-leasing
regulations against carriers, when Congress abolished the ICC, Congress chose to
enforce the regulations instead by providing truckers with a private cause of action
against carriers for violating those regulations, see 49 U.S.C. § 14704(a). See also
Swift Transp., 632 F.3d at 1113.
3
In re Arctic Express, 636 F.3d at 796 (internal quotation marks, alterations omitted);
see also Lease and Interchange of Vehicles, 43 Fed. Reg. 29,812 (July 11, 1978).
B. This litigation
This case involves allegations that TransAm has undertaken abusive practices
that the truth-in-leasing regulations preclude. Plaintiffs, three independent truckers,
sued TransAm on behalf of themselves and all similarly situated truckers. The truth-
in-leasing claim at issue here is but one of a number of claims that the truckers have
asserted against TransAm. As a general overview of this litigation, the truckers have
alleged that TransAm recruited independent drivers by falsely representing, among
other things, how much money drivers could make as independent truckers leasing
their trucks and driving services to TransAm, rather than driving as TransAm
employees; once recruited, TransAm leased semi-tractors to the independent truckers,
with an option for the truckers eventually to buy their vehicles; the truckers in turn
leased the vehicles, plus their driving services, back to TransAm; and, contrary to its
promises, TransAm limited the amount of money that the independent truckers made.
Based on these allegations, the truckers asserted two claims alleging that
TransAm had violated the Kansas Consumer Protection Act by making false
representations to the truckers to entice them to contract with TransAm, and thirteen
claims alleging that the terms of TransAm’s standard agreement to lease truckers’
4
vehicles and driving services violated the DOT’s truth-in-leasing regulations.2
TransAm, in turn, asserted counterclaims alleging that the truckers had breached their
contracts with TransAm.
The only claim at issue in this interlocutory appeal is the truckers’ claim that
TransAm violated the truth-in-leasing regulations—specifically 49 C.F.R.
§ 376.12(i)—by requiring the truckers to pay TransAm $15 each week to use
TransAm’s satellite communications system. Such a system has a variety of uses in
the trucking industry, including providing a means of communication between the
carrier and the truckers, route planning, keeping automated records of drivers’ hours
and state fuel taxes, and monitoring the temperature of any refrigerated trailer being
hauled.
TransAm purchases its satellite communications system from third-party
vendors. According to TransAm, it pays $25 per week per driver for its system.
In order to access TransAm’s system, TransAm’s standard lease requires that a
trucker’s vehicle “must contain a satellite communications unit which is compatible
with Carrier’s satellite communications system. If the Equipment does not have a
2
TransAm, then, has two lease arrangements with the truckers: 1) Defendant
TransAm Leasing, Inc. leased vehicles to the truckers, and 2) the truckers then leased
their vehicles and driving services to Defendant TransAm Trucking, Inc. TransAm
Trucking is the parent company of TransAm Leasing. It is TransAm Trucking’s
standard form lease agreement for the truckers’ vehicles and their driving services
that underlies the truth-in-leasing claim at issue in this case. Nevertheless,
throughout this litigation, the parties and the district court have treated the two
TransAm business entities as one. Thus, we have not distinguished between them in
this opinion.
5
compatible satellite communications unit, then Contractor [trucker] may borrow a
compatible unit from Carrier during the term hereof.” (Aplt. App. 571 ¶ 1(b).)
[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 fifteen dollars
($15.00) 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.
(Id. (emphasis added); see also id. 578 ¶ 15(b) (further authorizing TransAm to
deduct this $15-per-week usage fee from compensation TransAm owes the trucker).)
Drivers who work as TransAm’s employees also use its satellite communications
system, but they do not pay a fee.
The district court certified the class—all persons who since November 2, 2008,
had leased trucks from TransAm and then leased their vehicles and driving services
back to TransAm—but only for the truckers’ claim challenging the $15 fee for using
TransAm’s satellite communications system. The parties then filed cross-motions for
summary judgment on that claim. The district court granted the truckers’ motion for
partial summary judgment on liability, ruling the $15 fee violated 49 C.F.R.
§ 376.12(i).
TransAm also moved for summary judgment, arguing among other things that,
even if its $15 usage fee technically violated § 376.12(i), the truckers could not prove
they were entitled to damages as a result of that violation. The district court denied
TransAm summary judgment on the question of damages. TransAm appeals both
decisions.
6
II. STANDARD OF REVIEW
Rule 56(a), Fed. R. Civ. P., requires a court to “grant summary judgment if the
movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” We review the district court’s summary
judgment decisions de novo. See United States v. Supreme Ct. of N.M., —F.3d—,
2016 WL 5946021, at *13 (10th Cir. June 7, 2016). “Where, as here, we are
presented with cross-motions for summary judgment, we must view each motion
separately, in the light most favorable to the non-moving party, and draw all
reasonable inferences in that party’s favor.” Id. (internal quotation marks omitted).
III. DISCUSSION
A. TransAm violated the truth-in-leasing regulations by requiring truckers to
pay TransAm $15 each week to use TransAm’s satellite communications system
The truckers’ claim challenging TransAm’s $15 weekly fee to use TransAm’s
satellite communications system requires us to address the interplay between two
truth-in-leasing regulations. The truckers contend that this $15 usage fee violates 49
C.F.R. § 376.12(i). That regulation provides in pertinent part that
[t]he lease shall specify that the lessor is not required to purchase or rent
any products, equipment, or services from the authorized carrier as a
condition of entering into the lease arrangement.
Not only must a carrier specify this in its lease agreements, but the carrier must also
“adhere[] to and perform[]” this lease provision, id. § 376.12; that is, the carrier
cannot actually require truckers “to purchase or rent any products, equipment, or
7
services from the authorized carrier as a condition of entering into the lease
arrangement.”3
In defending its $15 usage fee, TransAm relies on a second truth-in-leasing
regulation, 49 C.F.R. § 376.12(h), which states:
Charge back items. The lease shall clearly specify all items that may be
initially paid for by the authorized carrier, but ultimately deducted from
the lessor’s compensation at the time of payment or settlement, together
with a recitation as to how the amount of each item is to be computed.
The lessor shall be afforded copies of those documents which are
necessary to determine the validity of the charge.
As explained below, § 376.12(i) provides, in part, a substantive
restriction on the terms a carrier can include in its lease with independent
truckers. Section 376.12(h), on the other hand, imposes disclosure and
documentation requirements for fees that the carrier may permissibly deduct
from the compensation it owes a trucker.
1. TransAm’s $15 fee violates § 376.12(i)
TransAm violated § 376.12(i) because it required truckers to purchase a
service—the use of TransAm’s satellite communications system—as a condition of
entering into a lease arrangement. More specifically, TransAm required truckers to
pay TransAm $15 each week to use TransAm’s satellite communications system,
regardless of whether the truckers borrowed the hardware to access that system from
3
See Al-Anazi v. Bill Thompson Transp., Inc., No.15-cv-12928, 2016 WL 3611886,
at *4-5 (E.D. Mich. July 6, 2016); Mervyn v. Nelson Westerberg, Inc., 76 F. Supp. 3d
715, 718-19 (N.D. Ill. 2014) (citing Owner-Operator Indep. Drivers Ass’n. Inc. v.
Mayflower Transit, LLC, 615 F.3d 790 (7th Cir. 2010)); Owner-Operator Indep.
Drivers Ass’n, Inc. v. Ledar Transp., No. 00-0258-CV-W-FJG, 2004 WL 5249148, at
*7 (W.D. Mo. Dec. 30, 2004) (unreported).
8
TransAm or furnished it themselves. We agree with the district court that, while
TransAm can require truckers to use a satellite communication system, TransAm
“cannot under § 376.12(i) require its independent contractors to purchase or rent this
system from it” (Aplt. App. 1018). Instead, truckers “must have the option of
obtaining equipment or services—including satellite communications services—from
an outside source.”4 (Id. (citing Lease & Interchange of Vehicles, 129 M.C.C. 700,
729-30 (I.C.C. 1978)); cf. Port Drivers Fed’n 18, Inc. v. All Saints, 757 F. Supp. 2d
463, 467 (D.N.J. 2011) (holding lease that required truckers to carry worker’s
compensation insurance, but gave truckers the option of buying it from the carrier or
a third party did not violate § 376.12(i)).5
Our conclusion that TransAm’s requiring truckers to pay it $15 each week to
use TransAm’s satellite communications system violated 49 C.F.R. § 376.12(i) is
bolstered by the history and purpose of the truth-in-leasing regulations. See Swift
Transp., 632 F.3d at 1116-18 (looking, in applying another truth-in-leasing
4
TransAm does not argue that truckers cannot obtain their own satellite
communications system, but only that it would be prohibitively expensive for them to
do so.
5
See also Davis v. Larson Moving & Storage Co., Civ. No. 08-1408 (JNE/JJG), 2008
WL 4755835, at *7-8 (D. Minn. Oct. 27, 2008) (unreported) (holding allegations that
carrier required truckers to buy uniforms from the carrier stated claim for violation of
§ 376.12(i)); Tayssoun Transp., Inc. v. Universal Am-Can, Ltd., No. Civ.A. H-04-
1074, 2005 WL 1185811, at *18-19 (S.D. Tex. Apr. 20, 2005) (unreported) (holding
carrier’s requirement that trucker pay it $5 per trip for cargo insurance violated
§ 376.12(i)); Ledar Transp., 2004 WL 5249148, at *7 (holding carrier’s requirement
that truckers buy “insurance products” from carrier violated § 376.12(i)); id. (holding
carrier’s requirement that truckers “purchase repair services” from carrier violated
§ 376.12(i)). These cases, plus the cases discussed in the text, appear to be all of the
cases applying § 376.12(i) to alleged forced purchases from a carrier.
9
regulation, to regulation’s plain language, as well as its purpose and regulatory
history). Congress authorized the truth-in-leasing regulations after a series of
hearings in the 1970s “uncovered numerous problems and abuses suffered by the
independent truckers.” In re Arctic Express, 636 F.3d at 795. “Congress’s
substantive purpose in authorizing the Truth-In-Leasing regulations was to protect”
independent truckers, id. (internal quotation marks omitted), “to remedy disparities in
bargaining positions between independent owner operators and motor carriers,”
Owner-Operator Indep. Drivers Ass’n, Inc. v. New Prime, 398 F.3d 1067, 1070 (8th
Cir. 2005), to address many of the “inequities in the lessor/lessee relationship”
between carriers and independent truckers, Lease and Interchange of Vehicles, 42
Fed. Reg. 59,984 (Nov. 23, 1977), and to “eliminate or reduce opportunities for . . .
illegal or inequitable practices by motor carriers,” In re Arctic Express, 636 F.3d at
796 (quotation omitted). Precluding a carrier from requiring a trucker to purchase
products, equipment, or services from it as a condition of entering into a lease with
the carrier eliminates the opportunity for “unscrupulous carriers . . . to take unfair
advantage” of truckers, but otherwise leaves the trucker and carrier free to negotiate
the terms of their lease. Lease and Interchange of Vehicles, 129 M.C.C. 700, 729-30
(June 13, 1978) (addressing predecessor proposed I.C.C. regulation, 49 C.F.R.
§ 1057.12(j)). Truckers, then, must be free to purchase products, equipment, and
services from someone other than the carrier, but a trucker with that option can still
choose to purchase or rent the product, equipment, or service from the carrier. See
10
id. This restriction on a carrier requiring a trucker to purchase or rent products,
equipment, or services is “all inclusive.” Id.For the foregoing reasons, then, we conclude that the provision in TransAm’s
standard lease requiring truckers to pay it $15 each week to use TransAm’s satellite
communications system violates § 376.12(i).
2. Section 376.12(h) does not validate TransAm’s $15 usage fee
In defending its requirement that truckers pay TransAm $15 each week for
using TransAm’s satellite communications system, TransAm argues that this fee is
lawful because it complies with another truth-in-leasing regulation, 49 C.F.R.
§ 376.12(h). As previously mentioned, that regulation provides that “[t]he lease shall
clearly specify all items that may be initially paid for by the authorized carrier, but
ultimately deducted from the lessor’s compensation at the time of payment or
settlement, together with a recitation as to how the amount of each item is to be
computed.” Id. In addition, that regulation provides that “[t]he lessor shall be
afforded copies of those documents which are necessary to determine the validity of
the charge.” Id.Section 376.12(h) addresses a different abusive practice than § 376.12(i).
Section 376.12(i), on which the truckers rely, prevents a carrier from forcing truckers
to purchase or rent products or services from the carrier rather than having the option
of purchasing or renting those products or services from someone else. Section
376.12(h), on the other hand, precludes a motor carrier from unexpectedly reducing
truckers’ compensation through unexplained deductions from their pay by requiring
11
carriers to specify in the lease what fees the carrier will deduct from truckers’
compensation and further to explain at the outset of the lease arrangement how much
any deduction will be or, if the deduction will vary from time to time, how that
deduction will be calculated. See Swift, 632 F.3d at 1115 (“One way to ensure
carriers do not take advantage of lessors is to mandate that carriers disclose the full
costs that lessors will be obligated to pay up front. This prevents carriers from hiding
fees until the charges have already been incurred and allows lessors to make
informed decisions about where to seek products and services.”).
Section 376.12(h) does not purport affirmatively to authorize a carrier to
deduct any particular fee. Instead, it addresses the procedures and disclosure
requirements by which the carrier can deduct an authorized fee from the truckers’
compensation. Section 367.12(h) applies to “all items that may be initially paid for
by the authorized carrier, but ultimately deducted from the lessor’s compensation at
the time of payment or settlement” (emphasis added). An item “may be” deducted if
the terms of the lease so provide and the deduction does not violate any other
substantive truth-in-leasing regulation (such as § 376.12(i)), so long as the lease
clearly specifies that the fee will be deducted and explains how much the fee will be
or at least how the fee will be calculated, and the carrier provides truckers with
adequate documentation of the fees charged back to them. See Swift Transp., 632
F.3d at 1115-21; Owner-Operator Indep. Drivers Ass’n, Inc. v. Landstar Sys., Inc.,
12
622 F.3d 1307, 1320-21 (11th Cir. 2010).6 Section 376.12(h) is a provision requiring
disclosure and documentation of permissible fees, whereas § 367.12(i) imposes
substantive restrictions as well as disclosure requirements on what fees a carrier can
impose on truckers in the first place. Section 376.12(h), then, is not in tension with
6
Cases applying § 376.12(h) illustrate that this regulation addresses the disclosures
the carrier must make and the documentation the carrier must provide regarding the
amount of a fee to be charged back to the trucker, rather than addressing the
permissible subject matter of that fee itself. See, e.g., Port Drivers Fed’n 18, Inc. v.
All Saints Express, Inc., 757 F. Supp. 2d 443, 454-55 (D.N.J. 2010) (holding lease
violated § 376.12(h) both because it did not indicate how the amounts charged for
“repairs or maintenance, gasoline, fuel, oil, labor, tires, insurance or merchandise”
would be computed and because lease did “not include a provision that allows drivers
to examine documentation regarding charge-backs”); Brinker v. Namcheck, 577
F. Supp. 2d 1052, 1060-61 (W.D. Wis. 2008) (holding carrier violated § 376.12(h) by
not clearly specifying the charges in their leases for drug tests, license fees and cargo
and liability insurance); Owner-Operator Indep. Drivers Ass’n, Inc. v. C.R. England,
Inc., 508 F. Supp. 2d 972, 981 (D. Utah 2007) (holding carrier violated § 376.12(h)
by not clearly specifying charge backs for such things as fuel, repairs, tires, and
administrative fees, by failing to explain how the amount of those charge-backs was
to be calculated, and by failing to provide truckers with “copies of documents
necessary to determine the validity of the charge-backs”); Owner-Operator Indep.
Drivers Ass’n, Inc. v. Ledar Transp., No. 00-0258-CV-W-2-ECF, 2000 WL
33711271, at *1, *10 (W.D. Mo. Nov. 3, 2000) (unreported) (granting preliminary
injunction on claim alleging that carrier violated § 376.12(h) by not clearly
specifying fees for “advances for fuel and truck repairs, insurance, damaged trailer
equipment, truck lease payments, escrow fund deposits, license fees, fuel and
highway use taxes, Qualcomm communications systems, cash advances, etc.”).
Further, viewing § 376.12(h) as stating disclosure and documentation requirements is
consistent with other provisions of the truth-in-leasing regulations, which mandate
similar procedural protections and disclosure requirements for truckers by requiring,
e.g., that the lease specifies when the lease term begins and ends, 49 C.F.R.
§ 376.12(b); clearly states the compensation that the carrier will pay the trucker, id.§ 376.12(d); specifies which party is responsible for removing identification devices
at the end of the lease, id. § 376.12(e); “clearly specif[ies] the responsibility of each
party with respect to the cost of fuel, fuel taxes, empty mileage, permits of all types,
tolls, ferries, detention and accessorial services, base plates and licenses, and any
unused portion of such items,” id.; and specifies who is responsible for loading and
unloading the vehicle and the compensation, if any, to be paid for that service, id.
13
§ 376.12(i), and it does not authorize TransAm to require truckers to pay a fee to
purchase use of TransAm’s satellite communications system in violation of
§ 376.12(i).
3. The Seventh Circuit’s decision in Mayflower is inapposite
For the first time on appeal, TransAm relies on Owner-Operator Independent
Drivers Association, Inc. v. Mayflower Transit, LLC, 615 F.3d 790 (7th Cir. 2010),
to argue that § 376.12(h) permits TransAm to pass along its expenses for the satellite
communications system to the truckers. But Mayflower is inapposite.
Mayflower addressed payments for liability insurance which the carrier, by
law, is required to purchase. 615 F.3d at 791. More specifically, the carrier must
provide liability insurance for any vehicles it uses to transport freight, including
vehicles it leases from independent truckers. Id. (citing 49 U.S.C. § 13906; 49
C.F.R. § 376.12(j)(1)). The carrier in Mayflower passed on to its independent
truckers the expense the carrier incurred in purchasing this required liability
insurance. Id. Truckers argued that, by doing so, the carrier violated 49 C.F.R.
§ 376.12(i) because the carrier was, in essence, forcing truckers to buy liability
insurance from the carrier as a condition of entering into a lease with Mayflower.
Mayflower, 615 F.3d at 791, 793-94. The Seventh Circuit rejected the truckers’
characterization of the carrier’s transferring of its expense in purchasing the required
liability insurance to the truckers as forcing them to purchase liability insurance from
the carrier, contrary to § 376.12(i). Mayflower, 615 F.3d at 793. The Seventh
Circuit further concluded that the carrier could charge truckers for the carrier’s
14
expense in purchasing liability insurance, distinguishing between a carrier requiring a
trucker to purchase services and products from a carrier, which the carrier cannot do
under § 376.12(i), and a carrier transferring some of its required insurance costs to
truckers, which a carrier can do. 615 F.3d at 793-94.
Mayflower, then, addressed whether a carrier could pass along to truckers the
carrier’s own cost of purchasing required liability insurance. The carrier in
Mayflower was not compelling truckers to purchase insurance that they could obtain
elsewhere. In fact, the carrier was the entity required to obtain the insurance, and
Mayflower only addressed the propriety of allocating those expenses between the
carrier and the truckers. Here, on the other hand, truckers challenge TransAm
requiring them to purchase access to a satellite system from TransAm, when truckers
could instead purchase that same service from another entity. It is those compelled
purchases that § 376.12(i) prohibits.
Importantly, Mayflower also held that another truth-in-leasing regulation, 49
C.F.R. § 376.12(j)(1), expressly permitted the carrier to charge back to truckers the
carrier’s cost of providing liability insurance. 615 F.3d at 793-94. Section
376.12(j)(1) provides:
The lease shall clearly specify the legal obligation of the authorized
carrier to maintain insurance coverage for the protection of the public
pursuant to [Federal Motor Carrier Safety Administration] regulations
under 49 U.S.C. 13906. The lease shall further specify who is
responsible for providing any other insurance coverage for the operation
of the leased equipment, such as bobtail insurance. If the authorized
carrier will make a charge back to the lessor for any of this insurance,
the lease shall specify the amount which will be charged-back to the
lessor.
15
The Court in Mayflower interpreted the third sentence of this
regulation—“[i]f the authorized carrier will make a charge back to the lessor
for any of this insurance, the lease shall specify the amount which will be
charged-back to the lessor,” id.—specifically to authorize a carrier to charge
back to truckers the carrier’s cost incurred for buying the required liability
insurance. See 615 F.3d at 793-94. By contrast, here there is no regulatory
authorization for a shipper to pass satellite and communications costs down to
the truckers.7
For the foregoing reasons, the district court correctly granted the truckers
partial summary judgment, holding that TransAm’s requirement that truckers pay it a
$15 weekly fee to use TransAm’s satellite communications system, as a condition to
entering into a lease arrangement with TransAm, violated § 376.12(i).
B. The district court erred in denying TransAm summary judgment on the
truckers’ claim for damages resulting from TransAm’s § 376.12(i) violation
In addition to seeking declaratory and injunctive relief, the truckers also
sought money damages for TransAm’s violation of 49 C.F.R. § 376.12(i). See 49
U.S.C. § 14704(a)(2) (“A carrier . . . is liable for damages sustained by a person as a
result of an act or omission of that carrier . . . in violation of this part”). It was the
7
TransAm, for the first time on appeal, attempted to argue that the weekly charge to
truckers was only an economic adjustment of its costs, and not a required purchase.
That argument is inconsistent with the characterization TransAm made to the district
court and, further, we will not address arguments raised for the first time on appeal,
see Anderson v. Spirit Aerosystems Holdings, Inc., 827 F.3d 1229, 1238-39 (10th
Cir. 2016).
16
truckers’ burden to prove their actual damages, see Landstar Sys., 622 F.3d at 1324;
that is, that they suffered monetary harm from TransAm’s requiring the truckers to
pay TransAm $15 each week to use TransAm’s satellite communications system
instead of giving the truckers the option of purchasing that service elsewhere and not
paying TransAm’s $15 weekly fee, see Swift Transp., 632 F.3d at 1122.
TransAm moved for summary judgment, arguing, among other things, that
even if TransAm’s $15 weekly fee violated § 376.12(i) (as it does), the truckers
failed to assert any evidence that they suffered any actual damages as a result of that
violation. The district court erred in rejecting that argument.
“The court shall grant summary judgment if the movant shows 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) (emphasis added). As the movant, it was
TransAm’s “initial burden of making a prima facie demonstration of the absence of a
genuine issue of material fact and entitlement to judgment as a matter of law.”
Savant Homes, Inc. v. Collins, 809 F.3d 1133, 1137 (10th Cir. 2016) (internal
quotation marks omitted). Where, as here, however, the movant (TransAm) “does
not bear the burden of persuasion at trial,” it “may satisfy [its summary-judgment]
burden by pointing out to the court a lack of evidence on an essential element of the
nonmovant’s claim.” Id. (internal quotation marks omitted). TransAm met this
burden by arguing in its summary judgment motion that the truckers put forth no
evidence that they suffered actual damages as the result of TransAm’s violation of
§ 376.12(i).
17
The burden then shifted to the non-moving truckers “to set forth specific facts
from which a rational trier of fact could find for” them on their damages claim.
Collins, 809 F.3d at 1138 (internal quotation marks omitted). “To satisfy this burden,
the nonmovants [truckers] must identify facts by reference to affidavits, deposition
transcripts, or specific exhibits incorporated therein.” Id. (internal quotation marks
omitted). “These facts must establish, at a minimum, an inference of the presence of
each element essential to the case.” 8 Id. (internal quotation marks omitted).
7F
The truckers failed to meet this burden with regard to their claim that they
suffered actual damages as a result of TransAm’s § 376.12(i) violation. In fact, the
truckers did not even try to meet their burden. Nor did they posit a theory of how
they would be entitled to damages. Instead, in response to TransAm’s motion for
summary judgment, the truckers simply asserted:
Defendants’ arguments regarding damages are premature.
Plaintiffs can and will put on evidence regarding damages at time of
trial. Defendants’ attempts to require Plaintiffs to establish damages at
a summary judgment phase is incorrect. Plaintiffs are entitled to seek
summary judgment on liability only—especially when liability is as
clear-cut as it is here—leaving damages for another day. Defendants
point to nothing that establishes Plaintiffs cannot establish damages
....
(Aplt. App. 927.) The truckers make the same argument again on appeal.
8
The truckers contend that evidence of actual damages is not “an essential element”
of liability for violating § 376.12(i). We need not address whether that statement is
correct, however, because TransAm does not appear to assert that particular argument
on appeal. Instead, TransAm argues more generally that, if TransAm violated
§ 376.12(i) (which it did), and if the truckers want to recover damages for the
violation of § 376.12(i) (which they do), then the truckers must come forward with
some evidence of their damages in order to oppose TransAm’s summary judgment
motion successfully.
18
Because the truckers did not try to meet their burden of proffering evidence to
support their claim for damages in response to TransAm’s motion for summary
judgment, Rule 56(a) required the district court to grant TransAm summary judgment
on that damages claim. See Swift, 632 F.3d at 1122 (upholding summary judgment
for carrier because truckers failed to produce any evidence that they had suffered any
monetary loss from the carrier’s violations of the truth-in-leasing regulations).
The truckers could have made other arguments as to why it was premature for
the district court to address their claim for damages. For example, the truckers could
have argued they needed additional discovery in order to respond to TransAm’s
motion for summary judgment on their damages claim. See Fed. R. Civ. P. 56(d)
(addressing when facts are as yet unavailable to the nonmovant to oppose summary
judgment). The truckers successfully made such an argument as to their individual
claims for other violations of the truth-in-leasing regulations, and they made that
argument in the same pleading in which truckers asserted they did not yet have to put
forth evidence of their damages stemming from the § 376.12(i) violation. But the
truckers never made a Rule 56(d) argument regarding their § 376.12(i) damages
claim.
Thus, the district court erred in denying TransAm’s motion for summary
judgment on the issue of damages.
III. CONCLUSION
For the foregoing reasons, we AFFIRM partial summary judgment for the
truckers, upholding the district court’s determination that TransAm violated 49
19
C.F.R. § 376.12(i). But we REVERSE the district court’s decision to deny TransAm
summary judgment on the truckers’ claim for damages resulting from that § 376.12(i)
violation, and REMAND for further proceedings consistent with this decision.
20