Owner-Operator Independent Dri, et al v. Swift Transportation Co., Inc., et al
Filing
FILED OPINION (DOROTHY W. NELSON, DAVID R. THOMPSON and M. MARGARET MCKEOWN) AFFIRMED. Judge: DWN Authoring, Judge: DRT , Judge: MMM . For the foregoing reasons, we affirm the district court s finding that Swift s Revised Lease complies with the Truth-in-Leasing regulations and its denial of damages, injunctive relief, restitution, and disgorgement. AFFIRMED. FILED AND ENTERED JUDGMENT. [7618777] [09-17643, 09-17726]
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
OWNER-OPERATOR INDEPENDENT
DRIVERS ASSOCIATION, INC.; FRANK
BELCHER; MARC MAYFIELD,
Plaintiffs-Appellants,
v.
SWIFT TRANSPORTATION CO., INC.
(AZ); SWIFT TRANSPORTATION CO.,
INC. (NV),
Defendants-Appellees.
OWNER-OPERATOR INDEPENDENT
DRIVERS ASSOCIATION, INC.; FRANK
BELCHER; MARC MAYFIELD,
Plaintiffs-Appellees,
v.
SWIFT TRANSPORTATION CO., INC.
(AZ); SWIFT TRANSPORTATION CO.,
INC. (NV),
Defendants-Appellants.
No. 09-17643
D.C. No.
2:02-cv-01059-PGR
No. 09-17726
D.C. No.
2:02-cv-01059-PGR
OPINION
Appeal from the United States District Court
for the District of Arizona
Paul G. Rosenblatt, Senior District Judge, Presiding
Argued and Submitted
December 9, 2010—San Francisco, California
Filed January 20, 2011
1193
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OWNER-OPERATOR v. SWIFT TRANSPORTATION
Before: Dorothy W. Nelson, David R. Thompson, and
M. Margaret McKeown, Circuit Judges.
Opinion by Judge D. W. Nelson
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COUNSEL
Brian J. Campbell, Phoenix, Arizona, for the plaintiffsappellants-cross-appellees.
Paul D. Cullen, Daniel E. Cohen, and Joyce E. Mayers, Washington, District of Columbia, for the plaintiffs-appellantscross-appellees.
William E. Quirk, James C. Sullivan, and Anthony W.
Bonuchi, Kansas City, Missouri, for the defendants-appelleescross-appellants.
OPINION
D. W. NELSON, Senior Circuit Judge:
Plaintiffs Frank Belcher, Marc Mayfield, and the OwnerOperator Independent Drivers Association, Inc. (“OOIDA”)
appeal the district court’s order granting summary judgment
to Defendants Swift Transportation Co. (“Swift”) regarding
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OWNER-OPERATOR v. SWIFT TRANSPORTATION
liability and damages under the Truth-in-Leasing regulations.1
Defendants cross-appeal the district court’s finding that the
statute of limitations is four years instead of two. We affirm.
I.
FACTUAL AND PROCEDURAL BACKGROUND
Swift is a federally regulated motor carrier that hauls
freight in interstate commerce. The named plaintiffs in this
case are former owner-operator truck drivers who were hired
by Swift to haul freight. Plaintiff OOIDA is a trade association with more than 160,000 members. Owner-operators are
truck drivers who contract with motor carriers to provide
hauling services; they typically own their own equipment and
lease out their trucks and hauling services to carriers on a
weekly basis. Frequently, carriers pre-pay the costs of certain
goods and services for which the owner-operators are ultimately responsible. These items may include fuel, insurance,
tires, and other necessary goods and services. The cost of
these items is then deducted from owner-operators’ compensation in a process known as a “charge-back.” Charge-backs
are noted along with compensation on drivers’ weekly pay
stubs, also known as settlement sheets or statements.
The Department of Transportation (“DOT”) is authorized
to regulate the relationship between owner-operators and
motor carriers, including required terms in their leases. See 49
U.S.C. § 14102(a). The federal Truth-in-Leasing regulations,
49 C.F.R. Part 376, set forth specific requirements with regard
to charge-backs in response to concerns that carriers were taking advantage of owner-operators and overcharging them with
undisclosed mark-ups on certain items. See OOIDA v. Swift
Transp. Co. (“Swift I”), 367 F.3d 1108, 1110 (9th Cir. 2004).
The regulations were originally enforced by the Interstate
Commerce Commission (“ICC”); now that the ICC has been
eliminated, owner-operators have a private right of action to
1
We use “OOIDA” in this opinion to refer to all plaintiffs, and “Swift”
to refer to defendants.
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enforce the regulations. See id.; 49 U.S.C. § 14704(a). Section
14704(a)(1) provides a right to injunctive relief, and (a)(2)
provides a right to seek damages for injuries “sustained by a
person as a result of an act or omission of [a] carrier or broker
in violation of this part.” 49 U.S.C. § 14704(a).
Plaintiffs brought suit under section 14704(a) against Swift
“alleging that the carriers’ standard form lease agreements
violate the Truth-in-Leasing regulations in various respects.”
Swift I, 367 F.3d at 1110. Plaintiffs sought declaratory relief,
injunctive relief, and damages. As a result of this litigation,
Swift revised its leases beginning January 1, 2003. 49 C.F.R.
§ 376.12(h), 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. The lessor shall be afforded copies of
those documents which are necessary to determine
the validity of the charge.
The district court found that Swift’s form lease agreements
used prior to 2003 (the “Old Form” lease), violated the Truthin-Leasing regulations because they “did not disclose the fact
that certain of the charge-backs included a ‘mark-up.’ ”
OOIDA v. Swift Transp. Co. (“DC Opinion & Order”), No.
CV-02-1059-PHX-PGR, 2007 WL 2808997, at *2 (D. Ariz.
Sept. 27, 2007). By contrast, the district court found that
Swift’s leases entered into on or after January 1, 2003
(“Revised Lease”) complied with section 376.12(h) because
they disclosed that charge-backs would include certain administrative costs and other fees such as “the cost of the fuel,
taxes, other government fees and charges, delivery/freight
costs and administrative expenses.” See id. at *5-6 & n.11.
Swift’s Revised Lease also discloses each item that will be
subject to a charge-back and either a flat-fee amount for that
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charge-back or other information relevant to determining the
price. Swift’s settlement statements (which are similar to pay
stubs or receipts) list the amount deducted from owneroperators’ compensation. Those amounts match the amount
listed earlier on the leases. However, Swift’s Revised Lease
does not disclose what portion of that price is attributable to
costs and what portion is profit, administrative fees, or other
charges.
The district court granted in part and denied in part the parties’ cross-motions for summary judgment. It concluded that,
while Swift’s Old Form lease violated the Truth-in-Leasing
regulations, injunctive relief was not necessary because
Swift’s current lease complied with the regulations. Id. at *9.
It also held that Plaintiffs had failed to prove damages and
that restitution and disgorgement were not available under the
regulations. Plaintiffs filed a motion to reconsider, which the
district court denied on September 15, 2009. OOIDA v. Swift
Transp. Co., No. CV-02-1059-PHX-PGR, 2009 WL 2983206
(D. Ariz. Sept. 15, 2009). This appeal followed.
II.
STANDARD OF REVIEW
We review a district court’s interpretation of a federal statute de novo, United States v. Migi, 329 F.3d 1085, 1087 (9th
Cir. 2003), and we do the same for its grant of summary judgment. Howard v. Everex Sys., Inc., 228 F.3d 1057, 1060 (9th
Cir. 2000). In evaluating a motion for summary judgment, we
infer all facts in favor of the non-moving party. SEC v. Koracorp Indus., Inc., 575 F.2d 692, 698 (9th Cir. 1978). A district
court’s decision to grant or deny an injunction is reviewed for
abuse of discretion. Id. at 701.
III.
THE DISCLOSURE & DOCUMENTATION
REQUIREMENTS OF 49 C.F.R. § 376.12(h)
Plaintiffs argue that the district court erred in concluding
that Swift’s Revised Lease complied with 49 C.F.R.
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§ 376.12(h). Plaintiffs contend that the Revised Lease (post2003), while an improvement over the Old Form Lease (pre2003), nonetheless falls short of compliance with the regulations because it does not disclose the amount of Swift’s profits and mark-ups as components of the charge-back prices.
[1] When construing a statute or regulation, we look to
“the whole law, and to its object and policy,” not simply to
“a single sentence or member of a sentence.” Doe v. Rumsfeld, 435 F.3d 980, 987 (9th Cir. 2006) (quoting John Hancock Mut. Life Ins. Co. v. Harris Trust & Sav. Bank, 510 U.S.
86, 94-95 (1993)). Section 376.12(h) provides as follows:
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.
We have previously held that “[a] primary goal of this regulatory scheme is to prevent large carriers from taking advantage
of individual owner-operators due to their weak bargaining
position.” Swift I, 367 F.3d at 1110; see also Lease and Interchange of Vehicles (“Notice of Proposed Rulemaking” or
“NPRM”), 46 Fed. Reg. 44013, 44014, 1981 WL 107853
(Sept. 2, 1981), (“It appears that, in certain instances, carriers
are defeating the intent of the present regulations by profiting
from charge-back items at the expense of owner-operators.”);
Lease and Interchange of Vehicles (“Final Rule”), 47 Fed.
Reg. 51136, 51139, 1982 WL 146684 (Nov. 12, 1982), (discussing one purpose of the Final Rule, to “deter any excessive
‘mark up’ of insurance, as discussed in our notice of proposed
rulemaking”). 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 pre-
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vents 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. See Lease and
Interchange of Vehicles Ex Parte No. MC-43 (Sub-No. 7),
131 M.C.C. 141, 151-52, 1979 WL 11158, at *8 (Jan. 9,
1979), RED Add. 13 (“We believe that a prime concern of
lessors in choosing insurance coverage is knowing exactly
how much they will be charged. With this information they
are better equipped to obtain the best insurance coverage possible.”).
[2] In furtherance of these goals, section 376.12(h) contains both a disclosure provision, requiring carriers to disclose
the charges they will deduct from lessors’ compensation, and
a documentation provision, requiring carriers to offer proof
that lessors have been charged appropriately. We address the
disclosure and documentation provisions separately below.
A.
Disclosure
Swift’s Revised Lease lists all charge-backs to which lessors are subject, along with either the flat-fee price for that
charge-back (i.e., $15/week) or other information relevant to
compute the price (i.e., number of gallons times the posted
pump price). The Lease also discloses whether the price of a
charge-back includes a mark-up or administrative fee.
OOIDA argues, however, that the disclosure requirements
mandate that Swift recite precisely how all charge-backs are
to be computed, including informing lessors what portion of
the price is composed of Swift’s actual costs versus its profits,
administrative expenses, etc. In this case, they argue that
Swift’s mere statement of the dollar amount to be charged and
the notice that the flat fee included “administrative costs” was
insufficient to satisfy the disclosure requirements. Thus, the
crux of the current dispute is whether motor carriers must
simply disclose (1) the full charge they impose on owneroperators (or, in the case of a variable-rate charge, the method
of computing the charge) and (2) the fact that certain charges
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included mark-ups; or whether, as plaintiffs contend, they
must also disclose (3) the complete methods by which such
charges are calculated, including documentation of their costs
to third parties and profits realized.
[3] Defendants do not cross-appeal the district court’s
declaratory judgment that their Old Form Lease was unlawful.
See DC Opinion & Order, 2007 WL 2808997, at *2
(“conclud[ing] that . . . Swift’s old form leases . . . violated
the charge-back regulation at least to the extent that those
leases did not disclose the fact that certain of the charge-backs
included a ‘mark-up’, i.e., a sum added by Swift as compensation for its administrative costs in supplying the products or
services to the owner-operators and/or to provide it with a
profit on those products and services”). Therefore, we do not
review in this opinion the question of whether the regulations
mandate that carriers disclose the existence of mark-ups.
Instead, we consider the narrower question of whether Swift’s
current lease, which includes such disclosures, is lawful without revealing the additional, more detailed information Plaintiffs argue is required.
[4] This is an issue of first impression in this Circuit.
While this Court has already heard an earlier appeal in this
case, that appeal concerned only a denial of preliminary
injunction and its analysis was confined to the correct standard for issuing such an injunction. The Eleventh Circuit, the
only court of appeals that has analyzed this issue on the merits, recently filed an amended opinion persuasively addressing
a similar claim. The court concluded that, at least with respect
to flat-fee charge-backs, “376.12(h) does not require [carriers]
to do more than disclose the flat-fee in the lease and follow
up with settlement statements that explain the final amount
charged back.” OOIDA v. Landstar Sys., Inc. (“Landstar II”),
622 F.3d 1307, 1320 (11th Cir. 2010).
[5] While the text of the regulation does not rule out either
party’s proffered construction, a plain language reading
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slightly favors Defendants’ simpler construction. The text of
the regulation simply mandates that the lease (1) identify all
goods and services that will be subject to a charge-back; and
(2) provide lessors with a way to determine how much they
will be charged for that product or service (or “a recitation as
to how the amount of each item is to be computed”). 49
C.F.R. § 376.12(h). The requirement that carriers disclose
“how the amount of each item is to be computed” appears to
be, but is not necessarily, satisfied where carriers simply do
the full calculation in advance and supply owner-operators
with the exact price they will be charged. Similarly, for
variable-rate fees, identifying how the price will be calculated
may, but need not necessarily, involve disclosing exactly what
the carrier’s costs and profits are. However, as the Eleventh
Circuit noted, neither party’s interpretation contradicts the
meaning of the text. See Landstar II, 622 F.3d at 1320 (noting
that “both [parties] make sensible arguments about the plain
language of § 376.12(h).”). Therefore, we must move beyond
the four corners of the regulation to examine its purpose and
history.
[6] Beyond the text of the regulation, Plaintiffs contend
that its purpose would also be served by requiring carriers to
disclose their profits and the quantity of any mark-ups they
include in charge-backs. They argue that the final version of
section 376.12(h) incorporated the ICC’s disapproval (voiced
earlier in its Notice of Proposed Rulemaking) of the profits
carriers were making off of charge-backs to the detriment of
owner-operators.2 Thus, it intended to curb excessive mark2
Defendants contend that the NPRM issued in 1981, 46 Fed. Reg.
44013, 44014-15, 1981 WL 107853 (Sept. 2, 1981), is irrelevant because
it is superceded by the Final Rule, which contains narrower language. The
Eleventh Circuit also heavily emphasized this point, effectively disregarding the NPRM in its decision. Landstar II, 622 F.3d at 1320-22. While
Defendants and the Eleventh Circuit are correct that the Final Rule, to the
extent that it differs from the NPRM, controls, dismissing the NPRM commentary in its entirety is not warranted given the ICC’s reference to it in
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ups by motor carriers and level the playing field with regard
to information about how charge-backs are computed. See
Final Rule, 47 Fed. Reg. 51136, 51139, 1982 WL 146684
(Nov. 12, 1982). However, OOIDA seems to erroneously
equate “excessive” with “any” mark-ups in this instance. See
DC Opinion & Order, 2007 WL 2808997, at *2. The district
court, and virtually every court that has addressed the issue,
has correctly concluded that profiting from charge-backs is
not per se unlawful. Id.; see also, e.g., Landstar II, 622 F.3d
at 1319; OOIDA v. C.R. England, Inc., 508 F. Supp. 2d 972,
981 (D. Utah 2007) (“[C]harge-backs that include profits and
fees are not per se unlawful under § 376.12(h) . . . .”). Thus,
to ascribe to the regulations a purpose of eliminating carriers’
profits is unsustainable.3 The central purpose of the statute is
the Final Rule itself. See Final Rule, 47 Fed. Reg. 51136, 51139, 1982 WL
146684 (Nov. 12, 1982), (discussing the need to protect lessors from
unfair carrier practices, “as discussed in our notice of proposed rulemaking”). However, the NPRM does not merit the weight that Plaintiffs would
give it because the Final Rule refers to changes made as a result of comments indicating the proposed rule would be onerous on carriers. See id.
at 47 Fed. Reg. 51139; Landstar II, 622 F.3d at 1320-22 (discussing the
differences between the proposed and final versions of the rule); see also
id. at 1319 (“Few principles of statutory construction are more compelling
than the proposition that Congress does not intend sub silentio to enact
statutory language that it has earlier discarded in favor of other language.”) (quotations omitted). Therefore, we refer to the NPRM throughout this opinion as probative evidence of the regulation’s purpose to the
extent that it is consistent with the text and commentary in the Final Rule.
3
One case Plaintiffs cite to support their contention that a full itemization is necessary has been persuasively dismissed by the Eleventh Circuit.
In Ledar II, the carrier’s lease contained neither a disclosure of what services and products would be charged back to the owner-operators, nor a
description of how the amount of those charges would be calculated. See
OOIDA v. Ledar Transport, No. 00-0258-CV-W-FJG, 2004 WL 5249148,
*5 (W.D. Mo. Dec. 30, 2004) (“Ledar II”) (“Ledar’s Lease Agreement
with Plaintiffs failed to identify [numerous] items that were charged-back
against their compensation . . . .”). The court also made the following finding of fact: “Ledar charged-back for Comdata-related transaction fees in
excess of what Ledar advanced on behalf of Plaintiffs and Class members.
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not to limit carriers’ profitability; rather, it is to ensure that
they do not reap unfair profits “at the expense of owneroperators.” See NPRM, 46 Fed. Reg. 44013, 44014-15, 1981
WL 107853 (Sept. 2, 1981).
[7] Thus, the district court reasoned that courts should construe the regulation to ensure that owner-operators have fair
notice of any fees they will be required to pay. See DC Opinion & Order, 2007 WL 2808997, at *4. This construction is
reasonable given the regulation’s text and the competing values of fairness and efficiency cited in the regulatory history.
Compare NPRM, 46 Fed. Reg. 44013, 44014, 1981 WL
107853 (Sept. 2, 1981) (“It appears that, in certain instances,
carriers are defeating the intent of the present regulations by
profiting from charge-back items at the expense of owneroperators.”); with Final Rule, 47 Fed. Reg. 51136, 51139,
1982 WL 146684 (Nov. 12, 1982) (“The parties contend that
the costs and administrative burdens associated with the proposed rule would be enormous . . . . In light of these comments, we conclude that, rather than require carriers to state
with specificity the amount of charge-backs, we should,
instead, require that the lease contain the charge-back items,
Ledar hid its actual costs by ‘whiting out’ the actual costs in documentation provided to drivers.” Id. at *6 (footnote omitted). The court’s conclusion of law on this issue states, “The regulatory history of Section
376.12(h) indicates that charge-backs that exceed the actual amount
advanced by the motor carrier are unlawful.” Id. at *6 n.36 (citing NPRM,
46 Fed. Reg. 44013 (Sept. 2, 1981)).
The Eleventh Circuit pointed out that Ledar II relies on the 1981 Notice
of Proposed Rulemaking, rather than the Final Rule, in determining that
mark-ups themselves are unlawful. Landstar II, 622 F.3d at 1319. While
we note above that the NPRM should not be dismissed entirely, in this
case its language is not supported by the Final Rule. The Final Rule does
not indicate in any way that mark-ups are per se unlawful; indeed, it
attempts to deter “excessive mark-ups,” suggesting that only a certain subset of mark-ups are problematic. Therefore, we agree with the Eleventh
Circuit that Ledar II’s analysis is flawed and does not merit concurrence
with its conclusions.
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together with a recitation as to how the amount of each item
is computed.”). Other courts considering this issue have come
to similar conclusions. See Landstar II, 622 F.3d at 1319-22;
C.R. England, 508 F. Supp. 2d at 981-82.
[8] Disclosure of the amounts owner-operators will be
charged furthers this purpose of fair notice by ensuring that
carriers do not lure lessors to purchase goods from them with
the false promise of at-cost or low charges, only to hit them
later with charges that they were unaware of before they
received their settlement statements. A complete disclosure of
profits and third-party costs is unnecessary to reach this goal.
[9] Defendants’ position is the strongest with regard to its
flat-fee charge-backs. If the carrier charges a flat fee, there is
no danger of surprise when the operators receive their settlement statements. Lessors can plan accordingly and purchase
their goods and services elsewhere if they can find a better
deal. See OOIDA v. Rocor Int’l, Inc., No. CIV-98-846-L,
2000 WL 35512897, at *3 (W.D. Okla. July 19, 2000)
(“[Carrier’s] argument that it need not disclose the method of
computing the $35.00 charge because [it is] a ‘flat fee’ does
not alter the fact that it did not disclose the amount charged
. . . .”). A listed price is thus the clearest way to comply with
the requirement that carriers inform lessors how their charges
will be calculated, as nothing is left to chance or surprise.
Neither the text nor the purpose of the regulation requires
more. See Final Rule, 47 Fed. Reg. 51136, 51139, 1982 WL
146684 (Nov. 12, 1982) (concluding that whenever carriers
cannot “state with specificity the amount of charge-backs, we
should, instead, require that the lease contain . . . a recitation
as to how the amount of each item is computed”); Landstar
II, 622 F.3d at 1320.
Construing the regulation becomes more complicated, however, when the carrier does not charge a flat fee, but rather
some variable rate for a product or service. In such cases, simply disclosing that a charge will include a mark-up may be
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insufficient because, without knowing what the mark-up will
be, the lessor may have no ability to determine up front what
she will be required to pay. Indeed, the Eleventh Circuit’s
analysis in Landstar II explicitly distinguished flat-fee from
variable-rate charge-backs, presuming that a full accounting
of mark-ups was required for variable-rate prices in order for
lessors to know what they would be charged. The court noted,
Landstar admits that § 376.12(h) mandates the disclosure of the motor carrier’s third-party, actual costs
for variable-rate charge-backs. For example, Landstar agrees that it must disclose its actual, third-party
costs for charge-backs under certain variable-rate
formulas: for instance, it admits that it must provide
its actual costs for the LCAPP Tire Program, which
specifies in the lease that the charge-back is “Landstar’s vendor cost + $6 administrative fee.”
Landstar II, 622 F.3d at 1320; see also Tayssoun Transp., Inc.
v. Universal Am-Can, Ltd., No. Civ.A. H-04-1074, 2005 WL
1185811, at *17 (S.D. Tex. Apr. 20, 2005) (holding that
leases containing variable-rate insurance charge-backs with
no comprehensible explanation of how they were calculated
violated § 376.12(h)); C.R. England, 508 F. Supp. 2d at 98182 (finding violation of § 376.12(h) for variable-rate chargebacks that were not disclosed in the lease); OOIDA v. Ledar
Transport, No. 00-0258-CV-W-2-ECF, 2000 WL 33711271,
at *7 (W.D. Mo. Nov. 30, 2000) (Ledar I) (“For the few items
that Defendant’s Standard Lease Agreement does specify, it
fails to recite how the amount of each such item is computed
(e.g., whether Defendant will deduct simply the actual cost of
the charge, or the cost plus administrative fees, etc.).”); Cunningham v. Lund Trucking Co., 662 F. Supp. 2d 1262, 1274
(D. Or. 2009) (finding a violation of 376.12(h) for failure to
disclose how deductions for insurance premiums and license
fees would be calculated).
The Eleventh Circuit’s analysis goes further than the district court in this case with regard to the disclosures required
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for variable-rate charge-backs. Landstar II, 622 F.3d at 1320.
Indeed, it appears Landstar conceded that it was required to
provide a full itemization of its costs to third-parties for variable fees. See id. (“Landstar admits that § 376.12(h) mandates
the disclosure of the motor carrier’s third-party, actual costs
for variable-rate charge-backs.”). While section 376.12(h)
makes no explicit distinction between flat and variable fees,
the Eleventh Circuit’s rationale is sensible in that it reconciles
the text of the regulation with its articulated purposes in both
the NPRM and the Final Rule. Where carriers have charged
a flat fee, no further disclosure of “how” a price is to be determined is warranted, for lessors already have the exact price
they will be expected to pay. Where carriers have charged a
variable rate, the court held, the regulation requires a clear
disclosure of how the price will be calculated.
However, we decline to make the blanket assertion that all
variable-rate charge-backs per se require a disclosure of the
amount of carriers’ profits and costs. A full “recitation as to
how the amount of each item is computed” does not necessarily require carriers to disclose their precise profits or costs to
third-parties, even for variable-rate fees. Instead, a carrier
could identify some fixed benchmark, multiplier, percentage
mark-up, or other formula that would allow the lessor to calculate his price, without revealing how much of the mark-up
contained profits versus other expenses. For example, Swift’s
2007 Revised Lease sets a formula for weekly collision insurance rates based on the stated value of the lessor’s vehicle. By
contrast, as Swift’s counsel conceded at oral argument, certain
variable-rate charge-backs would require a full, itemized disclosure. For example, if a charge-back was described as being
based in part on the carrier’s actual third-party costs, see, e.g.,
Landstar II, 622 F.3d at 1320 (discussing a lease specifying
“that the charge-back is ‘Landstar’s vendor cost + $6 administrative fee’ ”), those costs would have to be disclosed so that
the lessor could determine what it needed to pay.
[10] The controlling principle is that carriers must provide
sufficient information such that lessors can determine in
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advance what their final costs will be. Because the variable
fees Plaintiffs challenge can be determined without disclosing
Swift’s actual costs or profits, those costs or profits need not
be itemized. For instance, its 2007 Revised Lease charges for
collision insurance at a weekly rate of “$.048/$100 of value.”
For such rates, the regulation does not require disclosure of
how each component of the price is calculated, except to the
extent they are necessary to determine the final price. This
narrower construction is sufficient to arm lessors with the
information to determine what will be deducted from their
paychecks and alert them when the charge-back includes a
mark-up so that they can be wary of any potential abuses.
We therefore affirm the district court’s finding that Swift’s
Revised Lease complies with the disclosure requirements of
section 376.12(h).
B.
Documentation
[11] In addition to its disclosure provision, section
376.12(h) requires Swift to provide “copies of those documents which are necessary to determine the validity of the
charge.” Appellants contend Swift violated this provision by
only listing the final amount charged on its settlement statements instead of disclosing the amount of Swift’s mark-ups.
At issue is the intended meaning of “validity.” Appellants
would construe validity to mean the “fairness” of the charge,
such that owner-operators could verify how much profit Swift
had made through each charge-back and what percentage of
the price charged derived from Swift’s actual costs. Swift, on
the other hand, construes “validity” to mean simply that the
charge initially promised is the charge actually deducted from
owner-operators’ paychecks. In other words, for example,
owner-operators only need information sufficient to verify
that if Swift said it would charge them $25 per week for insurance, it actually charged them $25 per week.
[12] Because we conclude that the disclosure requirements
do not mandate a complete itemization of Swift’s profits and
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fees (except where required to calculate variable-rate fees),
we similarly hold that the documentation provision does not
require such an itemization. Indeed, the district court concluded that the weekly settlement statements satisfy the documentation requirement to the extent that they “provide
sufficient information to allow [owner-operators] to determine
whether or not the charge-back rates previously disclosed to
them were being used to determined their charge-backs.” DC
Opinion & Order, 2007 WL 2808997, at *4. This is all the
regulation requires to allow lessors to ensure that they only
pay for what they have agreed to pay in advance. See Landstar II, 622 F.3d at 1319-20; Rocor Int’l, 2000 WL 35512897,
at *3 (“Likewise, ROCOR’s argument that it need not disclose the method of computing the $35.00 charge because [it
is] a ‘flat fee’ does not alter the fact that it did not disclose
the amount charged and has not provided ‘copies of those
documents which are necessary to determine the validity of
the charge.’ ”) (quoting 49 C.F.R. § 376.12(h)).
We affirm the district court’s finding that Swift’s Revised
Lease complies with the documentation requirements of section 376.12(h).
IV.
RESTITUTION AND DISGORGEMENT
Plaintiffs argue that section 14704(a)(1)’s provision authorizing the court to provide injunctive relief permits them to
seek restitution and disgorgement for Swift’s past violation of
Truth-in-Leasing regulations. They contend the district court
erred in finding that the statute confined the court’s equitable
powers to injunctive relief only.
The district court notes that this “is not a settled issue in the
Ninth Circuit.” OOIDA v. Swift Transp. Co., No. CV-021059-PHX-PGR, 2009 WL 2983206, at *2 (D. Ariz. Sept. 15,
2009). However, the district court’s approach is supported by
both the statutory text, 49 U.S.C. § 14704(a)(1) (“A person
may bring a civil action for injunctive relief . . . .”), and out-
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OWNER-OPERATOR v. SWIFT TRANSPORTATION
of-circuit case law on this issue. See Landstar II, 622 F.3d at
1324 (“Injunctive relief constitutes a distinct type of equitable
relief; it is not an umbrella term that encompasses restitution
or disgorgement.”) (citing OOIDA v. New Prime, Inc., 213
F.R.D. 537, 545 (W.D. Mo. 2002)); C.R. England, 508 F.
Supp. 2d at 983-84 (concluding that § 14704 only authorized
injunctive relief, damages, and attorney’s fees).
[13] Plaintiffs argue that courts always retain their full
equitable powers unless a statute expressly removes them. See
Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946).
However, Porter and its progeny contain the caveat that “unless otherwise provided by statute,” the court retains its full
equitable powers. See id. at 398-99 (construing a statute giving the district court power, “upon a proper showing, to grant
‘a permanent or temporary injunction, restraining order, or
other order’ ”) (emphasis added); see also CFTC v. Co Petro
Mktg. Grp., Inc., 680 F.2d 573, 583-84 (9th Cir. 1982) (construing a statute with open-ended language conferring powers
on the court); CFTC v. Wilshire Inv. Mgmt. Corp., 531 F.3d
1339, 1344 (11th Cir. 2008) (same). In this case, by contrast,
the statute has done precisely that; it has provided a different
scheme of enforcement, listing only injunctive relief to the
exclusion of other equitable remedies. Indeed, it “ ‘is an elemental canon of statutory construction that where a statute
expressly provides a particular remedy or remedies, a court
must be chary of reading others into it.’ ” Landstar II, 622
F.3d at 1323-24 (quoting Meghrig v. KFC Western, Inc., 516
U.S. 479, 488 (1996)). Therefore, the district court’s reading
of the statute is the most sensible in light of longstanding case
law and principles of statutory interpretation.
Plaintiffs also attempt to argue that Swift I, the Ninth Circuit’s earlier opinion in this case, supports their position with
regard to the availability of equitable remedies. 367 F.3d
1108, 1112-14 (9th Cir. 2004). However, Swift I’s discussion
of “traditional equitable discretion” relates solely to the test
courts should use in determining whether to grant a prelimi-
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nary injunction. It is thus inapposite to the question presented
here as it concerns the court’s “discretion to determine the
appropriateness of injunctive relief,” not its discretion to
award other forms of equitable relief in the face of a statute
providing only for injunctive relief. Id. at 1112.
[14] We affirm the district court’s determination that restitution and disgorgement are not permitted under section
14704(a)(1).
V.
DAMAGES
Plaintiffs argue that the district court erred in concluding
that they were not entitled to recover damages under section
14704(a)(2) for Swift’s past violation of the Truth-in-Leasing
regulations. The district court found that Plaintiffs had failed
to demonstrate “actual damages” as a result of Defendants’
violations, which the court concluded was required by the
statute. DC Opinion & Order, 2007 WL 2808997 at *7-9.
Plaintiffs, by contrast, argue that the proper measure of damages in this instance is the amount of Swift’s undisclosed and
undocumented mark-ups.
“We review the trial court’s determination that damages
were not proved under the clearly erroneous standard.” Landstar II, 622 F.3d at 1325 (citing Anderson v. Bessemer City,
470 U.S. 564, 573 (1985)). However, we review its interpretation of a federal statute de novo. Migi, 329 F.3d at 1087 (citations omitted).
[15] The district court’s conclusion regarding the standard
for proving damages comports with the statutory text and case
law on this question. The text of section 14704(a)(2) states
plainly that
[a] carrier or broker providing transportation or service subject to jurisdiction under chapter 135 is liable for damages sustained by a person as a result of
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OWNER-OPERATOR v. SWIFT TRANSPORTATION
an act or omission of that carrier or broker in violation of this part.
49 U.S.C. § 14704(a)(2) (emphases added). Each court that
has addressed the issue, including our own, has agreed that
the statute requires proof of actual damages. See Fulfillment
Servs., Inc. v. United Parcel Serv., Inc., 528 F.3d 614, 621-22
(9th Cir. 2008); see also, e.g., Landstar II, 622 F.3d at 1326;
OOIDA v. New Prime, Inc., 339 F.3d 1001, 1012 (8th Cir.
2003). We are bound by Fulfillment Services and the text of
the statute itself to require actual damages.
[16] Using the legal standard of actual damages, the district court’s decision to grant summary judgment to Swift on
the issue of damages was not in error. As the court pointed
out, Plaintiffs failed to produce evidence of actual damages,
arguing instead that they merited monetary awards in the
amount of Swift’s undisclosed mark-ups. DC Opinion &
Order, 2007 WL 2808997, at *8-9. Plaintiffs, on appeal, cannot point to any evidence in the record of monetary loss they
have suffered as a result of Swift’s violations. Since the mere
act of charging a mark-up does not violate the regulations,
Plaintiffs cannot prove damages simply by showing that Swift
sometimes charged more than its actual costs for chargebacks. See C.R. England, 508 F. Supp. 2d at 981-82 (“Simply
proving that Defendant charged more to Plaintiffs for a product or service than it paid to a third-party vendor is insufficient, without more, to establish that Plaintiffs have sustained
damages as a result of a disclosure violation under
§ 376.12(h).”).
We therefore affirm the district court’s determination that
Plaintiffs failed to show actual damages as required under
section 14704(a)(2).
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VI.
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INJUNCTIVE RELIEF
Lastly, Appellants argue the district court erred in not
awarding injunctive relief against Swift for its past violation
of the Truth-in-Leasing regulations.4 The district court concluded that injunctive relief was unnecessary because Swift is
currently compliant with the regulations. DC Opinion &
Order, 2007 WL 2808997 at *9.
“We review permanent injunctive relief for an abuse of discretion or application of erroneous legal principles.” Hunsaker v. Contra Costa Cnty., 149 F.3d 1041, 1042 (9th Cir.
1998). Substantively, there is “[n]o per se rule requiring the
issuance of an injunction upon the showing of [a] past violation.” Koracorp, 575 F.2d at 701. Instead, the district court
has discretion to determine “whether there is a reasonable
likelihood that the wrong would be repeated.” Id. If so, it may
order relief.
Under this deferential standard of review, we hold that the
district court’s denial of injunctive relief was not an abuse of
discretion. Since the court’s declaratory judgment regarding
the Old Form Lease’s violations of Section 376.12(h) is
unchallenged and legally binding on the parties, and Swift’s
Revised Lease complies with the regulations, the court did not
abuse its discretion in determining that injunctive relief was
unnecessary.
VII.
CROSS-APPEAL: STATUTE OF LIMITATIONS
Because we affirm the district court on the issues discussed
above, we do not reach this issue.
4
As the district court notes, injunctive relief would only be available
with regard to OOIDA, as the individual named plaintiffs no longer drive
for Swift. DC Opinion & Order, 2007 WL 2808997 at *9.
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VIII.
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OWNER-OPERATOR v. SWIFT TRANSPORTATION
CONCLUSION
[17] For the foregoing reasons, we affirm the district
court’s finding that Swift’s Revised Lease complies with the
Truth-in-Leasing regulations and its denial of damages,
injunctive relief, restitution, and disgorgement.
AFFIRMED.
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