Article

Landstar, OOIDA Settle 'Truth-in-Leasing' Litigation

January 2013, TruckingInfo.com - Feature

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Landstar System and the Owner-Operator Independent Drivers Association announced the end of their decade-long litigation over federal truth-in-leasing regulations, with the Florida-based carrier saying its leases were proven valid and the association saying the lawsuit helped further clarify the regulations.


At issue in the case was Landstar's compliance with federal regulations that govern the leasing relationship between motor carriers and truck owner-operators. Truth-in-leasing regulations cover transparency in trucking transactions and what motor carriers must reveal to their leased owner-operators.

OOIDA filed suit in 2002 against Landstar in an effort to obtain court rulings that would provide further clarity with respect to the legal obligations of motor carriers under the leasing regulations. As a result of the lawsuit, it said in a press release, the meaning of the regulations was further developed by the court.

For instance, the court outlined the obligation of motor carriers with respect to describing charge-backs in lease agreements and making supporting documents available. The requirement for motor carriers to strictly comply with the requirements of the regulations was also confirmed.

In 2006, a judge ruled that Landstar may charge more than it pays for products and services it buys on behalf of the independent truck drivers whose equipment Landstar leases, reports the Jacksonville (Fla.) Business Journal, where Landstar is based. But to do that, it must provide access to documents used in determining the validity of such charges, which Landstar deducts from the amount it pays owner-operators.

Both Landstar and the OOIDA saw the 2006 ruling as a victory, notes reporter Michael Clinton. But litigation continued until this week's announcement. In the end, Landstar says, it did not have to pay any injunctive or monetary relief to the OOIDA.

"After a decade of proceedings, including two trials and extensive appeals, this litigation comes to an end after affirming the validity of Landstar's current leases in place with all of its BCOs and with no award of injunctive or monetary relief of any kind to the plaintiffs," according to Michael Kneller, Landstar vice president and general counsel, in a release.

According to Jim Johnston, president of OOIDA, the organization is also ready to put the litigation in the past.

"Landstar is a reputable motor carrier with a history of retaining owner-operators who are among the most highly skilled and professional individuals in the trucking industry. We are optimistic that we can work together in the future in advancing the goals of owner-operators," he said in a statement.

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