Welcome to Transportation Law Today

Managed by Paul J. Loftus, a partner at Dinsmore & Shohl LLP, Transportation Law Today provides professionals in the rail, transit, inland maritime, and trucking industries with current news and analysis of laws, rulings, and regulatory policies.

Monday, July 30, 2012

USDOT Fines Travelocity over Fee Disclosure

Last week the USDOT announced it had fined online travel-site Travelocity for violating rules on full-fare disclosure. Travelocity was fined $180,000.00.

A investigation by DOT's Aviation Enforcement Office found that potential customers booking international flights did not see all surcharges and other fees until an itinerary was selected, where the full fare was then disclosed. The rationale for the fine was the consumers may have selected certain routes on the basis of price, for which the full price was not actually disclosed, and therefore may have prevented them for selecting other options based on price.

In a somewhat related action, the same enforcement office also fined air carrier World Atlantic Airlines for failing to provide previously booked flights after charter operator Direct Air missed payments to the carrier and later ceased operations. Here is the World Atlantic announcement, which also resulted in a $180,000.00 fine.

A $180,000 fine seems very steep for a carrier that did not complete flights for which it had contracted, but had not been paid by the charter operator. I certainly have sympathy for charter passengers left high and dry when a charter operator ceases operations, which happened here, but basically the air carrier was fined $180K for requiring payment before flying, which is against DOT rules. DOT rules also prevent charter flights from being canceled less than 10 days before the scheduled departure.

Tuesday, July 17, 2012

FRA & OSHA Enter Agreement to Enforce FRSA Whistleblower Complaints

The Federal Railroad Administration (FRA) has announced an agreement with the Department of Labor's Occupational Safety & Health Administration (OSHA) to "Protect Railroad Workers from Retaliation." The FRA's press release is attached here. The agreement addresses whistle blower complaints made under the Federal Rail Safety Act (FRSA), specifically, 49 USC 20109.

The agreement, or MOA in government-speak (Memorandum of Agreement) between the agencies, is attached here.

Under the FRSA, as amended in 2007, rail workers can bring complaints of harassment and other issues to OSHA for treatment as a whistle blower complaint, under an administrative process. Various complaints by employees have resulted in monetary awards to whistle blowers, including at times punitive damages awarded by the DOL's Administrative Law Judges. It remains to be seen whether some of the more significant rewards are litigated beyond the DOL administrative process, which I predict will happen.

With regard to the FRA/OSHA agreement, the MOA essentially is an information sharing agreement under which FRA is to advise rail employees who bring complaints to them of their right to bring the complaint to OSHA. Likewise, OSHA will send the FRA complaints it receives under the FRSA for potential violations of FRA regulations. Also, OSHA is to advise FRA when it "learns of a potential violation of an FRA accident/incident reporting violation under 49 CFR part 225, or other violation of federal rail safety regulations."

Finally, FRA's enforcement staff is to be trained in "recognizing complaints of retaliation under 49 USC 20109" and to assist OSHA staff "in recognizing potential violations of Federal railroad safety regulations revealed during investigations" under the FRSA.

A likely result then from a whistle blower complaint to OSHA from a rail employee is a potential FRA citation, and fine, for a violation of FRA regulations uncovered by the employee's complaint. In other words, potentially two penalties for the same alleged conduct.

Monday, July 9, 2012

Fourth Circuit Upholds $10 Million Award to Physician Injured During Boat Demo

In an unpublished opinion released today, the U.S. Court of Appeals for the Fourth Circuit in Richmond, affirmed the judgment of the U.S. District Court/E.D. North Carolina which awarded nearly $10.4 million to a physician injured during a sea trial of a Triton 2286 center console.

The plaintiff was injured during a demo or sea-trial that took place during a small craft advisory off Beaufort, NC. An employee of Triad Marine Center was at the controls when the 22 ft boat hit a wave head on, rose into the air, and "slammed back down" causing the prospective buyer to fall and injure his ankles. At trial the injured physician claimed permanent disability from the ankle injuries and his need for continued opioid pain medication.

The District Court, at the underlying bench trial under admiralty jurisdiction, found the joint defendants (the salesman and dealer employer) negligent and awarded the Plaintiff a total verdict of $10,397,291.58, of which $3,320,995.58 was prejudgment interest. The prejudgment interest was calculated at NC's statutory interest rate for judgments of 8%, as opposed to the federal rate (which is typically applied post judgment), which is currently 0.21%.

The Court, in affirming the District Court's use of the NC-state rate for prejudgment interest upheld the lower court's discretion to look to state law "or other reasonable guideposts indicating a fair level of compensation." The Fourth Circuit noted contrary opinions from other Circuits, but affirmed the lower court's exercise of discretion in choosing the state rate. Because this opinion is not published, it does not establish precedent in the Circuit for prejudgment interest rates in maritime personal injury cases.

Ironically, the District Court will be required to utilize the statutory rate for post judgment interest, set by 28 U.S.C. 1961, which again is the minuscule rate of 0.21 %, for the period the appeal has been pending.

Tuesday, July 3, 2012

PHMSA Rules Tort Claim for Haz Mat Package Warning Preempted

The USDOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a ruling, published in today's Federal Register, which preempts a common law tort action for design, manufacture and marking (including warnings) for a haz mat package.

The underlying event was the explosion of a DOT specification 39 cylinder, which exploded in January 2003 when placed in 180 deg. water. The explosion killed Kenneth Elder, whose survivors brought a product liability action against the cylinder manufacturer.

PHMSA's ruling came after the manufacturer petitioned the agency to make a preemption ruling on the underlying tort claims. The Hazardous Materials Transportation Act gives the agency authority to make such rulings, under 49 U.S.C. 5125(d).

Under the HMTA, claims relating to design, manufacture and labeling are preempted if the "non-federal requirement (i.e. a lawsuit seeking to impose an additional warning) is not "substantively the same" as federal regulation under the haz mat act. This is a somewhat different standard than preemption under the Federal Rail Safety Act (FRSA) - 49 U.S.C. 20106 - which permits more stringent state regulation covering the same subject matter as federal rail regulations if the state regulation is meant to address a local safety hazard and does not burden interstate commerce.

PHMSA determined that any "state requirement, including a State's common law" which is not substantively the same as the federal regulations on the design, manufacturing, or marking of a haz mat package is preempted, and thus, the underlying claim that Mr. Elder's death was a result of an improper design, marking, or warning of the cylinder was preempted. PHMSA did emphasize, however, that the HMTA preemption provision does not insulate anyone from violating a haz mat regulation or when the packaging does not conform to a specification under the haz mat regulations.

The procedure utilized by the defendant manufacturer, filing an administrative petition with PHMSA seeking a preemption ruling, is interesting. Unlike the FRSA, the HMTA specifically permits PHMSA to make a preemption decision on the legal claims brought Mr. Elder's survivors. So, in effect, an administrative agency has made a preemption decision which presumably will end a legal case pending in the Courts.

Monday, July 2, 2012

Happy Birthday to Transportation Law Today!

It was one year ago (yesterday actually), that Transportation Law Today's inaugural post was published. Thank you to all of you who have viewed the blog and posted comments during the last year. From our early posts, which for some reason were extremely popular in Latvia, to our growing audience, thank you for your visits and views.

As a practicing attorney, the "today" portion of "Transportation Law Today" has always been a challenge, but I attempt to provide interestng news and current developments about surface transportation from courts, regulators, and other sources. I look forward to many posts in the future, and again thanks to our readership.

P.S. I've actually been to Latvia - beautiful country.

Thanks again to everyone for the last year. - PJL.