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A chargeback isn't a sale of insurance

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The 7th Circuit Court of Appeals held today that a chargeback for the cost of insurance is not a sale of insurance, as some owner-operators of leased trucks argued. The Circuit Court also took issue with the District judge’s decision on which statute of limitations applied to the parts of the suit.

In Owner-Operator Independent Drivers Association Inc., et al. v. Mayflower Transit, LLC, No. 08-1679, some owner-operators of trucks leased by Mayflower Transit challenged the company’s policy of reducing price-per-mile payments and other fees by the cost of insurance, a process called chargeback. They argued under 49.U.S.C. Section 14704(a)(2) that a chargeback violates 49 C.F.R. Section 376.12(i), which says “the lessor is not required to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into a lease arrangement.” The owner-operators claimed the requirement to reimburse Mayflower for the insurance is the same thing as buying insurance from Mayflower.

U.S. District Judge Sarah Evans Barker dismissed some of the plaintiffs’ claims for relief after finding that the statute of limitations is two years, even though Section 14704(a)(2) didn’t define a period of limitations for suits on its authority. The owner-operators argued that the residual statute of limitations allows for a four-year period.

Judge Barker held that a chargeback for the cost of insurance isn’t a sale of insurance. She also thought the failure of Section 14705(c), which states a two-year statute of limitations under Section 14704(b), but doesn’t mention Section 14704(a)(2), was a scrivener’s error and that it could be corrected by reading the reference to (b) as if it were referring to (a)(2).

This was a problematic approach, wrote Chief Judge Frank Easterbrook, because Congress enacted and the president signed a statute that places a two-year limitation on administrative complaints under (b), but left (a)(2) to the four-year residual statute of limitations.

“A judge’s belief that Congress planned to do something different but bollixed the job does not alter what the enacted statute provides,” he wrote. “The Constitution gives the force of law only to what is actually passed by both houses of Congress and signed by the President. What Congress meant to do, but didn’t, is not the law.”

Two other Circuit Courts have also addressed this subject and found that (b) must be enforced as written and the period of limitations for suits under (a)(2) is four years.

The 7th Circuit also affirmed that a chargeback is not considered a sale of insurance and does not violate Section 376.12(i). Chief Judge Easterbrook noted that the 8th Circuit reached the same conclusion on chargebacks and no other Court of Appeals has held otherwise. The judges remanded for any further proceedings that may be required by their ruling on the limitations issue.

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  1. Uh oh, someone is really going to get their panti ... uh, um ... I mean get upset now: http://www.theguardian.com/us-news/2015/mar/31/arkansas-passes-indiana-style-religious-freedom-bill

  2. Bryan, stop insulting the Swedes by comparing them to the American oligarchs. Otherwise your point is well taken.

  3. Sociologist of religion Peter Berger once said that the US is a “nation of Indians ruled by Swedes.” He meant an irreligious elite ruling a religious people, as that Sweden is the world’s least religious country and India the most religious. The idea is that American social elites tend to be much less religious than just about everyone else in the country. If this is true, it helps explain the controversy raking Indiana over Hollywood, San Fran, NYC, academia and downtown Indy hot coals. Nevermind logic, nevermind it is just the 1993 fed bill did, forget the Founders, abandon of historic dedication to religious liberty. The Swedes rule. You cannot argue with elitists. They have the power, they will use the power, sit down and shut up or feel the power. I know firsthand, having been dealt blows from the elite's high and mighty hands often as a mere religious plebe.

  4. I need helping gaining custody of my 5 and 1 year old from my alcoholic girlfriend. This should be an easy case for any lawyer to win... I've just never had the courage to take her that far. She has a record of public intox and other things. She has no job and no where to live othe than with me. But after 5 years of trying to help her with her bad habit, she has put our kids in danger by driving after drinking with them... She got detained yesterday and the police chief released my kids to me from the police station. I live paycheck to paycheck and Im under alot of stress dealing with this situation. Can anyone please help?

  5. The more a state tries to force people to associate, who don't like each other and simply want to lead separate lives, the more that state invalidates itself....... This conflict has shown clearly that the advocates of "tolerance" are themselves intolerant, the advocates of "diversity" intend to inflict themselves on an unwilling majority by force if necessary, until that people complies and relents and allows itself to be made homogenous with the politically correct preferences of the diversity-lobbies. Let's clearly understand, this is force versus force and democracy has nothing to do with this. Democracy is a false god in the first place, even if it is a valid ideal for politics, but it is becoming ever more just an empty slogan that just suckers a bunch of cattle into paying their taxes and volunteering for stupid wars.

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