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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. The voices of the prophets are more on blogs than subway walls these days, Dawn. Here is the voice of one calling out in the wilderness ... against a corrupted judiciary ... that remains corrupt a decade and a half later ... due to, so sadly, the acquiescence of good judges unwilling to shake the forest ... for fear that is not faith .. http://www.ogdenonpolitics.com/2013/09/prof-alan-dershowitz-on-indiana.html

  2. So I purchased a vehicle cash from the lot on West Washington in Feb 2017. Since then I found it the vehicle had been declared a total loss and had sat in a salvage yard due to fire. My title does not show any of that. I also have had to put thousands of dollars into repairs because it was not a solid vehicle like they stated. I need to find out how to contact the lawyers on this lawsuit.

  3. It really doesn't matter what the law IS, if law enforcement refuses to take reports (or take them seriously), if courts refuse to allow unrepresented parties to speak (especially in Small Claims, which is supposedly "informal"). It doesn't matter what the law IS, if constituents are unable to make effective contact or receive any meaningful response from their representatives. Two of our pets were unnecessarily killed; court records reflect that I "abandoned" them. Not so; when I was denied one of them (and my possessions, which by court order I was supposed to be able to remove), I went directly to the court. And earlier, when I tried to have the DV PO extended (it expired while the subject was on probation for violating it), the court denied any extension. The result? Same problems, less than eight hours after expiration. Ironic that the county sheriff was charged (and later pleaded to) with intimidation, but none of his officers seemed interested or capable of taking such a report from a private citizen. When I learned from one officer what I needed to do, I forwarded audio and transcript of one occurrence and my call to law enforcement (before the statute of limitations expired) to the prosecutor's office. I didn't even receive an acknowledgement. Earlier, I'd gone in to the prosecutor's office and been told that the officer's (written) report didn't match what I said occurred. Since I had the audio, I can only say that I have very little faith in Indiana government or law enforcement.

  4. One can only wonder whether Mr. Kimmel was paid for his work by Mr. Burgh ... or whether that bill fell to the citizens of Indiana, many of whom cannot afford attorneys for important matters. It really doesn't take a judge(s) to know that "pavement" can be considered a deadly weapon. It only takes a brain and some education or thought. I'm glad to see the conviction was upheld although sorry to see that the asphalt could even be considered "an issue".

  5. In response to bryanjbrown: thank you for your comment. I am familiar with Paul Ogden (and applaud his assistance to Shirley Justice) and have read of Gary Welsh's (strange) death (and have visited his blog on many occasions). I am not familiar with you (yet). I lived in Kosciusko county, where the sheriff was just removed after pleading in what seems a very "sweetheart" deal. Unfortunately, something NEEDS to change since the attorneys won't (en masse) stand up for ethics (rather making a show to please the "rules" and apparently the judges). I read that many attorneys are underemployed. Seems wisdom would be to cull the herd and get rid of the rotting apples in practice and on the bench, for everyone's sake as well as justice. I'd like to file an attorney complaint, but I have little faith in anything (other than the most flagrant and obvious) resulting in action. My own belief is that if this was medicine, there'd be maimed and injured all over and the carnage caused by "the profession" would be difficult to hide. One can dream ... meanwhile, back to figuring out to file a pro se "motion to dismiss" as well as another court required paper that Indiana is so fond of providing NO resources for (unlike many other states, who don't automatically assume that citizens involved in the court process are scumbags) so that maybe I can get the family law attorney - whose work left me with no settlement, no possessions and resulted in the death of two pets (etc ad nauseum) - to stop abusing the proceedings supplemental and small claims rules and using it as a vehicle for harassment and apparently, amusement.

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