ILNews

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. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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