Commercial Transportation

• Publication year: 2017

Commercial Transportation

Stephen G. Lowry

Madeline E. McNeeley

Kristy S. Davies

Yvonne S. Godfrey

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Commercial Transportation

by Stephen G. Lowry^*

Madeline E. McNeeley^**

Kristy S. Davies^***

and Yvonne S. Godfrey^****

I. Introduction

Commercial transportation involves all of the significant forms of passenger and property transportation across the United States. This Article covers five major areas: (1) trucking; (2) aviation; (3) limousines, taxis, rideshare services, and commercial transit; (4) autonomous vehicles; and (5) railroads. This Article surveys significant judicial and legislative developments in Georgia commercial transportation law during the period from the beginning of the 2012 regular session of the 151st Georgia General Assembly through May 31, 2017.¹

Each of the areas covered are subject to heavy federal regulation. Much of this Article discusses Georgia's interaction with federal

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regulations and laws pertaining to each area. It is apparent that the General Assembly struggles to keep up with the rapid technological and business changes for commercial transportation.

II. Trucking and Commercial Transit

Effective July 1, 2012, Georgia's former Motor Carrier Act² was repealed and replaced with the Georgia Motor Carrier Act of 2012 (GMCA).³ The GMCA regulates and controls for-hire transportation of persons and property "to protect public welfare, provide for a competitive business environment, and provide for consumer protection."⁴ To this end, the GMCA "shall be liberally construed."⁵ With certain exceptions,⁶ the GMCA regulates all motor carriers,⁷ including "[e]very person owning, controlling, operating, or managing any motor vehicle, including the lessees, receivers, or trustees of such persons . . . used in the business of transporting for hire persons, household goods, or property . . . for hire over any public highway" in Georgia.⁸ Essentially, the GMCA regulates all tractor-trailers and for-hire transportation services, including passenger bus lines.⁹ Importantly, the Georgia Public Service Commission (the Commission) adopted The Federal Motor Carrier Safety Eegulations (FMCSR)¹⁰ issued by the United States Department of Transportation.¹¹

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In addition to complying with the FMCSR, any motor carrier operating on the public highways of Georgia must "[o]btain a certificate . . . [m]aintain liability insurance . . . [and] [a]ct in compliance with Georgia's workers' compensation laws."¹² Georgia's direct-action statute permits a claimant in any tort or contract action to name not only the motor carrier but its insurance carrier as a defendant in the action.¹³ The direct action statute even applies to insurers of interstate carriers engaging in intrastate transport in Georgia that are otherwise not registered as an intrastate motor carrier in Georgia.¹⁴ In 2017, Georgia's minimum-financial-liability limits for intrastate carriers were $100,000 for bodily injury or death to one person, with a $300,000 aggregate limit for multiple personal injuries or deaths in a twelve-passenger-or-fewer vehicle, and a $500,000 aggregate limit for multiple personal injuries or deaths involving a thirteen-passenger-or-more vehicle.¹⁵ To the extent the motor carrier operates in interstate or foreign commerce, the FMCSR minimum levels of financial responsibility for vehicles transporting non-hazardous commodities is $750,000,¹⁶ while the minimum levels for vehicles transporting the most hazardous substances require a minimum of $5,000,000.¹⁷ While more pronounced for intrastate motor carriers, both the minimum limits for intrastate and interstate carriers will often leave the motor carrier woefully underinsured. Collisions involving large trucks and tractor-trailers can cause not only severe catastrophic injuries but, in many cases, multiple catastrophic injuries where $300,000, $500,000, or $750,000 will not even cover victims' medical expenses. This is an area in desperate need of review at both the state and federal levels.

The FMCSR require an MCS-90 endorsement to be attached to all insurance policies.¹⁸ This ensures compliance with the FMCSR and that "injured members of the public are able to obtain judgment from negligent authorized interstate carriers."¹⁹ The endorsement makes the insurer liable to third parties for any injury resulting from the negligent

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use of any motor vehicle by the insured even if the vehicle is not covered under the insurance policy, such as leased vehicles.²⁰ However, while the GMCA "contemplates that a motor carrier can be engaged in both interstate and intrastate commerce, [it will] not impose federal financial responsibility limits on an interstate motor carrier that is engaged in intrastate commerce [of nonhazardous commodities at the time] of the accident."²¹ This is the case even if the applicable policy has a MCS-90 endorsement for higher limits.²² It is difficult to understand how a motor carrier with a minimum-coverage policy could somehow argue that a lower amount of coverage should apply. In any event, these low limits further harm the victims of truck crashes and leave motor carriers exposed to excess judgments.

The GMCA, through its adoption of the FMCSR, sets forth a multitude of safety standards supporting negligence and negligence per se claims. This includes the duty of a motor carrier to maintain a driver qualification file with the driver's application for employment, motor vehicle record,²³ certificate of driver's road test,²⁴ an annual-review-of-driving record, and a list²⁵ of the driver's violations of motor vehicle laws and ordinances.²⁶ Similarly, the FMCSR sets strict standards concerning a driver's allowable driving time,²⁷ equipment inspections and maintenance,²⁸ and alcohol and drug use.²⁹ In the past five years, Georgia state and federal courts have seen an increase in claims of third-party liability and independent claims against the motor carrier for negligent hiring, supervision, and retention.

An employer is required to "exercise ordinary care in the selection of employees and not to retain them after knowledge of incompetency."³⁰

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Thus, under Georgia law, "the appropriate standard of care in a negligent hiring/retention action is 'whether the employer knew or should have known the employee was not suited for the particular employment.'"³¹ "An employer generally is not responsible for torts committed by his employee when the employee exercises an independent business and in it is not subject to the immediate direction and control of the employer."³² In other words, employers are not accountable for the negligence of independent contractors when "the employer has no right of control over the manner in which the work is to be done,"³³ and "[the contractor], rather than the employer, is the proper party to be charged with the responsibility for preventing the risk."³⁴

In the case of motor carrier law, however, this general rule does not apply. Instead, "the motor carrier is fully responsible to the public for the operation of its leased vehicles, regardless of whether the vehicles are used in the scope of the carrier's business . . . . This doctrine of strict vicarious liability imposed upon the lessee motor carrier is known as 'statutory employment.'"³⁵ Several recent cases illustrate the application of this principle.

In Bramlett v. Bajric, the plaintiff suffered injuries in a collision in Georgia with a tractor-trailer owned by DAL Express Transportation (DAL). DAL leased the tractor-trailer to DSL Express Trucking (DSL), a Florida interstate motor carrier that was not registered in Georgia and did not engage in intrastate transport within Georgia. Both DAL and DSL moved for summary judgment on the plaintiff's negligent hiring, retention, and supervision of the driver.³⁶

The United States District Court for the Northern District of Georgia found DSL, rather than DAL, vicariously liable for the driver's actions at the time of the collision because 49 C.F.R. § 376.12³⁷ "requires motor carriers using leased equipment to 'have exclusive possession, control, and use of the equipment for the duration of the lease' and to 'assume complete responsibility for the operation of the equipment during the duration of the lease.'"³⁸ The court characterized the relationship

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between the parties and equipment as that of a bailment, in which case "an employee of the bailor is a borrowed servant of the hirer (1) if the hirer had complete control and direction of the bailor's employee for the occasion, whereas the bailor had no such control, and (2) if the hirer had the exclusive right to discharge the bailor's employee."³⁹ As DSL maintained consistent contact with Bajric during the drive, inspected his logs, verified his fuel receipts, and organized his shipping routes, DSL sufficiently controlled the driver and trailer to invoke the "borrowed servant doctrine and face vicarious liability."⁴⁰

In Aycock v. U.S. Pipe & Foundry Co., LLC,⁴¹ the plaintiff filed a wrongful-death claim arising out of United States Pipe and Foundry Company's negligent hiring and supervision of Atlas Transport, "a motor carrier whose driver allegedly caused the fatal collision."⁴² The defendant moved to dismiss the plaintiff's negligent hiring and supervision claims, alleging that Georgia law does not recognize liability against a broker or shipper for the negligent selection of an independent motor carrier.⁴³

The United States District Court for the Middle District of Georgia found that, while the defendant correctly stated the general rule that employers are not liable for the negligent acts of an independent contractor, the plaintiff's complaint created reasonable inferences that the necessary servant or agency relationship existed.⁴⁴ Specifically, plaintiff's allegation that the "[d]efendant 'hired' Atlas Transport, 'selected' Atlas Transport, personally loaded the trailer, and arranged for the transportation of goods [was]...