In a decision regarding payments between an independent owner-operator and the trucking company that hired their services, the words of a federal appellate court judge may be sound advice for all drivers: “Trust, but verify.”
Judge Joel Flaum noted the phrase — which he said is of Russian origin but popularized by President Ronald Reagan, who put Flaum on the bench — in denying driver Michael Stampley’s lawsuit alleging Altom Transport underpaid him. Altom’s website describes it as a hauler of chemicals and petroleum, based in Indiana.
Stampley was appealing a lower court ruling that denied his claim he should be paid more from Altom in a dispute that centered on two issues. One is uncontested: that Altom billed its customers for tank washes, but the payments Altom received for that were not part of the base amount of revenue that would be used to calculate Stampley’s 70% share to be paid to him. The second issue, and the one that ultimately is what cost Stampley in court, is whether Stampley objected in time. (The decision did not specify any of the sums in question).
The decision handed down last week by the U.S. Court of Appeals for the 7th Circuit spells out the history of the relationship between Stampley and Altom. Under the provisions of the Truth in Leasing regulations that are part of federal trucking law, Altom is required to supply its drivers with “a copy of the rated freight bill, or in the case of contract carriers, any other form of documentation actually used for a shipment containing the same information that would appear on a rated freight bill.” The contract between Stampley and Altom included a provision that Stampley could be given a computer-generated version of the freight bills that it sent to the customers for whom Stampley was hauling freight.
But there was another provision: Stampley had 30 days in which to review the receipts “to contest, in writing, the information contained on any rated freight bill or computer-generated document.” And if he didn’t do so, he “shall waive all rights to contest the validity or accuracy of any/all payments made pursuant to this (section),” according to the wording in the contract republished in the court decision.
The problem with the tank washes, according to the court decision, is that there was nothing about them in the receipts provided to Stampley. And the revenue from these tank washes was not included in the “gross” revenues of which Stampley was entitled to receive 70%.”
But Stampley did not challenge his pay in the 30-day period, a process whereby he might have been able to get a better picture of what Altom was charging shippers for tank washes. As the home page of Bulk Connection, a tanker broker, says about tank washes, “the tank or trailer and equipment used to transport the product must be thoroughly washed and dried before it can be used again to haul another product.”
Stampley did ultimately discover the omission, though the decision does not say how long it took. But it clearly wasn’t within 30 days, leading to the lawsuit.
The original suit tried to bring in other drivers by having it certified as a class action. That attempt failed in the lower court. So did Stampley’s individual claim, on the grounds that he failed to challenge the receipts for his work within the 30 days in the contract.
There is no dispute about the 30-day provision in the contract. Stampley did have a right to see not only the computer-generated invoice that he did receive, but also to examine “the source documents from which such computer-generated information was compiled at Altom’s home office during reasonable business hours.”
But he didn’t do that. As the court said, Stampley “never disputed or requested to view the source documents within 30 days.” But he argues that the 30-day clause doesn’t apply because the computer-generated document didn’t have the same information as the freight bills, which would have detailed the tank washes.
The decision says Stampley knew about the washes; he just didn’t know they weren’t part of the base against which the 70% was calculated. Although it is unclear when Stampley found out about the washes’ omission in the bill, it appears to be relatively soon. Part of the dispute is when the 30-day clock began, and the two sides’ argument on that seems to indicate a relatively short period before Stampley saw the light. The court sided with Altom’s interpretation of when the 30-day clause began.
And that’s when Flaum comes back to his original recommendation: Trust, but verify. Had Stampley availed himself of the ability to review the documents in the 30-day window, “he could have challenged [the washes’] exclusion, so long as he did so within thirty days of each payment,” the judge wrote. “By choosing simply to trust the documents he received and not to verify them, or challenge the exclusion of tank wash funds from his payment until long after the 30-day period expired, Stampley has forfeited his opportunity to do so now.”
Emails sent by FreightWaves to the attorneys for Altom and Stampley were not responded to by publication time.