Court ruling a mixed bag in OOIDA-Landstar dispute

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Motor carriers can assess administrative fees and make profits on charge-backs to independent contractors, but they must disclose documents that demonstrate the validity of those charge-backs, a federal judge in Florida has ruled. Judge Henry Adams issued an order regarding various motions for summary judgment in a long-running class action lawsuit filed by the Owner-Operator Independent Drivers Association against Landstar System.

Adams granted Landstar’s motion that charging more for products and services than they pay third-party vendors is lawful. But he also granted OOIDA’s motion that such mark-ups in charge-backs be disclosed. “The legislative history makes clear that the regulation does not require the lease to state on the face of the lease the amount of charge-backs or the mark-ups, but rather to list the items subject to charge-backs and provide access to the documents to determine the charges’ validity,” Adams ruled.

The court also rejected OOIDA’s allegation that Landstar had violated the federal regulations by making undisclosed and or undocumented reductions from revenue derived from freight before calculating compensation. Landstar literally complied with the rules governing disclosure of compensation, Adams said. And the judge again rejected Landstar’s claim that OOIDA should not have standing to file a class action suit in the case.