Anti-Indemnification Passes in South Dakota

South Dakota last month became the 31st state to pass legislation protecting truckers from shipping contracts that require the carrier to shoulder all responsibility for accidents even though they may not be at fault.

The bill passed the House in January and the Senate in February. Gov. Dennis Daugaard signed the bill into law on Feb. 24. It takes effect July 1.

“Our message was quite simple,” said Myron Rau, president of the South Dakota Trucking Association. “No one should be indemnified and held harmless; liability should rest with the party at fault.”

Legislators quickly understood the concept and sided with it, Rau added.

Anti-indemnification bills also are moving through legislatures in Alabama and Mississippi this year. And, trucking leaders in Minnesota said they are optimistic legislation introduced there will be passed and signed by Gov. Mark Dayton.

“We’ve had a good reception among legislators understanding this is a fairness issue,” said John Hausladen, president of the Minnesota Trucking Association.

“We’ve not had any public opposition but we have had some folks behind the scenes that don’t like the bill, so we do have a fight on our hands,” Hausladen said, adding that the opposition is coming from shippers whom he declined to name.

This is the second effort by Minnesota truckers to obtain protection from having to sign contracts that make them responsible for any accident even if it occurs on a shipper’s property.

“We took a run at it two years ago and then-Gov. Tim Pawlenty vetoed it,” Hausladen said.

It is unclear how Dayton views the issue, Hausladen said, adding that if the bill gets legislative approval, he believes there is a good chance the governor will sign it.

Trucking leaders in some states, such as Louisiana, said they faced strong opposition when they fought for anti-indemnification laws.

Louisiana truckers, for example, won in the legislature in 2010 but, afterward faced a court suit by shippers trying to nullify the new law.

Late last year, however, a state court judge ruled against the Louisiana Chemical Association, upholding the law that protected truckers from indemnification in contracts.