November 28, 2011 1:30 AM, EST

Trucking Wins Victory in Louisiana Ruling; Case Has Liability Implications in 30 States

By Timothy Cama, Staff Reporter

This story appears in the Nov. 28 print edition of Transport Topics.

A Louisiana judge rejected a challenge to the state’s anti-indemnification law, saying the Louisiana Chemical Association had no grounds for its lawsuit in which the group called the statute unconstitutional.

“We’re happy about the decision,” Cathy Gautreaux, executive director of the Louisiana Motor Transport Association, told Transport Topics. “It means that there’s a little bit more comfort level, since it withstood a challenge to the state.”

LMTA and American Trucking Associations filed briefs supporting the law, which prohibits a shipper from assigning legal liability to a trucking company for actions that are not the trucker’s fault (7-11, p. 30).

Judge Wilson Fields dismissed the chemical industry’s lawsuit Nov. 14, saying it had “no cause of action,” meaning the group presented no issue on which the judge could make a legal decision, said Doug Williams, an attorney with the firm Breazeale, Sachse & Wilson. Williams worked for LMTA and ATA on the case, which was filed against the state.

LCA argued that the law, which took effect in January 2011 after Louisiana’s legislature passed it in 2010, violated the right to enter into contracts, a right outlined in the U.S. and Louisiana constitutions.

“They hadn’t attached a copy of a contract that was supposedly unconstitutionally impacted by this law,” Williams told TT. “There was no controversy for the court to issue an opinion.”

Fields initially issued his opinion in August, but gave LCA additional time to present evidence for a cause of action, such as a contract that had been unconstitutionally invalidated. The Nov. 14 ruling concluded that LCA had not done that, Williams said.

“What they did attach to their petition was a couple of documents that are frequently referred to as master service agreements. We took the position that these are not contracts,” Williams said. Master service agreements set terms for future contracts, but are not contracts themselves, he said.

LCA declined to comment to TT.

“We all said that the Louisiana Chemical Association hadn’t stated a cause of action on which relief could be granted,” said Bob Pitcher, vice president of state laws for ATA. “And the judge agreed.”

The decision is good news for trucking, and not just in Louisiana, because the chemical association’s arguments claimed violations of the U.S. Constitution, Pitcher said. “And the court dismissed it and said that none of those seemed to be any good.”

But LMTA was cautionary in its celebrations. “It’s not over. It’s far from over,” Gautreaux said.

Williams warned that “there are some signs” that LCA is considering appealing the decision to a higher court.

Declining to comment to TT, spokeswoman Desiree Lemoine said the case is still in litigation, but she did not elaborate.

Gautreaux thinks LCA will target the legislature during its session next year.

“There’s a really good chance that they’re going to go to the legislature next year and try to repeal it,” she said.

Thirty states currently have anti-indemnification laws, Pitcher said. Though the chemical industry, as a major shipper, often lobbies against such laws, the Louisiana case is the first court challenge to one, he said.