Digital Freight Brokerages May Impact Liability for Shippers and Carriers

The transportation industry continues to evolve.  With the advent of new technology such as autonomous vehicles, the industry faces new questions pertaining to appropriate regulations, and how these advances may impact the liability of the parties to a transaction.  One of the more recent technological developments is the development and subsequent use of digital freight brokerages such as Uber Freight and Convoy, among others.  These digital freight brokers attempt to remove the human middleman, i.e. the broker, and instead utilize a web-based technology platform to match shippers with a motor carrier that can fulfill their needs on a one-time basis. The shipper provides details on the transaction, and the web-based technology typically utilizes an algorithm or other software to efficiently match the freight and a carrier.  Where the broker normally invests heavily in people, the digital freight brokerage invests in technology.

While digital freight brokerages potentially fill a need in the marketplace, the concept does not come without concerns.  There are specific regulations that both brokers and motor carriers must adhere to, and many transactions are not simple “A to B” trips. When issues arise, it requires the interplay and cooperation between all parties to a transaction to reach a resolution.  Over and above these logistical concerns, the legal ramifications arising from this development are yet to be seen.  As the plaintiff’s bar continues to craft theories of broker liability, the nature of the transaction presents questions.  For example, if the digital freight broker’s algorithm matches a shipper with a carrier that is not able to meet the needs of the shipper- to what extent is the digital freight brokerage liable? Moreover, what if through no fault of the shipper or the digital freight broker, the algorithm or related software malfunctions and fails to find a potential carrier for time-sensitive cargo?  In the same vein, what if, through no fault of the motor carrier, the digital freight brokerage software fails to communicate (or otherwise keep record of) instructions related to a shipment that impact the manner in which the motor carrier must transport the cargo which subsequently causes damage?

These scenarios have yet to be addressed by courts throughout the country and will have an impact on the development of the digital freight brokerage industry.  It is unclear what (if any) regulations may be passed that are specifically applicable to digital freight brokerages as the technology develops and that sector of the industry grows.  Given the uncertainty related to this technology and growing niche within the transportation industry, the parties to a transaction should do their best to account for these potential scenarios with specificity when negotiating agreements, as well as plan ahead to address these potential scenarios.  The transportation industry should also watch closely to see what, if any, regulations are passed specifically to digital freight brokerages to ensure compliance with any such regulations.

Written by associate James Hetzel.

The District of Columbia Will Not Hold In-Person Informal Conferences or Formal Hearings

The District of Columbia is not holding in-person informal conferences or Formal Hearings.  The informal conferences are being held telephonically and the Formal Hearings are being held via the web.  The CRB has recently ruled that there is NO right to a physically proximate (in person) Formal Hearing.  Calesli Durant v. Washington Gas Company et al., CRB No. 20-167, AHD No. 20-211, OWC No. 694983 (August 25, 2020).  If a party objects to a web hearing, the party must identify with particularity how a video hearing impairs the ability to impeach a witness and impedes the ALJ’s ability to assess credibility.  General assertions that credibility assessments require an in-person hearing are not sufficient.

Additionally, OWC has moved to:

400 Virginia Ave, S.W.
Washington, DC 20024

All mail should still be sent to the Minnesota Ave address.

Updates on Workers’ Compensation Operations in the District of Columbia

The District of Columbia is not holding in-person informal conferences or Formal Hearings.  The informal conferences are being telephonically and the Formal Hearings are being held via the web.  The CRB has recently ruled that there is NO right to a physically proximate (in person) Formal Hearing.  Calesli Durant v. Washington Gas Company et al., CRB No. 20-167, AHD No. 20-211, OWC No. 694983 (August 25, 2020).  If a party objects to a web hearing, the party must identify with particularity how a video hearing impairs the ability to impeach a witness and impedes the ALJ’s ability to assess credibility.  General assertions that credibility assessments require an in-person hearing are not sufficient.

Additionally, OWC has moved to:

400 Virginia Ave, S.W.

Washington, DC 20024

All mail should still be sent to the Minnesota Ave address.

Virginia Adopts Uniform COVID Workplace Safety Rules

Virginia made history by becoming the first state to adopt coronavirus-related workplace safety mandates which establish requirements for employers to control, prevent, and mitigate the spread of the coronavirus (COVID-19).

In addition to mandating social distancing, the rules require all employers to:

  • Provide flexible sick-leave policies, telework and staggered shifts when feasible;
  • Provide both handwashing stations and hand sanitizer when feasible;
  • Assess risk levels of employers and suppliers before entry;
  • Notify the Virginia Department of Health of positive COVID-19 tests;
  • Notify VOSH of three or more positive COVID-19 tests within a two-week period;
  • Assess hazard levels of all job tasks;
  • Provide COVID-19 training of all employees within 30 days (except for low-hazard places of employment);
  • Prepare infectious disease preparedness and response plans within 60 days;
  • Post or present agency-prepared COVID-19 information to all employees; and
  • Maintain air handling systems in accordance with manufacturers’ instructions and the American National Standards Institute (ANSI) and American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) standards.

Here is the link with the full text of the order:  https://www.doli.virginia.gov/wp-content/uploads/2020/07/RIS-filed-RTD-Final-ETS-7.24.2020.pdf

Here is the link with all of the templates and forms to allow employers to comply with new regulations:  https://www.doli.virginia.gov/covid-19-outreach-education-and-training/

Maryland Department of Labor Releases Guidance on Employer Correspondence with Employees

The Maryland Department of Labor (hereinafter “MDOL”) recently released guidance regarding how employers should manage correspondence to an employee regarding the availability of unemployment compensation.

MDOL suggests that if an employer is sending a letter or email to an employee about the availability of unemployment compensation, the employer should first advise the employee that unemployment benefits are available to workers who are unemployed and meet the Maryland eligibility requirements. The employer should also explain the MDOL requirements to the employee, including any relevant COVID-19 updates. Additionally, the employer should provide the employee with the Maryland unemployment website and a list of possible documentation the employee will need to file an unemployment claim.

If the employer is sending a text message to an employee about the availability of unemployment compensation, MDOL suggests advising the employee that unemployment benefits are available to workers who are unemployed and provide the employee with the Maryland unemployment website.

To access the full MDOL guidance visit: https://www.dllr.state.md.us/forms/uiavailnotice.pdf

Maryland Workers’ Compensation Commission Responds to Coronavirus (COVID-19)

After closing its doors to in-person hearings on March 16, 2020, the Maryland Workers’ Compensation Commission has seen a backlog of cases.  On June 6, 2020, the Commission resumed in-person hearings while continuing to allow the option for virtual hearings, which began in May.  What can you expect from these hearings?

New Shared Requirements:

  • All exhibits must be electronically submitted three days prior to a hearing. Most Commissioners appear to have reviewed all exhibits before the proceedings, which may allow for a more streamlined hearing where the Commissioner likely has an idea of the basic facts of the dispute beforehand.
  • Claimant’s Counsel must also submit fee petitions electronically, which requires their client’s signatures before the hearing. We may see more delayed attorney’s fee awards as a result.
  • Impeachment evidence cannot be physically submitted but must be immediately available to all parties and may be formally submitted after the hearing.
  • Stipulations, settlements, withdrawn issues, or other preliminary matters can be emailed to the Commissioner’s assistant instead of taking up a hearing slot or requiring any physical attendance.

Virtual hearings:

  • These hearings are conducted through the Microsoft Teams software and require all parties have video, but those without audio capacity can call in using a telephone. Some Commissioners have set up the hearings so all parties may see everyone at the same time, while others have limited the screen so that all parties, other than the Commissioner, may see the Claimant only.
  • No one may force any claim into a virtual hearing as they require the consent of all parties to schedule.
  • There remain some questions as to how to use impeachment evidence with these hearings, which may make these virtual hearings less advisable for more complex claims.

In-person hearings are not yet back to business as usual: 

  • Each hearing is hand-set by the Commission to provide a time for each claim to proceed. You may not enter the hearing site until five to ten minutes before the scheduled time.
  • Each person is asked to fill out screening questionnaires, provide contact information for contact tracing, and have his/her temperature taken by contactless thermometer before entering the hearing room.
  • Each person must wear a mask and maintain social distancing of at least six feet. The hearing rooms have been spread apart to allow this distance, with the claimant sitting in a chair alone in the middle of the room.
  • Parties are encouraged to bring only those people absolutely necessary for a hearing to minimize the number of people in any room at one time.
  • After the hearing, all parties are required to immediately leave the premises. As a result, you will only see the people involved in the hearings immediately before and after your hearing, eliminating the ability to follow up on intractable cases in person.

Written by associate April Kerns.

 

Michael A. Washington v. Arena Football One and Travelers Indemnity Company: Attorney’s Fee Award

This matter was appealed to the Compensation Review Board on Reconsideration of an Award of Attorney’s Fee by Administrative Law Judge Donna J. Henderson.

The parties had attended an informal conference on permanent partial disability (PPD), and a recommendation on PPD was issued.  Claimant, Michael Washington, filed an Application for a Formal Hearing.  Employer, Arena Football One, then submitted a letter accepting the recommendation.

On March 5, 2020, after an evidentiary hearing was held, a Compensation Order was issued, awarding Claimant PPD benefits to his left leg as a result of a work injury sustained.  On April 2, 2020, Claimant filed a petition requesting an award of attorney’s fees against Employer in the amount of $3,480.95.  Employer filed an Opposition.  An ALJ subsequently awarded Claimant’s counsel attorney’s fees based upon the 4% difference between an earlier Recommendation issued and the Compensation Order.  On April 14, 2020, an Order on Reconsideration of Award of attorney fee was issued concluding that Employer had never been ordered to pay Claimant any percentage of permanent disability. Therefore, Employer could not be ordered to pay attorney’s fees.  Claimant appealed.

On appeal, Employer argued that it is not liable to pay Claimant an attorney’s fee of any amount, as it did not refuse to pay Claimant PPD benefits pursuant to the OWC recommendation.  Employer argued that Claimant filed an Application for Formal Hearing and that Employer later submitted a letter accepting the recommendation.  Therefore, it was Claimant who rejected the OWC recommendation.  Further, Employer argues that D.C. Code § 32-1530 (b) is specific in setting forth the requisite conditions for a claimant to recover attorney’s fees: the employer must refuse to pay compensation for a claimant to be awarded attorney’s fees and it denies such fees when the condition is not met.

Claimant argued that because Employer did not pay any PPD benefits despite the recommendation made by the Office of Workers’ Compensation (OWC), Employer de facto refused the recommendation offered by OWC.

The CRB affirmed the April 14, 2020 Order on Reconsideration of Award of Attorney Fee.  The CRB noted that in Providence Hosp. v. DOES, 855 A.2d 1108, 1111 (D.C. 2004), the District of Columbia Court of Appeals stated that “[t]he statute clearly did not apply because [the employer] never rejected the mayor’s recommendation” and thus, the claimant could not recover attorney’s fees.  Id. at 1113.  Further, the District of Columbia Court of Appeals concluded that the statute is specific in setting forth the requisite conditions for Claimant to recover attorney’s fees and leaves no discretion to the agency or court.  Here, neither party argues that Employer formally rejected the recommendation prior to Claimant’s rejection of the Memorandum of the Informal Conference.  Further, when Claimant filed an Application for a Formal Hearing, any subsequent acceptance or failure to reject by Employer is irrelevant. The April 14, 2020 Order on Reconsideration of Award of Attorney Fee was affirmed.

The practical effect of this decision is that there are no de facto rejections.  An employer must expressly reject the recommendation in order for  Claimant to be eligible for attorney’s fees.

Written by associate Marleigh Davis.

New Code Section Changes Employer Response Obligation under the VA Workers’ Comp Act

In its February 2020 session, Virginia’s General Assembly made a change to the Virginia Workers’ Compensation Act. The following briefly summarizes the new amendment:

Under the new section 65.2-601.2, the employer will be required to provide a statement of intent in response to an employee’s claim within 30 days. When a claim is filed, the Commission will now order the employer, within 30 days of such order, to advise the employee whether the employer intends to (i) accept the employee’s claim, (ii) deny the employee’s claim, or (iii) if the employer lacks sufficient information from the employee or a third party to be able to accept or deny the claim.

If the employer intends to deny the claim, the response shall provide reasons for the denial, and if the employer is unable to accept or deny because of lack of sufficient information, the employer must identify the information needed from the employee or a third party to enable it to make such a determination.

Failure to make a timely response could result in a penalty.

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FMC Investigation into Demurrage and Detention Charges

An increase in frequency of detention and demurrage charges assessed against port users across the country recently resulted in a Federal Maritime Commission (“FMC”) investigation into the detention and demurrage practices at U.S. ports.  The spike in detention and demurrage charges appears to be the result of factors outside of the control of port users, including increased port congestion and internal port inefficiencies. The increased congestion at ports has led to increased commercial driver turn times, decreased productivity and efficiency, an inability to retrieve an adequate number of containers, and has compounded the already pervasive issue of the commercial driver shortage for drayage motor carriers due to mounting driver frustration.

In September 2018, the FMC commissioner issued an interim report and Notice of Proposed Rule Making for “just and reasonable regulations and practices relating to or connected with receiving, handling, storing, and delivery of property.” The focus of the FMC investigation was to closely examine port practices that are leading to substantial detention and demurrage charges to port users and to provide solutions to move cargo more efficiently through the ports. The interim report revealed that there are differing, often conflicting, standards from port to port with respect to many demurrage and detention practices and recognized the need for uniform standards and transparency.

In December 2018, the FMC commissioner issued a final report on the investigation. The final report concluded that there was a need for greater transparency and consistency in notice, billing practices, dispute resolution and terminology in the ports’ detention and demurrage practices. The final report therefore recommended that the FMC create “Innovation Teams” to establish ways to standardize port practices. The FMC is in the process of reviewing the recommendations of the final report and will either accept or reject the recommendations.

While the standardization of demurrage and detention practices would be a step in the right direction, the underlying port inefficiencies must be addressed in order to combat the growing concerns in the intermodal industry.

For more information about this article, please contact Renee Bowen at 410.230.3943 or rbowen@fandpnet.com.

 

 

Changes at the Maryland Workers’ Compensation Commission

Commissioner Godwin Retires

Commissioner Lauren Godwin, who served in her position since 1996, has retired from the Maryland Workers’ Compensation Commission effective July 1, 2019.

Welcoming Commissioner Oh

Effective July 1, 2019, Governor Hogan appointed Ju (Lynn) Y. Oh as a commissioner for the Maryland Workers’ Compensation Commission.

Ms. Oh received her Juris Doctor from the University of Baltimore School of Law in 2004.

Following law school, Ms. Oh served as a Judicial Law Clerk to the Honorable Thomas F. Stansfield from 2005 to 2006.  She then joined the law office of Humphreys, McLaughlin & McAleer, LLC as an Associate in 2006.  Ms. Oh became a partner at that firm in 2012, where she represented employers and insurers leading up to her Commission appointment.