OOIDA Wins Round In Lease Dispute

The Owner-Operator Independent Drivers Association won a major round in its lawsuit against New Prime Inc. and Arctic Express when a U.S. Appeals Court ruled it could sue the companies over truth-in-leasing violations.

The group’s focus in the suit has been lease-purchase agreements, in which drivers lease equipment from a company for 48 or 60 months with the option to buy. In its original 1997 lawsuit, OOIDA charged that the two carriers, at the termination of agreements, had illegally withheld money from owner-operators that had been placed in escrow to cover such things as maintenance and insurance.

Arctic and New Prime filed motions to dismiss the suit on the grounds that the complaint falls within the Federal Highway Administration’s domain and not within the courts’ jurisdiction. In November 1997, a Missouri District Court agreed, saying OOIDA did not have a “private right of action.”

OOIDA appealed the ruling to the Eighth U.S. Circuit Court of Appeals, which reversed the lower court on Aug. 10.

The U.S. Department of Justice, acting on behalf of the Department of Transportation and the FHWA, argued in support of the private right of action. Joining Prime and Arctic in opposition was American Trucking Associations.

The ruling clears the way for OOIDA to go back to the federal district courts and resume its lawsuits against the two carriers.

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