Freight Charges

Pursuant to SAFETEA-LU and a petition for rulemaking from the American Moving and Storage Association, the FMCSA has amended its freight broker regulations by adopting new final consumer protection rules governing brokers of household goods shipments moving in interstate or foreign commerce. The final rules become effective January 28, 2011.

Under the new regulations, household goods brokers must provide their DOT and MC numbers on advertisements and web sites (the FMCSA is planning to notify affected brokers of their future DOT numbers under the new URS), furnish estimates of expected moving charges and brokerage fees, give customers FMCSA pamphlets containing tips for successful moves and detailing the consumer’s rights and responsibilities, and disclose the broker’s policies concerning deposits, cancellations, and refunds. Brokers' estimates for consumers must be in writing, must be made on behalf of a specific household goods motor carrier pursuant to a written agreement containing specified provisions, and must (unless waived) be based on a physical survey by the motor carrier on whose behalf the estimate is provided if the goods are within 50 miles of the motor carrier’s or its agent’s location.  The household goods motor carrier is required to ensure that brokers' estimates meet all the requirements of the consumer disclosure rules that apply to the motor carrier's own estimates.

Finally, household goods brokers must increase their surety bonds or trust funds from the current requirement of $10,000 (which applies to all brokers of freight) to the new minimum of $25,000 by January 1, 2012. 
 

The 7^th Circuit has implemented a pilot program (the “7^th Circuit Pilot Program”) designed to address the rising cost associated with the discovery of electronically stored information (“ESI”). In the initial stage of this pilot program a proposed Standing Order Relating to the Discovery of Electronically Stored Information has been created and will be used in select cases by certain judges within the district. 

The 7^th Circuit Pilot Program, like the recently amended Federal Rules of Civil Procedure, requires the parties to understand and discuss likely sources of discoverable ESI at the beginning of a case. At this time the parties are also required to discuss what ESI is to be preserved and anticipated issues relating to production of that information including the format of production and privilege issues. Unlike the Federal Rules, the pilot program requires litigants to consider and discuss whether discovery can be conducted in stages to minimize cost to the parties.

The pilot program’s initial report and proposed Standing Order Relating to the Discovery of Electronically Stored Information can be viewed at:

http://www.ilcd.uscourts.gov/Statement%20-%20Phase%20One.pdf

If your company is involved in trucking class action cases, truck accident litigation, cargo claims, or simply trying to collect your freight charges, it is important to understand the role of ESI, along with traditional paper documents, in litigation. The 7^th Circuit Pilot Program illustrates that courts, like litigants, are becoming more familiar with ESI and are addressing ESI issues both under the recently amended Federal Rules and via unique approaches like the 7^th Circuit Pilot Program. As businesses store more and more information electronically it is important to recognize that this information may be discoverable in litigation and have an organizational plan regarding storage of this information (who, where, when, how long), a procedure for disposing of outdated electronic information, and the ability to suspend disposal once litigation is reasonably anticipated. Although programs like the 7^th Circuit Pilot Program may ultimately help contain the rising costs associated with discovery of ESI, a company can reduce its litigation cost related to ESI significantly by taking steps in advance of litigation to understand and manage its stored data.