It is common practice for motor carriers to arrive at a location and pick up a pre-loaded, sealed container for delivery. Often, the driver has no way of determining the weight of the container. Nevertheless, the driver and his or her company may face significant penalties and fines if the load is heavier than state weight limits allow. While at first blush it may seem as though the merchant who loaded the container should be liable for the fines and penalties, it is likely that the carrier will have to pay, unless there is a shipping contract to the contrary.
State Regulation of Trucking Loads
Because the language of many states' statutes penalizes the operation of an overweight vehicle rather than the loading, carriers are liable for fines, regardless of whether they or someone else loaded the truck. Among the states that penalize the operation of an overweight vehicle are New Hampshire, Rhode Island, Connecticut, Massachusetts, Nebraska, North Carolina, Pennsylvania, and Vermont.
However, other states seem to penalize entities that participate in the loading of an overweight truck. For instance, Michigan's law provides that "[a]n owner of a vehicle or a lessee of the vehicle of an owner-operator, or other person, who causes or allows a vehicle to be loaded and driven or moved on a highway, when the weight of that vehicle violates section 722 is responsible for a civil infraction and shall pay a civil fine . . . ." (Mich. Comp. Laws § 257.724(3) (emphasis added)). Similarly, New Jersey's law fines the "owner, lessee, or bailee" of an overweight vehicle, but provides "in the case of any vehicle or combination of vehicles carrying a sealed ocean container, either the shipper, the consignee or both, shall be liable for a violation of the weight limitations." (N.J. Stat. Ann. § 39.3-84.1(i), (j) (emphasis added)).
These other state statutes penalize both the loading and operation of an overweight vehicle. What happens when only the carrier is fined; may it escape liability by pointing its finger at the loader? The Michigan and New Jersey laws appear to be silent on the issue. One of the few states, if not the only state, that addresses such a situation is California. Under the California laws, if a carrier is assessed an overweight fine, it may ask that "any other person who directs the loading, maintenance, or operation of the vehicle" be made a codefendant (Cal. Vehicle Code § 40001(f) (emphasis added)). Subsection (f) continues by providing that if the codefendant is found solely at fault for the violation then the complaint against the owner/driver should be dismissed.Thus, a carrier may be able to shift its penalty liability onto a shipper/loader if:
Thus, a carrier may be able to shift its penalty liability onto a shipper/loader if:
- The fine was assessed in California;
- The carrier is able to ask the court to make the loader a co-defendant; and
- The carrier can prove the overweight violation was solely the fault of the loader/shipper.
What happens when the carrier is fined in a jurisdiction besides California? The answer is that it depends on the language of the relevant shipping contract.
What Does the Contract Say?
The "Uniform Straight Bill of Lading" governs most interstate motor carrier transportation in this country. The United States Surface Transportation Board has promulgated extensive regulations governing the content of the Uniform Straight Bill. While the required provisions do not directly state whether a carrier or a loader/shipper should be liable for overweight fines and penalties, the Uniform Bill is a flexible document that may incorporate by reference the carriers' tariffs and rules. These may be relevant to the issue of penalty liability. Both carriers and shippers who are faced with the question of overweight penalty liability are thus well advised to consult the carriers' tariffs and rules.
Going forward, however, a negotiated transportation contract is a prudent course of action. A court may look askance at a party who attempts to enforce rules and tariffs incorporated in a bill of lading if the other party was not aware of the provisions in the rules or tariffs. Moreover, often the rules and tariffs, like the bill of lading, may not address overweight-penalty liability. Thus, a separately executed shipping contract clearly stating each party's liability for fines or penalties is a more preferable alternative.
Fairness: Implied Indemnification
Assuming that neither the applicable state statute nor the contractual agreement between the shipper/loader and the carrier deal with the issue of fines for overweight loads, the carrier will likely have to pay the fines, irrespective of whether it seems fair or not. It is true that established principles of law allow a party (the indemnitee) to obtain complete reimbursement, or indemnification, from a second party (the indemnitor) when fairness or equity requires it. The courts say the indemnitor owes an "implied duty" to indemnify the indemnitee. Arguing an implied duty to indemnify in the context of the carrier of sealed, overweight goods has a superficial appeal to it: the shipper/merchant loaded the goods; they should pay for the fines caused by the overloading. The carrier faces substantial obstacles in mounting an implied indemnification claim, however.
First, the courts have traditionally hesitated from allowing a party liable for a violation of law (like the overweight fines and penalties) to obtain indemnification from another party. The reasoning behind the hesitance is that allowing indemnification only encourages more illegal behavior. Second, indemnification ordinarily is not available when both parties are at fault. If the carrier knew or should have known that the load was overweight, indemnification may not be available. Third, indemnification is only available if the indemnitee had to pay for a legally imposed liability, not if the indemnitee voluntarily paid. Thus, if the carrier had good defenses against the assessment of a fine, but chose to pay the fine rather than contest it, it may be prevented from seeking indemnification from the shipper/loader.
Conclusion: Sign a Contract
The uncertainty regarding implied indemnification claims points to the need for a properly drafted and executed transportation contract. With such a contract, both the shipper/loader and the carrier of overweight loads can avoid litigation when penalties and fines are assessed.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.