Document: 423 U.S. 28 96 S.Ct. 229 46 L.Ed.2d 169 TRANSAMERICAN FREIGHT LINES, INC., Petitioner,v.BRADA MILLER SYSTEMS, et al. No. 74-54. Argued Oct. 8, 1975. Decided Nov. 12, Syllabus Respondent Brada Miller and petitioner Transamerican, two licensed motor carriers, made an agreement whereby respondent leased a vehicle to petitioner, be operated by respondent's driver over petitioner's authorized route. Under the lease was "have control responsibility for operation of said equipment in respect public, shippers Interstate Commerce Commission," but agreed indemnify claims arising out negligence, though indemnification clause specifically did not limit liability public connection with use equipment. While being under lease, accident occurred, suit brought against carriers predicated on negligence vehicle's driver. Petitioner settled claim then sought recovery District Court clause. That court granted motion summary judgment ground that contravened ICC regulation requiring agreements between regulated must contain written undertaking "control shall lessee." The Appeals affirmed, reasoning since respondent, contrary intent regulation, had bear costs its own it assumed ineffective. Held: entered into does contravene ICC's control-and-responsibility requirement. Pp. 35-43. (a) An violates requirement only if lessor service provided as well physical operation. Here vehicle, parties, remained furnishing involved ministerial delegation shipment. 38-40. (b) Nor provision conflict safety regulations, because such provision, which places ultimate financial negligent lessor, may tend increase rather than diminish protection public. P. 41. 497 F.2d 926, reversed remanded. Alphonso H. Voorhees, St. Louis, Mo., petitioner. Joseph L. Leritz, respondents. Mr. Justice BLACKMUN delivered opinion Court. 1 In this case we are concerned responsibility" Commission's leasing 49 CFR § 1057.3(a) (1975),1 applicable carriers. question before us is narrow: Does prohibit, policy, indemnifies lessee loss caused lessor? 2 * On January 19, 1968, Freight Systems, Inc., Transamerican Lines, Miller, lessee, tractor trailer Hardrick trip from Detroit, Mich., Kansas City, Mo.2 held authority serve those points, Transamerican's routes "without deviation." represented that, specifies, City "in direction point" "authorized serve." recited "to competent employee" event employee . representative of" Miller. App. 90; Brief A-2. It further provided: 3 "4. mutually understood agreed, (Transamerican) during term have Commission period terms Paragraph hereof. 4 "9. (Brada Miller) hereby agrees save harmless any all claims, suits, losses, fines or other expenses of, based upon incurred injury person persons, damage property sustained alleged been reason part Miller), agents, servants employees Nothing 9 contained construed anywise Agreement." Ibid. 5 employee. Pursuant 1057.4(c) (1975), trip, required inspection filed report safe. 66-67, 89, 90. checked medical Hardrick. Id., at 75. affixed door identification placard stating reciting number assigned ICC; so throughout trip. 55-58, 63-65. 6 way near Smithboro, Ill., driven automobile Sandra Wear collided. injured. reported prescribed form. later United States Southern Illinois both Transamerican. She Hardrick's negligence. cross-claims each litigation. During trial her $80,000 dismissed cause action prejudice.3 amended cross-claim pleading settlement seeking amount plus defending action. 7 due course moved "the pleadings, depositions, answers interrogatories exhibits file show indemnity policy unenforceable." 91. 8 Miller's motion. unreported opinion, cited 204(e) Act, 24 Stat. 379, added, 543, amended, U.S.C. 304(e),4 authorizes prescribe regulations carriers' use, leases, vehicles owned them, 1057.4(a)(4) regulations,5 issued pursuant authority, governing followed what regarded precedent established controlling Alford v. Major, 470 132 (CA7 1972). Seventh Circuit concluded: "Therefore, would permit Major circumvent regulations' exert actual borrowed drivers, find 135. 10 affirmed unpublished opinion. 926 1974). It, too, relied 304(e), 1057.4, earlier case. emphasized observation Alford, F.2d, 135, quoting case, " 'was make sure responsible fact, law, maintenance supervision drivers.' Pet. cert. A-10. felt cost bearing" were related, party duty statute internalize breach duty." A-12. reasoned inasmuch therefore 11 Because asserted, ibid., could distinguished Allstate Ins. Co. Alterman Transport 465 710 (CA5 1972), certiorari.6 420 971, 95 1389, 43 650 (1975). II 12 issue us, therefore, whether and, consequence, unenforceable. order place proper perspective, note, initially, certain general aspects carrier operations. 13 Demand carrier's services fluctuate seasonally day day. Keeping expensive operating capacity, avoiding waste resources attendant empty backruns idleness, necessary continuing objectives. natural, finds itself short meet immediate demand will seek another operations, latter pleased accommodate. Each thereby advantaged. 14 A equipment, permissible defined circumstances, distinguished, however, sharing lending permitted. Motor Carrier 1935, §§ 301-327, properly certificated haul freight interstate foreign commerce. certificate limited routes, destinations, classes freight. 308(a). See Nelson, Inc. States, 355 554, 78 496, 484 (1958); Kreider Truck Service, Extension Lard Oils, 82 M.C.C. 565 (1960). As has developed designed responsibility-and-control prevent guise With special exceptions, require ship bill lading, compensate basis, inspect assume full 1057.4. do operate equipment; perform task But shipment it. III 15 formulated 1950's rulemaking procedure known Ex parte MC-43. Lease Interchange Vehicles Carriers, 51 461 (1950); 52 675 (1951); 64 361 (1955); 68 553 (1956). initial formulation sustained, variety attacks, American Trucking Assns. 344 298, 73 307, 97 L.Ed. 337 (1953). There outlined background existing conditions truck industry regulation." 302, 310. referred development practice using nonowned interchange leasing. 303, 311. "The illegal, either Act rules consideration." 303-304, 311 (footnote omitted). noted record proof abuses evasions requirements, difficulties fixing lessee's responsibility, problems. 304-306, S.Ct., 311-312. 16 After detailed examination proceedings resulted promulgation protective provisions observed: purpose protect practices detrimental sound transportation consistent regulatory system," assure 310, 314. "So aimed directly frustrate success undertaken Congress." 311, 315. apparent, elimination problem transfer enforcing requirements injuries members significant aims guideposts comprehensive rules. 17 likewise apparent important feature remedy devised eliminate undesirable rule furnished one 30 days more. 1057.4(a)(3). This served "hard core problem," is, owner-operator evils." M.C.C., 555. effectuated provisions, some mentioned above, writing negotiated advance; identified lessee; provide payment specified rate; conduct taking possession; 18 Obviously, 1057.4(c), relates, distinct importance. addressed apprehension might furnish less reliable lessee. And tends charge IV 19 light early industry, problems existed, evolved resolve problems, turn Miller-Transamerican lease. 20 A. Whether presence conflicts lease's 1057.3(a), operational We readily conclude, impinge course, express clear. parties equipment" requires formally requires. Moreover, added bare words assumption specification directed Commission." separate subsequent paragraph affect basic public; affected relationship lessor. final sentence clear: 21 "Nothing 22 very defended 23 acknowledged, sure, lessor's allows aspect control, sense, remain kind Its concern, noted, destinations freight, integrity certifications, makes keeps shipper, Commission. "It now seems accepted when furnishes others, he same extent vehicles, need transportation." 681. 25 expressly prohibit they neither sanction nor forbid seem follow, then, mere here burden not, itself, offend long absolve duties imposed regulations. say, clause, character, factor considered determining particular arrangement illegal legal 26 Commission, occasion, element, among demonstrate lack Tanksley Transfer Points Four 110 674, 678-679 (1969); Diamond Transportation System, Wisconsin Oklahoma Origins, 117 706, 712-713 (1973). never condemned isolation. 27 Although law consequences injured damaged fact. accompanied indicia demonstrating vehicle. isolation framed judgment, Appeals, so. B. similarly conclude provisions. Safety operation, concern equipment-leasing U.S., 305, 312; 686-696. reflected 1057.4(e) relating, respectively, inspections familiarity These apply regardless existence agreement, fully comply despite having contracted indemnification. 29 necessarily lessen safety. contrary, rule, more familiar leases experience, ability, furnishes. placing thus tendency greater shippers. At time, become meaningful. also produces additional source funds who These, factors pertinent evaluation administrative policy; evaluate. hold concerns promulgated. utter word caution: our decision indication chooses study problem, regulate even proscribe lessor.7 merely present interpreted. Chicago, R. I. & Q. Co., 437 6, 9-10 (CA7), denied, 402 996, 91 2173, 161 (1971). 31 ourselves disagreement Appeals. emphasize viewed narrow character Appeals' holding effect isolation, disagree reverse. Other issues raised answer thereto, recognize, undetermined. Among these, seemingly, questions Wear's whole, authority. no view issues; resolved remand. 32 reversed, remanded proceedings. 33 ordered. 34 Reversed 35 DOUGLAS concurs judgment. phrase (1975) equipment." Section reads follows: except paragraphs (c) (d), relative apply: "(a) Equipment used point serve. To regularly authorized, serve: Provided, first time passes until give receipt identifying date possession thereof retaken completed where contemplated, signed their duly regular copy carried while 1057.4(a)(4), relating exchanged another, parallel "exclusive possession, complete thereto." dated November 1967. dismissal preserved rights Diversity citizenship after settlement. "Subject subsection (f) (setting forth exceptions material here) section, prescribe, (under contracts, arrangements) "(1) contract, specify effect, compensation paid carrier, entire covered thereby; "(2) reasonably accordance owners including chapter thereof." facts, appears inadvertent reference. 1057.3 states "except (d)" thereof, "shall apply" question, n. 1, supra. agreement. section's proviso, substance miscitation, significance here. Despite distinguishing features, attempts distinguish, cases seemingly below Denver Midwest Freight, Busboom Trucking, 190 Neb. 231, 207 N.W.2d 368 (1973), Gordon Leasing Navajo 130 N.J.Super. 290, 326 A.2d 114 (1974). Seemingly opposed, addition Alterman, Carolina Carriers Corp. Pitt County 492 243 (CA4 1974), pending, 73-1750; Indiana Refrigerator Dalton, 516 795 (CA6 1975), 75-211; Parr 510 490, 494 1975); Jones Ryder 507 100 74-973; Cooper-Jarrett, J. Corp., 70 Misc.2d 88, 332 N.Y.S.2d 177 (1972); Newsome Surratt, 237 N.C. 297, 74 S.E.2d 732 (1953); Continental Daily Express, Wis.2d 581, 617 General Expressways, Schreiber 377 F.Supp. 1159 (ND Ill.1974), reached conclusion unenforceable policy. Watkins Zero Refrigerated 381 363 aff'd, 525 538 involving contract concluded "serves useful upheld." 540. Circuit's felt, "inapposite." joint brief amici curiae submit violation They acknowledge current determine us; occasion future consider agreements; so, possible come protecting opposite note submission longstanding recognized deference. Bowles Seminole Rock Sand 325 410, 414, 65 1215, 1217, 89 1700 (1945); Udall Tallman, 380 16-17, 85 792, 801-802, 616 (1965).

Category: 7