Opinion ID: 809906
Heading Depth: 3
Heading Rank: 2

Heading: Espenschied’s Status as a “Motor Carrier”

Text: Wilshire next contends that the district court erred in concluding that Espenschied was a “motor carrier” for purposes of triggering its MCS-90 - 11 - endorsement. As will be explained more fully, we vacate this portion of the judgment and remand for further proceedings. Our resolution of this issue rests primarily on the definition of the term “motor carrier” and, as such, our discussion begins there. The financial responsibility requirements of the MCA apply to “motor carriers.” 49 U.S.C. § 31139(b) (noting that the Secretary of Transportation shall prescribe regulations requiring minimum levels of financial responsibility to satisfy public liability “for the transportation of property by motor carrier”) (emphasis added); see also 49 C.F.R. §§ 387.3, 387.7. The MCA defines “motor carrier” as “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). Federal regulations promulgated pursuant to the MCA and accompanying the MCS-90 endorsement define “motor carrier” as a “for-hire motor carrier or a private motor carrier.”6 49 C.F.R. § 387.5. In turn, “for-hire carriage” is defined as “the business of transporting, for compensation, the goods or property of another.” Id. Finally, the regulations establish that the minimum financial responsibility requirements of the MCA apply to “for-hire motor carriers operating motor vehicles transporting property in interstate or foreign commerce” and for-hire motor carriers transporting hazardous materials. Id. § 387.3(a), (b). 6 The term “motor carrier” also “includes, but is not limited to, a motor carrier’s agent, officer, or representative; an employee responsible for hiring, supervising, training, assigning, or dispatching a driver; or an employee concerned with the installation, inspection, and maintenance of motor vehicle equipment and/or accessories.” 49 C.F.R. § 387.5. - 12 - Our review of the record reveals that Wilshire argued in the district court that its MCS-90 endorsement was not triggered because Espenschied, as merely the lessor of the trailer, was not a “motor carrier” as it “was not transporting property for hire when the accident occurred.” Jt. App. at 324-25 (emphasis added); see also id. at 655. Instead, DATS, the lessee, was the only company doing so. Id. at 324-25, 655. The district court concluded that Wilshire’s MCS-90 obligation was triggered, however, because Espenschied was a registered motor carrier; it owned the trailer and was responsible for its maintenance; the Herrods sued Espenschied for its negligent maintenance of the trailer; and the MCS-90 endorsement requires payment for injury “resulting from negligent operation, maintenance, or use of motor vehicles.” See id. at 1044. In so ruling, the district court addressed Wilshire’s argument that Espenschied was not “operating, maintaining or using” the trailer at the time of the accident, but it did not address Wilshire’s separate argument that Espenschied was not acting as a for-hire motor carrier at the time of the accident. As we construe the MCA and relevant regulations, the financial responsibility requirements of the MCA – including the MCS-90 endorsement – apply only to for-hire motor carriers. See, e.g., 49 U.S.C. §§ 31139(b), 13102(14); 49 C.F.R. §§ 387.3, 387.5. Accordingly, in order to determine whether Wilshire’s MCS-90 endorsement applies, it must be determined initially whether Espenschied was operating as a for-hire motor carrier at the time of the accident. It does not appear that the district court made such a determination, however. It noted that - 13 - Espenschied is a “registered motor carrier,” Jt. App. at 1044, but it did not answer the question whether Espenschied was operating as a for-hire motor carrier at the time of the accident.7 To be a “for-hire carriage,” Espenschied had to be in the “business of transporting, for compensation, the goods or property of another.” 49 C.F.R. § 387.5 (emphasis added). The district court’s order did not address the factual predicate of “compensation” that is necessary to qualify Espenschied as a for-hire motor carrier. Wilshire argued that a lessor of motor-vehicle equipment does not act as a for-hire motor carrier, within the meaning of the MCA and the pertinent regulations, for purposes of triggering an MCS-90 endorsement. We therefore direct the district court, on remand, to determine whether Espenschied was acting as a for-hire motor carrier at the time of the accident. 7 The parties do not seem to dispute that Espenschied was a federally certified freight trucking company and that it had motor carrier authority at the time of the accident. Although this may be factually accurate, it does not answer the separate question whether Espenschied was transporting the goods of another for compensation at the time of the accident in order to qualify it as a for-hire motor carrier for purposes of triggering Wilshire’s MCS-90 obligation. - 14 -