SBTC Files Ethics Complaint with TIA Against TQL Over 49 CFR 371.3 Waiver Language in Contracts...
James Lamb
Executive Director, Small Business in Transportation Coalition (SBTC) @JimLambUSA
From:?"James Lamb" <[email protected]>
Date:?Sun, May 7, 2023 2:41 pm
Cc:?[email protected],[email protected],[email protected],[email protected],[email protected],[email protected],[email protected],[email protected],[email protected],[email protected],[email protected]
Subject:?RE: TIA Ethics Complaint from the SBTC against TQL
Please see the additional document we would like to offer TIA on this matter, which we just came across after I clicked send, which was just posted on social media.
In it, Mr. Voltmann unequivocally acknowledged an "absolute right under CFR 371.3."
We hope this precedent guides the current TIA leadership and your Ethics Committee accordingly.
Thank you.
/s/ JAMES LAMB, Executive Director
Small Business in Transportation Coalition, Inc. ("SBTC")
Truckers.com
Visit our new website:?
1775 I. (Eye) Street, NW, Suite 1150
Washington, DC 20006
@JimLambUSA
(202) 587-2751
From:?"James Lamb" <[email protected]>
Date:?Sun, May 7, 2023 2:32 pm
Cc:?[email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], "[email protected]" <[email protected]>, "[email protected]" <[email protected]>, "[email protected]" <[email protected]>
Subject:?TIA Ethics Complaint from the SBTC against TQL
Dear Ms. Reinke,
As you know, the TIA issued a model contract between brokers and carriers years ago in the spirit of "best practices."
This document contains no language suggesting brokers should ask independent truckers and motor carriers to waive their regulatory rights to documents 49 CFR 371.3 designed to afford these parties to transactions to know broker commissions, which TIA calls "margins," as a condition to do business.
Notwithstanding?TIA's failed August 2020 petition to FMCSA for rulemaking to repeal 49 CFR 371.3, which, as you know, the agency denied on March 17, 2023, it therefore appears that it is NOT the policy of TIA to recommend brokers evade regulation through contracts that waive truckers' rights to broker rate transparency.
It appears FMCSA has rejected TIA's argument that brokers are somehow shippers with the right to waive regulations pursuant to?49 CFR § 14101b.?
We also note that FMCSA is proceeding with our request to strengthen the broker rate transparency rule as per its March 16, 2023 petition approval letter to SBTC.?
We believe it therefore now well established that brokers are not shippers entitled?to waive 49 CFR § 371.3c under 49 CFR § 14101b by virtue of the ICC Termination Act of?1995 and that?FMCSA's attached March 1, 2022 interim letter, which affirms that brokers should be abiding by all regulations that apply to them during the pendency of rulemaking, is now?authoritative and binding upon all brokers?including TQL and all other TIA members that operate as duly licensed and bonded property brokers.
Accordingly, the SBTC has issued a?CEASE & DESIST?letter to TQL for having language that makes waiver of 371.3 in its contracts as a condition for receiving loads from TQL.
Please see that letter below.
Comes now, the SBTC to file this non-member Ethics Complaint with TIA pursuant to your complaint procedures on behalf of the SBTC membership as many of our members have been adversely affected by what we believe is TIA's (sic, should be TQL's) unethical if not unlawful policy contrary to your model agreement and Ethics Code.
By copy of this email, we hereby request that Polly Bond, TIA's staff member assigned to the Ethics Committee, please forward our compliant on to the Ethics Committee for adjudication.
We have duplicated your attached non-fillable PDF complaint form below and offer this complaint via email in accordance with your instructions posted at?
The SBTC requests your Ethics Commission please review and process our complaint and issue a determination as to whether TIA concludes TQL is indeed violating your ethics policy by circumventing we believe obviously in bad faith 49 CFR 371.3 --if not outright evading carriers' right to records in violation of 49 U.S. Code § 14906 - Evasion of regulation of carriers and brokers through waivers of 371.3 in its contracts.
Indeed, we believe this business practice does not conform to your?Code of Ethics,?which states:
1. A member shall deal fairly with customers, colleagues, fellow members, and the general public.
2. A member shall conduct his or her professional life in accordance with the interests of TIA, the?third-party transportation services industry, and the general transportation public.
3. A member shall adhere to honesty and integrity and to generally accepted principles of?professional conduct.
4. A member shall not engage in any practice, which tends to corrupt, the integrity of TIA, the third-party transportation services industry or process of government.
5. A member shall make proper, just, and prompt payment for all contractual obligations.
6. A member shall abide by all lawful agreements to which he or she is a party, including all?agreements with shippers, carriers and other transportation intermediaries.
7. A member shall compete vigorously – but not unfairly – with other members.
8. If a member has evidence that another member has been guilty of unethical, illegal or unfair?practices, including those in violation of this Code, the member shall present information promptly?to TIA.
As we have stated to TQL we believe this practice may even raise restraint of trade issues and may result in a class action lawsuit under the existing private right of action if this practice is not immediately terminated and TOL commits on or before May 10, 2023 that it will in fact cease and desist from further engaging in this practice, which adversely affects our members and their regulatory rights.
We ask TIA please issue guidance to its members on this issue as a number of other brokers are engaged in this practice and they may be contacted by an attorney representing SBTC's in the near future if this problem persists.
Please advise us the TIA Ethics Committee's decision and whether TIA condemns or condones this waiver of 371.3 practice so that we may know how to proceed in furtherance of our members' rights under the law.
Thank you.
Sincerely,
/s/ JAMES LAMB, Executive Director
Small Business in Transportation Coalition, Inc. ("SBTC")
Truckers.com
Visit our new website:?
1775 I. (Eye) Street, NW, Suite 1150
Washington, DC 20006
@JimLambUSA
(202) 587-2751
?
??????????????TIA ETHICS COMPLAINT?
Complaint Filed By:?????????????????????????????????Complaint Made Against:?
Name JAMES LAMB???????????????????????????????Name Total Quality Logistics LLC (TQL)?
Company Small Business in ???????? Company TQL???MC-322572
Transportation Coalition, Inc. (SBTC)?
Address 1775 I. Street NW, Ste 1150???????Address??4289 IVY POINTE BLVD???
City/St./Zip Washington, DC 20006??????????City/St./Zip??CINCINNATI, OH??45245?
Phone (202) 587-2751??????????????????????????????Phone (513) 831-2600?
Fax?N/A??????????????????????????????????????????????????????Fax Unknown
Email [email protected]??????????????????????Email [email protected]??
Signature /s/ JAMES LAMB, SBTC Executive Director
Date 7 MAY 2023?
1. Nature of complaint: (Attach additional sheet(s) if necessary.)
SBTC believes?TQL is violating the fairness, honesty and integrity clauses in your Code of Ethics by having language in their contracts that makes waiver of 371.3 a condition for receiving loads from TQL because it is a blatant attempt to evade regulation in violation of 49 U.S. Code § 14906. We believe there can be no reasonable finding that this business practice is ethical when it violates Federal law and existing regulation.?
SBTC also believes this does not conform to your best practices inherent within the attached model broker-carrier contract.
As TIA is a member of FIATA, we believe this practice violates FIATA policies as well
FIATA is therefore copied here for their information.
2. Nature of Ethics Code Violations (Explain which TIA Ethics provisions you believe were violated and how):
(X) A member shall deal fairly with customers, colleagues, fellow members, and the general public.
Compelling a waiver of regulatory rights through contract in violation of 49 CFR 371.3 and?49 U.S. Code § 14906 is unfair
领英推荐
?
(X) A member shall conduct his or her professional life in accordance with the interests of TIA, the third party transportation services industry, and the general transportation public.
Compelling a waiver of regulatory rights through contract in violation of 49 CFR 371.3 and??49 U.S. Code § 14906 by a rogue brokerage is unprofessional, not in the interests of TIA , the 3PL industry or the general transportation public.
(X) A member shall adhere to honesty and integrity and to generally accepted principles of professional conduct.
Evading 49 CFR 371.3 in contracts in violation of?49 U.S. Code § 14906 is dishonest and lacks integrity to?generally accepted principles of professional conduct as evidenced by TIA's own model broker-carrier agreement.??FMCSA seems to concur in their attached March 1, 2022 letter to the SBTC.
?
(X) A member shall not engage in any practice, which tends to corrupt, the integrity of TIA, the third party transportation services industry or process of government.
We believe that compelling a waiver of regulatory rights through contract in violation of 49 CFR 371.3 and?49 U.S. Code § 14906 insults the rule of law and is corrupt.
We believe the media has raised serious concerns about past TIA leadership possibly colluding with USDOT officials in this area back in 2020:
TIA therefore owes its members and the industry clarity on this issue and assurance it has regained its moral compass contrary to past appearances of impropriety.
(X) A member shall make proper, just, and prompt payment for all contractual obligations.
Payment made under cloak of secrecy in violation of 49 CFR 371.3 cannot be deemed "just."
(X) A member shall abide by all lawful agreements to which he or she is a party, including all agreements with shippers, carriers and other transportation intermediaries.
Agreements which evade regulation in furtherance of restraint of trade are unlawful under?15 USC §1, which states:
?
"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court."
(X) A member shall compete vigorously – but not unfairly – with other members.
TIA Members evading 49 CFR 371.3 are engaged in practices we believe constitute unfair trade practices and unfair competition with other TIA members, SBTC small broker, carrier and trucker members, and members of the industry generally.
If a member has evidence that another member has been guilty of unethical, illegal or unfair practices, including those in violation of this Code, the member shall present information promptly to TIA.
Although SBTC is a non-member, please see attached documents offered promptly after SBTC issued its cease and desist letter.
3. Remedy (Explain what you would like the Committee to do to resolve the
complaint):?
SBTC asks the TIA to please issue guidance to its members on this issue as a number of other brokers are engaged in what we contend is this unlawful and questionable business practice.?Please advise SBTC the TIA Ethics Committee's decision in accordance with your time frame in your instructions and whether TIA condemns or condones this waiver of 371.3 practice so that we may know how to proceed in furtherance of our members' rights under the law.
APPENDIX A
CEASE AND DESIST LETTER TO TQL
From:?"Laurence Socci" <[email protected]>
Date:?Mon, May 1, 2023 7:54 pm
To:?"[email protected]" <[email protected]>
Cc:?"[email protected]" <[email protected]>
Subject:?CEASE AND DESIST DEMAND
May 1, 2023????????????????via [email protected] & U.S. Certified Mail, R.R.R.
Total Quality Logistics, LLC
Attn: Chris Brown, Legal Department
4289 Ivy Pointe Blvd.
Cincinnati, Ohio 45245
Re: CEASE AND DESIST DEMAND
Dear Mr. Brown:
I am the attorney for the Small Business in Transportation Coalition (SBTC), Inc., a 501c6 non-profit trade organization representing the interests of small business owners in the transportation industry.
It has come to our attention that Total Quality Logistics, LLC (TQL) is engaged in a questionable business practice, which involves requiring motor carriers and independent truckers to contractually waive their rights to shipper rate information under 49 CFR 371.3 as a condition to do business with TQL.
Our member Pink Cheetah Express LLC has provided us with the attached agreement which states, in part:
4. COMPENSATION. CARRIER agrees to perform the Services for BROKER, under CARRIER's Operating Authority exclusively, at a rate mutually agreed upon in writing in a TQL Rate Confirmation ("Rate Confirmation"), which shall be incorporated into this Agreement, or by Electronic Communications (defined in Section 20). Additionally...?
c. BROKER and CARRIER shall use commercially reasonable efforts to verify the accuracy of all freight charge billings invoiced by BROKER to CUSTOMERS for the Services performed by CARRIER. BROKER shall have the right to audit, from time to time, CARRIER's freight charges, and CARRIER shall fully cooperate with any audit. BROKER is not required to disclose its charges to CUSTOMERS, commissions, or brokerage revenue, and?CARRIER waives its right to receive, audit, and/or review information and documents to be kept as provided in 49 C.F.R. § 371.3..." (emphasis added).?
Our member has also furnished us an email from Amy Unger, a TQL Legal Claims Specialist, dated March 17, 2023, which stated to Pink Cheetah Express:
"Please note that on June 10, 2019 Pink Cheetah Express LLC and Total Quality Logistics entered into a Broker Carrier Agreement (“Agreement”).?Section 4(c) of the Agreement states in part:
BROKER is not required to disclose its charges to CUSTOMERS, commissions, or brokerage revenue, and CARRIER waives its right to receive, audit, and/or review information and documents to be kept as provided in 49 C.F.R. § 371.3."
We note that TQL is a member of the Transportation Intermediaries Association (TIA) and that TIA, as a matter of best practices, published a model broker-carrier contract many years ago, which does not include the waiver language referenced above. It therefore appears TIA does not consider your waiver language to be reasonable and customary.
As you know, the FMCSA recently approved the SBTC's May 6, 2020 petition to open rulemaking on this matter and denied the Transportation Intermediaries Association's request to open rulemaking to repeal 49 CFR 371.3, thereby dismissing TIA's misguided argument that property brokers are shippers for the purposes of 49 CFR § 14101b with waiver rights under the law.?We expect the rulemaking on our petition to commence shortly.
SBTC's position is that brokers licensed and regulated by the FMCSA may not circumvent duly promulgated regulations without being in violation of 49 U.S. Code § 14906 - Evasion of regulation of carriers and brokers. We note with respect to those brokers that do evade regulation, the statute clearly states:
"A person, or an officer, employee, or agent of that person, that by any means tries to evade regulation provided under this part for carriers or brokers is liable to the United States for a civil penalty of at least $2,000 for the first violation and at least $5,000 for a subsequent violation, and may be subject to criminal penalties."?
Furthermore, the SBTC received the attached letter from FMCSA dated March 2, 2022 which we believe affirmed carriers' rights under 49 CFR 371.3 in 2022. Please note FMCSA stated last year:
"As to your request for guidance on compliance with Part 371 during the pendency of the related rulemaking petitions filed by SBTC, the Owner-Operator Independent Drivers Association (OOIDA), and the Transportation Intermediaries Association (TIA),?all brokers remain subject to any requirements that are applicable to them.?As to your request for guidance “on how motor carriers and independent truckers should handle situations in which they are told they may not have loads if the[y] choose to exercise their right to broker transparency,” FMCSA will consider this request in connection with SBTC’s May 2020 petition for rulemaking (emphasis added)."?
Now that the TIA's request that FMCSA repeal 49 CFR 371.3 is off the table, we contend this letter is now authoritative and that TQL must abide by 49 CFR 371.3.
Lastly, as you know, "restraint of trade" is generally defined as any activity that prevents another party from conducting business as they normally would without such a restraint. We contend the caselaw is clear when it comes to?evasion of federal regulation through contract for the purpose of engaging in restraint of trade. We remind TQL that??15 USC §1 states:
"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court."
We offer this 2022 summary of actions before SCOTUS on the matter of unreasonable restraint of trade:
With many of our members affected by TQL's evasion of regulation through contact, it would appear that this matter is now ripe for a class action.
Accordingly, and on behalf of independent truckers and small carriers many of which, are dues paying members of the SBTC, the??SBTC hereby DEMANDS that TQL IMMEDIATELY CEASE AND DESIST from continuing to engage in this unlawful practice of requiring carriers waive their regulatory rights to rate transparency under 49 CFR 371.3 as a condition to receive loads from TQL and immediately advise the SBTC in writing no later than May 15, 2023 that it has terminated what we believe is this unlawful and abusive practice so that we may know how to proceed.
Thank you for your anticipated cooperation.
Sincerely,
Laurence Socci, Esq.
?
Laurence L. Socci, Esq.
Member of the District of Columbia Bar
and
U.S. District Court Bar
(202) 262-5843
We're still waiting, Anne..
“No One Out ??♀?’s The Pink ?? Cheetah ??!”
1 年AMEN! ????