Pittsburgh, PA
Copyright: sepavo / 123RF Stock Photo

I recently provided some thoughts to The Legal Intelligencer on Uber’s plans to roll out a fleet of self-driving cars in Pittsburgh later this month. The company announced its plans without submitting details to the Pennsylvania Public Utility Commission, which regulates taxis and ride-sharing services in the vast majority of the Commonwealth. In the piece, I discuss some open questions centered around liability raised by the announcement.

To read the piece, please visit “As Uber Rolls Out Driverless Cabs, States Play Catch-Up on Regulations” on Law.com. (The article requires a subscription or a free sign-up.)

Devotees of “Are We There Yet?” will recall that I profiled Ford’s New Shared Lease Program back in February, highlighting that the legal issues were tightly intertwined with the potential impracticalities.  Ford launched its Credit Link program in March, expecting that customers at three dealerships in millenial-laden Austin, Texas would jump at the opportunity to spread the cost of a vehicle across the wallets of up to five of their friends. As it turns out, Ford has gotten zero customers for the program since it rolled out.

Ford never publicly put a number on how many customers it expected to attract in the first three months of Credit Link, but it surely had to be more than none.  Ford seemed to attribute the difficulties to lack of customer awareness in a recent Automotive News article about the program, but also noted that it had a good flow of traffic on the Credit Link website.  While awareness for a radically new car leasing/sharing program certainly may be an issue, it may just as well have to do with the legal ramifications and practical problems inherent in getting a group of people to agree on anything as big as a car lease and then binding themselves together by contract.  One of the Austin-area dealership employees interviewed intimated as much, noting that “getting six people to agree on something has been very difficult.”  Ford may have to loosen the reigns on some of the program’s joint and several restrictions that bind the car-sharing parties to deal with the lease individually even if one of their cohort decides to leave them holding the bag.

Or maybe it is because, as Ford informed the folks at Jalopnik, Credit Link does not include the new GT350R.  There’s goes my idea for a group lease on a track car….

Copyright: jjspring / 123RF Stock Photo
Copyright: jjspring / 123RF Stock Photo

What happens when the limitation of liability clause in a contract between a shipper and a carrier is inconsistent with the bill of lading? In a recent case, the carrier could end up liable for over $1 million in damages instead of $15,000 after a New Jersey federal court held that a contract overrides a bill of lading.

The Contract v. the Bill of Lading

Copyright: kasinv / 123RF Stock Photo
Copyright: kasinv / 123RF Stock Photo

The contract provided that the carrier is liable for the full invoice value of the shipper’sgoods for any loss or damage subject to a $250,000 limit per occurrence. It also contained an “Entire Contract” clause providing that its terms cannot be modified or waived except in writing signed by both parties, and a provision that where any bills of lading or other documents are inconsistent with the contract, the contract governs.

The bill of lading, issued by a warehouseman on the shipper’s behalf, declared that the value of the goods was $2.30 per pound for a total of $15,772.80.

The End Result

The court found that the contract should be given full effect because the “very purpose and intent of the Override Provision is to render a conflicting bill of lading ineffective.”

Interestingly enough, the contract between the shipper and the warehouseman prohibited the warehouseman from declaring any value on products shipped. In a prior opinion, the court was quick to note that the shipper may very well have a claim against the warehouseman for the warehouseman’s lapse.

There has been a fair amount of news about Senate Bill 984 in Pennsylvania, which would allow companies like Uber to operate in the state.  SB 984 was approved by the Senate and in early May, approved 23-2 by the House Consumer Affairs Committee.  7050230_lThe Committee, however, tabled the bill almost immediately.  Despite the fact that the House convenes on June 6, 2016, the bill is not set to be put to a vote at that time.

Coincidentally, a few weeks later, House Bill 1290, a different bill on the same topic, was approved 24-2 by the House Consumer Affairs Committee and the House plans to vote on the bill on June 6. It would then need to be considered by the Senate.

So, how is HB 1290 different from SB 984?

For one, HB 1290 does not include the 1.7 percent tax levy on the services provided, or the “minimum annual assessment fee” of $2 million from the biggest ride-sharing services, like Uber .  And while it allows the Philadelphia Parking Authority to enforce the requirements of the bill and pass regulations related to the proposed service, those regulations cannot be contrary or in addition to the bill.

I will continue to provide updates as both bills make their way through the legislative process.

The Pennsylvania Public Utility Commission’s attempt to deregulate the entry requirements for passenger motor carriers (think taxi and paratransit service) continues to make its way through the regulatory process.  As I reported previously, the proposed regulation eliminates the requirement that new applicants demonstrate a “need” for the proposed service.  7050230_l

Now, the Independent Regulatory Review Commission (IRRC) has weighed in based on comments that carriers and legislators submitted last month.  The IRRC asked the Commission to provide more information and justification for its position that increased competition will benefit the industry and better establish that the Commission has fully explored:

  1. whether the regulation represents a policy decision of such a substantial nature that requires legislative review;
  2. the economic impact of the regulation;
  3. protection of the public health, safety and welfare;
  4. need for the regulation;
  5. implementation procedures;
  6. whether the regulation is supported by acceptable data; and
  7. whether a less costly or less intrusive alternative of achieving the goal of the regulation has been considered.

Not surprisingly, the IRRC questioned whether the Commission fully considered the interplay between the proposed regulation and SB984 (the pending legislation that would allow companies like Uber and Lyft to operate).

The Commission has two years to address the IRRC’s concerns.  I will continue to update you as the regulation makes its way through the regulatory process.

Today, the Pennsylvania Public Utility Commission reduced an initial almost $50 million penalty directed to Uber to $11.3 million.

Copyright: alphababy / 123RF Stock Photo
Copyright: alphababy / 123RF Stock Photo

The fine stems from Uber’s alleged illegal operation in Pennsylvania beginning in February 2014.  It was not until April 2014 that Uber sought authority to operate in the Commonwealth.  Uber was not actually granted that authority until July 2014.  In the meantime, Uber continued to operate without authority.  According to the Commissioners, the amount of the fine was based on the number of proven violations during the relevant time period.

Uber is apparently “shocked” and plans to appeal the fine.  One obvious focal point of Uber’s appeal will be its contention that it did not violate any of the PUC’s regulations because it is not a motor carrier or broker in the first place.  The company may face an uphill battle with that argument as the regulations provide a pretty broad definition for motor carrier to include any company offering to transport passengers for money.

Stay tuned……

Before we head directly outside of our office to celebrate Villanova’s National Championship, we’re bringing you the latest transportation legal news.  This week we highlight a literal sausage fight at Mercedes, a development in “Dieselgate”, and how movies can affect car buying.  On the transportation front, taxicab companies prevail in an equal protection suit against the city of Boston over Uber/Lyft and the FDA issues its final food safety rule.

Copyright: iqoncept / 123RF Stock Photo


  • Despite efforts to placate its North American dealer network, a trio of Illinois dealers are suing VW over “Dieselgate” losses. (Automotive News)
  • A new class-action suit filed in the District of NJ targets Mercedes over claims that its Bluetec systems pollute at a rate much higher than advertised.  (Autoblog)
  • That law firm may be in for a fight. The Mercedes folks don’t mess around, as evidenced by a fight over free brats at their shareholder’s meeting.  (Jalopnik)
  • Is “The Big Short” hurting the subprime auto lending market?  (Bloomberg)


  • A federal judge in Boston ordered the city to revise its taxi regulations by September, and show why ride-hailing companies like Uber and Lyft should not be governed by those rules.  (Boston Herald)
  • The IRS issued a Rulemaking Notice related to the excise taxes on the sale of trucks.  (CCJ)
  • FDA published its final sanitary transportation rule requiring companies transporting food to ensure the food isn’t contaminated during shipping.  (FDA)
Copyright: iqoncept / 123RF Stock Photo
Copyright: iqoncept / 123RF Stock Photo


Before Peter Cottontail hops down the bunny trail, we’re bringing you the latest transportation legal news.  This week we highlight rumblings of discontent in the VW dealer network and a mandate on oem parts in Maryland.  On the transportation front, we’re tracking FDA regulations that will affect refrigerated trucks and Septa’s move to better understand Uber.



  • Volkswagen’s U.S. Dealers “propose” reparations for franchise losses in a situation that has the potential to devolve into litigation. (Jalopnik)
  • Maryland’s “Better Parts For Consumers Bill” would limit auto repairs to oem parts for the first two years of a car’s life (Automotive News)
  • It is not legal news, but it is funny. For fans of the movie Spaceballs, Tesla will now let you retrofit your Model S with its “Ludicrous Speed” option. (The Verge)


  • 33 US Congressmen want to block the FMCSA’s proposed Safety Fitness Determination. (American  Trucker)
  • New food safety rules will take effect at the month and force refrigerated carriers to make a slew of operational changes. (FDA)
  • Cab company owner Michael Hashemian filed a lawsuit Tuesday in Philadelphia asking a judge to dissolve the Philadelphia Taxi Association, Inc., a group he cofounded last April “to combat the financial impact of UberX on the taxicab industry. (UberPeople)
  • SEPTA initiates a study to determine how partnering with ride sharing companies like Uber and Lyft could affect SEPTA.  (Philly.com)

I recently wrote about shipping delay claims and shared a great piece from Brightstone Insurance Services about avoiding losses due to delay.  Unfortunately, a delayed shipment can be, at times, unavoidable and so, we turn to the issue of what happens when a shipper is seeking “special damages” resulting from the delay.

Copyright: jlueders / 123RF Stock Photo
Copyright: jlueders / 123RF Stock Photo

What is the general rule for the measure of damages in transportation cases?  The shipper is entitled to recover the difference between the fair market value of the goods in the condition they were supposed to have been in at the time of delivery and the fair market value of the goods as delivered.  This rule obviously does not work when a carrier delivers goods that are in pristine condition, but are late.  In that case, the shipper or receiver will often try to recover “special damages” from the carrier.

What are “special damages”?  The concept of special damages in transportation cases dates back to the well-known 1854 case of Hadley v. Baxendale in which the business of a mill came to a screeching halt when a carrier delayed the shipment of a new crankshaft that was crucial to the mill’s business.  The mill owners sought lost profits resulting from the shutdown of the mill.  The court denied the claim for special damages because the owners failed to inform the carrier of how crucial the crankshaft was to their business.

Under Hadley, special or consequential damages are not recoverable under the Carmack Amendment if the shipper and the carrier did not contemplate them when they entered into the contract.  If a carrier, however, knew at the time of contracting that the shipper would suffer a specific type of damage other than actual loss if delivery were delayed, then the carrier could be held liable for such special damages.

Practice pointers:

  • With respect to special damages, the governing question is did the carrier have specific knowledge of the possibility of the damages and agree to assume them?
  • For the carrier to be liable for special damages, it must be advised by the shipper before the shipment is hauled of the potential consequential damages.
  • Contracts matter, especially when a carrier is shipping seasonal cargo or cargo like the crankshaft in Hadley.  A carrier can avoid liability for special damages by including limitation of liability clauses in its contracts.
  • In certain circumstances, a limitation of liability contained in a contract between a broker and the carrier can also be binding on the shipper.

Last week on the blog, I wrote about shipping delay claims in “How Did It Get So Late So Soon.” For more great advice on how to manage high risk cargo and avoid shipping Easter baskets late to Target, head over to Brightstone Insurance Services’ blog and read a great piece about avoiding consequential losses or losses due to delay.

Look for my post on damages due to delay next week.