Owner-Operator Independent Drivers Association, Inc. v. Mayflower Transit, LLC

In the
United States Court of Appeals
For the Seventh Circuit
No. 08-1673
OWNER-OPERATOR INDEPENDENT DRIVERS
ASSOCIATION, INC., et al.,
Plaintiffs-Appellants,
v.
MAYFLOWER TRANSIT, LLC,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. IP 98-458-C B/S—Sarah Evans Barker, Judge.
ARGUED SEPTEMBER 18, 2009—DECIDED AUGUST 9, 2010
Before EASTERBROOK, Chief Judge, and WILLIAMS and
TINDER, Circuit Judges.
EASTERBROOK, Chief Judge. Federal regulations require
motor carriers to have insurance for the protection of
the public, which may be injured by collisions on the
highway. 49 U.S.C. §13906; 49 C.F.R. §376.12(j)(1). Carriers
may provide service through leased equipment—and
a leased truck frequently is owned by its driver, who

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2 No. 08-1673
comes with the lease. See Transamerican Freight Lines, Inc.
v. Brada Miller Freight Systems, Inc., 423 U.S. 28 (1975). The
required insurance must cover any leased gear and
its driver.
Mayflower Transit, which transports household goods
for people who move to new homes, pays the owner-
operator of a leased truck a negotiated price per mile
(or per ton-mile), plus fees for other services such as
packaging and loading the shipper’s goods. Mayflower
reduces these payments by the cost of insurance. The
process is called a chargeback. Some of the lessors, and
an association that represents them, contend in this
suit under 49 U.S.C. §14704(a)(2) that a chargeback
violates 49 C.F.R. §376.12(i), which provides that “the
lessor is not required to purchase or rent any products,
equipment, or services from the authorized carrier as
a condition of entering into the lease arrangement.” As
the owner-operators see things, a requirement to reim-
burse Mayflower for the expense of insurance is the
same thing as a purchase of insurance from Mayflower.
The district court dismissed some of the owner-opera-
tors’ claims for relief after concluding that the statute
of limitations is two years. Neither §14704(a)(2) nor
any other statute sets a period of limitations for suits on
its authority. The owner-operators contended that the
residual statute of limitations, 28 U.S.C. §1658(a), thus
prescribes a four-year period. (Section 14704 was enacted
in 1995 and therefore is potentially covered by §1658,
which applies to federal statutes enacted or amended
after December 1, 1990. See Jones v. R.R. Donnelley & Sons

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No. 08-1673 3
Co., 541 U.S. 369 (2004).) But the district court concluded
that the two-year period that §14705(c) specifies for
administrative complaints under §14704(b) also applies
to suits under §14704(a)(2). The district judge separately
concluded that a chargeback differs from a compulsory
purchase of insurance, so the owner-operators lost on
the merits.
We start with the statute of limitations, which affects
not only the chargeback question but also any other
claims within the scope of §14704(a)(2). Plaintiffs’ suit
included many subjects, and although most are not per-
tinent to this appeal (the parties accept the district
judge’s disposition of them), the relief on some may
depend on the length of the limitations period—as the
relief on the chargeback issue certainly does, should
we rule in the owner-operators’ favor. An appeal from
a final decision brings up earlier interlocutory decisions,
such as the ruling about limitations. And the appeal is
from a final decision—at least, from a decision that was
made final after oral argument. Mayflower dismissed
some counterclaims without prejudice, planning to rein-
state them after the appeal. That made the decision non-
final. See Horwitz v. Alloy Automotive Co., 957 F.2d 1431 (7th
Cir. 1992); JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190
F.3d 775, 776–77 (7th Cir. 1999). But after the problem
was pointed out at oral argument, the parties filed a
stipulation resolving the counterclaims with prejudice.
That made the decision final, and as in other recent
appeals we give effect to this belated disposition.
See National Inspection & Repairs, Inc. v. George S. May
International Co., 600 F.3d 878, 883–84 (7th Cir. 2010).

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Section 14704(b) allows shippers to recover damages
when a carrier charges more than the rate specified in
its tariff. Section 14705(c) reads: “A person must file a
complaint with the Board or Secretary, as applicable, to
recover damages under section 14704(b) within 2 years
after the claim accrues.” This limit on shippers’ time to
launch an administrative proceeding to recover an over-
charge defined by a tariff is unrelated to §14704(a)(2),
which allows carriers to enforce legal rights established
by the statute or regulation. But the district judge thought
that the failure of §14705(c) to mention §14704(a)(2) was a
scrivener’s error. The judge concluded that Congress
had changed the numbering of §14704’s subsections
and failed to adjust §14705 to match, leaving §14705(b)
pointing to the wrong part of §14704. That could be
corrected, the judge held, by reading the reference to
§14704(b) as if it were a reference to §14704(a)(2).
The problem with this approach is that Congress
enacted, and the President signed, a statute that places
a two-year period of limitations on administrative com-
plaints under §14704(b), while leaving suits under
§14704(a)(2) to the four-year residual statute of limita-
tions. A judge’s belief that Congress planned to do some-
thing different but bollixed the job does not alter what
the enacted statute provides. The Constitution gives
the force of law only to what is actually passed by both
houses of Congress and signed by the President. What
Congress meant to do, but didn’t, is not the law. So
when a statute’s language conflicts with its legislative
history—a fair description of the events that led to
§14704 and §14705—it is the enacted text rather than

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No. 08-1673 5
the unenacted legislative history that prevails. Exxon
Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 568–71
(2005); In re Sinclair, 870 F.2d 1340 (7th Cir. 1989).
Courts sometimes take liberties with texts that seem to
be garbled or absurd, on the theory that when there is a
choice between sense and nonsense both the legislature
and the President prefer sense. But there is nothing
absurd about §14705(b) as written. It points to a statute
that could do with a period of limitations. Whether a four-
year period applies to §14704(a)(2) and a two-year
period to §14704(b), or the reverse, neither outcome is
absurd.
Several opinions that post-date the district court’s
resolution of the limitations issue hold that only a lin-
guistic glitch permits invocation of the anti-absurdity
canon. See, e.g., Spivey v. Vertrue, Inc., 528 F.3d 982 (7th
Cir. 2008); United States v. Logan, 453 F.3d 804 (7th Cir.
2006), affirmed, 552 U.S. 23 (2007). Allowing the “correc-
tion” of substantive problems would make too much
inroad on the legislative power, because judges tend to
see as “absurd” propositions with which they disagree.
And in United States v. Head, 552 F.3d 640 (7th Cir. 2009),
we held that a legislative blunder in adjusting cross-
references when amending a statute does not justify
invoking the doctrine of scrivener’s error, unless the text
as enacted is hash. The principle behind Head applies
equally to §14705(b), whose cross-reference makes
sense. Legislative history—what would in contract inter-
pretation be called extrinsic ambiguity—does not justify
revising a text that has no intrinsic ambiguity or any
difficulty in application.

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6 No. 08-1673
Two other courts of appeals have addressed this
subject. Owner-Operator Independent Drivers Association v.
United Van Lines, LLC, 556 F.3d 690, 692–96 (8th Cir.
2009); Owner-Operator Independent Drivers Association, Inc.
v. Landstar System, Inc., 541 F.3d 1278, 1297 (11th Cir.
2008). Both have held that §14705(b) must be enforced
as written, and that the period of limitations for suits
under §14704(a)(2) therefore is four years. We agree
with those decisions. (United Van Lines discusses the
incongruous fact that claims under §14704(b) appear to
be subject to two different statutes of limitations, one
from §14705(b) and another from §14705(c). We have
nothing to add to its discussion. No matter what one
makes of the oddity, it does not imply anything about
how long people have to sue under §14704(a)(2).)
Let us turn, then, to the question whether the
chargeback violates §376.12(i). Plaintiffs say that it does,
because to pay for something is the same thing as to
purchase something. But that can’t be right. Suppose
that Mayflower were to cover the cost of insurance by
reducing the amount it offers per mile of transportation.
“We will pay you $1.10 per mile and charge back 10¢
per mile for insurance” is identical to “we will pay
you $1.00 per mile and not charge you anything for in-
surance.” No one would say that the latter violates
§376.12(i); it is not a “sale” of insurance any more than
the statement “we will pay you $1.00 per mile and not
charge you anything to cover the expense of renting
our buildings and paying the telephone workers who
took the shippers’ orders” would amount to “selling” the
owner-operators the labor of the telephone workers, or a

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No. 08-1673 7
slice of Mayflower’s business premises. Cf. Krzalic v.
Republic Title Co., 314 F.3d 875 (7th Cir. 2002) (charging
for title-transfer services does not violate a rule against
separate sales or kickbacks in real estate closings).
Plaintiffs treat the chargeback as a sale of insurance
by Mayflower. Yet it is not an insurer. It is not autho-
rized to underwrite risks. The regulation requires motor
carriers to purchase insurance underwritten by real in-
surers, so that persons injured by a motor carrier’s opera-
tions may find a source of compensation more reli-
able than the motor carrier itself, which often is thinly
capitalized. Mayflower is a large and solvent firm that
has been in business for decades; it can pay for its own
casualties (and will do so indirectly because its insurer
will set an experience-rated premium that covers the
costs of indemnity, plus a loading charge for the
insurer’s administrative overhead). But many other
motor carriers are small, and some would take too few
precautions against accidents if they anticipated that a
major loss would lead them to declare bankruptcy. Then
the owners would reap profits as they came in, and use
the corporate shield of limited investors’ liability to
protect themselves against tort judgments. The insurance
requirement prevents that. And the regulation places
on the motor carrier under whose certificate the service
is rendered the obligation to secure insurance; that
makes enforcement much easier than placing a separate
mandatory-insurance obligation on the many owner-
operators who own and lease a single truck. Yet nothing
in this rationale for mandatory insurance implies that
lessors need not pay for the coverage secured through

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8 No. 08-1673
the motor carrier; as we’ve observed already, they
will pay indirectly (through lower rates per mile) if they
do not pay through a chargeback.
If this were not clear from the text of §376.12(i) and
the fact that Mayflower is not an insurer (so it can’t
be selling insurance to the lessors), it is made clear by
comparing §376.12(i) with §376.12(j)(1), which speaks to
the topic. This subsection, captioned “Insurance”, reads:
The lease shall clearly specify the legal obligation
of the authorized carrier to maintain insurance
coverage for the protection of the public pursuant
to FMCSA regulations under 49 U.S.C. 13906. The
lease shall further specify who is responsible
for providing any other insurance coverage for
the operation of the leased equipment, such as
bobtail insurance. If the authorized carrier will
make a charge back to the lessor for any of this
insurance, the lease shall specify the amount
which will be charged-back to the lessor.
The reference to chargebacks in the third sentence is
incompatible with the owner-operators’ contention
that chargebacks are “sales” forbidden by §376.12(i).
Courts do not read regulations to create such a glaring,
and unnecessary, inconsistency.
Plaintiffs want us to read the third sentence, which
speaks of chargebacks, as limited to the second, which
deals with “other insurance coverage . . . such as
bobtail insurance.” But the third sentence refers to “any”
of “this” insurance, and that construction is best under-
stood as including the insurance mentioned in the

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No. 08-1673 9
whole subsection. It would have been easy to write: “If
the authorized carrier will make a charge back to the
lessor for any of [the other] insurance [mentioned in the
previous sentence], the lease shall specify the amount
which will be charged-back to the lessor.” But that’s not
what the third sentence says. Section 376.12(j)(1) con-
firms our understanding of §376.12(i): A chargeback for
the cost of insurance is not a sale of insurance. The
eighth circuit reached the same conclusion in United
Van Lines, 556 F.3d at 696–97. No court of appeals has
held otherwise.
The judgment with respect to chargebacks is affirmed,
and the case is remanded for any further proceedings
that may be required by our ruling on the limitations
issue.
8-9-10

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