The opinion of the court was delivered by: Walls, Senior District Judge
Port Drivers Federation 18, Inc., Florencio Hernandez, Julian Hernandez, Jose Landa, Nelson Rodriguez, and Juan Marte ("plaintiffs" or "contractors") contend that All Saints Express, Inc. ("All Saints") has failed to comply with the Federal Truth in Leasing Regulations ("Regulations") in violation of this Court‟s October 18, 2010 injunction. On January 25, 2011, All Saints was ordered to show cause why it should not be held in contempt of court.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs are independent owners and operators of trucks who lease their trucking equipment and driving services to defendant All Saints. All Saints‟ sole business is transporting the cargo of St. George‟s customers between ports in New York and New Jersey and the St. George warehouse, or directly from the St. George warehouse to customers of St. George.
Plaintiffs filed a complaint which alleged that the leases that they had entered into with All Saints violated of the Federal Truth in Leasing Regulations. Both plaintiffs and defendants moved for summary judgment. On October 18, 2010, the Court granted summary judgment in plaintiffs‟ favor finding that the leases entered into between plaintiffs and All Saints violated: (1) the compensation provision of 49 C.F.R. § 376.12(d), (2) the compensation documentation provision of 49 C.F.R. § 376.12(g), (3) the signed lease of a specific duration provision of 49 C.F.R. §§ 376.11(a)-(b) and 376.12(b), (4) the workers‟ compensation insurance documentation provision of 49 C.F.R. § 376.12(j)(2), and (5) the chargeback provision of 49 C.F.R. § 376.12(h). The Court also permanently enjoined All Saints "from violating the conditions and requirements of the Regulations." Port Drivers Fed‟n 18, Inc. v. All Saints Express, Inc., No. 09-868, 2010 WL 4116500, at *18 (D.N.J. Oct. 18, 2010).
Plaintiffs contend that despite the October 18, 2010 order, All Saints has failed to comply with the Regulations. Specifically, they contend that All Saints has not entered into compliant leases and instead has submitted two potential leases to plaintiffs that violate the Regulations.
"A plaintiff must prove three elements by clear and convincing evidence to establish that a party is liable for civil contempt: (1) that a valid order of the court existed; (2) that the defendants had knowledge of the order; and (3) that the defendants disobeyed the order." Marshak v. Treadwell, 595 F.3d 478, 485 (3d Cir. 2009) (citation omitted). Any "ambiguities [in the order] must be resolved in favor of the party charged with contempt." John T. ex rel Paul T. v. Delaware Cnty. Intermediate Unit, 318 F.3d 545, 552 (3d Cir. 2003). While courts should "hesitate to adjudge a defendant in contempt when there is ground to doubt the wrongfulness of the conduct," the defendant‟s alleged behavior need not be willful to be found in violation of the applicable order because "good faith is not a defense to civil contempt." F.T.C. v. Lane Labs-USA, Inc., 624 F.3d 575, 582 (3d Cir. 2010). A court should, however, evaluate the steps the defendant took to comply with the order because a defendant may not be held in contempt if it can "show that it (1) has taken all reasonable steps to comply with the valid court order, and (2) has violated the order in a manner that is merely "technical‟ or "inadvertent.‟" Id. at 591.
All Saints does not challenge the validity of the order or their knowledge of the order. Instead, they contend that they have fully complied with the issued injunction.
Insurance Provision 49 C.F.R. § 376.12(j)(1) states:
The lease shall clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public pursuant to 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.
Plaintiffs contend that the insurance provisions in All Saints‟
proposed lease fail to state All Saints‟ legal obligation to maintain
insurance for the protection of the public. All Saints maintains that
Section 11(B) of the proposed lease satisfies § 376.12(j)(1). Section
11(B) states "[w]hile the lease Equipment leased hereunder is under
the exclusive possession, control and use of ASE, ASE shall assume
complete responsibility for the operation of the Equipment leased
under this Agreement for the duration of this Agreement." *fn1
(Pl. Ex. K, Proposed Lease, at 6.)
While All Saints claims to maintain a $5 million liability policy, there is no language to this effect in the proposed lease. Instead, the language All Saints points to states that All Saints will be responsible for the operation of the equipment when it is in All Saints‟ possession. There is no mention of All Saints carrying any insurance at all. The first sentence of Section 11(B) should read as follows:
While the Equipment leased hereunder is under the exclusion possession, control and use of ASE, ASE shall assume complete responsibility, including insurance for the protection of the public, for the operation of the Equipment leased under this Agreement for the duration of this Agreement.
Such language comports with the regulations.
Plaintiffs also contend that the lease fails to clearly state the types of insurance that the contractor is required to maintain. The proposed lease requires the contractors to maintain the insurance listed in Schedule B and requires the contractors to provide All Saints with proof of insurance "for the equipment and personnel, including, but not limited to, vehicle liability and bobtailing." (Pl. Ex. K, Proposed Lease, at 6.) Schedule B states that the contractor must maintain "BOBTIAL [sic] /DEAD HEAD-NON TRUCKING COVERAGE." (Pl. Ex. K, Proposed Lease, at 13.) All Saints contends that Schedule B is specific and requires that the contractors purchase Bobtail/Dead Head-Non Trucking insurance only. Plaintiffs argue that the inclusion of the phrase "including, but not limited to" renders the provision ambiguous.
Schedule B clearly explains that the only insurance the contractor is required to obtain is bobtail/dead head-non trucking coverage.*fn2 ...