Arguing that an In-State Errand by a Trucking Company Employee That Resulted in an Accident Does Not Trigger a Federally Mandated Insurance Endorsement, Which Applies Only When a Vehicle is engaged in Interstate Transportation of Property For Hire at the Time the Accident Occurs.
This case presented an issue of first impression in Connecticut dealing with the interplay of federal interstate commerce jurisdiction and motor vehicle insurance law, which is usually the province of the states. Congress has given the Secretary of Transportation carefully delimited jurisdiction over the interstate transport of property by motor carriers and directed the Secretary to impose minimum liability insurance coverage amounts in order to protect the public. (These limits are often higher than state-imposed minimums, and thus are a preferred source of recovery in lawsuits.)
At issue here was how to determine whether the federally mandated insurance coverage applies to particular accidents. The defendant was the insurer of a New Haven towing company. The plaintiff, Martinez, was injured in a collision with one of the company’s trucks while the driver of the truck was running a purely local errand for the company to pick up truck parts. Having obtained a judgment against the company in an earlier action, in this action the plaintiff invoked the terms of the federal insurance endorsement in order to obtain from the insurer the unpaid portion of the earlier judgment. To establish interstate commerce jurisdiction (which is required by the federal endorsement), she argued that the court should look to the company’s operations as a whole (which did encompass commerce outside Connecticut), rather than to the route taken by the truck on this specific trip. She also argued that the vehicle parts that were the purpose of the truck driver’s errand, once installed in the towing company’s trucks, would travel in interstate commerce. She also invoked general public policy grounds.
NELF filed a brief in which it emphasized that this is an issue of federal, not state, law. The brief closely read the statutes, regulations, and the endorsement and demonstrated that, as courts elsewhere have overwhelmingly ruled, jurisdiction is to be determined by the nature of the specific trip that caused the accident and not by other, more general considerations. In addition, NELF distinguished a series of cases invariably cited by plaintiffs like Martinez when they argue against the trip-specific rule.
On July 12, 2016, the Connecticut Supreme Court issued its decision adopting the trip-specific rule by a vote of 6 to 1. The decision clearly shows NELF’s influence. The court not only followed NELF’s unique approach in how it distinguished the plaintiff’s cases, it also followed NELF in noting that some of plaintiff’s public policy arguments could be ruled out because they are inconsistent with how federal law addresses intrastate commerce with respect to liability coverage. A little surprisingly, the majority stated that they would have adopted the trip-specific rule even if they had thought it wrong (which they did not) because it is the rule used by the U.S. Court of Appeals for the Second Circuit. The state court explained that, because Connecticut lies within the federal jurisdiction of that circuit, it customarily follows the Second Circuit on federal questions in order to avoid problems like forum-shopping. It is worth noting that NELF alone had argued in favor of the trip-specific rule in part by reminding the state court of this customary deference.
This case presented an issue of first impression in Connecticut dealing with the interplay of federal interstate commerce jurisdiction and motor vehicle insurance law, which is usually the province of the states. Congress has given the Secretary of Transportation carefully delimited jurisdiction over the interstate transport of property by motor carriers and directed the Secretary to impose minimum liability insurance coverage amounts in order to protect the public. (These limits are often higher than state-imposed minimums, and thus are a preferred source of recovery in lawsuits.)
At issue here was how to determine whether the federally mandated insurance coverage applies to particular accidents. The defendant was the insurer of a New Haven towing company. The plaintiff, Martinez, was injured in a collision with one of the company’s trucks while the driver of the truck was running a purely local errand for the company to pick up truck parts. Having obtained a judgment against the company in an earlier action, in this action the plaintiff invoked the terms of the federal insurance endorsement in order to obtain from the insurer the unpaid portion of the earlier judgment. To establish interstate commerce jurisdiction (which is required by the federal endorsement), she argued that the court should look to the company’s operations as a whole (which did encompass commerce outside Connecticut), rather than to the route taken by the truck on this specific trip. She also argued that the vehicle parts that were the purpose of the truck driver’s errand, once installed in the towing company’s trucks, would travel in interstate commerce. She also invoked general public policy grounds.
NELF filed a brief in which it emphasized that this is an issue of federal, not state, law. The brief closely read the statutes, regulations, and the endorsement and demonstrated that, as courts elsewhere have overwhelmingly ruled, jurisdiction is to be determined by the nature of the specific trip that caused the accident and not by other, more general considerations. In addition, NELF distinguished a series of cases invariably cited by plaintiffs like Martinez when they argue against the trip-specific rule.
On July 12, 2016, the Connecticut Supreme Court issued its decision adopting the trip-specific rule by a vote of 6 to 1. The decision clearly shows NELF’s influence. The court not only followed NELF’s unique approach in how it distinguished the plaintiff’s cases, it also followed NELF in noting that some of plaintiff’s public policy arguments could be ruled out because they are inconsistent with how federal law addresses intrastate commerce with respect to liability coverage. A little surprisingly, the majority stated that they would have adopted the trip-specific rule even if they had thought it wrong (which they did not) because it is the rule used by the U.S. Court of Appeals for the Second Circuit. The state court explained that, because Connecticut lies within the federal jurisdiction of that circuit, it customarily follows the Second Circuit on federal questions in order to avoid problems like forum-shopping. It is worth noting that NELF alone had argued in favor of the trip-specific rule in part by reminding the state court of this customary deference.
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