Jacksonville, Florida (NASDAQ-LSTR) Landstar System, Inc., a safety-first non-asset based provider of transportation capacity and logistics services, announced today that the United States District Court for the Middle District of Florida has issued summary judgment rulings rejecting claims of improper pricing by Landstar in a pending class action case involving current and former Landstar Business Capacity Owners (BCOs) and the Owner-Operator Independent Drivers Association, Inc. (“OOIDA”). BCO is the Landstar term used to refer to the independent owner-operator small business owners who supply the company with the truck capacity used to haul freight under exclusive lease arrangements.
First, the Court rejected OOIDA’s argument that Landstar’s current leases with its BCOs violate the federal leasing regulations.
Second, the Court denied OOIDA’s motion for summary judgment alleging that Landstar unlawfully reduced the compensation of its BCOs on certain loads. With respect to these claims, the Court found that Landstar has "literally complied with the [applicable] requirements [of the federal leasing regulations] in [its] Original and New Leases.”
Third, Landstar offers voluntary programs to its BCOs to enable them to buy discounted products and services that are then “charged-back” against the BCO’s settlement compensation. The Court rejected OOIDA's argument that it is unlawful for Landstar to sell these items for more than Landstar's third-party costs.
Fourth, the Court ruled that federal law requires a motor carrier to provide access to the documents owner-operators need to “ascertain whether they are being charged properly” for a given charge-back item. Landstar believes that all charge-backs to its BCOs were charged correctly and a review of the underlying documents will bear that out.
These rulings are significant, according to Bob LaRose, Landstar Executive Vice President and Chief Financial Officer, because they will allow Landstar to continue providing and developing cost-saving programs to help BCOs minimize the expenses associated with their businesses. These programs are a vital part of making Landstar's BCOs among the most profitable owner-operators in the industry.
Landstar is proud of the way in which these programs have enabled its BCOs to achieve cost savings that would not otherwise be available to them from other sources throughout the transportation industry, including similar programs offered by OOIDA. Said LaRose, “All our BCOs need to do is look at the pricing, compare and decide for themselves whether or not to participate in any of these programs.
Trial has been set in this matter for January 2007. Landstar continues to believe it has meritorious defenses to the claims at issue in this litigation and intends to continue to assert these defenses vigorously.
Landstar System, Inc. delivers safe, specialized transportation services to a broad range of customers worldwide. The Company identifies and fulfills shippers’ needs through the coordination of individual businesses comprised of independent sales agents and third-party transportation capacity providers. Landstar's carrier group, which is comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Ranger, Inc. and Landstar Carrier Services, Inc., delivers excellence in complete over-the-road transportation services. Landstar’s global logistics group, which is comprised of Landstar Global Logistics, Inc. and its subsidiaries Landstar Express America, Inc. and Landstar Logistics, Inc., provides international and domestic multimodal (over-the-road, air, ocean and rail) transportation, expedited, contract logistics and warehousing services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.