JACKSONVILLE, Fla., Aug. 31 /PRNewswire-FirstCall/- Landstar System, Inc. (Nasdaq: LSTR), a safety-first non-asset-based provider of transportation capacity, announced today that Landstar will appeal the ruling of the U.S. District Court, Middle District of Florida, certifying a class action in the lawsuit styled Owner-Operator Independent Drivers Association, Inc., et al. v. Landstar System, Inc., et al. In this lawsuit, the Owner-Operator Independent Drivers Association, Inc. ("OOIDA") and four named owner-operators allege that Landstar's contractual agreements with its independent owner-operators, who Landstar refers to as business capacity owners ("BCOs"), do not strictly comply with certain disclosure requirements of the federal leasing regulations. The Court's class certification ruling is purely procedural and in no way addresses whether the plaintiffs' claims have any merit.
BCOs leased to Landstar are small business owners who own and operate the capacity necessary to transport freight for customers of Landstar. Operating under the Landstar umbrella, BCOs can compete on a level playing field with even the largest competitor trucking companies and still enjoy the freedom to make their own decisions and run their businesses as they see fit. The freight available to haul in the Landstar system is among the highest paying freight in North America. Landstar BCOs determine which freight they haul and when they haul it. Landstar also makes available discount purchasing programs to its BCOs to help reduce the costs associated with owning and operating their businesses. While participation in these programs is wholly voluntary on the BCO's part, the discounts available to Landstar's BCOs under the programs are significant. Accordingly, participation by Landstar's BCOs is very high.
"Given the extensive compensation-related disclosures that Landstar routinely provides BCOs, you have to wonder if OOIDA is simply out to use the courts to gain a competitive advantage as it sells -- presumably, at a significant mark-up -- many of the same products and services that Landstar facilitates for its BCOs," said Landstar Executive Vice President and Chief Financial Officer Bob LaRose. "Is OOIDA hoping to extinguish popular and completely voluntary BCO discount programs by asserting new interpretations of the federal leasing regulations that would require disclosures that OOIDA itself does not provide?"
"This class-action ruling is based on perceived efficiencies in resolving liability on a class-wide basis, rather than through a series of separate trials," said Landstar Vice President, General Counsel and Secretary Michael Kneller. "Landstar continues to believe, however, that individual contractor- specific issues predominate over common issues, and will therefore ask the U.S. Court of Appeals in Atlanta to overturn this ruling." Kneller also pointed out that the Court's decision did not find that damages could even be awarded on a class-wide basis. Rather, said Kneller "the Court stated that if issues of liability are resolved in favor of the class, 'the issue of damages will be unique and subject to individualized proof.'"
This procedural decision relates only to Landstar Inway, Inc., Landstar Ligon, Inc., and Landstar Ranger, Inc., as earlier in the case, Landstar won dismissal of all claims against Landstar System, Inc., Landstar Express America, Inc., Landstar Gemini, Inc., and Landstar Logistics, Inc. Landstar Inway, Landstar Ligon and Landstar Ranger are among the most stable and successful motor carriers in North America, having each won numerous awards, and their BCOs are among the most loyal and highly compensated in the industry. The relationship between Landstar and its BCOs has resulted in one of the lowest turnover rates in the trucking industry, significantly below the industry average. The commitment of Landstar to provide individual BCOs with the freedom to run their businesses the way they want continues to set Landstar apart from even the most successful trucking companies.
Landstar believes it has meritorious defenses to the claims asserted by OOIDA in this lawsuit and intends to continue asserting its defenses vigorously.
Landstar System, Inc. delivers safe, specialized transportation services to a broad range of customers world-wide. 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 Global Logistics, Inc., Landstar Express America, Inc. and Landstar Logistics, Inc., together, provide domestic and international expedited, warehousing, contract logistics and intermodal transportation 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(R) under the symbol LSTR.