On July 24, 2023, the United States Court of Appeals for the Eighth Circuit ruled on a case involving the “kick-out” provision in 49 U.S.C. § 31105 which is part of the Surface Transportation Assistance Act of 1982. Wilson v. CTW Transportation Servs., Inc., No. 22-3049, 2023 WL 4697221, at *2 (8th Cir. July 27, 2023).
Avery Wilson (“Wilson”) filed an administrative complaint against CTW Transportation Services (“CTW”) after CTW terminated its freight hauling contract with Wilson. The complaint alleged Wilson’s contract was terminated in retaliation for reporting a safety issue, in violation of 49 U.S.C. § 31105(a).1
PROCEDURAL POSTURE BEFORE THE ADMINISTRATIVE LAW JUDGE
The case proceeded in front of an administrative law judge (“ALJ”) assigned by the United States Department of Transportation. The ALJ ordered discovery to close on May 25 and set trial for July 27. During the discovery phase, issues arose as to whether Wilson had produced all the relevant documents. CTW sought the missing documents from Wilson, but Wilson failed to produce them until May 27, two days after the close of discovery. CTW believed some of the documents Wilson produced had been fabricated. Additionally, Wilson failed to turn over his phone, despite an order to do so from the ALJ. Wilson ultimately fired his attorney and elected to proceed pro se.
The discovery disputes pushed the trial date back to September 8. On August 31, Wilson notified the ALJ that he intended to file in federal district court under section 31105’s “kick-out” provision. Section 31105(c)’s “kick-out” provision holds, if the Secretary of Labor has not issued a final decision within 210 days of the filing of the complaint and the delay is not due to the bad faith of the employee, the employee may bring an action in the appropriate federal district court. In Wilson’s case, the 210 days ran on May 5, which was twenty days before the close of discovery.
The day before trial began, Wilson sent a letter to the ALJ criticizing his handling of the case. CTW moved to dismiss the administrative complaint for bad faith based on Wilson’s delay in filing in federal court, his alleged manipulation of documents, and his ongoing failure to produce his phone for analysis. The ALJ found that Wilson had engaged in bad faith but allowed him two weeks to file a complaint in federal district court. Wilson filed his complaint, and the ALJ dismissed the administrative complaint with prejudice.
THE DISTRICT COURT PROCEEDING
Once in federal district court, Wilson reasserted his section 31105(a) retaliation claim. CTW moved to dismiss for lack of jurisdiction, arguing that section 31105 does not provide jurisdiction because Wilson’s bad faith delayed the administrative proceedings.
The district court agreed that it lacked jurisdiction, finding that Wilson “engaged in bad faith delay … by committing serious violations of the rules of discovery, refusing to comply with basic requirements to prepare the case for trial before the ALJ, and heaping personal insults on the ALJ in an attempt to postpone the proceedings.”
Wilson appealed, arguing that the district court misinterpreted section 31105(c) by relying on his alleged bad-faith conduct that occurred after the 210-day window had already expired. CTW argued such an interpretation should be rejected on policy considerations, noting Wilson’s reading of the statute would allow aggrieved parties to engage in bad faith conduct and still bring a complaint in federal district court.
EIGHTH CIRCUIT REVERSES
On appeal, the Eighth Circuit agreed with Wilson. Based on the plain language of Section 31105(c), jurisdiction exists when two conditions are met. First, the Secretary of Labor has not issued a final decision within 210 days from the filing of the complaint. Second, “the delay is not due to the bad faith of the employee.” By including “the” before “delay,” the statute specifies a particular delay – the Secretary’s failure to issue an opinion within the statutory time frame. The Eighth Circuit concluded there is no other delay mentioned in section 31105(c) to which “the delay” could refer to. As such, as long as the aggrieved party’s bad faith did not cause the delay, jurisdiction will lie in the district court under section 31105(c).
In evaluating whether Wilson’s bad faith conduct caused the delay, the Eighth Circuit took issue with the district court’s reliance on conduct after the 210-day deadline had already ran. For example, the district court characterized Wilson’s failure to meet discovery deadlines and his criticisms of the ALJ as bad faith conduct. These actions, however, occurred in August and September, well after the 210-day deadline had ran. The Eighth Circuit concluded such conduct could not have caused the Secretary’s failure to meet the 210-day deadline.
CTW argued that Wilson also engaged in bad faith conduct prior to the May 5 deadline. However, the district court did not specifically find that pre-May 5 conduct alone caused the delay. As such, the Eighth Circuit vacated the district court’s dismissal and remanded the case for further proceedings to determine whether the Secretary’s failure to issue a final order was due to Wilson’s bad faith conduct before the 210 days had run.
FOR ASSISTANCE ON TRUCKING AND TRANSPORATION LAW MATTERS
Contact John F. Fatino for more information about trucking and transportation matters at 515-288-6041. Megan E. Happe, associate attorney, assisted in the preparation of these materials.