If you purchased a physical object recently, there’s a pretty good chance it traveled on a truck to get to you. That’s a good thing: There’s little doubt that truckers are playing a useful role in interstate commerce any time they’re shepherding goods to our doors. But does an empty truck still carry something? The Supreme Court may have to answer this very Zen question in a potential upcoming case involving trucking companies, insurance policies, and the lower courts that split trying to solve this existential dilemma.
The case, Prime Insurance Company v. Wright, began with a crash. In 2013, a trucker named Decardo Humphrey was driving his tractor-trailer truck through the Midwest. After he’d completed a job that took him from South Holland, Illinois, to Fort Wayne, Indiana, his employer, Riteway Trucking, assigned him to pick up another shipment in Fort Wayne and deliver it to its final destination in South Holland. While on the way to pick up the second shipment, Humphrey got into an accident with a driver named Darnell Wright. Humphrey sorted out the details with Wright and the local police, proceeded to pick up the shipment that same day, crossed back into Illinois, and delivered it.
Wright later successfully sued Humphrey and Riteway for the accident and won a $400,000 summary judgment in his favor. A complicated state and federal legal squabble then broke out between Riteway and its insurer, Prime Insurance Company, which claimed that Riteway had forfeited its insurance policy for not contesting Wright’s lawsuit. Prime then sued Wright in federal court to get a declaration that it would not be responsible for paying what is known as a MCS-90 endorsement.
An MCS-90 endorsement is a nearly universal feature of the American trucking industry. First mandated by the Motor Carrier Act of 1980, it functions like an add-on of sorts for the standard auto insurance used by trucking companies. Imagine that you’re driving home one night and a wayward semitruck forces you off the road and into a pond, totaling your car. The MCS-90 endorsement allows you to get compensation from the truck’s insurance company even if the trucker’s insurance plan doesn’t cover the accident in question for some reason.
In practical terms, it is designed to ensure that drivers injured by commercial trucking accidents always have some sort of financial recourse. Insurance companies offset the cost of the MCS-90 endorsement by charging higher premiums to trucking companies, which in turn pass that cost along to the companies that rely on them. Most importantly, as a federal mandate, this endorsement only kicks in when the truck is engaged in interstate commerce. A semitruck carrying goods from San Francisco to Los Angeles would not necessarily be covered.
Was Humphrey’s empty truck engaged in interstate commerce when the crash occurred? The insurance company said no. The relevant statutory text, Prime Insurance argued, says that the MCS-90 endorsement only applies when a truck is engaged in the “transportation of property by motor carrier or motor private carrier” across state lines or international borders. Since Humphrey was driving between jobs within the bounds of Fort Wayne when the crash occurred, and since his truck was empty at the time and therefore wasn’t engaged in the “transportation of property,” they argued that the endorsement didn’t apply.
A federal district court disagreed, however, and sided with Wright. The court took a more expansive view of what counted as “interstate commerce” under the statute by looking at what it described as the “totality of the circumstances.” It concluded that Humphrey’s truck began engaging in interstate commerce when he started the first job at Riteway’s direction that brought him to Fort Wayne, and that his involvement with interstate commerce continued until he dropped off the second shipment back to South Holland after the crash. That conclusion put Prime Insurance back on the hook for the $400,000 judgment.
The Seventh Circuit Court of Appeals upheld that ruling in January. In its decision, the three-judge panel noted that two other federal appeals courts had drawn different conclusions from the statutory text. The Fifth Circuit had taken a narrow approach, according to the panel, by concluding that the MCS-90 endorsement only applied if the truck was actively carrying property across state lines during an accident. The Eighth Circuit, on the other hand, had said that the endorsement applied when the truck driver had a “fixed intent” to engage in interstate commerce at some point in the immediate future. That would cover Humphrey’s empty truck, as well as a considerably greater amount of commercial trucking in general.
Judge Frank Easterbrook, writing for the panel, ruled in favor of the broader approach. He pointed to statutory language that defined “transportation” as “services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.” That covers a great deal more, he noted, than the act of physically moving property across interstate lines.
Nothing else in the U.S. Code or the Department of Transportation’s regulations “tells us to ask about anyone’s intent, about whether a truck was carrying freight at the moment of impact, or about the ‘totality’ of anything (let alone what would be in the list of circumstances that must be totally contemplated),” Easterbrook wrote. “All we need to know is whether the collision occurred during an interstate journey to deliver freight or one of the steps mentioned in [the statutory text]. The answer to that question is ‘yes.’” As a result, he concluded, Prime Insurance was back on the hook for the $400,000 judgment.
Prime Insurance does not want to pay that $400,000 judgment, however, and so it asked the Supreme Court to intervene over the summer. It argued that the Seventh Circuit had missed the forest for the trees when reading the relevant statutes. “A liability is not ‘for the transportation of property’ between ‘a place in a State’ and ‘a place in another State’ if the liability arises from an empty truck on an intrastate trip,” the company told the justices in its petition for review. “Rather, a vehicle must be carrying property on an interstate trip at the relevant time for the statute to apply.”
In other words, the company argued that it doesn’t matter why Humphrey’s truck was traveling anywhere when the accident occurred because it was empty at the time and therefore not engaging in any interstate commerce. While Easterbrook’s reading of the statute draws upon the definitions outlined by Congress, there is also a certain koan-like logic behind the company’s counterargument. If a semitruck isn’t carrying anything to buy or sell across state lines, is it still engaged in interstate commerce? If it crashes in the forest, can anyone hear it?
While all of this might seem like an arcane dispute over commercial insurance policies, the differing interpretations could have a palpable impact on one of the nation’s primary arteries of commerce. The Trucking Industry Defense Association, an industry group that includes both trucking companies and their insurers, urged the justices to take up the case on both legal and economic grounds.
“The proliferation of uncertainty and inconsistency of MCS-90 exposure to intrastate travel does nothing more than create increased risk, which results in insurers charging higher premiums to motor carriers,” the TIDA argued in its friend-of-the-court brief. “In turn, motor carriers will inevitably pass these costs on to consumers and the public at large in the form of higher prices on consumer goods.” While the group did not argue for a specific reading of the laws in question, it did argue that the Seventh Circuit’s reading of them should be overturned as erroneous.
That “uncertainty,” in turn, could also have downstream consequences for the rest of the American economy. The American Trucking Associations, an industry group, estimated last year that trucking accounted for roughly 72 percent of total goods shipped within the U.S. in 2022, far outpacing rail and air freight. A national shortage of commercial truck drivers exacerbated the supply chain crisis that arose in late 2021, leading to slowdowns and bottlenecks that rippled throughout the rest of the economy.
It is almost impossible to predict when the Supreme Court will hear a case, but the justices are most likely to intervene when different federal courts are reading federal laws in different ways. In its petition, Prime Insurance also emphasized that the federal appeals courts were clearly divided on the issue, as were some state supreme courts. Wright, in his own brief for the justices, downplayed the scope of that circuit split and told the court that the Seventh Circuit had gotten it right. When the court gathers again for its next conference at the end of September, we’ll find out whether the justices are interested in spending part of their fall term taking up this riddle.
