Status of Placard/Logo Liability in the Fifth Circuit and Mississippi

What is the Placard Liability or Logo Liability rule in Mississippi?

The “placard liability” or “logo liability” rule is stated as follows:

[I]f there is an existing lease between an ICC-authorized carrier and an owner of leased equipment and the equipment bears the carrier’s ICC placard, then the driver of the equipment will be deemed to be the carrier’s statutory employee. . . . Consequently, the carrier will be held vicariously liable for injuries resulting from the use of the leased equipment. Jackson v. O’Shields, 101 F.3d 1083, 1086 (5th Cir. 1996) (citation omitted).

In 1986, the ICC regulations were modified to give leasing parties more discretion regarding the terms of the lease. Id. at 1086-87. These modified regulations no longer require the carrier-lessee to remove placards or other forms of identification from the leased equipment. Id. at 1087. Instead, the lease must indicate which party (the carrier-lessee or the owner-lessor) has this responsibility. Id.

The applicable regulations state in part: “The lease shall clearly specify which party is responsible for removing identification devices from the equipment upon the termination of the lease and when and how these devices, other than those painted directly on the equipment, will be returned to the carrier . . . .” 49 C.F.R. § 1057.12(e). Nevertheless, the regulations as amended “still require the authorized carrier to identify the leased equipment by displaying its name and MC number on the equipment.” Jackson, 101 F.3d at 1087, n.8 (citing 49 C.F.R. §§ 1057.11(c)(1), 1058.2).

The history of the ICC amendments suggests that they resulted from the ICC’s concern that carriers could incur liability even if owners wrongfully continued to display the carrier’s placards or other insignia on equipment after the lease contract had terminated. Id. at 1087 (citing 3 I.C.C. 2d at 92; Williams v. Steco Sales, Inc., 530 N.W.2d 412, 418-19 (Wis. Ct. App. 1995) (discussing the amendment of the ICC placard removal regulation)). In promulgating the amendments, the ICC emphasized that its leasing rules are not intended to apportion liability based on the existence of placards. Id. (citing 3 I.C.C. 2d at 93).

In the wake of these amendments, the Jackson court noted that “the continued validity of decisions in other circuits holding that a lease cannot be effectively terminated until a carrier removes its placard and obtains a receipt is at best questionable.” Id. In fact, the Fifth Circuit held that the mere presence of a carrier-lessee’s placard on a vehicle alone does not continue a lease where the carrier-lessee has taken reasonable steps to terminate the lease in accordance with its provisions. Id. at 1088.

Mississippi federal district courts have reached similar conclusions. See, e.g., Bailey v. Payne, Nos. 2:88CV170-S-O, 2:88CV171-S-O, 3:90CV59-S-O, 2:91CV37-S-O, 2:91CV38-S-O, 1994 U.S. Dist. LEXIS 21223, at *10-13 (N.D. Miss. Sept. 20, 1994) (holding that where lease provided that owner-lessor was responsible for removing carrier-lessee’s placards at the end of lease, owner-lessor’s failure to do so did not continue the lease or render carrier-lessee liable for the subject accident).

In essence, the ICC amendments discussed above have abrogated the “placard liability” or “logo liability” rule in favor of specifying in the lease which party is responsible for removing placards or other insignia. Therefore, where a carrier-lessee has made efforts to terminate the lease consistent with its provisions, the mere fact that its placard remains on the vehicle does not operate to continue the lease.