Lightning like Steve McQueen I'm in the fast lane when the light turns green and I built tough I ain't nothing.
But grit cause I made rugged blood.
Sweat and spit yeah, like a horse.
I fly then I push yourself in for a bumpy ride I like to.
Play hard but I work harder and I weather the storm cause I'm built.
Stronger what is up, ladies and gentlemen, we are back. We are live. It is a freight coach podcast, the top podcast in transportation coming to you guys every single weekday, 08:30 a.m. Pacific, 1030 Central to break down some industry headlines, but most importantly, provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real sound of freight, ladies and gentlemen. And I say that before every single show. And what I mean by that is I only speak with transportation professionals because at the end of the day, you guys, I want to put the right information out there from the people who have done what you're looking to do or who are currently doing what you're trying to achieve.
So you can take that information, apply it, utilize it, and see a meaningful difference in your business and your life. Happy Monday, everybody. Corey Buchan, happy Monday to you as well. I got a very special guest for you guys here today, and I don't want to waste any more time, and I'm going to bring him up right away. But, you know, there's a lot of reports out there, freight guard reports and negative reviews and reviews on services and, you know, how do you decipher what's real and what's not? And can that ever be used to against you in the court of law? So I figured anytime that I have anything like this, I always want to speak with lawyers and with that.
And I saw this gentleman's post a couple weeks back and I thought, I got to get him on the show to talk about this. So I got Mister Dan Artave on the show today to break this down. Dan, thank you so much for joining me.
Chris, thanks so much for having me on today.
No, I appreciate it. And every time I have a lawyer on, and I've learned this from my lawyer friends, I need to say none of what you're about to hear is legal advice. If you need to talk to an attorney.
Thank you, Chris. That was getting the next thing out of my mouth.
Yeah, I, you know, I don't know if you're familiar with. His name is Matt Leffler. He's the armchair attorney. He's been on my show a bunch, Lauren began. She's also a maritime law attorney as well. And so they've got me very coached up on. Anytime you have an attorney on the show, to always throw that caveat in there.
I. That. That's perfect. And just, I wanted to mention that Matthew Loeffler and I happened to go to the same law school together and graduated in the same year. What a coincidence, right?
That is funny. He's great, man. He is something else.
Absolutely.
So what, you know, you had mentioned before went live that you focus on the transportation industry and transportation law for the most part, right?
Well, that's one of my focus areas. My practice is business law. It's always been business law. I started practicing law in 2010, actually. I worked for the state of Michigan as an assistant attorney general for a few years, so I got some of that regulator perspective. Then after that, I went into private practice in the metro Detroit area, doing a lot of private corporate commercial litigation, advising businesses, going to court for them, any kind of contracts or business disputes, that sort of thing. And then when I started my own law firm in 2020, against that business background, they focused on things that were interesting to me, technology. And it happened to, I happened to stumble upon some information about false reviews and what that meant, what defamation looked like in the age of social media.
Like, can you really post anything you want on Facebook about people, even if it damages their business? And that sort of led me to the transportation industry and how serious of a problem that is and how damaging it can be for a carrier. And brokers who make postings online oftentimes don't even realize that they could be potentially incurring liability. So that's definitely a focus area of mine. I have a transportation law arm of my firm right now focusing on these sorts of issues.
Yeah. So, I mean, I'm a first Amendment absolutist, as I'm sure a lot of people are ultimately. But what is that difference between speaking something out there and a defamatory comment that could potentially cause damages to people? Can you kind of clarify that? Because I think in today's day and age with social media, people just, like, say, literally whatever, online, if you've been on the Internet for more than 5 seconds, you know what I'm talking about.
That's absolutely the case, Chris and I, you know, the biggest difference you need to understand is that there's a difference between a statement of opinion and a statement of fact. So when you express your opinion about a trucking company, for example, you can go out there and you can make a post online. I think this company, ABC Transports driver, is a terrible driver, and he's rude. That's a statement of opinion. That's not something that can be proven false or true with facts in a court of law. But if you go out there and you make a posting like ABC trucking is a double broker, oh, all of a sudden you have made a statement of fact that's capable of proof.
And if you did this in a way that caused publication to third parties, that was made negligently without you checking your sources or just kind of going off the cuff and you've caused damages, well, all of a sudden you have the four elements necessary for cause of action, for defamation, false movement of fact, publication, negligence, and damages.
Okay, so where does, I mean, can you clarify what journalistic privileges are in this instance? In this instance? Because, you know, there's sometimes that, I've seen some stories in our industry go into publication, and it's like, at what point is that, like, toeing the line between, like, hey, you're reporting on something that's not actually true.
Yeah, and Chris, there's a lot of nuances to this, so I'll try to keep it as simple as I can. But journalistic privilege, usually there is more leeway from courts on when there's commenting on something that's a public interest or of public benefits. So again, there could be some benefit to, for example, going online and stating, well, this carrier is really dangerous. For example, they have very dangerous practices. Oh, okay. Well, there's something called the common interest exception to defamation that might apply there. And the same sorts of things apply to journalistic things that are of public interests, of certain topics that you can comment on. And, for example, you can make comments about public figures like politicians, and you're entitled to a lot more deference than just, you know, negligence. You actually have to be malicious about it and purposefully call bars.
Yeah, because there's been a couple of news stories here as of recent, kind of about this literal topic that we're about to jump into here that come to mind where, you know, they're, they've put out multiple articles about a similar service. And I'm like, at what point is that, like, damaging to somebody's business if it turns out that it's not true? Because it kind of seemed like there was a bunch of stuff that was unsubstantiated, to say the least, inside of this article, and it could have just been somebody's opinion. But that opinion piece could be very, I would say, like, I mean, it could possibly put a company out of business if it, you know, caught fire in today's day and age with social media. Right?
Absolutely. And just circling back to the time when I got involved with freight guards, I remember reading about a yemenite case between a company called Penguin trucking here in Michigan and El Hollingsworth, a major broker. And this case basically resulted in a $600,000 plus judgment, I believe, or settlement against the broker due to the fact that they put out a statement that was proven false and damaged penguins business. And I believe they lost contracts that they were able to demonstrate in a court that they lost contracts because of this false statement.
Yeah. And that is, you know, again, and, you know, to jump into what our topic is, I mean, the post that Dan put out there was, you know, about a company that essentially sued a trucking company, sued a broker in court and they had to pay out. And it was like, you know, $200,000. I think it's in like punitive damages or something like that was out there. And what, so what was that this penguin case? Is that the one you're alluding to or was this a separate one?
No, no, this is a different case. This is one I actually advised on directly. And I acted as general counsel for this company. We had local council involved because the broker was in Virginia. So the lawsuit had to get filed in Virginia. And in any case, the broker. What had happened is that the broker was trying to get a hold of the carrier's driver something like six to 8 hours before the scheduled pickup time. The driver was sleeping. He hung up on the broker trying to check in. And then. So the broker, or actually it was a broker's agent in that instance, overreacted a little bit and not only canceled the load, but put out three freight guards before the. Before this trucking company's principle even woke up on the west coast that the time difference also made.
And so this guy, you know, he runs a trucking company with 20 years of experience, good record, good clients, wakes up to having not one, not two, but three freight guards accusing him of all kinds of nonsense, just provably false statements like he never even had a truck in the area and wasn't intending to deliver. And all this stuff, all this nonsense. And so also, the strange thing about this particular case is I'm a big advocate of attempting to resolve disputes without litigation. And believe me, we tried to just get this post down and maybe get some sort of resolution, maybe own up to the mistake. But we ended up having to go to litigation.
And at the end of the day, the court awarded not only $200,000 plus of actual damages that the court recognized the reputation of this broker was worth, but also issued what is called a punitive damages award, which is basically the court made an example out of this broker and said, don't you or anybody else go out there and damage people's reputation with these sorts of statements?
Yeah. And that's, you know, I, I will say I was fortunate early on in my career to kind of have a security blanket where like frontline reps could never write a freight guard report out there. Like if there was ever an issue, you had to send it to compliance and then compliance would decide, is this freight guard worthy or not? Right. And I, because like, I, you know, we would check said service that, you know, and we would go there and like, a lot of it to me was like a broker just not doing their job or emotionally reacting. And anybody with, you know, kind of half a brain could decipher that. Right. And, but then again, like, we never did a lot of that because of what you're describing right here. Right.
Where it's like you could, if you say the wrong thing and it's just like. Or it's you not doing your job and then you make an emotional outburst that causes damage to another company, it can be used against you. Right. And I think that it's very important for people to do that inside of their organization. And even, you know, I'd like to get your opinion on this. And again, this isn't legal advice, but are recorded phone calls, are, could that be used in some of these situations as well? If you have recorded phone calls?
Recordings are subject to different state rules. But in general, yes. That there's ways to get them in as evidence of fact. That's the general answer, Chris.
Yeah, no, for sure. So another part of why I wanted you to come on this show was based on what you had said in your post as well, about the massive change that they made here inside. And you can mention the company's name if you want. I mean, anybody out there with half a brand knows who issues freight guard reports. So what was this big change that they put out there?
So I think it was a week or so ago or towards the beginning of the month, we received reports that the company that is responsible for freight guards changed their policy actually to prevent freight guard removal. So freight guards, for all intents and purposes are permanent and there's ways to, you know, they'll be marked as deleted but basically stay up as part of a carrier's permanent record. And so when I saw this was very very concerning to me because in addition to carriers, I represent brokers. I have broker clients.
Yeah.
And like you said, I've always been a big advocate of having a compliance process in place and having either chief legal or somebody of the equivalent level sign off on anything that goes up. That's like a freight guard report because of the implications. And so when freight guards are now permanent and cannot be deleted, that caused a lot of concern in my lawyer brain that screams liability is being invited here and there's basically no way to unring the bella. So I issued a post on LinkedIn and I said this is a follow up to a legal alert I sent to my clients that says look, everybody hit pause on putting freight guards on until you understand the full implications of that. This is not something you can undo.
If you have a rogue agent going out there and posting on behalf of your company, you can incur liability. It's not a defense. It's not a defense that oh, I didn't know you're responsible for what's posted on behalf of your company. And so that's just very concerning to me from a perspective as like I said, I'm general counsel to several of these companies and try to keep people out of disputes, keep them out of court and make sure that the processes are iron cladd. So when a policy change like that comes in that immediately causes me to say hit pause, let's reevaluate.
No, exactly. And you know, and this is, you know, one thing that I've really prided myself on here over these last couple of years is calling out all the b's in the industry, right. Because I'm as a broker, I know brokers are, in my opinion are the cause of 99% of their own problems. They are very much self inflicted for the most part when it comes down to freight guards and like issues with the carriers that you source. Right. And I want to put two underlines over you. You are the one who decided to utilize this carrier. And I think that there's a lot of mudslinging that goes on out there that I see is an operational breakdown inside of the freight brokerage is what caused that. Right?
Like you know, there's certain follow ups that you should be doing, but ultimately it's you who decided to book the carrier. Right? Like because you can't go to your customer and say, oh, this driver is doing this. It's like, no, in your customer's eyes, they hired you to move their freight. Whoever you hired to actually pick it up is on you. Right. So it's like, I think that people need to be held liable for this, especially if it gets to the point of what you're describing here, Dan, of like this can cause irreversible damages to people's business because you had a broker or a agent, a rogue agent, have a bad day and throw a temper tantrum online.
Yeah. And I've seen this to bigger carriers. Maybe they'll lose 20, 30% of their business on the spot market just like that. Without even anybody looking into what the source of the freight guard is. If you're a smaller carrier, mom and pop shop with a couple of trucks, you're going to be standing there.
Yeah, it's not making money at all. It will, in my opinion, it will literally, a bad freight guard report or an unsubstantiated freight guard report will bankrupt somebody in today's day and age, especially with the, I mean, because fraud, double brokering, freight theft is at an all time high. Right. And it's only rising too, might I add. I want to be, I want to point that out. Freight theft, double brokering and fraud has risen exponentially over these last couple of years. I think I saw a report by travelers insurance that it's up like some 300%. Freight theft is over these last, I think, since 2021. Please don't exactly quote me on that. But travelers recently put out something that broke all of that stuff down.
So when we're out there and you're having a bad day and you post a freight guard report or a negative review on a carrier and it's out there for good, like that will potentially put somebody out of business in today's market. And I don't see that, like, slowing down anytime soon. Dan, I think it's going to get worse before it gets better. If I'm being completely honest, I think you're absolutely right.
And again, from my perspective as a counselor to brokers, I just want to make sure that there's, one, a process in place, and two, they understand the gravity of the situation of what they're doing and what they're potentially exposing themselves to. You better be sure when you put out something like that, especially when a free guard is now permanent. And so, but I also don't want to minimize the impact of fraud and the rise of double brokering and the legitimate concerns that a lot of brokerages have when trying to vet carriers.
And I think there's absolutely a place for feedback but at the same time I think it should be done in a professional, carefully measured, intelligent way and also gives the carriers a fair chance to respond and rebut their side of the story because I think anybody in the information industry of the brokers will only benefit from more information about a particular situation.
Yeah, and here's another thing too, is this is only opening up somebody to come out there and just do like a broker review style thing where it's going to be just as detrimental. Right. And I think that there's been, you know, from my standpoint, brokers haven't really been checked on. They're able to say literally whatever they want about carriers operations without fear of retribution or rebuttal. And I think it's only a matter of time before something else like that comes out there. And again, I want to be clear. There is a major difference between reporting about stolen freight, actual crimes. And I'm upset because this driver didn't answer their phone at two in the morning when I wanted them to. Therefore I pulled them off the load. I want to be abundantly clear about that. That's the stuff that I'm talking about.
And everybody who has been in this industry for more than five minutes knows the majority of these freight guard reports that are out there fall into the later camp. All right? It's the driver got lost, had to pull them off load, they're crappy, blah, blah. That's the, it's just like yelp out there is really what it is. And you know, so it's like, but when it comes down to the actual cases of fraud, identity theft, stolen freight, that very much needs to be talked about.
Absolutely. That continues to be very important. And from, just to follow up on your comment about the brokers and the carriers, the relationship is really dictated by the market as well. Right now it's pretty unfavorable to carriers, I would say. So brokers can be a lot more choosy right now and I think that's also part of why the freight guard reports are so impactful and disproportionately impactful.
So do you think like what are some things that, I mean you brought up compliance with brokers, right? Like there needs to be like what steps should they follow or could they follow in the event that they need to report an actual event, not a had a bad day event like an actual event. And how do they do that in a way, Dan, that offers some form of protection from a future potential litigation?
Well, I think the first thing that everybody needs to have, every broker needs to have is a written policy in place. Written policy that says, okay, if I'm an agent and I'm considering filing a freight guard, I am going to write down the facts, what happened, provide the documentation and take it up the chain to the person that can make the decision on the back of the behalf of the company, whether that's the CEO or chief legal. I would, as a lawyer I'm obviously biased. I would prefer this go through a lawyer before anything gets posted. But I know that's not realistic either. But the second part of it is in addition to the policy, and as part of the policy, you have to have a strict documentation process. Document, document. Everything that could be in a phone call should go via email.
That should be a best practice. Everything should be documented. You should have all the documentation. The, you know, if you're, you have. If you do have phone call logs, make sure they're timestamped and everything that will support your case. Because at the end of the day, the best defense to a defamation case is truth. And if you can prove that what you posted is true, you will be absolved from liability.
So what? Cause I have a lot of drivers who watch the show and I, you know, what can they do to protect themselves from stuff like this, right?
Where.
Or what can they do from there? Because a lot of people, and I say this, you know, because like my dad was an owner operator, right? And this wasn't really a thing when he was driving. But there are a lot of drivers now who have to fight that digital onslaught that's coming to, you know, running a business is hard enough. They don't need anything else to help them, you know, prohibit them from succeeding. So what can an owner operator or a small fleet that mom and pop trucking company, what can they do to protect themselves in the event something like this comes out about them? And it is in true, you know, false.
Well, that is very difficult. And as you point out, that it's very much, it's a lot of impact on these smaller carrier operators and who may not have the resources of some of the bigger companies and who might not be able to absorb a hit from a freight guard report. But I think some of the best practices that I would recommend to carriers is first of all, be aware of what's going on with your company. If you have multiple drivers, make sure that you are aware of any disputes and try to resolve them proactively before they become a problem. Basically try to do what you can to head off a freight guard and resolve this informally over the phone because ultimately it's business and there's no reason to sink a business over somebody having a bad day.
So I think if you can just approach it in a way like, okay, I'm going to try to resolve this directly with the broker, maybe meet them halfway way if there's a problem. I think that's a good attitude to have and a good sort of the first step to trying to get this resolved because, you know, you don't want to have a freight guard at the end of the day.
No.
And I would also say that make sure that you have your spam filters checked because when you get a freight guard report, you get an email notification of it from a very specific email address. So I've seen carriers who don't even know they have a freight guard because they just miss this and then they also miss their chance to respond because freight guards must be responded to within 72 hours. Now again, that's not a silver bullet to mitigate all your damage, but it's an option and it's something that every carrier should make sure that they take advantage of when hit with a freight guards. Take your chance to actually post a response, but again, you can't do it if you miss the email. So be aware of what's going on.
At what point will some of these companies that are vetting or, you know, like this freight cards, at what point are they going to be brought into a lawsuit that shows that you prohibited somebody from working based on whatever information. Right. Because that's something that, the first thing that came to my mind when I saw that post, Washington, why isn't somebody just suing them to change their internal policies or is that even a thing? I guess. Again, I'm not a lawyer, so that's why I have people come on to break this down.
Yeah, absolutely. And that's a great question, Chris. I, there's something that Congress, the federal Congress passed in the late nineties called the Federal Communications Decency act, specifically section 230 that was enacted to protect growing platforms like Google, at the time, YouTube, at the time Facebook, from being responsible as the speaker for stuff that people post on their platform because it would have just sunk their businesses. We would have not had Google, Facebook, YouTube, because there's no way for them to police that so Congress wanted to protect them. And the law broadly applies to anybody that acts as sort of like a public forum and a marketplace of ideas, so to speak.
So if there is a problem with the posting made, that somebody makes a freight guard report, the problem is between the target of the posting, which is the carrier, and the speaker, or in this case, the posting broker. That's the dispute. The forum, in this instance, it would be protected by section 230 of the Communications Decency act. Now, that protection, it's not absolute, and the forum does still have some responsibility not to be negligent. And one of the things that I pointed out or wanted to point out about this policy change where freight guards are permanent, it's going to be impossible to get any sort of relief when a carrier sues a broker without involving the forum, because you have to get an injunction against the forum. Now, if the broker can't comply with a court order to remove the posting voluntarily.
So that was a little bit of something perplexing for me. And then, you know, freight guard's a big business. They have their own legal counsel, and I'm absolutely sure they ran this by them. But I think this will only lead to more complex litigation and possibly even cases that drag on longer than they should, just simply because of the fact that a freight guard can be removed.
Yeah, I think this is an ongoing thing, and this is going to continue out there, and I want to be mindful of your time, but I really appreciate you joining me to kind of break this down and hopefully provide some clarity for individuals out there. And most importantly, have you think before you post out there sometimes. But Dan, if anybody that's listening to this is possibly in one of these situations and they need to talk to somebody, how do they reach out to you to be in contact with you?
The best way to reach out to me is through my website, www. Dot artave@law.com artaevatlaw.com. And my email is danrtaevaw.com. Email is also a great way to reach out to me. I would be happy to schedule conversations with all players in the industry to see what I can do, because at the end of the day, again, I see my job as a lawyer to help people out, to help them prevent disputes and to mitigate any sort of potential liability. Because let's face it, at the end of the day, nobody in the trucking business makes money litigating. They make money hauling freight. And that's what I want to help all businesses do, including the trucking ones.
I appreciate it, Dan. And if you guys can't find Dan for whatever reason, just hit me up. I will gladly put you guys in contact with him, but that is going to be it for today, you guys. I will be back tomorrow. I'll be on the road for the next couple of days. So I'll be live from Jacksonville, Florida for these next couple of days out there. But as always, you guys, we will be live every single weekday, 830 in Pacific, 1030 Central. I appreciate you guys. I love you guys. And we'll be talking to you soon and we'll.