During the first half of the twentieth century, motor carriers attempted to immunize themselves from liability for negligent drivers by leasing trucks and nominally classifying the drivers who operated the trucks as “independent contractors.” See White v. Excalibur Ins. Co., 599 F. 2d 50, 52 (5th Cir. 1979), cert. denied, 444 U.S. 965, 100 S. Ct. 452,62 L.Ed.2d 377 (1979); see also Am. Trucking Ass’ns v. United States, 344 U.S. 298, 304-04, 73 S.Ct. 307,311-12, 97 L.Ed. 337 (1953) (detailing pre-amendment problems and abuses that threatened public interest and vitality of trucking industry); Empire Fire & Marine ins. Co. v. Guaranty Nat’l Ins. Co., 868 F.2d 357, 362 (10th Cir. 1989) (same). In order to protect the public from the tortious conduct of the often judgement-proof truck-lessor operators, Congress in 1956 amended the Interstate Common Carrier Act to require motor carriers to assume full direction and control of the vehicles that they leased “as if they were the owners of such vehicles.” Price v. Westmoreland, 727 F.2d 494,495-96 (5th Cir. 1984); Simmons v. King, 478 F.2d 857, 866-67 (5th Cir. 1973); Wirtz v. Dependable Trucking Co., 260 F.Supp. 240, 243 (D.N.J. 1966). The purpose of the amendments to the Act was to ensure that motor carriers would be fully responsible for the maintenance and operation of the leased equipment and the supervision of the borrowed drivers, thereby protecting the public from accidents, preventing public confusion about who was financially responsible if accidents occurred, and providing financially responsible defendants. See Integral Ins. Co. v. Lawrence Fulbright Trucking, Inc., 930 F.2d 258, 261(2nd Cir. 1991); Empire Fire & Marine Ins. Co., 868 F. 2d at 362; Alford v. Major, 314 F.Supp. 979, 983 (N.D.Ind.1970), aff’d, 470 F.2d 132 (1972); Wirtz, 260 F.Supp at 243; Graham v. Malone Freight Lines, Inc., 948 F.Supp. 1124, 1132 (D.1996), clarified on reconsId., 43 F.Supp.2d 77, aff’d, 201 F.3d 427, 1999 WL 1338356; see also Transam Freight Lines, Inc. v. Brada Miller Freight Sys. Inc., 423 U.S. 28, 36, 96 S. Ct. 229, 233, 46 L.Ed.2d 169 (1975) As a result of the regulatory authority granted in the Act, the Interstate Commerce Commission (ICC) issued regulations that require a carrier who leases equipment to enter into a lease agreement with the equipment owner providing that the carrier-lessee shall have exclusive possession, control, and use of the equipment, and shall assume complete responsibility for the operation of the equipment, for the duration of the lease. 49 C.F.R. § 376-11-.12 (2000); Price, 727 F.2d at 496 & n. 2 (applying predecessor to part 376). These regulations are known as the Federal Motor Carrier Safety Regulations. 49 C.F.R. subch. B (2000). The lessee must also insure any leased vehicles. 49 U.S.C. § 11107(a)(3); 14102.

Because under the FMCSR motor carriers have both a legal right and duty to control leased vehicles operated for their benefit, the regulations create a statutory employee relationship between the employees of the owner-lessors and the lessee-carriers. White, 599 F.2d at 52-53; see also Meyers v. Norton Ramsey Motor Lines, Inc., No. 4:96CV324-D-B, 1997 WL 170308, at (N.D.Miss.1997) (recognizing that ICC regulations create statutory employee relationship between ICC carrier and drivers and equipment covered by lease agreement). Thus, a motor carrier’s liability for equipment and drivers covered by leasing arrangements is not governed by the traditional common-law doctrines of the master-servant relationship and respondeat superior. Instead, a carrier is vicariously liable as a matter of law under the FMCSR for the negligence of its statutory employee drivers. See, e.g. Empire Indem. Ins. Co., v. Carolina Cas. Ins. Co., 838 F.2d 1428, 1433 (5th Cir.1988); Planet Ins. Co., 823 F.2d at 288; Price, 727 F.2d at 496; Grinnell Mut. Reinsurance Co. v. Empire Fire & Marine Ins. Co., 722 F.2d 1400, 1404 (8th Cir. 1983), cert. denied, 466 U.S. 951, 104 S.Ct. 2155, 80 L.Ed.2d 540 (1984); Rodriguez v. Ager 705 F.2d 1229, 1233-36 (10th Cir.1983); Simmons, 478 F.2d at 867; Mellon Nat’l Bank & Trust Co. V. Sophie Lines, Inc. 289 F.2d 473, 476-77 (3rd Cir.1961).

Under Section 10927 of the Motor Carrier Act, the ICC can issue an operating permit to a motor carrier only if the motor carrier has filed an adequate “bond, insurance policy, or other type of security . . . in an amount not less than . . . the Secretary of Transportation prescribes.” 49 U.S.C.A. § 10927(a)(1) (West Supp.1994).¹ Morever, ICC regulations require that a motor carrier’s surety bond or insurance policy be sufficient “to pay any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance or use of motor vehicles subject” to ICC regulation. 49 C.F.R. § 1043.1(a) (1993). Finally, in order to assure compliance with section 10927(a)(1) and 49 C.F.R. § 1043.1(a), the form ICC endorsement (an MCS-90) must be included in the insurance policies of all ICC registered carriers.² See Integral Ins. Co. (2d Cir.1991); Canal Ins. Co. v. First Gen. Ins. Co., 899 F.2d 604, 611 (5th Cir.1989). The endorsement MCS-90, as mandated by Sections 29 and 30 of the Motor Carrier Act of 1980 (49 C.F.R. § 387.7(d)(1)) requires insurance companies who insure vehicles owned or leased by interstate trucking companies to include this additional coverage, up to the required levels, 49 C.F.R. §§ 387.9 and 387.303, regardless of whether the vehicle is listed as a covered vehicle on the policy. 49 C.F.R. § 387.15, adopted pursuant to 49 U.S.C. § 13906 (a)(1) and (f). ( A “lease” is defined under) U.S.C.A. § 13102 and 49 C.F.R. §376.2(e) as “a contract or arrangement in which the owner grants the use of the equipment . . . to an authorized carrier for use in the regulated transportation of property.” The endorsement MCS-90 in the prescribed form reads, in relevant part:

In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by the insured or elsewhere. The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of the policy, and for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.

Under the express terms of the MCS-90 (also referred to as “the ICC endorsement”), its scope supercedes any limitations, exclusions, exceptions, or conditions of the base policy. The history and policy behind federal regulation of interstate carriers, specifically with respect to their use of leased tractor-trailers, has been set forth in many cases, both federal and state. E.g., T.H.E. Ins. Co. v. Larsen Intermodal, 242 F.3d 667, 672 (5th Cir.2001); Progressive Casualty Ins. Co. v. Hoover, 570 Pa. 423, 809 A. 2d 353, 359 n. 9, n. 10 (2002). The Fifth Circuit in T.H.E. Ins. Co. summarized that history and the underlying public policy:

The MCS-90 was required under the regulations of the now-defunct Interstate Commerce Commission (“ICC”). When the ICC was abolished, its authority to regulate carriers was transferred to the Department of Transportation, but the old regulations remain in effect until new ones are promulgated. John Deere Ins. Co. v. Nueva, 229 F. 3d 853, 855 n. 3 (9th Cir. 2000). This Court has stated that ICC endorsements are governed by federal law. Canal Ins. Co. v. First Gen. Ins. Co., 889 F.2d 604, 610 (5th Cir. 1989), modified on other grounds, 901 F.2d 45 (5th Cir. 1990) (citing Carter v. Vangilder, 803 F.2d 189, 191 (5th Cir. 1986)). We also held that the policy embodied in the ICC regulations “was to assure that injured members of the public would be able to obtain judgments collectible against negligent authorized carriers.” Canal v. First Gen., 889 F.2d at 611. Thus, the insurer’s obligations under the MCS-90 are triggered when the policy to which it is attached provides no coverage to the insured. The First Circuit has aptly described the obligation placed upon the insurer by the MCS-90 as one of suretyship. “[W]e consider the ICC endorsement to be, in effect, suretyship by the insurance carrier to protect the public–a safety net . . . [I]t simply covers the public when other coverage is lacking.” Canal Ins. Co. v. Carolina Cas. Ins. Co., 59 F.3d 281, 283 (1st Cir. 1995). (Emphasis supplied).

The Tenth Circuit, in Empire Fire and Marine Ins. Co. v. Guarantee Nat’l Ins. Co., 868 F.2d 357 (10th Cir.1989), examined the governmental purpose behind the aforementioned requirements. After giving a “brief overview” of the trucking industry and the events leading up to its regulation, the Tenth Circuit found that “the purpose of the [ICC] endorsement was to provide financial protection to members of the public and to shippers.” Id. at 366 n. 13 (emphasis added) (citing Transamerican Freight Lines, Inc. v. Brada Miller Freight Sys’s, Inc., 423 U.S. 28, 34, 96 S.Ct. 229, 232, 46 L.Ed.2d 169 (1975)). Later courts have also found this same governmental purpose in their analysis of the ICC endorsement requirement. See, e.g. Canal Ins. Co., 889 F.2d at 611 (“[T]he policy embodied in the [financial responsibility] statutes and regulations was to assure that injured members of the public would be able to obtain judgments collectible against negligent authorized carrier’s.”). Moreover, this purpose is found in the ICC’s own statements on the issue. See Preamble to 49 C.F.R. § 387.1 (1993) (The purpose of these [financial responsibility] regulations is to create additional incentives to motor carriers to maintain and operate their vehicles in a safe manner and to assure that motor carriers maintain an appropriate level of financial responsibility for motor vehicles operated on public highways.”).

The regulations of Part 387 of 49 C.F.R. which implement 49 U.S.C. § 31119(b) and contain the MCS-90 endorsement, state that they apply to (1) carriers transporting certain hazardous materials and “for-hire motor carriers,” (2) operating in interstate or foreign commerce, and (3) weighing over 10,000 pounds. See 49 C.F.R. § 387.3 (2002). “For-hire carriage” is defined as “the business of transporting, for compensation, the goods or property of another.” Id. § 387.53.

Application of the MCS-90 endorsement should not depend on whether the carrier was hauling one particular type of product on the day of the accident instead of another. Such an application would not advance the public policy goals of the Motor Carrier Act in protecting the general public, and it also would defy common sense. See Magann Equip., Inc. v. Buffkin, 238 Va. 712, 385 S.E.2d 619, 622 (1989) (“[B]ecause the endorsement is such an integral part of the ICC regulatory scheme, selective application of the endorsement . . . would not satisfy the requirements of Brada”). Whether or not T. I. Woods Enterprises, Inc. was required to have an ICC endorsement for the particular trip at issue here, nothing prevented them from voluntarily purchasing the endorsement for their trucks and trips if they so desired. Cf. Fawley Motor Lines, Inc. v. Cavalier Poultry Corp., 235 F.2d 416, 418 (4th Cir. 1956) (“The owner of a motor vehicle may use it for the purpose of transporting agricultural commodities in interstate commerce without obtaining a certificate of convenience and necessity . . . or complying with any provisions of the act; but there is nothing in this exemption which forbids common carriers hauling agricultural commodities . . . to cover such hauling” should they decide to comply with the Interstate Commerce Act.). Accordingly, once issued, bought, and paid for an MCS-90 endorsement and the public policy upon which it was based, arguably provides coverage regardless of the type of product that is being hauled. See Royal Indemnity Company v. Jacobsen, 863 F. Supp. 1537 (D. Utah 1994); Gulf v. Kline, 98 Fed. App x. 471, 475-476 (6th Cir. 2004); Transport Indem. Co. v. Paxton Nat’l Ins. Co., 657 F.2d 657, 659 (5th Cir.1981), cert. denied, 455 U.S. 982, 102 S.Ct. 1490. 71 L.Ed.2d 692 (1982) (“ICC policy factors are frequently determinative where protection of the public or a shipper is at issue.”)

It is noteworthy that the U. S. DOT regulations are even broader than those of the ICC. The ICC did not implement its own endorsement, but rather adopted the DOT’s MCS-90 endorsement for those motor carriers subject to the ICC regulations. Notice of Final Rules, 132 M.C.C. 948, 1982 WL 600 28482 at 1. Thus, the MCS-90 endorsement is not limited to those carriers specifically subject to ICC jurisdiction. Rather, the MCS-90 endorsement required by the DOT explicitly applies in many situations (e.g., transportation of hazardous commodities and intrastate for-hire carriers) even where the transportation arguably falls outside the jurisdiction of the ICC. See Century Indemnity Co. v. Carlson, 133 F. 3d 591 (8th Cir. 1998). Where a motor carrier for hire is available for both interstate and intrastate work to a lessee, even if not used in interstate commerce on a particular job, such availability also confers federal jurisdiction. See QBE Ins. Co. v. P&F Container Svcs., 828 A. 2d 935 (2003).

In Reliance National Insurance Co. v. Royal Indemnity Co., 2001 WL 94737 (S.D.N.Y. Aug. 24, 2001), the New York district court held that the ICC regulations applied to an accident which occurred during a wholly intrastate trip. In Reliance, an independent owner-operator leased his truck to an ICC licensed motor carrier engaged in interstate trucking. During the lease’s duration, the owner-operator also leased his truck to another company for use as a float in a parade. The truck’s parade trip was wholly intrastate. During the parade, an accident occurred in which an individual was struck and killed by the truck. Following the accident, the insurance company for the ICC licensed motor carrier sought a declaratory judgment as to its obligation to cover the truck owner. In making its determination as a coverage, the New York district court considered whether or not the ICC had jurisdiction over the wholly intrastate trip. The court initially noted that “[the ICC], as a creation of Congress, has only the power bestowed upon it by its constituent legislation,’ and this authority ‘is not coextensive with the plenary authority of Congress under the Commerce Clause.’” Id. (internal citations omitted.) While the court acknowledged that “the ICC’s jurisdiction over transport is not unlimited”, it is noted that “the Interstate Commerce Act is a highly remedial statute and its terms are broadly comprehensive enough to bring within them all of those who, no matter what form they use, are in substance engaged in the business of transportation of property on the public highways for hire.’” Id. citing Georgia Truck System v. ICC, 123 F2d 210, 211 (5th Cir. 1941). The court also noted “[t]he Act being a remedial statute, it should be liberally interpreted to effect its evident purpose.’” Id. citing McDonald v. Thompson, 305 U.S. 263, 265, 59 S.Ct. 176, 83 L.Ed. 164 (1938) and Piedmont and N. Ry. Co. v. I.C.C., U. S. 299, 311, 52 S. Ct. 541, 76 L. Ed. 1115 (1932) (“The Transportation Act was remedial legislation, and should therefore be given a liberal interpretation....”). Id. Relying on established Fifth Circuit and Supreme Court jurisprudence, the court held that the insurance company’s reading of the ICC’s jurisdiction was “overly narrow and ignores both the statute’s plain language and Congress’ evident intent.” Id. The court explained its reasons as follows:

“Reliance’s argument rests on the theory that the ICC’s jurisdiction is based solely upon the geography traversed by any given shipment - - i.e., if it does not cross state, territorial, or international lines, the ICC has no jurisdiction. Had Congress only written 49 U.S.C. § 13501 to say “The Secretary and the Board have jurisdiction ....over transportation by motor carrier....to the extent that passengers, property or both are transported by the motor carrier - - (1) between a place in - - (A) a State and a place in another State,’ Reliance might have an argument. However, Congress chose to give the ICC jurisdiction over not only ‘transportation by motor carrier,’ but also ‘the procurement of that transport.’ Whereas ‘transportation by motor carrier’ focuses on the transport itself, ‘the procurement of transport’ focuses on the business arrangements through which the interstate transport was procured. The statute’s plain language 529 gives the ICC jurisdiction over both.” Id.

It is the MCS 90 Endorsement that, by its terms, obligates the user to cover all of the insured’s motor vehicle “regardless of whether or not each motor vehicle is specifically described in the policy ...” 49 C.F.R. § 387.15 (1997) (Form MCS 90). Canal Ins. Co. v. Distribution Services, Inc., 176 F. Supp. 559 (E.D. Va. 2001). Accordingly, to the extent that insurance carrier is liable by virtue of having filed a Form BMC 91X Certificate, its liability arises from the fact that by making this filing, its policy is deemed to have been amended to include the MCS 90 Endorsement coverage for non-owned vehicles. Northland Ins. Co., v. New Hampshire Ins. Co., 63 F. Supp. 128, 139 (D.N.H. 1999).

¹  The minimum amount of liability protection for personal injuries is $750,000.00 See 49 C.F.R. 1043.2(b)(2) (1995); 49 C.F.R. 387 (1997).

²  In a case such as this, the regulations specify that the required insurance is to be provided by a Form MCS-90 endorsement, See 49 C.F.R. § 1043(a)(4) (1995) and the proof of insurance requirement is to be satisfied by the filing of a Form BMC 91X. See 49 C.F.R. § 1043(a)(3) (1995); See also 49 C.F.R. § 387-15 (1997).