Note

10.

Commitments and Contingencies

From time-to-time, we are a party to ordinary, routine litigation arising in the ordinary course of business, most of which involves claims for personal injury and property damage incurred in connection with the transportation of freight.

We maintain insurance to cover liabilities arising from the transportation of freight for amounts in excess of certain self-insured retentions. In management's opinion, our potential exposure under pending legal proceedings is adequately provided for in the accompanying condensed consolidated financial statements.

May 8, 2017,

the U.S. District Court for the Southern District of Ohio issued a pre-trial decision against our Southern Refrigerated Transport, Inc. ("SRT") subsidiary relating to a cargo claim incurred in

2008.

The court had previously ruled in favor of the plaintiff in

2014,

and the prior decision was reversed in part by the Sixth Circuit Court of Appeals and remanded for further proceedings in

2015.

As a result of this decision, we increased the reserve in respect of this case by

$0.9

million in the

first

quarter of

2017

in order to accrue additional legal fees and pre-judgment interest since the time of the previously noted appeal. On

September 25, 2018,

the Sixth Circuit Court of Appeals ruled in favor of the plaintiff and against SRT. While considering its further appeal to the U.S. Supreme Court, SRT will likely pay this claim, related accrued interest and legal fees totaling approximately

$6.8

million within the next

six

months.

Our SRT subsidiary is a defendant in a lawsuit filed on

December 16, 2016

in the Superior Court of San Bernardino County, California. The lawsuit was filed on behalf of David Bass (a California resident and former driver), who is seeking to have the lawsuit certified as a class action case wherein he alleges violation of multiple California wage and hour statutes over a

four

year period of time, including failure to pay wages for all hours worked, failure to provide meal periods and paid rest breaks, failure to pay for rest and recovery periods, failure to reimburse certain business expenses, failure to pay vested vacation, unlawful deduction of wages, failure to timely pay final wages, failure to provide accurate itemized wage statements, and unfair and unlawful competition as well as various state claims. The case was removed from state court in

February, 2017

to the U.S. District Court in the Central District of California, and subsequently, SRT moved the District Court to transfer venue of the case to the U.S. District Court sitting in the Western District of Arkansas. The motion to transfer was approved by the California District Court in

July, 2017,

and the case will now be heard in the U.S. District court in the Western District of Arkansas.

Based on our present knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of open claims and pending litigation, taking into account existing reserves, is

not

reasonably possible to have a materially adverse effect on our consolidated financial statements.

We had

$35.1

million and

$32.9

million of outstanding and undrawn letters of credit as of

September 30, 2018

and

December 31, 2017,

respectively. The letters of credit are maintained primarily to support our insurance programs.

See Note

for a discussion of contingencies related to our acquisition of Landair Holdings, Inc.