Item 3. LEGAL PROCEEDINGS

We are involved in or addressing various legal proceedings and claims, governmental inquiries, notices and investigations that have arisen in the ordinary course of our business and have not been fully adjudicated, some of which may be covered in whole or in part by insurance. Certain of these matters include class-action allegations. We do not believe that the resolution of any of these matters, including the matter described below, will have a material adverse effect upon our financial position, results of operations or cash flows.

On March 29, 2017, the United States Environmental Protection Agency issued a Finding and Notice of Violation (“NOV”) to us, alleging violations of the Truck and Bus Regulation and the Drayage Truck Regulation as promulgated by the California Air Resources Board. The NOV alleges, among other things, that we failed to (i) timely install diesel particulate filters on certain diesel-fueled vehicles that we owned and operated in California; and (ii) verify the installation of diesel particulate filters on certain diesel-fueled vehicles that we caused to be operated in California. We expect that this matter will result in monetary sanctions to us that exceed $100,000; however, we do not believe it is reasonably possible that this matter would result in a loss that would have a material effect on our financial position, results of operations or cash flows.