The issue of broker liability in the wake of serious trucking accidents may come before the U.S. Supreme Court again, but there is no guarantee the nine justices will at last take up the issue.
Attorneys for Katia Gauthier, the widow of a driver killed in Georgia in 2020 in a crash with a truck, have asked the Supreme Court to review a decision by two lower federal courts that TQL Logistics, one of the biggest brokers in the country, was not negligent when it hired the carrier Hard to Stop to transport a load from Claxton Poultry Farms.
With both the U.S. District Court for the Southern District of Georgia and the 11th U.S. Circuit Court of Appeals having taken TQL out of the case, the Gauthier attorneys now face a potentially tough climb in appealing to the Supreme Court for review.
On two other occasions in recent years, the question of whether a broker can be held liable or negligent in a case involving a truck it hired has come before the Supreme Court seeking review. Both requests were rejected.
In Miller vs. C.H. Robinson (NASDAQ: CHRW), the brokerage company had been found negligent in 2020 by the 9th U.S. Circuit Court of Appeals for a Nevada crash that left the plaintiff, Allen Miller, a quadriplegic. C.H. Robinson had hired a driver who did business as two companies, RT Service and Rheas Trans, and it was that driver involved in the crash that injured Miller.
The Supreme Court, in the closing days of its 2021-2022 term, denied C.H. Robinson review of the 9th Circuit decision.
Two different circuits, two different directions
The more recent denial of review in a case related to broker liability involved brokerage company GlobalTranz and was handed down near the start of 2024. The key difference between it and the C.H. Robinson case is that GlobalTranz was found to be protected by the provisions of the Federal Aviation Administration Authorization Act, the so-called F4A law that is a key piece of federal legislation guiding rulings on liability and negligence not just for brokers but for other questions of state regulation of transportation.
Attorneys for Gauthier had sought an en banc review before a larger panel of appellate court judges, but that request was denied in August.
So while the Supreme Court denied review in both cases, there is a clear conflict at the appeals court level: The 9th Circuit ruled F4A did not fully protect C.H. Robinson; the 7th Circuit, where Ying Ye, the widow of a man killed by a truck hired by GlobalTranz, sued the broker, ruled that brokers were protected.
That type of conflict can help spur, but doesn’t ensure, a Supreme Court review.
What will SCOTUS do?
“I could see this going one of two ways,” Nataniel Saylor, a partner with the trucking-focused Scopelitis law firm, said of how the Supreme Court might react.
One course of action, he said, might be that if it ever gets to the point that there have been four requests for certiorari, and the precedents are 2-2 (two decisions widening the definition of broker liability and two limiting it), “then maybe they take up the fourth case.”
But if it’s 2-1 or 3-1 with the Ninth Circuit decision widening the definition of broker liability, the justices might think “chances are the Ninth Circuit just got it wrong,” Saylor said.
Saylor noted that even though the only decision on the books widening the definition of broker liability comes from the Ninth Circuit, other circuits without a binding precedent–like those that are home to the TQL and GlobalTranz decisions–can still look to Miller vs. Robinson as a “persuasive” precedent should a court in one of those other circuits be forced to address the issue.
In another significant broker liability case, the broker – Landstar Systems (NASDAQ: LSTR) – was ruled to be protected by F4A in an 11th Circuit ruling in April 2023. That case involved the theft of cargo, not an injury to a person.
The plaintiff, Aspen American Insurance Co., chose not to request review from the Supreme Court. But it adds to the weight of conflicting opinions, which in just a few years stands at three in which the brokers were fully protected by F4A (Landstar, GlobalTranz and now TQL) and one where it wasn’t (C.H. Robinson).
While those cases have received most of the recent attention, there are others that took on the question of liability under F4A. In the 9th Circuit ruling against C.H. Robinson, the two judges who ruled against Robinson cited previous decisions that dealt with the so-called safety exception and transportation companies, including litigation involving Amazon and Walmart Transportation.
Attorneys for Katia Gauthier declined comment when asked about the case and the lawyers’ rationale for proceeding further.
The safety exception
F4A has a key clause. It says states may not take actions that would impact a “price, route or service” of a motor carrier.
But it has a second one too: the safety exception. In the case of C.H. Robinson, the court turned to that to hold the 3PL negligent in its hiring of the driver involved in the accident that paralyzed Allen Miller. The safety exception says F4A “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.”
“In passing the FAAAA, Congress was primarily concerned with the States regulating economic aspects of the trucking industry by, for example, enacting tariffs, price regulations, and other similar laws,” the 9th Circuit wrote in its Miller decision, citing precedents. “Congress’s ‘clear purpose’ in enacting the safety exception, then, was ‘to ensure that its preemption of States’ economic authority over [that industry] … not restrict the States’ existing power over safety.”
The safety exception also is restricted to actions in “connection” with “motor vehicles.” While C.H. Robinson argued that it was not a motor vehicle as defined by the law, the 9th Circuit disagreed. “We hold that negligence claims against brokers, to the extent that they arise out of motor vehicle accidents, have the requisite “connection with” motor vehicles,” the court ruled. “Therefore, the safety exception applies to Miller’s claim.”
The Supreme Court didn’t take up that question, nor did it take up the questions in the Ying Ye/GlobalTranz case.
In the 7th Circuit decision rejecting Ye’s claims, which were that GlobalTranz was negligent in hiring a carrier called Global Sunrise that was involved in an accident that killed Ye’s husband, the court cited F4A and its prohibition of state action that could affect prices, routes or services.
“Ye’s negligent hiring claim has much more than a tenuous, remote, or peripheral relationship to broker services,” it wrote. “The relationship is direct, and subjecting a broker’s hiring decisions to a common-law negligence standard would have significant economic effects. So Ye’s claim is expressly preempted by [F4A].”
The Miller case takes no issue with that; it rejected the charge of broker negligence on the part of C.H. Robinson and cited the provisions of F4A. But it was the safety exception that put that case at odds with others, since the judges in Ye/GlobalTranz did not find that GlobalTranz’s hiring decisions were negligent enough to bring in the safety exception.
The standoff now has another player in the Gauthier/TQL case, and the trucking industry will be watching closely to determine if the existence of another conflict among circuit courts is enough to get the Supreme Court’s attention, and review.
More articles by John Kingston
Court decision opens the door for reimplementing Rhode Island truck toll
Werner case at Texas Supreme Court: Did driver fail to perform a legal ‘duty’?
Credit position of BMO’s transportation clients worsens in the fourth quarter
The post Supreme Court again asked to rule on broker liability; case involves TQL appeared first on FreightWaves.
