Negligence claims arising from motor carrier collisions have typically focused on the driver, owner and/or operator of the subject vehicle involved in the accident. This traditional model allowed freight brokers, direct shippers and third-party logistic providers to sidestep the escalating transportation claims, insurance costs and potential nuclear verdicts. However, in late 2022, the US Supreme Court declined to hear Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Circ. 2020), cert. denied., in which the US Court of Appeals for the Ninth Circuit allowed a complaint to include a freight broker that arranged for the tractor-trailer to transport goods on behalf of a retailer as an appropriately named defendant. This decision is in line with other cases ultimately holding that when a portion of the transportation process calls into question the safety of other vehicles or individuals, shipping, brokering and logistics providers are now fair game for direct negligence claims. (See, e.g., Wardingley v. Ecovyst Catalyst Techs., LLC, 2022 WL 16714139 (N.D. Ind. Nov. 4, 2022), where the court allowed state law claims against the property broker in motor carrier collision; Quinones v. Ladejo, 174 N.E.3d 407, 499 (OH Ct. App. 2021), where the court held plaintiffs’ claims fell under safety regulation exception to Federal Aviation Administration Authorization Act’s general preemption provision and thus were not preempted; and Lopez v. Amazon Logistics, Inc., 458 F. Supp. 3d 505 (N.D. Tex. 2020).)
In Miller, the driver of a semi-tractor trailer lost control of the trailer while operating the vehicle in icy conditions in Nevada and collided with plaintiff’s vehicle. The plaintiff became lodged and pinned under the trailer, suffering extensive injuries and resulting quadriplegia. The plaintiff sued various parties, including the driver, the carrier, the shipper, and the freight broker. The plaintiff alleged the broker failed to select a competent carrier to transport the load, and specifically that the broker breached its duty to select a competent contractor to transport the load by retaining incompetent, unfit or inexperienced carrier contractors or sub-haulers. The plaintiff continued to claim that the broker either knew or should have known of the carrier’s alleged extensive history of safety and legal issues, including but not limited to: 1) over 40% of the trucks deemed illegal when stopped on the road for random inspections; 2) numerous hours of service violations; and 3) falsifying data in log books. Miller¸ 976 F.3d at 1021.
The broker moved for judgment on the pleadings, arguing that the Federal Aviation Administration Authorization Act preempted the plaintiff’s negligence claim. The Ninth Circuit denied the motion, holding that the federal law did not preempt state law negligence claims against a broker arising out of a carrier collision and that the negligence claim could move forward under the “safety regulatory authority.” Id. at 1026-1029. (At the time of the appeal, Plaintiff Miller had settled with the other parties and only the broker, and target of this analysis, remained in the litigation. Regardless, the preemption argument was broker specific. Id. at 1021.) The Supreme Court declined to take up the appeal, agreeing with the Ninth Circuit that the negligence claim by plaintiff against the broker could remain. Of note, this is not and was not a determination that this specific broker was negligent.
Although the Miller decision was specific to a broker in the Ninth Circuit, the decision may be interpreted to expand the obligations held by freight brokers, direct shippers and third-party logistics providers in the national transportation arena. The specific obligation of each entity will vary by company, state and jurisdiction, and the lack of controlling authority on claims concerning negligent brokering further complicates defining clear parameters on the potential limits of liability. However, with this most recent Supreme Court decision in hand, freight brokers and their related direct shippers and logistic providers should proceed cautiously.
Freight brokers, direct shippers and third-party logistics providers should make efforts to ensure their carriers have sufficient insurance, are licensed and operating within appropriate authority (both state and federal), and do not have known safety deficiencies. In addition, these transportation providers should have a working familiarity with the Federal Motor Carrier Safety Regulations (FMCSR) and must take reasonable care in selecting or hiring motor carriers to haul their customers’ freight in compliance with the FMCSR. Further, freight brokers, direct shippers and third-party logistics providers should work with their safety teams and counsel to develop policies and procedures on how to onboard new carriers and ensure sufficient records are being maintained relative to such efforts.
