If At First You Don't Succeed, Try And Try Again: A Broker Is Finally Successful At A Federal Preemption Argument

by SmithAmundsen LLC
Contact

SmithAmundsen LLC

A recent ruling by Judge Ronald Guzman of the U.S. District Court for the Northern District of Illinois should have a significant impact on how brokers, and in some circumstances motor carriers, defend themselves in litigation going forward. The matter of Natalia Volkova, individually and as Trustee of the Estate of Alexandre Volkova, deceased, v. C.H. Robinson Company, et al. (N.D. Ill. Court No. 16 C 1883) involved an accident between two tractor-trailers in which the decedent’s tractor-trailer crashed into the motor carrier defendant’s tractor-trailer when its driver was making a U-turn on the highway. In addition to naming the motor carrier and its driver in the suit, the plaintiff also added the freight broker for the load, C.H. Robinson Company. We regularly see the brokers being added to cases involving significant damages when the motor carrier has limited coverage.

The plaintiff’s second amended complaint against C.H. Robinson was based on theories of agency as well as negligent hiring. The negligent hiring counts alleged that C.H. Robinson failed to perform a sufficient investigation and evaluation of the motor carrier and its driver before hiring them to transport the subject load. The plaintiff’s allegations were based on C.H. Robinson’s alleged failure to review carrier safety information, request safety data from motor carriers and request proof of proper training or licensing of a motor carrier’s drivers.

After over a year of litigation and no defense of federal preemption asserted, the plaintiff filed a second amended complaint and it was then that C.H. Robinson filed a motion to dismiss on the negligent hiring counts. The motion to dismiss argued that the plaintiff’s negligent hiring allegations were barred by federal preemption, an argument vehemently disputed by the plaintiff.

In granting C.H. Robinson’s motion to dismiss certain claims, Judge Guzman held that the negligent hiring claims of the plaintiff were in fact preempted, the first such decision accepting this argument.

The relevant portion of the Federal Aviation Administration Authorization Act of 1994 (hereinafter FAAAA) essentially provides that a state may not enact or enforce a law or regulation related to a price, route, or service of any motor carrier, broker, or freight forwarder with respect the transportation of property. As many brokers have attempted around the country, C.H. Robinson argued that this section of the FAAAA preempted any state law governing a cause of action regarding negligent hiring.

After an analysis of the FAAAA and its terms, the court pieced together relevant case law and definitions and became the first to accept the preemption argument in a personal injury action to determine that the plaintiff’s negligent hiring claims were preempted. The court reasoned that the negligent hiring claims relate to the core service provided by C.H. Robinson – hiring motor carrier to transport shipments. And while the services of a broker do not include the actual transportation of property, the broker arranges how others will transport the property, and therefore, their services fall within the scope of FAAAA preemption.

The court further examined the economic impact that would result to C.H. Robinson. Because enforcing the state negligence laws would have a significant economic impact on the services C.H. Robinson provides, the enforcement of such laws would hinder the objective of the FAAAA.

The plaintiff’s arguments that preemption should not apply to personal injury matters, but rather only property damage claims, were rejected by the court. The court also rejected the plaintiff’s argument that the FAAAA should not restrict a state’s safety regulatory authority with respect to motor vehicles, pointing to the plaintiff’s failure to convince the court that a state common law claim for negligent hiring constitutes a safety regulation.

The court noted that there is alternative case law across the country, but further provided that while those “other cases might be instructive, they do not dictate a specific result.” This allowed the court to differentiate this matter from other cases from around the county which seem to be in direct contradiction. The court went so far as to “respectfully disagree […] with the analyses of these courts to the extent that they do not faithfully apply the preemption analysis established by the Supreme Court.”

While the court recognized the tragic nature of the death sustained by the plaintiff’s decedent, it could not “ignore the straightforward preemption analysis” as laid out by the Supreme Court. If the varying inconsistent case law from around the country tells us anything, it is that this issue is anything but “straightforward.”

It is important to note that the plaintiff’s agency claims against C.H. Robinson remain. This will, however, minimize the issues presented to the jury and allows C.H. Robinson to focus its defense. We would expect to see an appeal of the preemption issue, and if that should occur, we will follow the matter through that process.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© SmithAmundsen LLC | Attorney Advertising

Written by:

SmithAmundsen LLC
Contact
more
less

SmithAmundsen LLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.