In catastrophic trucking accidents, plaintiffs don't just limit their claims to the driver. More commonly, they try to sue the motor carrier, shipper, broker(s), etc. However, recent federal court rulings provide some insight and strategy for dismissing claims against brokers.
In Gillum v. High Standard, LLC, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020), Scott Gillum was hit by a tractor-trailer and sued the driver, the motor carriers involved in hiring and training the driver, and the freight broker that selected the motor carriers. The freight broker, which Gillum accused of negligently hiring the motor carriers, moved to dismiss under the argument that federal law completely preempts state common law negligence claims against a freight broker. The federal district court agreed, concluding that the Federal Aviation Administration Authorization Act (FAAAA) completely preempts simple and gross negligence claims related to a freight broker’s services.
There was a split amongst courts that previously addressed this issue. The court considered the existing authority, looked at the plain language of the pertinent federal statutes, the limited statutory exceptions, Congressional intent, etc. The court held that “the FAAAA completely preempts Plaintiff's negligence claims . . . where that negligence ‘relates to’ the services the broker provides.”2020 WL 444371 at *7.
In essence, Plaintiff claims that [the broker] was negligent in arranging for the transportation of property between motor carriers. These allegations “go to the core of what it means to be a careful broker.” Krauss, 2018 WL 2063839, at *5 (holding FAAAA completely preempted claim against freight broker under negligent hiring theory because careless selection of a carrier is a core service of a freight broker); see also Georgia Nut Co. v. C.H. Robinson Co., No. 17 C 3018, 2017 WL 4864857 (N.D. Ill. Oct. 26, 2017) (“While the services of a freight broker do not include the actual transportation of property, they are focused on arranging how others will transport the property; these services, therefore, fall within the scope of the FAAAA preemption.”).
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The Court finds most persuasive the line of cases that have held negligence claims against freight brokers are preempted under the FAAAA because “[e]nforcing state negligence laws that would have a direct and substantial impact on the way in which freight brokers hire and oversee transportation companies would hinder” the objective of the FAAAA in deregulating the shipping and transportation industry.
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Plaintiff's claims against [the freight broker], therefore, seek to enforce a duty of care related to how Defendant arranged for the transportation of property between [the motor carriers], which—Plaintiff admits—are the very “services” Defendant provides as a federally-licensed freight broker. Such a claim “falls squarely within the preemption of the FAAAA.” Creagan, 354 F. Supp. 3d at 813.
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Such a holding comports with the impetus behind the FAAAA's preemption provision because, in essence, Plaintiff is seeking “to reshape the level of service a broker must provide in selecting a motor carrier to transport property.” Miller v. C.H. Robinson Worldwide, No. 17-cv-408, 2018 WL 5981840, at *4 (D. Nevada Nov. 14, 2018), appeal docketed, No. 19-15981 (9th Cir. May 7, 2019). To avoid negligence liability, a broker like Defendant would need to inspect each motor carrier's background and the ways in which the motor carrier investigates, hires, and trains its own drivers, and “such additional inspection would result in state law being used to, at the least indirectly, regulate the provision of broker services by creating a standard of best practices, and ultimately contravening Congress's deregulatory objectives in enacting the FAAAA.” Id. (citing Rowe, 552 U.S. at 370).
Gillum, 2020 WL 444371 at *4, 5, 6.
Erickson | Sederstrom was recently involved in a similar case. The Southern District of Iowa held:
Plaintiffs’ negligence claim against NTC Logistics relates directly to NTC Logistics’ services as a broker and their arrangement of the transportation of property. Thus, the [Federal Aviation Administration Authorization Act] preempts it. Further, the FAAA’s safety regulation authority exception does not apply to Plaintiffs’ claim because the claim does not constitute a regulation of motor vehicles. Because Plaintiff’s claim against NTC Logistics falls under preemption provision of the FAAA and the safety regulatory exception to preemption does not apply, Plaintiffs fail to state a claim upon which relief may be granted.
Eugene Flanagan v. BNSF Railway Co. et al, No. 1:21-cv-00014-RGE-HCA (S.D. Iowa Nov. 19, 2021).
There is still a divide among some federal district courts, but current trends seem to be giving freight brokers detailed and persuasive preemption opinions to use for dismissal.
Matt Quandt is a member of Erickson | Sederstrom’s experienced litigation group. His practice concentrates on catastrophic trucking accidents. Mr. Quandt is a member of TIDA (the Trucking Industry Defense Association) and offers rapid response services. He is licensed in state and federal courts in Nebraska, Iowa, Missouri, and Kansas.
