Robinson calls on Supreme Court to settle battle against ‘negligent hires’
The transportation industry wants the United States Supreme Court to resolve the controversial issue of whether freight brokers should be liable for damages resulting from accidents involving a trucker that the broker hired to move a load, but the broker would not have employed or controlled.
CH Robinson Worldwide Inc. (NASDAQ: CHRW), the nation’s largest brokerage firm, has asked the High Court to settle the long-standing “negligent hiring” dispute after an appeals court ruled in September last that the language embodied in a landmark 1994 law preempting the state economy from regulating transportation services preserved a state’s power to regulate safety through tort actions, including those filed against brokers following truck accidents. The lower court rejected Robinson’s offer for a new hearing in November.
There is no guarantee that the judges will accept Robinson’s request. In fact, the vast majority of âwrit of certiorariâ applications are denied.
In his April petition, Robinson said the US Ninth Circuit Court of Appeals ruling âmisinterpretsâ the so-called security exception enshrined in the 1994 law, commonly known as the FAAAA. A tort action against a broker is not an âexerciseâ of state regulatory powers. Robinson argued. The security exception empowers a state to promulgate and enforce security rules, but does not extend its power to act on “private claims filed by private parties to compensate for past injuries,” he said. declared.
The Ninth Circuit ruling overturned a federal district court ruling that allegations by Allen Miller, a motorist left paralyzed in a 2016 Nevada crash with a driver employed by a highway carrier Robinson had hired to move merchandise for warehouse retailer Costco Wholesale Corp. (NASDAQ: COST) from Sacramento to Salt Lake City, did not fall under the security exception language. Miller sued Robinson in 2017, alleging the broker was negligent in hiring the motor carrier, which was not identified in the broker’s petition. Miller’s lawyers had built their case around the interpretation of the security exceptions in the law.
For nearly two decades, shippers, brokers and carriers have waged a war against the plaintiff bar over the extent to which brokers bear legal and financial liability for accidents involving truckers and drivers hired to carry a load. Lawyers for the plaintiffs argue that brokers are responsible for ensuring that a carrier and driver have met all appropriate safety requirements, and that brokers have a much closer relationship with carriers than they claim. publicly.
Brokers say they don’t own trucks, employ no drivers, follow all federal safety guidelines and have no control over a driver’s behavior while on the road. Brokers also argue that it should be up to federal safety regulators, not industry, to determine the suitability of a driver and trucker. This last issue has been at the center of debates about safety and liability that go beyond negligent hiring.
Brokers believe the plaintiff bar has been focused on brokers because they know that small, limited-margin carriers do not have the insurance coverage, or the financial resources in general, to pay several verdicts. millions of dollars. The federal government requires liability coverage of at least $ 750,000, although most shippers and brokers will charge $ 1 million.
Road safety concerns are of deep concern across the supply chain due to the specter of shippers being pushed into the fray by an aggressive complainant bar. Highlighting this concern, Robinson’s petition drew pleadings in support of a broad cross section of the American business community.
The battle for negligent hiring has been fought in the judicial, legislative and regulatory fields. It dates from a fatal accident in 2002 in Maryland between a semi-trailer and a van with a driver and a passenger. The families of the victims sued the driver, Brian Foster, whose court documents showed he exceeded his federal duty hours and whose failure to stop or give way to an off-ramp led to the fatal accident. They also sued the carrier, Groff Brothers Trucking LLC, and Robinson, the broker who covered the load.
The plaintiffs said Robinson was responsible for the driver’s negligence as he controlled transportation on behalf of the shipper, presented himself as a single point of contact for his shipping needs, and the driver functioned as Robinson’s agent. in the exercise of its functions.
The lawsuit was ultimately settled out of court for an amount of $ 4 million. However, it was a 2004 ruling in the case of Federal District Court Judge J. Frederick Motz that raised alarm bells throughout the industry. Motz found that Robinson could have better investigated why Groff had a sub-standard federal security clearance before assigning the load to the trucker. But in what would become a big deal for all brokers and third-party logistics service providers (3PLs), Motz wrote that Robinson had “actively intervened” in the shipper-carrier relationship and in doing so, chose to do so. business âin a context strongly tinged with public interest. The common law, Motz wrote at the time, imposed on Robinson a “duty commensurate with his obligations.”
The letter and spirit of the judge’s ruling effectively opened the door to the plaintiffs’ bar to sue deep-pocketed brokers for liability in truck accidents. Many cases have been settled out of court for large sums, reflecting industry concerns facing a jury sympathetic to the plight of victims and their families.