C.H. Robinson loses U.S. Supreme Court bid in negligence lawsuit
The Supreme Court of the United States has denied C.H. Robinson’s petition to hear its case, allowing negligence claims in a crash lawsuit against the broker to continue.
On Monday, June 27, the U.S. Supreme Court declined to hear a case against C.H. Robinson that was filed by Allen Miller in 2017. The lawsuit makes arguments regarding federal preemptions under the Federal Aviation Administration Authorization Act of 1994 (F4A).
A truck hired by C.H. Robinson to haul freight for Costco struck Miller, causing him to be a quadriplegic. Miller’s complaint named the broker as a defendant, claiming it breached its “duty to select a competent contractor to transport.”
The Supreme Court’s refusal to hear the case leaves the U.S. Ninth Circuit Court of Appeals opinion intact. Essentially, that decision allows negligence claims against C.H. Robinson to proceed. If those claims succeed, brokers will be considered liable for motor carriers they subcontract for their clients.
F4A preemption and exemption
Although F4A can protect brokers from certain state laws and regulations, a safety exception is carved out. At the center of the case is whether that exemption applies to claims of negligence liability against a broker.
F4A prohibits states from enacting any law, regulation or other provision “having the force and effect of law related to a price, route or service of any motor carrier … or broker.” A federal district court in Arizona found that common law counts as an “other provision.”
However, F4A does not preempt state law when those effects are in a “tenuous, remote or peripheral … manner.”
Essentially, the courts are being asked to decide what the impact would be on brokers if they are liable for claims of negligence caused by a contracted motor carrier. If a court decides the effects are “tenuous, remote, or peripheral,” then F4A fails, and C.H. Robinson can be held liable.
F4A preempts C.H. Robinson negligence liability claims, one court rules
A federal district court in Nevada dismissed the case in favor of C.H. Robinson.
Judge Miranda Du said “to avoid negligence liability, a broker would consistently need to inspect each motor carrier’s background,” and “such additional inspection would result in state law being used to, at least indirectly, regulate the provision of broker services by creating a standard of best practices.”
Du referred to the decision in the Arizona case. That court found that any interpretation of the word “services” as it pertains to brokers “reasonably leads to no other conclusion than that a broker must find a reliable carrier to deliver the shipment.”
Based on that precedent, Du ruled that a finding of negligence liability has a “regulatory effect” on the market. Essentially, it would declare that the current level of the broker service of providing reliable carriers is unsatisfactory. Consequently, C.H. Robinson holds the burden of increasing its background checks to reach that standard.
Ninth Circuit finds F4A exemption applies
Although the Ninth Circuit agreed that the negligence claim relates to broker services, qualifying C.H. Robinson for a F4A preemption, it disagreed with the district court’s assessment that a safety exception does not apply. The court ultimately ruled against the broker.
An exemption prevents F4A from restricting “the safety regulatory authority of a state with respect to motor vehicles.” C.H. Robinson argued that the exemption does not apply to common-law claims. The Ninth Circuit disagreed.
The appellate panel argued that per C.H. Robinson’s logic only tort claims in states that codify court rulings are saved from F4A preemption. Meanwhile, the same claims would not be considered exempt in states that have not codified common law.
“It seems unlikely that Congress would have made the availability of this exception dependent on codification, particularly in light of (F4A’s) goal of uniformity,” the Ninth Circuit stated.
Accordingly, the Ninth Circuit reversed the lower court’s order, allowing claims of negligence against C.H. Robinson to proceed. LL
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