Florida court breaks ranks, says brokers can be sued for unsafe carriers

Should brokers be responsible for a crash involving a motor carrier they hired? That depends on which court is being asked. A Florida state court recently answered that question, adding to the mix of conflicting court rulings across the country addressing broker liability.

At the center of the debate is the Federal Aviation Administration Authorization Act (F4A). Enacted in 1994, F4A aimed to deregulate interstate transportation. It prevents states from having intrastate trucking regulations that are unreasonably burdensome to free trade and interstate commerce.

Section 14501(c) of F4A preempts any state law or regulation “related to a price, route or service” of a motor carrier or broker. That alone would take a broker off the hook in a lawsuit claiming negligent hiring and liability. However, there is an exception.

F4A’s safety exception states the above preemption cannot “restrict the safety regulatory authority of a state with respect to motor vehicles.” This is where the courts are split.

At the federal level, all of the appellate courts that have addressed broker liability – Sixth, Seventh, Ninth and 11th – agreed that the F4A preemption applies. When it comes to the safety exception, only the Sixth and Ninth Circuits have held that it applies to brokers.

It gets even more complicated when the lawsuit is heard in state court rather than federal court. That is what happened with Coyote Logistics in Florida.

Coyote Logistics to face broker liability claims

Coyote Logistics found itself in a personal injury lawsuit that is typical of other broker liability claims.

In 2017, Anheuser-Busch contracted with the broker who hired Anephna Transport to move a load of beer for the brewer from Jacksonville to Fort Myers. Anephna Transport “borrowed a driver” and a truck from another motor carrier.

The crash occurred when the truck hired by Coyote Logistics was traveling 30 mph in a 70 mph zone on Interstate 75 in Sarasota County at about 5 a.m. According to the lawsuit, the truck did not have operable taillights, marker lights or brake lights. It also did not have conspicuity tape. An ice cream truck ended up slamming into the rear of the tractor-trailer, killing the driver.

A lawsuit was filed against Anephna Transport, Anheuser-Busch, Coyote Logistics and the trucking company to which Anephna double-brokered the load. All but Coyote Logistics settled.

The ice cream truck driver’s estate portrayed Anephna Transport as a “dangerous and incompetent motor carrier.” The trucking company had a history of safety issues, state and federal law violations and improperly double-brokering loads. Plaintiffs argued that Coyote Logistics should have known all of this.

A Sarasota County Trial court ruled that allowing negligent selection claims against a broker would go against Congress’ intent in F4A. It found that the safety exception does not apply to brokers because negligent claims are not “with respect to motor vehicles.” Consequently, Coyote Logistics was released from all claims.

The Second District Court of Appeals saw it differently. Like the federal circuit courts, it agreed that enforcing liability laws upon a broker would have a significant and direct impact on the broker’s services. Therefore, the preemption applies.

However, the state court of appeals determined that Congress intended to keep states’ broad power over safety. Negligence and liability claims have a connection with motor vehicles in that they come from a motor vehicle crash.

The logic here is that tort claims incentivize the trucking industry to operate more safely. If F4A preempts such lawsuits, it “would undercut an important tool in the states’ efforts to maintain reasonably safe roadways, a practice expressly shielded by the safety exclusion,” the Second District reasoned.

“We are not persuaded by the cases cited by Coyote and relied upon by the trial court and reject the suggestion that a broker can never be held liable in a negligence case under (F4A),” Judge Morris Silberman states in the opinion. “This position simply does not give sufficient consideration to the safety exception. As one court has observed, “it is highly unlikely Congress intended to permit brokers to act as negligently as they see fit, with no redress for an injured party, without making this intent clear on the statute’s face.”

The case will go back to the trial court where Coyote Logistics must face negligent selection and liability claims.

Broker liability debate to be settled

After rejecting petitions to hear broker liability cases several times, the U.S. Supreme Court is finally set to settle the score.

Earlier this month, the Supreme Court agreed to hear a similar case involving C.H. Robinson. This was the fourth time the high court was asked to address the broker liability circuit split.

Two circuit courts are on one side of the debate, and two more are on the other side. The patchwork of rulings has left brokers in a state of uncertainty. They could be held liable for a crash in one region but not in another.

Further complicating things are state courts splitting from the circuit court in their jurisdiction. Earlier this year, an Illinois state appellate court applied the safety exception to a case involving Echo Global Logistics. However, the Seventh Circuit, which includes Illinois, found the safety exception does not apply to brokers.

The same thing happened with Coyote Logistics. The 11th Circuit has also determined that the safety exception does not apply to broker liability cases. Despite that finding, the state court went the opposite direction.

Oral arguments have not been scheduled in the Supreme Court case. The ruling in that case could affect Coyote Logistics’ case in Florida. LL