Broker wins court battle
One of the first known lawsuits attempting to compel broker transparency compliance ended with a victory for brokers, albeit a small one.
A federal court sided with Total Quality Logistics in a case that attempted to hold the broker accountable for existing broker transparency regulations.
Judge Sparkle Sooknanan of the District of Columbia federal district court dismissed Washington, D.C.-based Pink Cheetah Express’ lawsuit against TQL. The lawsuit was prompted and decided by a simple email.
Pink Cheetah Express’ lawsuit highlighted longstanding issues with broker transparency regulations and enforcement.
Ice cream load meltdown
The broker transparency regulatory showdown began with a load of ice cream.
In January 2023, Pink Cheetah Express contracted with TQL to haul the load. After delivering the load, the carrier sought records from the broker under 49 CFR 371.3. That regulation requires brokers to keep transaction records, including compensation received, and to disclose them to the parties of the transaction upon request.
That’s when the problems started.
TQL refused to turn over the records, pointing to a provision in the agreement with Pink Cheetah Express waiving its rights under the broker transparency regulations: “BROKER is not required to disclose its charges to CUSTOMERS, commissions, or brokerage revenue, and CARRIER waives its right to receive, audit, and/or review information and documents to be kept as provided in 49 C.F.R. § 371.3.”
In October 2023, Pink Cheetah Express submitted a complaint to the Department of Transportation secretary. The following month, the Federal Motor Carrier Safety Administration emailed TQL, telling the broker to remove the waiver and comply with broker transparency regulations (emphasis in original email):
Please ensure compliance with the Federal Motor Carrier regulations and follow the below guidance and regulations . . .
Remove the [§ 371.3 waiver] from any and all Broker/Carrier Agreements which . . . may be a violation of [49 U.S.C.] § 14906 . . .
Ensure compliance with the [§ 371.3]
regulation and provide transaction records to any carrier when requested.
TQL ignored the email and blocked Pink Cheetah Express from future communications. That prompted the carrier to sue the broker.
Pink Cheetah Express claimed TQL ignored a direct order from FMCSA. It asked the court to order TQL to:
- Turn over requested records
- Remove the waiver from its contracts
- Comply with FMCSA’s email in future transactions for all motor carriers
Guidance or an order?
The entire case centered on FMCSA’s email to TQL. Was it an official order or informal guidance?
The Interstate Commerce Commission (ICC) Termination Act of 1995 allows a civil lawsuit when a carrier or broker “does not obey an order of the Secretary” of the DOT. TQL argued that the email was merely guidance, not an official order. Therefore, it was unenforceable.
Since the word “order” is not defined in the ICC Termination Act, Sooknanan turned to the dictionary: “an authoritative direction; an injunction, or mandate; an oral or written command; an instruction.” Based on that definition, Sooknanan sided with TQL.
“The November 2023 email does not authoritatively identify a regulatory violation but instead suggests the waiver’s language ‘may be a violation’ of the statute,” Sooknanan determined.
The email then goes on to simply remind TQL of its obligations to follow broker transparency regulations.
A similar case found that treating an email as an official order would discourage the informal communication that is “vital to the smooth operation of both government and business.” The court ruled that FMCSA’s email is closer to advice and guidance than an order compelling TQL to do something.
Broker transparency rulemaking
Situations like Pink Cheetah Express’ highlight why stakeholders, including the Owner-Operator Independent Drivers Association, have pursued stronger broker transparency rules.
In 2020, OOIDA petitioned the DOT to begin the rulemaking process to give broker transparency regulations more teeth. That includes prohibiting brokers from including any provision that requires a carrier to waive its rights under 49 CFR 371.3.
Last November, FMCSA finally issued a notice of proposed rulemaking under former President Joe Biden. That generated nearly 7,000 comments by March. Instead of finalizing the rule, the new administration plans to issue a second notice of proposed rulemaking in May 2026.
Why is broker transparency important?
According to analysis from the OOIDA Foundation, broker transparency is about much more than just seeing the quoted rate on a load.
“It’s about hidden charges, fines and claims brokers impose without proper documentation,” the OOIDA Foundation wrote. “Small carriers rarely take the time – or have the luxury – to scrutinize every clause of dense broker-carrier agreements.”
The lack of transparency becomes apparent when brokers submit claims for freight loss without evidence.
“Small carriers frequently enter contracts under economic pressure, unaware of provisions stacked against them,” the Foundation wrote. “By the time they realize the imbalance, it’s often too late to avoid serious financial harm.”
According to the OOIDA Foundation, truckers should:
- Read broker-carrier agreements thoroughly and refuse clauses that eliminate broker transparency
- Support advocacy efforts pushing for stronger enforcement of existing transparency regulations
- Demand clear documentation before accepting deductions or responsibility for “Over, Short and Damaged” claims
These steps are important because there are often “hidden risks” contained in broker contracts, the Foundation said. For instance, some broker contracts may require carriers to waive rights granted under the Carmack Amendment – a federal law providing standard protections for cargo loss and damage.
“Cargo insurance policies may not cover liability that goes beyond federal standards, leaving carriers exposed to unexpected financial risks,” the Foundation wrote.
Another real-world scenario highlighted by the Foundation is when a carrier has a breakdown from an unexpected equipment issue. A broker could declare breach of contract, repower the load and bill the original carrier for costs. A lopsided contract could mean that the carrier goes unpaid for the miles driven, while also being placed on the hook for additional expenses. LL
Land Line Senior Editor Mark Schremmer contributed to this report.