U.S. solicitor general tells SCOTUS to avoid broker negligence case

C.H. Robinson is telling the U.S. Supreme Court that the U.S. solicitor general has it all wrong regarding whether brokers can be held liable for an incident involving one of their contracted motor carriers.

In May, the U.S. solicitor general told the nation’s highest court that it should deny C.H. Robinson’s petition to hear its case regarding claims of negligence liability. If the Supreme Court passes on hearing the case, that would allow the U.S. Circuit Court for the Ninth Circuit ruling against C.H. Robinson to stand.

Arguments over federal preemption stem from a lawsuit filed in June 2017 by Allen Miller. 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.”

Miller argued that C.H. Robinson should have known of the carrier’s incompetence because of several “red flags.” Some of those red flags include numerous citations for hours-of-service violations and false log books. Also, the carrier’s percentage of out-of-service violations was twice the national average.

C.H. Robinson is claiming that a finding of negligence liability violates F4A.

F4A preemption and exemption, a judge says

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 will 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 broker negligence liability claims

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 agrees that the negligence claim relates to broker services, qualifying C.H. Robinson for a F4A preemption, it disagrees 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 state 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. However, the broker is asking the Supreme Court to have the final say in the matter.

Ties to California’s AB5 challenge

In August 2021, C.H. Robinson petitioned the Supreme Court to make a final decision. The case has now involved the federal government, which also is involved in a similar F4A challenge dealing with California’s controversial AB5 bill, which could jeopardize the trucking industry’s owner-operator business model.

On the same day the federal government submitted the brief for the broker negligence case, the U.S. solicitor general also chimed in on California Trucking Association’s case against the controversial Assembly Bill 5.

Similar to the broker case, the California Trucking Association scored a victory in a federal district court after it was granted a preliminary injunction that prevents California from enforcing AB5 on motor carriers. However, a federal court of appeals reversed that decision. The California Trucking Association is asking the Supreme Court to hear the case.

The Office of the Solicitor General recommended the high court deny the California Trucking Association’s petition.

Although the solicitor general suggested denying the petition, the Supreme Court is not bound to the recommendation. The high court will likely make a decision on whether or not to hear the case by the end of June. The injunction against enforcing California’s AB5 on motor carriers will remain in place until the Supreme Court makes a determination. LL

Land Line Senior Editor Mark Schremmer contributed to this report