Transportation Law Update: U.S. Supreme Court Decides Not to Review Negligent Brokering Case

08.12.2022

Recently, the United States Supreme Court decided not to review a decision from the United States Court of Appeals for the Ninth Circuit regarding “negligent brokering.” C.H. Robinson Worldwide, Inc. v. Miller, No. 20-1425, 2022 WL 2295168 (U.S. June 27, 2022). This topic has become —a hot one--in the transportation industry. This article will review the decision from the Ninth Circuit Court of Appeals. The decision below is reported as Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020).

Case Summary at the District Court

Allen Miller (“Miller”) suffered major injuries after being struck by a semi-tractor trailer one night while he was driving near Elko, Nevada. The accident occurred after the truck driver lost control, crossed the median into oncoming traffic, and collided with Miller. Miller became lodged and pinned under the trailer, resulting in injuries that left him as a quadriplegic. Miller subsequently sued C.H. Robinson Worldwide, Inc (“Robinson”), the freight broker who “regularly engaged in the business of shipping, brokering and logistics”, and who arranged for the trailer to transport goods for Costco Wholesale, Inc.

Miller alleged that Robinson breached their duty to select a competent contractor to transport, and that they knew or should have known of the incompetence for various reasons including that the motor carrier had a history of safety violations and that their percentage of “out of service” violations are twice that of the national average.

Robinson argued that Miller’s negligence claim was preempted by the Federal Aviation Administration Authorization Act of 1994 (”FAAAA”). The FAAAA preempts state laws that are directly or indirectly “related to a price, route, or service of any….broker” unless one of the FAAAA exceptions apply. Miller’s response was that even if his negligence claim was preempted by the FAAAA, then it is saved from preemption by the safety exception under the FAAAA which provides that the FAAAA “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.”

The district court, who held in favor of Robinson, found that Miller’s negligence claim was preempted under the FAAAA because it was “related to” Robinson’s services. The district court reasoned that Miller was “attempting to reshape the level of service a broker must provide in selecting a motor carrier to transport property.” As a result, “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 regulate the provision of broker services by creating a standard of best practices.” The district court also held that the negligence claim did not fall within the safety exception as the exception does not “permit a private right of action – allowing for Miller to essentially do the state’s work and enforce the state’s police power.” Miller appealed.

Case Summary at the Appellate Court

The appellate court agreed with the district court’s holding that Miller’s negligence claim is “related to” Robinson’s services, thus making it preempted by the FAAAA. However, it found that the district court erred in holding that the safety exception does not apply. Robinson specifically argued that the safety regulatory authority of a state does not encompass common law torts and that Miller’s claim doesn’t satisfy the “with respect to motor vehicles” clause as Robinson did not own the vehicle or the employ the driver involved in the accident. The appellate court reasoned that the safety exception was not enacted to restrict the States’ existing power over safety, and this included their ability to regulate safety through common-law tort claims such as negligence. Rather, Congress enacted the exception with the intention to preserve the States’ broad power over safety. As well, the appellate court found that Miller’s claim has the requisite “connection with” motor vehicles because it arose from a motor vehicle accident that Robinson indirectly was involved in. Therefore, the safety exception applied to Miller’s negligence claim against Robinson.

The appellate court subsequently reversed the district court ruling and remanded the case for further proceedings. In light of the United States Supreme Court decision, the case will proceed back to the district court. The decision of the Supreme Court to not review the case was not set forth in its Order.

for more information

Contact John F. Fatino for more information about trucking and transportation matters at 515-288-6041. Drake University Law School J.D. candidate, Taylor J. Thomas, assisted in the preparation of these materials.

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