Last week, the Middle District of Pennsylvania added its name to the growing number of jurisdictions that are finding negligence claims asserted against brokers to be preempted by the Federal Aviation Administration Authorization Act (“FAAAA”) and are not saved by the safety exception of 49 U.S.C. § 14501(c)(2)(A). The Court granted summary judgment in favor a licensed property broker, Coyote Logistics, LLC (“Coyote”), in a wrongful death lawsuit, agreeing with Coyote’s position that the asserted negligence claims against it are preempted by the Federal Aviation Administration Authorization Act (“FAAAA”) and are not saved by the safety exception. In Lee v. Golf Transp., Inc. (see here), the Court concluded that Coyote cannot legally be responsible for the motor vehicle accident that led to the deaths of two individuals, solely on the grounds that it brokered the load. Where have we seen this before? (see here and here)
In its review, the Court declined to follow a blanket preemption analysis, as has been applied by other courts, instead choosing to look at the underlying facts of this specific case, and the claims asserted against Coyote. As noted by the Court, whether a state-based claim relates to the services of any [broker], a key factor when determining FAAAA preemption in personal injury cases, is an inquiry that can turn on the underlying facts of the specific cause of action. Here, the Middle District of Pennsylvania rightfully concluded that plaintiffs’ allegations strike at the heart of Coyote doing what Coyote does…being a freight broker. In other words, plaintiffs didn’t allege that Coyote failed to exercise reasonable care required by any other member of the general public, but rather, that Coyote was negligent in its actions specifically as a broker, as the one who arranged for the transportation of the freight.
As with any family, coaching, or decision tree, we were happy to see Taylor Nelson’s work pave the way for this and other important preemption decisions (see also Ying Ye v. GlobalTranz Enterprises, Inc. (here). In Lee, the Court cited quite a bit to, and relied in part on, our Firm’s successful defense of a negligent hiring claim against broker Landstar Ranger, Inc. in the Eleventh Circuit. In Aspen Am. Ins. Co. v. Landstar Ranger, Inc., (here) the Eleventh Circuit considered a negligent hiring claim against Landstar Ranger where the plaintiff’s insured used Landstar Ranger to broker its cargo, which cargo was ultimately stolen by an imposter motor carrier. The Eleventh Circuit held that negligent hiring claims against brokers are expressly preempted by § 14501(c)(1). Selecting a carrier to transport shipments, according to Landstar, “is precisely the brokerage service that” a negligent hiring claim against a freight broker challenges: the broker’s “allegedly inadequate selection of a motor carrier to transport … shipment.” Landstar, 65 F.4th at 1267. An allegation of negligence “against a transportation broker for its selection of a motor carrier to transport property in interstate commerce” relates to a freight broker’s “core transportation-related services.” Landstar, 65 F.4th at 1268. Accordingly, the Eleventh Circuit held that a plaintiff’s state-law negligent hiring claim against a freight broker is preempted—according to ordinary preemption principles—by § 14501(c)(1) of the FAAAA.
The Middle District of Pennsylvania goes on to highlight a few of the pertinent allegations in the Coyote case, for example, Count VI states: Defendants had a duty to:
- “use due care in choosing a careful and competent driver;”
- “ensure that it had appropriate hiring practices that put competent drivers behind the wheel;”
- “ensure that it had appropriate policies in place to ensure that its drivers did not violate FMCSA regulations;” and
- “to entrust the Volvo [tractor] and Wabash [trailer] to an attentive and skilled driver.”
These duties, as pointed out by the Court, go beyond the common law duty of ordinary care, and it is an oversimplification to characterize them as such.
Therefore, the Court found that enforcing laws upon a broker for vicarious liability, for negligent hiring/supervision/retention/
As with the prior cases in the 11th and 7th Circuits, after establishing preemption under FAAAA, this Court then turned to, and explained away, the safety exception to FAAAA preemption, which provides that laws within a state’s “safety regulatory authority … with respect to motor vehicles” are not preempted. Again, looking at the allegations made, the Court held that a common law negligence claim enforced against a broker is not a law that is “with respect to motor vehicles” and found that Plaintiffs’ claims are not saved from FAAAA preemption by the safety exception. In relying on the Landstar decision, Judge Mehalchick determined that a motor vehicle is a “vehicle, machine, tractor, trailer or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.” Landstar, 65 F.4th at 1271-72 (citing 49 U.S.C. § 13102(16)). Consequently, in cases of negligent hiring claims against brokers, regardless of whether the injury is lost property or bodily injury, “a mere indirect connection between state regulations and motor vehicles will not invoke the [Act]’s safety exception.” Landstar, 65 F.4th at 1272.
If you would like to speak with one of our transportation lawyers about this case, the impact (operationally and financially) it may have on your business, or any other transportation-related topic, please contact us. We are eager to help and are excited for this continued pendulum swing in favor of brokers.
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