By: Sophia L. Bernard, Esq.|Amelia Kozlowski, Esq.|Mercy Roberg, Esq.
The Middle District of Florida has decided that Aspen American Insurance Company will not get another bite at the preemption apple. As you may recall from Taylor Nelson’s April 14, 2023 and July 19, 2023 News Alerts, our firm secured victories in the Middle District of Florida and the 11th Circuit Court of Appeals on behalf of Landstar Ranger, Inc. (“Landstar”), a freight broker. This ruling paved the way for the 7th Circuit and subsequent jurisdictions to hold state law negligence claims asserted against brokers are 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). Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023). On March 14, 2024, the Middle District Circuit Court again ruled in Landstar’s favor! The court agreed that Aspen’s request to amend its complaint to add two alternative breach of contract claims was inappropriate because the case had already been dismissed and affirmed on appeal.
The Eleventh Circuit Court of Appeals’ decision in Aspen made waves throughout the transportation industry when that court held that that state law claims against brokers for negligent selection of a motor carrier or for negligent hiring are clearly within the scope of conduct that Congress intended to preempt when it drafted the Federal Aviation Administration Authorization Act’s (“FAAAA”) preemptive provisions. Almost five months after the appellate ruling, Aspen filed a Motion for Leave to File an Amended Complaint (“Motion”) in an attempt to re-litigate the issue before the Middle District of Florida. In its opposition, Taylor Nelson argued that the Motion should be denied because the case was closed after the Complaint was dismissed. The proposed Amended Complaint asserted insufficient facts to support a cause of action for breach of contract, and the limited facts asserted were in contradiction with those asserted in its Original Complaint.
The Middle District agreed, finding that the “case was originally closed on February 4, 2022, after the complaint was dismissed without prejudice” and that “[g]iven this Court’s dismissal of the complaint and subsequent order closing the case… the Court has ‘clearly indicated’ the dismissal of the complaint constitutes dismissal of the action.” Although the substance of the Middle District’s report and recommendation is largely focused on procedural posture, the court noted the proposed Amended Complaint’s deficiencies, notably its failure “to assert when or where the contract was entered, whether the contract was written or oral, or which state laws apply.” The court’s dicta implies that even if Aspen’s Motion was granted, it seemed unlikely from the proposed Amended Complaint that there was any contract, let alone an agreement where Landstar agreed to take on carrier liability, waiving FAAAA’s protections.
The practical takeaway from Landstar’s three victories in Aspen American Insurance Company v. Landstar Ranger, Inc. is this – broker liability for state law claims, specifically those for negligent selection of a motor carrier or negligent hiring are preempted by the FAAAA, however, this critical protection can be negated should a broker enter a contract where the broker assumes carrier liability. Careful contract drafting and negotiation is vital for brokers to ensure they do not waive the important protections FAAAA affords.
If you would like to speak with one of our transportation lawyers about contract review or drafting, or any other topic affecting your transportation business, please contact us.