Shipper liability takes another Texas setback; CHRW plays offense

The Texas case that recently brought victory to shippers was handed down last week in the Court of Appeals for the Eighth District in El Paso. That court upheld an earlier decision in the Texas court system that blocked claims against aircraft manufacturer Atlas Aerospace. 

Earlier losses for the plaintiffs

It was Atlas’ freight that was being hauled through Kansas in 2018 by Dorado’s Trucking (which in turn had been booked by a broker named Essen Global Logistics) when it was involved in a fatal collision resulting in two deaths.

Plaintiffs in the case–the deceased men’s relatives–sought to have Atlas held vicariously liable for the crash. They had not been successful in those efforts in the lower courts, and have now failed in their effort at a higher Texas court.

It’s the second recent decision in a Texas court where vicarious liability against a shipper was rejected. In May, an attempt to hold Home Depot negligent over the actions of a Werner (NASDAQ: WERN) truck driver that was hauling goods for the chain when it was involved in a fatal crash near Houston in 2024 was rejected by the Texas Supreme Court. There are echoes of that case in the recent decision involving Atlas Aerospace. 

In the Atlas litigation, its position as a defendant was severed from the other ongoing case involving the carrier and the broker. (That now-separate action has so far gone in favor of the drivers and carriers and is in appeal).

Atlas had won on summary judgment earlier in the case. In the latest decision favoring Atlas, handed down on the final day of July, the court favored Atlas again on several points. 

One of them was a fairly thorough demolition of the argument that the shipper who had contracted out the movement of its freight should be held liable, much like in the Home Depot case.

“Even in the light most favorable to the Mora family (the lead plaintiffs who lost a family member in the crash), we conclude they presented no evidence sufficient to raise a fact issue on whether Atlas exercised any control over which trucking company was hired, which tractors were used to haul the trailers, or which drivers were selected as Atlas’s products were transported from Mexico to Kansas,” Judge Gina Palafox wrote in her decision for the three-judge panel.  “The Mora Family’s summary judgment evidence of Atlas’s alleged control is so weak as to amount to no more than a scintilla of evidence, and, at most, rises to the level of controlling ‘merely the end sought to be accomplished’—that their products be transported from Mexico to Kansas,” quoting an earlier precedent.

While Atlas did participate in some aspects of the shipment, such as recommending routes for the transportation of goods from Mexico, the court said there was no evidence Atlas controlled that decision. 

Judge: not an active role

“We conclude the Mora Family’s argument conflates affirmative acts and passive omissions,” Judge Palafox wrote. “Preventing something requires active conduct—taking steps to stop or obstruct an outcome—while not opting in simply reflects a choice to not participate, which lacks the affirmative quality necessary to constitute prevention absent a legal duty to act.”

The parallels between the Atlas case and the judgement in Lipe vs. Lupus Superior case, which dragged in C.H. Robinson, goes to the issue of vicarious liability for an entity that is two or more degrees of separation from the actual incident that led to a lawsuit.

C.H. Robinson hired Lupus Superior in the tragic crash in 2021 when a truck from that company crashed into a group of cars, killing three people and the driver. 

The more than $600 million judgement drew particular attention not only because it is one of the biggest nuclear verdicts in trucking history, but it was the first one after the Supreme Court ruling in Montgomery vs. Caribe Transport II where a broker defendant could not use the Federal Aviation Administration Authorization Act in its defense. 

It also was a verdict against a company with deep pockets, but one in which a $600 million payout would be far from a small blip on its finances.

Out in front

Since the decision by a Dallas County Court jury, C.H. Robinson has been on the offensive in launching a push in the court of public opinion to defend itself beyond its legal arguments.

CEO Dave Bozeman tackled the case in the company’s recent second quarter earnings call. And earlier this week, the company published a question and answer document on its view of Lipe vs. Lupus Superior.

Much of what was in the document has been discussed by C.H. Robinson earlier. It reiterated that it is appealing the judgement. The broker described the crash as “heartbreaking.” It noted that Lupus Superior had a Satisfactory rating from the Federal Motor Carrier Safety Administration both before and after the 2021 crash in Mississippi. 

C.H. Robinson also reiterated that despite a jury finding that it was effectively the driver’s employer, it has never hired a driver. And it repeated that C.H. Robinson had used Lupus Superior for 270 loads without incident.

“We strongly disagree with the jury’s conclusions,” C.H. Robinson said. “We did not employ the driver, choose the driver, contact the driver, operate the truck, or control the actions of the driver involved in the accident.”

The one new issue raised in the Q&A was to tackle industry rumors. 

“Claims that the driver told C.H. Robinson he was sick, that we allowed him to continue driving, or that we didn’t reschedule the load are also false,” the document said. “What is true is that the driver worked for Lupus Superior, he did not communicate with C.H. Robinson, and we did not supervise, direct, or control his actions. After the carrier told us their driver had stopped, we rescheduled the load for four days later. Unbeknownst to C.H. Robinson, the driver continued driving.”

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