After arguing the issue of broker liability before the highest court in the land, C.H. Robinson on Sunday found itself facing a new battle, this time in the court of public opinion.
A CBS News report that focused in part on the issue of “chameleon carriers,” which the network had covered a few days earlier on 60 Minutes, reported on the role of freight brokers keeping chameleon carriers on the road. C.H. Robinson (NASDAQ: CHRW) was singled out by CBS as a 3PL that had hired trucking companies who could be considered chameleon carriers with spotty records. The video can be seen here.
CBS’ reporting is suddenly forcing the brokerage industry and C.H. Robinson into a position of public focus as it awaits the outcome of the Supreme Court deliberations in Montgomery vs. Caribe Transport II, which regardless of which way it goes is seen as establishing an enormous legal precedent over the issue of broker liability in accidents that leave a person or persons dead or injured.
In its response to the CBS report, C.H. Robinson came back to a defense that was part of the arguments it made in Montgomery: it is ultimately the federal government through the Federal Motor Carrier Safety Administration (FMCSA) that establishes the fitness of carriers, and brokers rely on those judgements.
C.H. Robinson had been an initial defendant in that case, having hired Caribe Transport II whose truck struck another driver, Shawn Montgomery, in December 2017 in Illinois. But the 7th Circuit’s interpretation of broker liability precedents excised it from the proceedings on appeal.
The case was granted certiorari to clear up conflicting circuit court broker liability decisions. It was C.H. Robinson whose attorneys argued before the high court in early March as plaintiff Montgomery, backed by enough legal industry interests that it could hire a former U.S. solicitor general to argue its case, wants the brokerage company back in as a defendant.
Dahlilia’s Law raised as an issue
CBS also cited President Donald Trump’s mention in his State of the Union address of the horrific injuries suffered by young Dalilah Coleman in 2024. An Indian immigrant, Partap Singh, was driving the truck that struck Coleman; the Department of Homeland Security has said he was in the country illegally but held a CDL from California.
C.H. Robinson is a defendant in the California Superior Court action filed by Coleman’s parents.
The heart of the case against brokers in general in the CBS reporting was summed up in a quote by Marcus Coleman, the father of Dalilah Coleman, who was interviewed for the report.
“Trust me, I’m upset with the driver, I’m upset with the carrier, but if we don’t go after the broker, this is going to continue happening,” he said.
CBS also said its reporting had revealed that C.H. Robinson had “hired thousands of trucking companies that had a history of safety issues. Dozens had hallmarks of chameleon carriers, operators that paper over poor safety records by reconstituting under a new name, same trucks, same truck, same owner.”
Quick response
With the CBS News report first aired Sunday morning, C.H. Robinson quickly published its defense to the report. (CBS reported that C.H. Robinson representatives would not sit for an interview, but the news story published by the network had multiple comments by the company in response to CBS queries).
Its first comment was to note that “Our deepest sympathies go out to all the families affected by roadway tragedies.”
The 3PL then moved to a shared explanation/defense of how it conducts its business.
“Shipments we arrange overwhelmingly move without incident, with just one serious accident claim filed for every 500 million miles driven on our customers’ loads,” C.H. Robinson said in its statement. “But even one accident is one too many. Which is why we will continue to advocate for strong federal oversight, tougher enforcement, and real reforms that make roads safer for American families.”
The company also said it is supporting the passage of Dahlila’s Law, HR 5688. That law passed the House Transportation & Infrastructure committee last month. No further action has been taken since then. The companion bill in the Senate, S 3917, has no scheduled action after being introduced in February.
English proficiency for drivers is a core part of Dahlila’s Law. But otherwise, the word “brokerage” is not mentioned in either version.
In its response, C.H. Robinson, without mentioning CBS by name, took aim at “recent media coverage (that) contains inaccurate and misleading characterizations of C.H. Robinson and the role of a freight broker within the transportation system.”
Is Montgomery driving the coverage?
It said “media attention” to the brokerage industry “is being driven by a landmark case currently before the Supreme Court, which challenges whether safety accountability remains at the federal level with the FMCSA or shifts to a patchwork of state‑level standards that would create inconsistency without improving roadway safety.”
In its response to the CBS report, C.H. Robinson came back to a defense that was part of the arguments it made before the Supreme Court: it is ultimately the federal government through FMCSA that establishes the fitness of carriers, and brokers rely on those judgements.
“We work exclusively with carriers that have been vetted and licensed by (FMCSA),” C.H. Robinson said. “We rely on the FMCSA’s expertise and proprietary data in vetting and licensing carriers. Under federal law, carriers are authorized to provide transportation services the moment they receive federal licensure. The FMCSA is uniquely positioned to evaluate carrier safety. As a federal agency, it has access to confidential driver records and data that no broker can obtain, giving it the authority and expertise to vet carriers.”
And if a carrier has an unsatisfactory rating with FMCSA, C.H. Robinson said, or “loses their insurance, has their DOT number suspended or loses their operating authority, we have technology that notifies us as soon as the FMCSA puts out that information. The carrier is then automatically blocked in our system and can’t be booked to carry a customer’s load. ”
While that court of public opinion is not likely to be familiar with the sometimes complex and arcane issues in Montgomery, the C.H. Robinson statement issued after the CBS report comes back to it at several points.
CHRW’s view of the issues at SCOTUS
“The case before the U.S. Supreme Court is not about immunity, rather, it centers on whether federally licensed freight brokers can be held responsible under varying state laws for the actions of an independent motor carrier involved in an accident, despite federal law distinguishing brokers from carriers.”
The technical issue before the court is not immunity, but something that might be viewed as similar: preemption. Specifically, if the Federal Aviation Administration Authorization Act (F4A) preempts state action affecting a price, route or service of a transportation provider, where do brokerages stand in the safety exception portion of F4A that says a state can’t be preempted from pursuing an action over safety “with respect to motor vehicles?” Is a brokerage a motor vehicle?
The split circuit court decisions on that question is why the Supreme Court will be weighing in on that sometime between now and the end of June.
Based on conversations and public statements at the Transportation Intermediaries Association Capital Ideas Conference in metro Phoenix last week, it is clear that there are two fears permeating the 3PL industry.
One is that it will lose in the Supreme Court and the industry’s exposure to liability claims could explode.
But the second is that even if C.H. Robinson prevails, F4A could be amended to make clear a Congressional desire that states can pursue safety-related actions against 3PLs, that “with respect to motor vehicles” includes brokerages. The CBS report, and the court of public opinion that increasingly might be thinking about freight brokerages, is likely to enhance those concerns.
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