A motorist who sued C.H. Robinson (NASDAQ: CHRW) for negligence in the aftermath of a 2016 crash that left him a quadriplegic will get another day in court against the logistics company after a ruling this week by the U.S. Court of Appeals for the 9th Circuit.
A three-judge panel voted 2-1 to reverse and remand a decision by the U.S. Federal District Court for the District of Nevada that had dismissed the case based on federal preemption law, known as the Federal Aviation Administration Authorization Act (F4A) of 1994.
The district court found that the claim by the plaintiff, Allen Miller, was preempted under F4A because it was “related to” C.H. Robinson’s services and that a special safety exception did not apply.
“We agree with the district court that Miller’s claim is ‘related to’ C.H. Robinson’s services,” the appeals court stated in its opinion, acknowledging that freight brokers arrange for transportation by motor carrier, and that Miller alleges that C.H. Robinson was negligent in performing the service. But the district court erred in deciding that the safety exception did not apply, the appeals court stated.
“In enacting that exception, Congress intended to preserve the States’ broad power over safety, a power that includes the ability to regulate conduct not only through legislative and administrative enactments, but also though common-law damages awards. Miller’s claim also has the requisite ‘connection with’ motor vehicles because it arises out of a motor vehicle accident.”
Company may ask appeals court to reconsider
C.H. Robinson provided FreightWaves with a detailed response.
“The majority in the appeals court decision correctly recognized that a claim against a broker for the negligent selection of a federally licensed motor carrier ‘imposes an obligation on brokers at the point at which they arrange for transportation by motor carrier’ and thus ‘has a “connection with” broker services,’” the company acknowledged.
“C.H. Robinson agrees with Judge Fernandez’s dissent, however, that such a claim is not saved from preemption by an exception for state regulation ‘with respect to motor vehicles.’ As Judge Fernandez stated, ‘[a]llowing it to avoid preemption would inevitably conscript brokers into a parallel regulatory regime that required them to evaluate and screen motor carriers (which are already subject to federal as well as state and local regulations) according to the varied common law mandates of myriad states.’ Because C.H. Robinson believes Congress sought to avoid just such a patchwork, C.H. Robinson is considering asking the Ninth Circuit for reconsideration.”
The accident cited in the lawsuit occurred in early December 2016 during snowy and icy conditions on Interstate 80 in Elko, Nevada. C.H. Robinson had selected a driver employed by a company doing business as RT Service and/or Rheas Trans Inc. to move the load of over 13,000 pounds of ramen rice noodles from Sacramento, California, to a Costco Wholesale facility in Salt Lake City.
According to Miller, who was 25 at the time, the truck’s driver was going too fast for the road conditions, causing his truck to slide across a median, overturn on its side, and continue to slide across the interstate’s westbound lanes where Miller was traveling. He could not avoid hitting the truck and ended up pinned underneath, suffering extensive injuries. He is now a quadriplegic.
Miller’s complaint alleges that C.H. Robinson “knew or should have known” of RT Service’s incompetence because of “red flags.” They included RT Service and/or Rheas Trans having “a history of safety violations; over 40% of their trucks have been deemed illegal to be on the road when stopped for random inspections; they have been cited numerous times for hours of service violations and false log books; and their percentage of out of service violations is twice that of the national average.”
Support for CTA’s AB5 appeal
The 9th Circuit’s decision was cited by the California Trucking Association (CTA) to support its claim — in the same venue — that a temporary injunction barring California’s AB5 employee classification law from being enforced within the trucking industry should be allowed to stand.
According to a filing Wednesday in that case, CTA noted that the Miller case reaffirms that Congress was “concerned about States enacting ‘barriers to entry’” when it adopted the F4A preemption provision.
“Miller also reaffirms that, ‘[t]o determine whether a state law has a “connection with” rates, routes, or services, we “examine the actual or likely effect” of the law,’” CTA asserted. “Here, there is abundant evidence in the record that application of the ABC test mandated by AB5 will prevent motor carriers from contracting with owner-operators as independent contractors and will therefore likely have a significant effect on the prices, routes, and services that a motor carrier can offer ‘to its customers.’”
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