Even as two broker liability cases are sitting before the Supreme Court, with the nine justices scheduled to discuss Monday whether to take them up and settle conflicting lower court precedents, there are other cases decided in recent months that are filling up a landscape of precedents.
One of the cases bubbling under the more widely-known rulings is in federal court, Fuelling vs. Echo Global Logistics. James Fuelling was killed in a January 2022 crash with a truck that had been booked by Echo Global.
The second case is in a California state court. The biggest name among the plaintiffs and defendants in that latter action is Walmart, but the case is known as Casarez vs. Irigoyen Farms.
And they are similar in that their respective courts both found that the safety exception in the Federal Aviation Administration Authorization Act (F4A) does not preempt the protection from litigation that brokers and similar third parties receive from the main core of the act.
That puts them in the same category as Montgomery vs. Caribe II, one of the two cases on the calendar to be reviewed Monday by the Supreme Court as it decides whether to grant certiorari and finally take up the question of broker liability under the safety exception.
Two clashing circuit court decisions before the nine justices
In the Montgomery case, C.H. Robinson’s (NASDAQ: CHRW) potential negligence or liability for its role in hiring a carrier–Caribe Transport–that was involved in the 2017 Illinois crash that injured Shawn Montgomery was tossed out by the U.S. District Court for the Southern District of Illinois, citing F4A. The U.S. Court of Appeals for the Seventh Circuit later affirmed that lower court decision.
But the other case in front of the nine justices in their Monday conference put 3PL giant Total Quality Logistics (TQL), in the case of Cox vs. TQL, on the losing side of the question in the Sixth Circuit. TQL hired a carrier that was in an Oklahoma crash that killed the wife of plaintiff Robert Cox.
Safety exception at center stage
The fundamental issue before the Supreme Court is the safety exception under F4A.
The 1994 F4A federal law preempts state actions that can impact a transportation “price, route or service.” But the safety exception allows state action against a transportation company for behaviors that might be considered negligent and cause physical harm, regardless of any impact on a price, route or service.
The exception can provide a plaintiff the ability to get around F4A when suing a brokerage, but their lawyers would need to prove to a court that the key wording in the safety exception–that it is “with respect to motor vehicles”–includes 3PLs.
Most of the time those efforts have been unsuccessful, with courts saying brokerages are not motor vehicles for the purpose of the safety exception. But that hasn’t been the conclusion all the time, and that’s why the issue is before the high court.
When will we hear?
Marc Blubaugh, head of the transportation practice at the Benesch law firm and the outside attorney for the Transportation Intermediaries Association, which has filed amicus briefs in F4A cases, said the logistics sector is likely to find out October 6 whether the court has granted certiorari on the broker liability question. He said common but not guaranteed practice is that decisions on certiorari requests are issued the Monday after the conference where the justices take up the issue.
Blubaugh added that it is possible that a Supreme Court grant of certiorari in Cox or Montgomery could result in the appellate courts that are reviewing cases like Fuelling vs. Echo Global deciding to halt proceedings while awaiting the judgement of the nine justices.
When the Supreme Court looks over the entire scope of court decisions on the question of the safety exception, they will see three loosely defined “buckets” of litigation:
- The two cases before the court seeking certiorari, Cox vs. TQL (broker loses in the circuit on appeal) and Montgomery vs. Caribe II (broker C.H. Robinson wins in the circuit as a lower court decision is upheld.)
- The “no, thanks” conflicting cases where the justices previously chose not to grant certiorari. One was Miller vs. C.H. Robinson in 2022, where the Ninth Circuit had found the safety exception in that case didn’t protect the 3PL. And then there were two cases where the justices declined certiorari where a 3PL had been successful on the lower court levels in swatting away negligence or liability charges, citing F4A: Ye vs. GlobalTranz (certiorari denied in 2024) and Gauthier vs. TQL, which was rejected for review earlier this year.
- And now it can look out over both state and federal courts, and find additional cases that are adding to the body of law on the safety exception even if they aren’t before the Supreme Court court as of now.
In the federal courts, there is Fuelling vs. Echo Global Logistics in the Fourth Circuit Court of Appeals.
And in a state court, specifically the appellate court in California’s Fifth Appellate District, there’s Casarez vs. Irigoyen Farms.
In the latter case, both a lower court in Fresno and the appellate court earlier this month ruled in favor of two companies–Walmart (NYSE: WMT) and agriculture grower Irigoyen Farms, which contracted with a 3PL called Royal Violet to move produce to Walmart–that were involved in the supply chain that put a truck on the road that ultimately killed a woman named Olivia Mendoza. Her mother Christina Casarez is the plaintiff in the case and had sued several companies, including Walmart and Irigoyen Farms.
Where the two cases come together is that with the appellate ruling in Casarez being recent–handed down as an unpublished decision September 10–it is now being cited by attorneys for Echo Global as a reason why the Fourth Circuit, where the appeal of Fuelling vs. Echo Global resides, should see Casarez as another reason to uphold the lower court decision on the safety exception that protected Echo Global.
Landstar decision cited in Echo Global case
The Casarez decision also cited yet another F4A-related case, Aspen vs. Landstar. That case that involved the theft of a load held Landstar was not liable under F4A.
In a September 19 letter to the clerk of the Fourth Circuit, soon after the appellate court’s ruling, Brian Schmalzbach, attorney for Echo Global, cited the California court’s Aspen-based reasoning as a reason why the circuit should uphold the lower court case that said Echo Global was protected under F4A.
“Casarez…followed the Eleventh Circuit’s persuasive Aspen decision by recognizing (F4A’s) ‘meaningful limit on the safety exception’ through the use of the narrower phrase ‘with respect to,’ which ‘must be construed as requiring a direct connection between the state law and motor vehicles,’” Schmalzbach wrote. “(The Fourth Circuit) should adopt the same construction, which gives full effect to the FAAAA’s text and context.”
Meanwhile, Adina Rosenbaum, an attorney for the Public Citizen public interest group that has been involved in other lawsuits targeting brokerages seeking protection under F4A, took the opposite argument. She is representing Angela Fuelling in the case involving Echo Global.
In her letter to the court, Rosenbaum cited other precedents where courts had reached a definition of “with respect to” that would open the door wider to 3PLs and other third parties being unable to use F4A as a defense in litigation. She cites a decision in a 2013 case, Dan’s City Used Cars, Inc. v. Pelkey, that has come up elsewhere in other F4A-related litigation, as supporting her argument.
Although the Casarez decision is in state court, Blubaugh described the state appellate court ruling as “a helpful decision for the brokerage industry in a part of the country that has not been kind to brokers on this issue.”
The state judges in the Casarez case analyzed the Miller vs. Robinson and TQL vs. Cox decisions, the two that rejected brokerage protection under F4A. Blubaugh said their “critique” of those two decisions was “shrewd.”
Miller vs. C.H. Robinson was a decision of the Ninth Circuit, which includes California.
Uber Freight involved in another F4A case
There’s another case that hasn’t received much attention that also deals with the issue of broker preemption under F4A’s safety exception. And it would be in the landscape of litigation the Supreme Court may study as it decides whether to grant certiorari on the two cases before it.
In January 2024, the U.S. District court for the Western District of North Carolina dismissed Uber Freight (NYSE: UBER) as a defendant in a case brought by the estate of Patrick Mays.
Uber Freight had hired POP Trucking to move a cargo of beverages from Virginia to North Carolina. A truck from POP Trucking was involved in a crash with a car carrying several members of the Mays family, and Patrick Mays was killed.
While the litigation against the trucking company and its owner was settled, the Mays family appealed the removal of Uber Freight from the case on the grounds of F4A preemption to the Fourth Circuit, where it is making similar arguments heard by various plaintiffs why a brokerage company should not be protected from charges of negligence and liability by a court’s interpretation of the safety exception and the definition of “with respect to.” That case is proceeding.
There had been a case before the Fifth Circuit, Crane vs. Liberty Lane, where a lower court had ruled in favor of broker Penske Transportation Management in its request to be severed from the case on the grounds of F4A preemption. But the Fifth Circuit declined to take up the appeal.
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