Check Call: Broker liability hits the headlines once again

The legal landscape for freight brokers continues to grow more complex, as yet another court case has put broker liability under scrutiny. The latest development comes from the Fifth Circuit Court of Appeals, which is now considering whether a freight broker can be held liable for a fatal crash involving a contracted carrier. The case, Crane v. Liberty Lane, is centered around a 2018 accident in Texas that claimed the life of Lyndon Meyer, and it could tip the balance in an already divided judicial system.

The ever constant issue in this fight is whether the Federal Aviation Administration Authorization Act (F4A), which generally protects brokers from state laws affecting their “price, route, or service,” also shields them from negligence claims related to carrier selection. While a district court initially dismissed the case in favor of Penske Logistics and Penske Transportation Solutions, which brokered the load in question, the plaintiffs have appealed. They argue that the case qualifies under F4A’s so-called “safety exemption,” which allows certain state-level claims if they relate to motor vehicle safety.

This case is just the latest in a growing number of broker liability lawsuits. The legal consensus is anything but settled. Courts in the Seventh and Eleventh Circuits have ruled in favor of broker immunity, while decisions in the Sixth and Ninth Circuits have gone the other way, allowing lawsuits against brokers to proceed under state negligence laws. Meanwhile, an Illinois state court recently denied a motion to dismiss against Echo Global Logistics in a similar case, adding further weight to the trend.

The outcome of the Fifth Circuit’s review could have national implications. If the court rules in favor of the plaintiffs, it would mark the third federal appeals court to allow broker liability claims, tipping the balance in the ongoing circuit split. That could increase the likelihood that the U.S. Supreme Court steps in to resolve the issue. Two high-profile cases, Caribe v. Montgomery and Cox v. TQL, are already petitioning the Court for review.