By this time in the years-long debate over broker liability under federal law, there aren’t too many legal arguments that haven’t been made before various federal district and appellate courts.
What is different now is that the pleadings are being placed in front of the U.S. Supreme Court in the case of Montgomery vs. Caribe.
The parade of legal briefs that will be submitted to the nine justices kicked off this week with a filing by attorneys for Shawn Montgomery. He was involved in a 2017 crash where his own truck, while parked legally on the right shoulder of an Illinois highway, was plowed into by a truck operated by Caribe Transport, a company that the Montgomery brief said had a “remarkably poor safety record.”
Montgomery survived, but later surgeries ended up costing him part of a leg and left him with long-term pain.
The broker that hired Caribe Transport was C.H. Robinson (NASDAQ: CHRW). The C.H. Robinson argument at the district court level was that it was protected from being held negligent in its hiring of Caribe by the safety exception of the Federal Aviation Administration Authorization Act (F4A) of 1994, given that the exception applies to action against motor vehicles, and a brokerage can’t be considered that.
That argument initially was rejected by the district court in Illinois. But on appeal, the Seventh Circuit, citing its own precedent in the broker liability case of Ye vs. GlobalTranz, disagreed and removed C.H. Robinson as a defendant, citing F4A.
After the Court over several years kicked aside review of other cases that had asked it to clear up the issue of whether the F4A safety exception protected brokers from negligence or liability claims, the attorneys for Shawn Montgomery finally broke through this year.
Cleaning up the conflicts
The Montgomery case gives the court a chance to clear up a circuit court landscape with several conflicting precedents on the issue of broker liability.
At the core of the case before the Court are five words: “with respect to motor vehicles.” More specifically, F4A’s safety exception “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.”
The exception provides an opening for tort action over safety-related incidents even as the rest of the law bans states from taking steps that could affect a “route, price or service,” as the F4A sought to ensure that federal deregulation of transportation going back to the late 70’s and early 80’s was not undercut by state action.
But does a broker fall under the definition of “motor vehicle,” creating a path to a finding of negligence or liability? That’s the issue before the Supreme Court.
The job of Montgomery’s attorneys, which includes former Solicitor General Paul Clement, is to persuade the Supreme Court that under the safety exception, the definition of “with respect to motor vehicles” can haul in a broker.
“Both the plain text of the safety exception and the statutory evolution of that provision make crystal clear that states retain the authority to regulate motor carrier safety by recognizing claims against brokers for negligently hiring dangerous trucking companies and drivers,” the brief says.
In a similar vein, the brief says a claim against a broker for “negligent hiring is plainly an exercise of state regulatory authority, as it seeks to regulate brokers’ conduct by requiring them to exercise due care in hiring trucking companies and drivers, and by imposing liability on them for any resulting injuries if they fail to do so.”
The definition of a motor vehicle
The only reason F4A and the “route, price or service” preemption over state action can be used by brokers, the attorneys argue, is because brokers are “in the business of arranging for transportation by motor vehicle.” Given that, the Montgomery attorneys argue, they can’t claim to be separate from a motor vehicle under the safety exception.
“To prevail, (C.H. Robinson and Caribe) must persuade this Court to interpret the FAAAA’s basic preemption provision broadly, and then turn around and interpret the safety exception narrowly,” the Montgomery brief says.
Earlier cases cited in the filing
Two other cases involving broker liability keep popping up in the Montgomery arguments. One is Ye vs. GlobalTranz, which like Montgomery vs. Caribe was decided in the Seventh Circuit. The Ye decision protected GlobalTranz against a finding of liability or negligence in the hiring of a driver whose truck killed the husband of Ying Ye.
An appeal to the Supreme Court by Ye for certiorari was denied.
The appellate court decision in the Ye case was a precedent that the same Seventh Circuit used to allow C.H. Robinson to exit the Montgomery case as a defendant.
But the circuit’s opinion in Montgomery comes in for heavy criticism by Montgomery’s attorneys. The brief refers to one finding by the circuit as “flat wrong” and another as a ”classic non sequitur.”
The other case that makes multiple appearances in the Montgomery brief is Cox vs. TQL. That Sixth Circuit decision went against TQL, which was found to not be protected by the safety exception.
The court has not acted on that TQL certiorari request yet. The general consensus is that it won’t do so while it considers what amounts to the same issue in Montgomery vs. Caribe.
But that didn’t stop Montgomery’s attorneys from citing the Sixth Circuit’s opinion in Cox. Montgomery’s brief cites this passage from the Cox decision: ““The crux of the alleged negligent conduct is that TQL failed to exercise reasonable care in selecting a safe motor carrier to operate a motor vehicle on the highway, resulting in a vehicular accident that killed Ms. Cox… Simply put, there is no way to disentangle motor vehicles from Mr. Cox’s substantive claim.”
No specific mention
One argument that has been a key point of contention is that since brokers are not mentioned specifically in the safety exception, they can’t be considered on the same level as a motor vehicle. Brokers are identified by name in other parts of F4A.
The Ye decision makes reference to the lack of a specific mention of brokers in the safety exception.
But in its dismissive approach of the logic of both the initial Ye decision and the appellate court’s citing of it in Montgomery, Montgomery’s attorneys note that no particular group is referred to in the safety exception, “no mention of motor carriers, drivers, motor vehicle manufacturers or any other entity specifically enumerated in the preemption provision which the safety exemption qualified,” the brief says. Under the logic of the Seventh Circuit, the brief says, “no state-law tort claim against any defendant would be preserved by the safety exception.”
C.H. Robinson declined to comment on the filing. Its deadline to file a response is January 14.
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