The federal government has reversed its stance on the broker liability controversy before the Supreme Court, suggesting that FMCSA regulations presume motor carriers are safe by virtue of their authorization.
For years, a split among federal circuit courts of appeals has left broker liability in a state of confusion. In some parts of the country, brokers are open to negligent hiring claims if a motor carrier they hired is involved in a crash. In other parts, brokers are off the hook.
It all comes down to the Federal Aviation Administration Authorization Act (F4A). Addressing the patchwork of state regulations for motor carriers, a preemption provision prevents states from enforcing laws affecting a motor carrier or broker’s price, route or service. If state laws impact these areas, F4A invalidates them.
However, there is an exception. F4A’s preemption cannot “restrict the safety regulatory authority of a state with respect to motor vehicles.” If it does, a claim can move forward.
In the case of broker liability, nearly every circuit court agrees that a state requiring brokers to exercise reasonable care in selecting motor carriers or be subject to liability affects their service. Therefore, it is preempted by F4A. But some circuits invoke the safety exception, while others do not.
On multiple attempts, the Supreme Court has refused to settle the score. In 2022, the high court asked the United States government to weigh in on C.H. Robinson’s petition to reverse a Ninth Circuit ruling allowing negligent claims to proceed.
At the time, the federal government urged the Supreme Court to deny the petition. The government argued that carrier selection is enough to fit “with respect to motor vehicles,” and therefore, the Ninth Circuit got it right. The Supreme Court ultimately punted on the case.
Fast forward to the present day, and two things have changed.
First, the Supreme Court has decided to rule on broker liability in a separate case involving C.H. Robinson. Second, a new administration is in the White House.
On Jan. 21, the U.S. solicitor general submitted an amicus brief in support of C.H. Robinson. In an about-face from the previous administration’s stance, the federal argument is telling the Supreme Court it interprets F4A to preempt broker liability claims with no safety exceptions.
The federal government argues the safety exception requires a direct connection to motor vehicles and their operations, such as traffic rules and claims against carriers and drivers. Brokers hiring carriers, the feds contend, is upstream and too far removed from the motor vehicle itself.
Those who believe broker liability claims are fair game argue that preempting them creates a safety gap. The United States says that isn’t so, and points to the Federal Motor Carrier Safety Administration.
The federal government argues that all motor carriers must receive authorization from FMCSA. That requires adhering to extensive safety regulations. FMCSA can rate carriers and revoke their authority if they fail to meet safety standards.
Meanwhile, brokers also must register with FMCSA. By doing so, they are required to hire only an authorized motor carrier.
If an authorized carrier is “one that FMCSA already has determined satisfies rigorous safety standards,” the federal government argues, then state laws should not require “brokers to second-guess federal registration decisions and independently evaluate the safety history of the carriers they select.”
“It makes sense that Congress would preempt state negligent-selection claims against brokers arising out of auto accidents,” the United States tells the Supreme Court. “Unlike a claim that a motor carrier was negligent on a particular occasion, a claim that a broker did not exercise due care in selecting a federally registered motor carrier would undermine FMCSA’s determination that the motor carrier satisfied federal registration requirements, including extensive safety requirements.”
If state broker liability cases are allowed to proceed, the government states it will subject brokers to 50 potentially different state negligence standards. That is exactly the kind of patchwork that F4A was trying to prevent.
There could be unintended consequences, too. The U.S. Solicitor General claims putting brokers on the hook for motor carrier crashes would cause them to gravitate towards the largest, most well-established carriers. That could squeeze out new, smaller carriers.
Of the 20 amicus briefs filed in the case, 13 are in support of C.H. Robinson. Oral arguments in the case have not been scheduled. LL
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