The Texas Supreme Court is reviving a trucker’s multimillion-dollar lawsuit claiming that the company he worked for is responsible for a serious crash he was involved in due to it coercing him to violate hours-of-service regulations.
More than two years after a petition for review was filed, the Texas Supreme Court has rejected an appeals court’s decision that awarded a trucker nearly $14 million in a case that found his employer negligent for a crash. Already greatly reduced from $80 million, the high court’s order could further decrease the award or reverse the final judgment altogether.
The negligence case stems from a crash that occurred after the trucker, Lauro Lozano, fell asleep at the wheel. In response to his claim that he was coerced to drive beyond what is allowed by federal regulations, a district and appellate court found three companies liable. However, the Texas Supreme Court decision has called into question Lozano’s employment status, kicking the case back to the appellate court.
Hours-of-service coercion
At the heart of the case is a crash that occurred as a result of violating hours-of-service regulations.
According to court documents, Lozano fell asleep while driving a truck from Texas to Maryland at about 1:30 a.m. in May 2015. He crashed into another tractor-trailer in front of him, resulting in serious injuries.
Lozano claims that Jorge Marin, the owner of the company he drove for, told him to continue driving despite him having exceeded his allowed hours of service. During litigation, it was revealed that Marin and his wife, Silvia Marin, had a history of encouraging and promoting the falsification of logbooks. Fearing he could lose his job if he did not comply with orders, Lozano drove with little rest.
In 2017, Lozano filed a lawsuit against the Marins and the three companies they owned: JNM Express, ANCA Transport and Omega Freight Logistics. Lozano drove a truck owned by JNM Express, which was leased under the authority of ANCA Transport. Omega Freight Logistics was a brokerage that secured loads for the other two companies.
A jury found all three of the companies were Lozano’s employers. The companies and the Marins were all found negligent. Lozano was awarded $80 million, including $25 million in punitive damages from each of the three companies. Punitive damages were lowered to $3 million per company under a state law limiting such damages, bringing the total award to nearly $14 million.
Definition of ‘employee’
All five defendants challenged the employment status of Lozano, which led to the state Supreme Court to allow them a second bite at the apple.
When determining Lozano’s employment status, both the trial and appellate court relied on the Federal Motor Carrier Safety Regulations’ definition of “employee”:
“Any individual, other than an employer, who is employed by an employer and who in the course of his or her employment directly affects commercial motor vehicle safety. Such term includes a driver of a commercial motor vehicle (including an independent contractor while in the course of operating a commercial motor vehicle), a mechanic and a freight handler.”
However, the defendants argued that state common law should be used to establish the employer-employee relationship. They claimed that if state law were applied, Lozano would be considered an independent contractor, and none of the three named companies in the lawsuit would be considered an employee.
The Texas Supreme Court found that neither of the lower courts allowed the defendants to raise those objections. Consequently, the high court has remanded the case back to the appellate court to hear arguments about which definition is to be used.
If the lower court finds that state common law dictates the employment status, this could change the entire course of the case by finding none of the defendants negligent.
Even if the federal definition is used, there is a question of whether “federal regulations impose a duty on motor carriers that runs to their drivers rather than only members of the public whom such drivers might injure.” In other words, can the federal definitions be used in a lawsuit brought by a driver?
Regardless, the Texas Supreme Court ruled there is insufficient evidence to find Omega Freight Logistics is an employee under either definition. The high court also took Silvia Marin off the hook, eliminating two of the five defendants.
The appellate court now is tasked with further exploring which definition applies to Lozano’s employment status and applying that to only two of the companies. The best-case scenario for Lozano would be for previous rulings to stay intact but with a lower punitive-damage award, with there being one less defendant. The worst-case scenario would be for the lower courts to side with the defendants on which definitions to use, potentially setting up a situation where they come out victorious. LL
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