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Brokers lose preemption battle (for now) in the war of broker liability.

As part of a movement toward deregulation of several industries, Congress, via the Motor Carrier Act of 1980, partially preempted state regulatory authority over trucking. Congress found that States’ regulation of intrastate transportation of property imposed an unreasonable burden on interstate commerce, impeded the free flow of transportation of interstate commerce and placed an unreasonable cost on the American consumer.

Congress expressly prohibited States from enacting and or enforcing laws, regulations or other provisions having the force and effect of law related to a price, route or service of any motor carrier…broker or freight forwarder. However, preemption was not to restrict the safety regulatory authority of a state with respect to motor vehicles.  This part of the law is known as the “safety regulatory exception”.   Almost all courts find that brokers generally have preemption protection, but many find the safety regulatory exception applies, which means causes of action for personal injury are not preempted. 

The issue:  Is a personal injury tort claim part of a State’s safety regulatory authority with respect to motor vehicles?  If so, actions against brokers continue, “un-preempted”.  If not, common law tort causes of action against brokers are preempted and not actionable. 

It doesn’t appear that personal injury judgments and verdicts rise to the level of States’ safety regulatory authority concerning motor vehicles.  Personal injury judgments are isolated and do not affect safety regulation.   From a practitioner’s standpoint it appears that perceived inadequacy of insurance limits of liability for motor carriers is the driving force in arguing the causes of action are not preempted. 

The issue has been decided by several district courts (within the Third, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth and Eleventh Circuits) and there is no consensus of opinion.

There has been only one United States Court of Appeals decision (Miller v. CH Robinson Worldwide, Inc.) which held that the actions against brokers were not preempted because the “safety exception” applied. C.H. Robinson, the broker in that instance petitioned the United States Supreme Court to decide the issue.

C.H. Robinson, and Amicus Curiae briefs filed by the National Association of Manufacturers, the National Retail Federation, the Chamber of Commerce of the United States of America, the Transportation Intermediaries Association, Inc., the Leading Industry Freight Brokers, DRI-The Voice of the Defense Bar, Interested Freight Carriers argued, persuasively, that the Ninth Circuit erred when it held that a common law negligence claim is an exercise of the “safety regulatory authority of a State,”  and that holding a negligence claim against a freight broker operates “with respect to motor vehicles.” 

The Amicus brief filed by the United States asserted that the Ninth Circuit was correct, arguing that common law tort claims are what Congress intended to leave to the States to decide with the safety regulatory exception. 

The United States also pointed out that there is no inconsistency of rulings among the Circuits.   C.H. Robinson argued the inconsistency among the District Courts is a sufficient reason for the U.S. Supreme Court to decide the issue. Also, recently a favorable opinion for a broker in Georgia (Gauthier v Hard to Stop LLC,) was appealed to Eleventh Circuit Court of Appeals.

On June 27, the Supreme Court declined to review the case.  This is unfortunate.  Perhaps if the Eleventh Circuit affirms and there is a conflict between the Circuits, the Supreme Court will review.  However, for now, the war continues.