In an unusual twist, giant brokerage TQL is asking the U.S. Supreme Court to review its lower court victories on the question of broker liability.
In a brief filed with the Supreme Court last week, TQL sided with its adversary Katia Gauthier in seeking review of the lower court cases. Her husband, Peter, was killed in May 2020 in a collision with a truck hired by TQL.
Gauthier’s subsequent lawsuit against the carrier and TQL resulted in a pair of decisions – in the U.S. District Court for the Southern District of Georgia and on appeal in the 11th U.S. Circuit Court of Appeals – that TQL was protected from legal claims by the provisions of the Federal Aviation Administration Authorization Act, enacted in 1994.
Gauthier’s appeal to the Supreme Court for review marks the third time the question of broker liability under the so-called F4A has been brought to the court for review. In one of those cases, a Circuit Court held the broker was not fully protected by F4A. In the second, another Circuit Court held the opposite. But despite that conflict, the nine justices of the Supreme Court rejected review both times.
Given that uncertainty, even with a court victory in hand, TQL wants the high court to take up the issue.
“It is certainly unusual,” Marc Blubaugh, co-chair of the Transportation & Logistics Practice Group at the Benesch law firm, said in an email to FreightWaves. “The fact that TQL is willing to risk its victory by requesting review sends a strong signal that it has a great deal of confidence in the merits of its legal position. In short, TQL necessarily sees this as an opportunity to put the scope of the so-called safety exception under FAAAA to rest once and for all.”
TQL’s brief to the Supreme Court makes clear that clarification of conflicting circuit decisions is its goal in making the same appeal to the Supreme Court that Gauthier has undertaken.
A ‘suitable vehicle’ for clarifying the issue of broker liability
The 11th Circuit’s decision in favor of TQL, the 3PL said, “deepened an existing conflict on that question; the question is exceedingly important to the national transportation industry; and this case is a suitable vehicle for resolving it.”
An attorney representing TQL in its request for review declined comment.
TQL’s brief includes a history of how F4A came into being and reiterates the core provision of the law as it relates to trucking: A state may not enact a law or regulation “related to a price, route or service” of a carrier.
It also addresses the safety exception of F4A, which does allow the act to be preempted if the state is enforcing, citing precedent, “traditional state power over safety” in order to ensure “safety on municipal streets and roads.”
The precedent that has had the brokerage community concerned is out of the 9th Circuit, in the case of Miller vs. C.H. Robinson (NASDAQ: CHRW). That case, like others, wrestled with the question of whether a brokerage could be found to be considered a “motor vehicle,” which is wording in the F4A.
“We hold that negligence claims against brokers, to the extent that they arise out of motor vehicle accidents, have the requisite ‘connection with’ motor vehicles,” the 9th Circuit wrote in its 2020 decision. “Therefore, the safety exception applies to Miller’s claim against C.H. Robinson.”
But the Supreme Court rejected C.H. Robinson’s request for review of the Miller decision, leaving it a precedent in the 9th Circuit and for any other circuits that lack a precedent on the question of broker liability. That is a major concern to the 3PL industry.
The question of whether a broker has a “connection with” a motor vehicle is key in legal arguments.
Under safety exemption, is a broker a motor vehicle?
That question – can a broker be considered a motor vehicle under the terms of the safety exception? – was at the heart of the dissent by Judge Ferdinand Fernandez in the Miller vs. C.H. Robinson case and is the argument that a lawyer for Public Citizen, the Ralph Nader-founded progressive organization that is representing Gauthier in her appeal to the Supreme Court, presumably would be challenging. (While F4A bars state law impacting pries, route of service of a motor carrier, it is the term motor vehicle that is found in the safety exemption).
“Robinson is a broker,” Fernandez wrote in his dissent. Citing federal law, he then defined a broker as “a principal or agent [that] sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.”
Fernandez again cited federal law to define a motor carrier as “a person providing motor vehicle transportation for compensation.”
“A broker cannot be a motor carrier,” Fernandez wrote. “Those definitions make clear that as a broker, C.H. Robinson and the services it provides have no direct connection to motor vehicles or their drivers. Any connection is merely indirect — for example, via an intermediary motor carrier.”
But the 9th Circuit held otherwise on the question.
The Supreme Court also rejected review of a case coming out of the 7th Circuit, Ying Ye vs. GlobalTranz, where F4A was found to protect the broker.
Eleventh circuit has ruled twice in favor of brokers
In a third case, this time in the 11th Circuit, the appellate court ruled in April 2023 that Landstar (NASDAQ: LSTR) was protected by F4A in an incident involving a stolen truck. That case was not sent to the Supreme Court for review, but as TQL notes in its filing with the Supreme Court, the appellate court cited the Landstar case in the TQL decision as a precedent, as both cases were in the 11th Circuit.
The inconsistencies need to be resolved, TQL argues in its brief.
“Although the court of appeals reached the correct result in this case, the question presented is one of considerable importance to the transportation industry,” TQL’s attorneys write in their submission. “The increasing uncertainty concerning the question presented not only imposes significant costs on respondents and other freight brokers but also undermines Congress’s deregulatory objectives in enacting the FAAAA. Moreover, this case is a suitable vehicle to resolve the conflict on the question presented.”
“While only three federal circuit courts have determined the issue, a bevy of federal district courts and state courts have continued to issue conflicting decisions on the subject,” Blubaugh said.
He also contrasted the TQL stance with that of GlobalTranz, which had argued the Supreme Court should not take up GlobalTranz’s own case involving broker liability.
“GlobalTranz acknowledged that the issue is indeed one of great public importance but stated in its opposition to review in the Ying Ye case that the Court might wish to allow the issue to ‘percolate’ for more time before seeking review,” Blubaugh said. In contrast, he added, “TQL is ready to join the issue.”
In addition to Public Citizen, which was not involved in the case in the lower courts, Gauthier has Georgia-based attorneys from the firm of Harris Lowry Manton in her appeal to the Supreme Court.
“We think this case is about interpreting the safety exception and that it’s clear that these types of cases are sufficiently connected to motor vehicles to fall within the safety exception,” Adina Rosenbaum of Public Citizen said of her group’s pro bono involvement.
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