Check Call: Broker liability still remains questionable

Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EDT. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.

In this edition: The Supreme Court rejected hearing another case on broker liability; spot rates on the decline in Phoenix; and the settlement heard round the world.

The Supreme Court continues to remain tight-lipped about the question of broker liability. Tight-lipped in the way of not hearing the case as it has once again chosen to pass on hearing the case. This rejection of a case that involves the death or injury of a person struck by a truck that was booked by a 3PL has actually brought a win for the brokerage industry.

As for why the Supreme Court refused to hear the case, great question. As FreightWaves’ John Kingston reported: “Presumably, the court either determined that the circuit split was still too shallow or that the issue did not yet rise to the level of an issue of great public importance,” Marc Blubaugh, head of the transportation practice at the Benesch law firm, said in an email to FreightWaves.

Where does it stand now? There are two major cases being called up as conflicting arguments for whether or not brokers should be held liable for its hired carriers actions on the road. The first ruling is in Miller v. Robinson in which the 9th Circuit ultimately held that C.H. Robinson was liable for hiring the trucking company involved in the crash. The ruling that now leaves the decision split is Ye v. GlobalTranz in which the 7th U.S. Circuit Court of Appeals ruled that GlobalTranz was not held liable for the death of Shawn Lin.

The one commonality between the two is that the Supreme Court declined to hear both cases, echoing Blubaugh’s sentiment that the issue isn’t of enough public importance. There is a light in the form of the guy named “James” case where the 11th U.S. Circuit Court of Appeals has affirmed that Landstar wasn’t negligent in the August 2020 theft of a truckload of expensive freight, saying that broker liability exception applied to cargo theft as well.

Regardless, the issue still remains up in the air and will until more courts provide varying opinions.

TRAC Tuesday. This week’s TRAC lane is from the heart of Southern California, Ontario, California to Phoenix, Arizona. Capacity is tightening in Ontario as outbound tender rejection rates increase to 4.35%. Spot rates remain relatively unaffected by the slightly tightened capacity in California due to the loosening of capacity in Phoenix as outbound tender rejections drop to 2.12%. The low rejection rate in Phoenix, coupled with the slow January, means rates should remain stable and lower than average for this lane for the foreseeable future.

Who’s with whom? The battle for the ages, in a surprising turn, has actually reached a settlement. Berkshire Hathaway and Pilot Travel Centers have reached an agreement. The lawsuit started when Berkshire Hathaway bought Pilot Travel Centers and then remaining 20% of the stock for Pilot was still in the hands of the founding family of Pilot, the Haslams. The family accused Berkshire Hathaway of adopting new accounting practices that impacted the value of that final one-fifth ownership.

After many months the two sides have come to a settlement, which the intricate details of still remain a mystery. FreightWaves’ John Kingston’s article states: “Pilot Corporation … and the Haslam family, is pleased to announce that it has reached an agreement to fully settle the Delaware litigation between the Company and Berkshire Hathaway Inc., Pilot Travel Centers, LLC, and National Indemnity Company, including the dismissal of all claims and counterclaims against each other,” the statement said. Pilot Corp. is the Haslams’, and Pilot Travel Centers, the largest chain of truck stops and travel centers in the country, is the operating entity now owned by Berkshire Hathaway.”

It’s seemingly good news that the worst of it is behind everyone and Berkshire Hathaway can get on with its plans for Pilot Travel Centers