Another brokerage company has won a court battle holding that a 3PL is not liable for an accident that involved a carrier the company hired to move freight.
TQL, the logistics company in the case, was heard by the 11th Circuit Court of Appeals. A three-judge panel unanimously held last week that TQL could not be held liable for a fatal accident on a Georgia road in 2020.
Katia Gauthier, the widow of Peter Gauthier who was killed in the accident, originally filed suit against the carrier, Hard to Stop, and TQL in a Georgia court. But the lawsuit was transferred to the U.S. District Court for the Southern District of Georgia.
TQL did not participate in the settlement that ended the case in early 2022. Instead, it successfully obtained a decision from the lower court that TQL could not be held liable for the death of Peter Gauthier, citing its protections from the Federal Aviation Administration Authorization Act (FAAAA).
Given that the lower federal district court already had ruled in TQL’s favor, the decision by the appellate court does not break new ground. However, it adds to the growing body of law that protects a brokerage from being held liable for an accident or other occurrence that happens involving a carrier it hired.
The fatal collision took place in May 2020 on a Georgia state road and resulted in Peter Gauthier, who was driving a car, being killed. According to the lawsuit, a driver for Hard to Stop made what the plaintiff — Gauthier’s widow Katia — said in a brief with the appellate court was a “negligent, reckless and illegal U-turn in the middle of the road” that he could not successfully complete.
The truck, according to the brief, ended up blocking several lanes of traffic, which was “made worse by the fact that many lights on the tractor and trailer were not functioning properly, the headlights were not properly adjusted, and the reflective tape marking on the tractor and trailer was not maintained in accordance with industry and federal regulations.”
Peter Gauthier “was unable to avoid colliding with the trailer.”
In the lawsuit filed against Hard to Stop and TQL, Katia Gauthier said TQL “had a duty to act with reasonable care” and that it had “breached that duty when it negligently hired, contracted with, and/or retained (driver) Shingles, when it knew or should have known of Shingles’s terrible record, including multiple speeding tickets, driving with a suspended license, battery, and constructive possession of controlled substances.”
Gauthier ultimately reached a settlement with Hard to Stop and other affiliated defendants. But the lower court cited the FAAAA in ruling that TQL was not liable for what happened to her husband.
The recent legal scorecard on questions of broker liability have been mostly in favor of the 3PL industry.
- Almost a year ago exactly, the Seventh Circuit dismissed an appeal from Ying Ye, the widow of a motorcycle driver who was killed when he collided with a truck operated by Global Sunrise and booked by 3PL GlobalTranz. The lower court cited the protections of the FAAAA in dismissing an appeal of a lower court decision from Ye. She took her appeal to the Supreme Court but was denied certiorari in January.
- On a state level, an Illinois appellate court in September, Alliance Shippers, a 3PL, was removed as a defendant in a case brought by the mother of a minor hit by a Dakota Lines truck and who suffered extensive injuries. Given that it was a state case, it did not cite the FAAA as the reason for its decision and it did not set a precedent for other federal cases. In a recent commentary about the case, Eric Zalud, partner and Co-Chair of Benesch’s Transportation & Logistics Practice Group, said of the Dakota Lines decision: “For broker liability cases that, for whatever reason, are not federally preempted, this case is a veritable mother lode of ammunition to defend against allegations of vicarious liability on behalf of the broker, in either freight loss and damage, or casualty scenarios.” He also described the past months as “a very good year for brokers; in the courts, that is!”
- The appellate court in the Gauthier case is the same 11th Circuit that handed down the Landstar case involving a load that was stolen, and it cited its findings in that lawsuit to argue why TQL could not be held liable. The Landstar (NASDAQ: LSTR) case is known as Aspen American Insurance, which was the plaintiff that sued Landstar after it paid off the shipper. The case from April 2023 did not involve a collision or a death; rather, it focused on a fake carrier who tricked Landstar into giving it a shipper’s cargo and then disappeared.
In its ruling, the 11th Circuit said in the Gauthier case that it was “(adopting) the same reading
of the (FAAAA) in Aspen American Insurance Company v. Landstar Ranger, Inc.” and held that the Act preempts state law claims against “a transportation broker” who was allegedly “negligent … in its selection of [a] carrier.”
The core foundation of the FAAAA is that a state may not pass a law or regulation that could impact a “route, price or service.” “Courts in this circuit and others have held that (FAAAA) preempts negligence-based claims against brokers or motor carriers when the subject matter is sufficiently ‘related to’ their prices, routes, or services,” the Fourth Circuit wrote.
The 4th Circuit decision noted that the FAAAA does have a safety exemption, a fact that has come up in previous litigation.
But in other cases, including the Gauthier case, courts have noted that the safety exemption applies to “motor vehicles.” The court in Gauthier cites its earlier precedent in Aspen vs. Landstar that says the safety exemption from FAAAA “requires that the relevant state law ‘have a direct relationship to motor vehicles.’” But the court found, as others have, that a broker can not be considered a motor vehicle under the safety exemption.
The one significant case with a precedent that remains on the books and which has trucking-focused lawyers concerned is Miller vs. C.H. Robinson. A 9th Circuit finding that held C.H. Robinson was liable for an accident that left Allan Miller a quadriplegic when he was struck by a truck hired by C.H. Robinson (NASDAQ: CHRW) was appealed to the Supreme Court, but was denied certiorari in 2022.
The safety exemption ultimately was the argument in Miller vs. C.H. Robinson as to why the FAAAA did not exempt the broker from liability. C.H. Robinson settled the case, but the decision could be used as the basis for a decision damaging to a 3PL in other federal litigation.
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