Will Supreme Court resolve conflicting rulings on broker liability?

Now the wait begins.

There is no clear timeline for when the U.S. Supreme Court will rule on a review petition filed earlier this month by Ying Ye, the widow of a man killed by a truck that was brokered by GlobalTranz.

The 7th U.S. Circuit Court of Appeals ruled in July that the Federal Aviation Administration Authorization Act (F4A) blocked GlobalTranz from being held liable for the death of Shawn Lin, Ye’s husband. Lin was riding a motorcycle in November 2017 when he collided with a truck driven by a driver for a company named Global Sunrise, which had been hired by Arizona-based GlobalTranz to move freight.

When the 7th Circuit decision was handed down, it created a split in the federal circuit court system over whether a broker could be held liable for such an accident, or whether the F4A  blocked that finding. In both the Ye case and the “guy named James” case involving Landstar in the 11th Circuit, the F4A was invoked by the ruling appellate panels to hold brokerages not liable.

But on the other side of the divide is the 9th Circuit’s decision from 2020 that held C.H. Robinson (NASDAQ: CHRW) liable for injuries suffered by Allen Miller in an accident involving a truck booked by Robinson. The giant brokerage company had asked the Supreme Court for review of the decision, but the court denied that request in June 2022.

The sharply different conclusions in the Ye and Landstar cases from the 9th Circuit decision in Miller set up the type of inconsistency in the circuits that can lead to a Supreme Court review.

“Even in what may seem like the best of circumstances, the odds of review by the U.S. Supreme Court, by definition, are always daunting — regardless of the merits,” Marc Blubaugh, head of the Benesch Law Firm’s transportation practice, said in an email to FreightWaves. “The Court receives over 7,000 requests for review every year, and the Court may only accept 100 cases for review, give or take.”

When the Supreme Court denied review of the Miller case in 2022, the reaction among what might be called the “trucking bar” was one of disappointment. But that was for a decision that went against a broker.

Now, there are two decisions in the circuit courts, as well as a recent lower court decision in Illinois regarding Coyote Logistics (NYSE: UPS), that are clearly in favor of brokers. So it isn’t clear that industry lawyers want to see the high court take up the issue after all.

Industry lawyers like the way the rulings have come down

“It’s a very favorable decision, at least to our brokerage clients,” Nathaniel Saylor, a partner with the trucking-focused Scopelitis law firm, said in an interview with FreightWaves. “So we’d like the 7th Circuit’s decision to just stand.”

The Miller case that went against C.H. Robinson “was the only decision for a while,” Saylor said. “So absolutely, we wanted it to be reviewed. We wanted it to be overturned. Since then, we’ve had the 7th and 11th Circuits come down favorably.”

If the Supreme Court denies review, Saylor said, the 7th Circuit decision in the Ye case and the 11th Circuit decision in Landstar (NASDAQ: LSTR) would set the precedent on F4A guidance in those jurisdictions. The Miller case would set the same for the 9th Circuit, putting brokers in more jeopardy in that region. As for the other lower courts and circuits, Saylor said, they can choose which precedent to look to should the issue of broker liability under F4A come before them.

The F4A prohibits state action that could impact a motor carrier’s “prices, routes or service.” There also is a safety exception in F4A, which permits legal action for improper safety management even if it could be seen to impact a price, route or service. It was the safety exception that ultimately led to C.H. Robinson’s loss in the Miller case.

Is a broker a motor carrier?

But that exception can only be found to be used against a motor vehicle or carrier. In the Ye case, GlobalTranz was not found to be a motor carrier, and its F4A arguments prevailed.

“If freight brokers cannot be held accountable for negligently hiring unsafe motor carriers, they will have reduced incentives to ensure that they are not hiring carriers that place unsafe motor vehicles on the road,” Ye’s attorneys write in their review request. “This reduction in safety will come at the expense of other drivers and their passengers, who are placed at risk of being injured or killed by motor vehicles when brokers negligently hire unsafe motor carriers to provide

motor vehicle transportation.”

And the Ye request goes after the decision on whether a broker does not fall under the safety exemption because it is not a motor carrier. “The Seventh Circuit erred in holding that personal injury claims against freight brokers based on the negligent hiring of an unsafe motor carrier are not sufficiently related to motor vehicles to fall within the safety exception,” the attorneys for consumer advocacy organization Public Citizen and the firm of Cowen Rodriguez write in their request.

And they cite language from the Miller decision: “The safe operation of a vehicle is necessarily connected to the vehicle’s operator, i.e., the motor carrier providing the motor vehicle transportation. The selection of a safe motor carrier therefore is logically a meaningful component of commercial motor-vehicle safety.”

With three decisions at the circuit level in conflict, the Supreme Court needs to weigh in, the attorneys argue. “A conflict now exists, and the time for this Court to consider the question presented thus has arrived,” the request states.

As far as when the request might be ruled on, the answer generally is: anytime. The court often hands down a long list of decisions on certiorari requests at the end of its term in June; that’s when it released its decision not only on Miller vs. Robinson but also the California Trucking Association case against independent contractor law AB5, which was denied review and is now back at the lower-court level. But there is no guarantee it won’t come down sooner.

“The circuit split is a highly favorable and important factor, particularly the split between the 9th and 7th Circuits,” Blubaugh said. “That said, a circuit split is not dispositive; it does not create an automatic path to review. After all, the United States has twelve federal appellate circuits.  SCOTUS sometimes waits for more circuits to examine and evaluate a particular issue before determining that a circuit split demands resolution.”

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