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U.S. District Court Decision Provides Brokers Additional Protection Against Negligent Hiring Claims

As those familiar with the trucking industry know all too well, it has become common practice for plaintiffs to seek damages against brokers in the event of trucking accidents. Their purpose in doing so is to find the entity with the deepest pockets as well as to add more defendants and causes of action to a lawsuit than there otherwise would be, improving the odds of a recovery. Fortunately for brokers, a recent U.S. District Court decision may limit plaintiffs’ ability to recover from brokers on the grounds of negligent hiring, which had been a prominent cause of action against brokers in the past.

On February 7, 2018, the U.S. District Court in the Northern District of Illinois issued an opinion that is likely to be cited by brokers who are sued for negligent hiring of a carrier in the future.  In Natalia Volkova v. C.H. Robinson Company, the plaintiff’s decedent’s tractor-trailer crashed into another tractor-trailer, driven by Dung Quoc Nguyen, an Antioch employee. Nguyen was making a U-turn in the middle of the highway when the collision occurred. The plaintiff then sued the driver (Nguyen), the carrier (Antioch), and the broker (C.H. Robinson), listing a multitude of causes of action.

The plaintiff sought recovery from C.H. Robinson alleging that it failed to “perform sufficient investigation and evaluation in hiring Antioch and Nguyen to transport the load at issue.” Conversely, C.H. Robinson filed a motion to dismiss on the grounds that the negligent hiring laws in which plaintiff attempted to hold C.H. Robinson liable were preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”).  In ruling in favor of C.H. Robinson, the court determined that the plaintiff’s claim against C.H. Robinson for state law negligent hiring was, in fact, preempted by the FAAAA.

Specifically, the decisive language in the FAAA read, “a State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” The court, citing the opinion set forth in Rowe v. New Hampshire Motor Transportation Association, 552 U.S. 364 (2008) reasoned that the case should turn on the meaning of the word “services” in the FAAAA. In determining that the FAAAA’s use of “services” was broad and encompassed all elements of the motor carrier service bargain, the court found that enforcement of a negligent hiring claim against a broker would be a prohibited state action relating to the broker’s service. Furthermore, it was the court’s determination that because the enforcement of the plaintiff’s claims would have a significant economic impact on the services provides by C.H. Robinson, the enforcement was preempted. Lastly, the court reasoned that the negligent hiring claims related to the core service provided by C.H. Robinson, which is hiring carriers to transport shipments.  Despite the fact that its services as a broker did not involve the actual transportation of property, the court found that C.H. Robinson arranges how property is transported, therefore placing its services within the scope of FAAAA preemption.

While not a binding decision on all courts throughout the country, the logic used in theVolkova decision has offered valuable precedent to provide brokers with another much-needed tool in the toolbox of ways to combat tenuous claims of liability by plaintiffs in the event of catastrophic trucking accidents. If your company is faced with any potential broker liability issues or you would like more information about this topic, please contact Kevin Coghill at (804) 377-1273 or kcoghill@setlifflaw.com, or Steve Setliff at (804) 377-1261 or ssetliff@setlifflaw.com.

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