Follow
Email
Nevada Trucking Law reported HERE that the Ninth Circuit has refused to apply FAAAA preemption to allegations of negligence against freight brokers. Recently, in the case of Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261, 2023 U.S. App. LEXIS 8845, 29 Fla. L. Weekly Fed. C 2391, 2023 WL 2920451 (11th Cir. Apr. 13, 2023), the Eleventh Circuit has now disagreed with the Ninth Circuit.
Tessco supplies wireless communications products. Tessco needed to deliver some of its goods to a purchaser. Tessco hired freight broker Landstar Ranger to help it identify a motor carrier to transport its goods. Landstar allowed the shipment of expensive products to be turned over to a carrier that Landstar thought was one of its registered carriers. In fact, the carrier that received the goods was a thief. The goods were lost.
Tessco filed a claim for the loss of the goods with the insurance company Aspen American. Aspen paid the claim and then filed suit against the broker Landstar. The suit alleged that Landstar had been negligent under Florida law in its selection of the carrier.
Landstar asked for a dismissal arguing that the Federal Aviation Administration Authorization Act (FAAAA) had pre-empted state law. The relevant portion of the FAAAA says:
(1) General Rule. Except as provided in paragraphs (2) and (3), a [s]tate . . . 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 private motor carrier, broker or freight forwarder with respect to the transportation of property.
49 U.S.C. § 14501(c)(1).
Interpreting the statute, the trial court found, like the Ninth Circuit, that the service of a broker is to arrange for the transportation of property by a motor carrier and that the negligence claims have a connection with or reference to the service of a broker. Therefore, the service that Landstar provided fell within the purview of the statute.
The next question was whether the negligence claims fell within safety exception to the statute. Aspen argued that it should and that the suit should be allowed to proceed. Here is where the court refused to follow the Miller case. The trial court said that the safety exception did not apply and dismissed the case.
When the case was presented to the Eleventh Circuit, the Court rejected Landstar’s argument that state negligence laws are not related to safety. The Court cited a number of examples of how Florida’s negligence law addressed safety concerns.
However, the Court agreed with Landstar on its final argument of the analysis. That is the question of whether Tessco could claim the benefit of the exception language. That language states:
Paragraph (1)—
(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization
49 U.S.C. § 14501(c)(2)(A).
The Court focused in on the statutory language “with respect to motor vehicles”. The Court pointed out that freight brokers don’t operate the motor vehicle. The motor carriers do that. Therefore, state negligence claims are barred by the express preemption of the FAAAA.
This sets up a split of the circuits between the Ninth Circuit and the Eleventh Circuit, leaving the question squarely in the U.S. Supreme Court. We at Nevada Trucking Law will keep the readers abreast of any new developments in this area.
If you have questions about Nevada Trucking, Coverage or Insurance Law, please contact Mike Mills at 702.240.6060×114 or email him at mmills@blwmlawfirm.com.
