The Future of Freight – Part II: The District Court Decision in Miller v. C.H. Robinson
This is the second part in a blog series discussing Miller v. C.H. Robinson Worldwide, Inc., a case currently on appeal to the Supreme Court of the United States as it decides whether trucking brokerage firms may face state law claims for the negligent acts of the motor carriers to which they broker loads. The first post in this series gave a general overview of preemption under 49 U.S.C. § 14501(c)(1), also known as FAAAA preemption, an effective defense brought by trucking brokers facing state law claims that are “related to a price, route, or service . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). This post will provide the context of Miller v. C.H. Robinson and discuss the District Court’s decision that Miller’s state law claims were barred by FAAAA preemption.
In early December 2016, an accident occurred in Elko, Nevada between a commercial semi-tractor trailer and a vehicle operated by plaintiff Allen Miller. The tractor trailer was driven by Ronel Singh, and was owned by RT Service’s. However, C.H. Robinson, the largest trucking broker in the country, contracted RT Service’s to deliver goods from Sacramento, California to Salt Lake City Utah. The driver of the vehicle that was hit, plaintiff Allen Miller, sued C.H. Robinson alleging that Robinson “had a duty to select a competent contractor to transport” the load, and that it breached a duty owed to Miller when hiring RT Services—i.e. a broker liability claim for negligent selection. Miller v. C.H. Robinson Worldwide, Inc., No. 3:17-cv-00408-MMD-WGC, 2018 U.S. Dist. LEXIS 194453, *3 (D.C. Nev. Nov. 14, 2018). However, Robinson claimed that FAAAA preempted any State or political subdivision from enacting or enforcing any rule or law against freight brokers relating to intrastate rates, routes, or services.
The Nevada District Court agreed that FAAAA expressly preempts certain state regulations relating to intrastate motor carriages in that 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 private motor carrier, broker, or freight forwarder with respect to the transportation of property. Miller, 2018 U.S. Dist. LEXIS 194453 at *6. The court highlighted this situation, stating that the federal preemption scenario was enacted by Congress to prevent a “patchwork” of state laws regarding the reasonableness factor of a freight broker. Id. at *9.
Miller claimed that FAAAA did not apply, because it authorized each state to enact regulations to “police” their own streets. Miller, 2018 U.S. Dist. LEXIS 194453 at *10-11. However, the Nevada District Court reasoned that nothing in FAAAA permits a private right of action, so Miller could not sue C.H. Robinson via this exception. Id. at *11. The court held that a broker could not be held liable for their contracted companies’ negligence while operating a vehicle, and extending this exemption to any state agency, authority, or legislature reworks the framework of the FAAAA statute. Should Miller have a private right of action, then each broker would be required to inspect each and every single truck and tractor trailer brokered by them, which this court says is wholly unreasonable. Id. at *10.
The Nevada District Court properly determined that 49 U.S.C. § 14501 insulates Robinson from personal injury suits involving their contracted carrier. First and foremost, the contracted service was unequivocally licensed as a freight service in good standing. Based on the plain language of 49 U.S.C. § 14501, state claims against a freight broker is explicitly preempted because, without preemption, each individual state could “replace market forces with their own, varied commands, like telling carriers they had to provide services not yet offered in the marketplace.” Miller, 2018 U.S. Dist. LEXIS 19445 at *8 (citing California Trucking Assoc. v. Su, 903 F.3d 953, 960 (9th Cir. 2018)). Forcing the freight brokers to take the additional step to review every single service they contract is an unduly burdensome compliance requirement, which likely would cause additional costs for companies, and drastically increase litigation costs to fight any case brought in a different State. Such a requirement would result in the exact “patchwork” of state laws defining different standards of reasonableness in every state—undermining the specific Congress sought to avoid in enacting FAAAA.
As we continue this series analyzing the impact of this case, the next blog will focus on the 9th Circuit’s interpretation of FAAAA and how the court’s holding impacts FAAAA preemption and the broker industry.
Patrick Mullinger also contributed to this blog