The Future of Freight - Part III: The Ninth Circuit’s Opinion in Miller v. C.H. Robinson
This is the third part in our 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 based on the negligence of motor carriers to whom 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. The second outlined the district court’s (correct) decision determining that plaintiff’s state law claims were preempted by FAAAA. This post will focus on the Ninth Circuit’s reversal of the district court’s decision.
In reversing the trial court’s decision, the Ninth Circuit determined that the district court correctly held that the plaintiff’s state law claims were “related to” the brokerage services of C.H. Robinson. Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016, 1020 (9th Cir. 2020). However, the Circuit judges found that the district court erred in concluding that FAAAA’s safety exception does not “permit  a private right of action,” which otherwise would allow individual plaintiffs to “essentially do the state’s work and enforce the state’s police power.” Id. The safety exception, codified in 49 U.S.C. § 14501(c)(2)(A), states that § 14501(c)(1) “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” In reversing the district court decision, the Ninth Circuit noted that “Congress intended to preserve the States’ broad power over safety… through common-law damages” and that tort claims were clearly within Congress’ mind while enacting this statute, stating that this exception was created to ensure that its preemption of States’ economic authority does not restrict the States’ existing power over safety. Id. at 1026 (citing City of Columbus v. Ours Garage & Wrecking Serv., Inc., 536 U.S. 424, 438, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002)). Additionally, the Court pointed to the FAAAA’s authority exemption, saying that the preemption provision targets “a government’s exercise of regulatory authority.” Miller, 976 F.3d at 1027 (citing American Trucking Associations, Inc. v. City of Los Angeles, 569 U.S. 641, 133 S. Ct. 2096 (2013).
The Ninth Circuit also explained that Congress only intended to regulate the economic aspects of state regulations on the trucking industry and stated that the power to ensure “safety” lies plainly in common-law tort cases. Miller, 976 F.3d at 1026. (citing Desaino v. Warner-Lambert & Co., 467 F.3d 85, 86 (2nd Cir. 2006)). Although the Court states that common-law cases have been used, the supporting authority cited actually did not involve FAAAA’s safety exception, but instead, other exceptions in FAAAA, or clarification on FAAAA. See American Trucking, 569 U.S. 641, 133 S. Ct. 2096 (2013) (the court only analyzed preemption generally, and did not discuss the “safety exception”; and additionally discussed the “market-participant” exception for governmental entities in contract with private entities); Northwest, Inc. v. Ginsberg, 572 U.S. 273 (2014) (stating that the ADA preempted a breach of good faith and fair dealing claim for termination of frequent-flyer program).
Further, the Court stated that tort claims “related to” broker prices, routes, or services might be saved from preemption in states where codified common law occurs, but cannot be saved in states that have not codified their common law. Miller, 976 F.3d at 1027. The Circuit panel believed that Congress would not have made this exception dependent on codification, particularly in light of FAAAA’s goal of uniformity, and thus C.H. Robinson’s argument that the exception applies only to positive enactments of law was not within the legislature’s intent. The Court stated that its conclusion on the safety exception had additional support through American Trucking, but acknowledged that American Trucking clarified other aspects of the FAAAA and not the safety exception. Miller, 976 F.3d at 1027.
Interestingly, the Court determined that negligence claims against brokers that stem from motor vehicle accidents are considered to be “with respect to motor vehicles.” Id. at 1030. In arriving at this conclusion, the court agreed that a private plaintiff’s action indirectly “regulate[s] the use of motor vehicles” by “creating incentives for brokers to select safe carriers… and thereby reduce the risk of trucking accidents.” Id. The language of the exception, according to the court, allows for a safety regulation to be “connected” to motor vehicles, and thus allows for state claims to enforce the states regulation. Id. This interpretation of the statute essentially renders moot the entirety of FAAAA, and thus would render any accident between a motor carrier and a vehicle subject to state regulations.
While the Ninth Circuit believes FAAAA may be read with multiple meanings, FAAAA is quite explicit in what kind of claims are preempted, and what the safety exception actually means. The safety exception only applies to State authorities. There is no mention of private rights of actions, nor does it grant authority for a plaintiff to enforce state regulatory measures. Seemingly, the Ninth Circuit read ambiguity where little-to-no ambiguity exists. Additionally, tort claims are inherently economic, as a windfall of broker liability litigation will increase costs drastically for the brokerage. In essence, a broker’s operation will necessarily be subject to a patchwork of different state laws, placing a substantial burden on the brokerage industry in attempts to comply with differing laws and regulations.
The court also seems to have misinterpreted C.H. Robinson’s argument on the positive enactment of the safety exception. FAAAA was enacted to protect the trucking industry from such a patchwork of various state regulations that may stifle the interstate movement of commercial materials. However, the safety exception was created to allow narrow state authority over motor vehicle safety. Without the safety exception, a state may not have the full authority to impose seatbelt laws or speed limits. However, this should not extend to common law civil tort claims. Instead of using the safety exception as a shield, plaintiffs could use it as a sword. This seemingly undermines the entirety of the FAAAA, as motor carriers inherently operate with “respect” to driving motor vehicles. If the Ninth Circuit’s decision is affirmed, then the FAAAA loses its effect, signaling a judicial override of Congressional authority.
Needless to say, the Supreme Court’s decision will have a significant impact on the scope of FAAAA applicability and the brokerage industry. The floodgates of litigation are bursting at the seam for accidents involving brokered motor carriers, and should the Ninth Circuit’s decision be affirmed, there will not just be a flood of litigation; there will be a tsunami. The next blog in this series will discuss the appellate briefs of both C.H. Robinson and Miller submitted to the Supreme Court, analyzing the parties’ arguments.
Patrick Mullinger also contributed to this blog