United States - Professional Negligence (2024)

Houston, Tex. (May 24, 2024) - This week, in a helpful ruling for transportation brokers, the Eastern District of Texas opined that state law tort claims against brokers...

United States Litigation, Mediation & Arbitration

Houston, Tex. (May 24, 2024) - This week, in ahelpful ruling for transportation brokers, the Eastern District ofTexas opined that state law tort claims against brokers arepreempted by the Federal Aviation Administration Authorization Act("FAAAA"), 40 U.S.C. § 14501(c)(1). The Courtgranted a motion to dismiss claims of negligent brokering, holdingthat the plain language of the FAAAA expressly preempted the claimsbecause they did not implicate the Act's safety exception.

The opinion presents an opportunity for freight brokerscurrently defending against tort claims in Texas (and nationally)to add this new authority to defensive filings designed to haveclaims dismissed from the outset. The importance of this opinion isunderscored by the fact that, as noted by the Court, the FifthCircuit "has not addressed" the question of FAAAApreemption of state law tort claims. However, this case, combinedwith a growing chorus of decisions around the country, are strongpersuasive authority on the subject, and it is hoped that the FifthCircuit will follow suit.

In Ashley Hamby, et. al. v. James Wilson, et. al.,E.D.TX. 2024 WL 2303850 (May 21, 2024), the plaintiffs madewrongful death claims against J.B. Hunt after a tractor-trailerrear-ended a passenger truck, resulting in two deaths. In thepetition, the plaintiffs alleged that J.B. Hunt had either acted asthe motor carrier transporting the load, or that it had brokeredthe load. The petition asserted claims for negligent entrustment,negligent hiring, negligent retention, negligent training,negligent supervision and gross negligence against J.B. Hunt. J.B.Hunt filed a motion to dismiss based on the FAAAA preemption. Theplaintiffs argued that there was a question as to whether thedefendant had acted as a freight broker or as the motor carrier,and that even if J.B. Hunt was only the broker, the FAAAA'ssafety exception applied. Although the Court did not opine on which"label" to apply to J. B. Hunt, it held that if J.B. Huntwas the motor carrier, the complaint should be dismissed forfailure to state a claim, and if it was merely the broker, the caseshould be dismissed as preempted by federal law.

Reasoning

The Court adopted the reasoning of the Seventh Circuit'sdecision in Ying Ye v. GlobalTranz Enterprises., Inc., 74F.4th 453, 464 (7th Cir. 2023), concluding that negligent hiringclaims do not fall under the safety exception: "[w]e thusconclude that Ye's negligent hiring claim against GlobalTranzdoes not fall within the scope of § 14501(c) (2)'s safetyexception. The claim is preempted and therefore properly dismissedby the district court."); citing Aspen Am. Ins. Co. v.Landstar Ranger, Inc., 65 F.4th 1261, 1272 (11th Cir. 2023)("Aspen's negligence claims are not 'with respect tomotor vehicles' under the FAAAA's safety exception. Theyare thus barred by its express preemption provision.");Gillum v. High Standard, LLC, 2020 WL 444371, at*5–6, 7 (W.D. Tex. Jan. 27, 2020)."

In Ye, the Seventh Circuit first held that thenegligent hiring claim fell comfortably within the language of theFAAAA's preemption provision. The Court then focused on whetherthe enforcement of Illinois' common law of negligence wouldhave a significant economic effect on broker services. The SeventhCircuit concluded that it would, finding that the negligence claimin this case "strikes at the core" of the freightbroker's services by challenging the sufficiency of the carethe broker took in hiring the motor carrier to provide shippingservices. Consequently, the Seventh Circuit held that the claim wasexpressly barred by the FAAAA's preemption provision.

The court further held that the Act's safety exception didnot save the negligent hiring claim from preemption.

Specifically, the Court stated:

The Act's text makes clear that Congress views motorvehicle safety regulations separately and apart from thoseprovisions imposing obligations on brokers. And this separatenesscounsels a reading of "with respect to motor vehicles"that requires a direct connection between the potentially exemptedstate law and motor vehicles. Any other construction would expandthe safety exception's scope without a clear, text-based limit.So the Court agrees with the district court that the connectionhere—between a broker hiring standard and motorvehicles—is too attenuated to be saved under §14501(c)(2)(A).

As the Seventh Circuit itself observed, its conclusion"aligns squarely" with the Eleventh Circuit'sdecision in Aspen American Insurance Co. v. Landstar Ranger,Inc., 65 F.4th 1261 (11th Cir. 2023). The Seventh Circuit alsohighlighted its disagreement with the Ninth Circuit's decisionin Miller v. Robinson Worldwide, Inc., 976 F.3d 1016 (9thCir. 2020) at length.

More specifically, in finding that a negligent hiring claimagainst a broker fell within the FAAAA's safety exception, theSeventh Circuit opined, the Ninth Circuit "unduly emphasizedCongress's stated deregulatory purpose in passing theAct," improperly relied "on a presumption againstpreemption to resolve any ambiguity in the breadth of the safetyexceptions' scope"— as acknowledged by the NinthCircuit in its later decision of R.J. Reynolds Tobacco Co. v.County of Los Angeles, 29 F.4th 542 (9th Cir. 2022) —and disagreed with the Ninth Circuit's conclusion that thephrase "with respect to" appearing in the safetyexception was "synonymous" with "relatingto."

Takeaway

The Hamby decision and its critique of Millerprovides freight brokers with solid additional ammunition to arguethat the FAAAA's safety exception does not apply to negligenthiring claims against freight brokers, even when the claim involvesbodily injury. With Hamby, Ye and Aspenas support, freight brokers should continue to argue for preemptionof all claims based in common law tort.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circ*mstances.