Amid all the consternation over the Supreme Court's denial of the California Trucking Association's case against the state's AB 5 contractor law, consternation well-justified of course, another high court dismissal with implications for the owner-operator/broker relationship may have been missed by some in the audience. Both cases involved decisions by the Ninth Circuit Court of Appeals, and both hinged on interpretation of the appropriate application of federal law, specifically the Federal Aviation Administration Authorization Act, or FAAAA.
The second suit involved a decision in a Nevada district court appealed to the Ninth Circuit against large broker C.H. Robinson after a 2016 crash that involved a carrier hauling a Costco load brokered by C.H. Robinson. The Ninth Circuit sent that case back to the district court after it had argued that C.H. Robinson was shielded from liability claims for the crash by the FAAAA. C.H. Robinson appealed the decision up the chain to the Supreme Court, yet denial of the petition to rehear means the decision will stand and the case will proceed at the district level.
At issue is whether brokers should be held liable via private action for the safety outcomes of the motor carriers they utilize, as transportation attorneys Bryan Nelson and John Marchione wrote in this story in Overdrive sister publication CCJ, published shortly after the Supreme Court declined to hear the appeal. In this particular crash case, plaintiffs allege the motor carrier showed out-of-service rates above the national average in the FMCSA's CSA Safety Measurement System, likewise adverse inspections/violations in the various measurement categories there. C.H. Robinson's "negligent selection," then, of this carrier, the argument went, made them liable for damages.
The case holds significance for brokers, obviously, given the rise in post-crash litigation, something truckers and their insurers know well. There could be a feeling of schadenfreude, pleasure at another's misfortune, among some carriers here -- It's about time brokers took some responsibility for their mistakes. Yet this case I'd wager holds importance, too, for owner-operators' ability to easily do business with a broker, generally speaking. Depending on how the risk of liability develops, a further chilling effect on brokers' willingness to contract with any small carrier showing negative violation information in the CSA SMS's various BASIC categories, or negative percentile rankings via any of the many private services that re-create the old "CSA Scores" in those categories, could exponentially grow.
[Related: After the worst happens: How the 'nuclear verdicts' threat rolls downhill to small fleets/owner-ops]
The chilling effect could extend to other scenarios for otherwise newer carriers, too. In this story last week about the rash of double-brokering by entities impersonating carriers/brokers and/or, as the case may be, bad actors duly authorized and insured/bonded as carriers/brokers set up in the federal system for the express purpose of executing double-brokering schemes, a broker noted a common theme among carriers he suspected of it: no inspections or violations recorded in the CSA SMS.
An owner-operator out of Georgia got in touch with a bone to pick about that. She noted the reality that just because you don't show an inspection doesn't mean you're a bad actor. It is most definitely possible, and in some areas I'd wager even probable, for a one-truck or other small carrier to go months -- even years -- without a roadside inspection being conducted. She'd been running with authority for upward of three years now without an inspection, partially attributable, she felt, to fairly light loads and equipment maintained so well it's obvious to any inspector who sees it roll across the scales. She shared a list of well more than 10 brokers she'd encountered in just the previous two weeks who just wouldn't work with her simply as a function of her good fortune, perhaps, in avoiding the delay of a roadside inspection.
