Energy On The Offensive #034 - Brokerage Authority Protection Held Up In Court

Bailey v. Progressive Cnty. Mut.. Ins. Co., 2024 WL 3845966, 2024 U.S. Dist. LEXIS 146269, C.A. No. 22-5161 (E.D. La. Aug. 16, 2024).

This case arises from a motor vehicle collision wherein Plaintiff Bailey’s motor vehicle was struck by a tractor trailer, which she alleged “improperly turned and struck the side” of her vehicle. In addition to the driver of the tractor trailer, she also brought suit against Mascar Group, LLC and Hector Cordies Toreres, the alleged owners of the vehicle, US Foods, for whom the driver was making a delivery, and DCL, who served as the broker between US Foods and Mascar. DCL moved to dismiss for failure to state a claim on the basis that the claim against it was barred by FAAAA.

The parties agreed that FAAAA bars state law negligence claims against brokers like DCL, but Plaintiff contended that her state law claims survive preemption under the “Safety Regulatory Exception” set forth in 49 U.S.C. § 14501(c)(2)(A). The court, citing Ye v. GlobalTranz Enterprises, Inc., 74 F. 4th 453 (7th Cir. 2023) and Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023), found that “there is no direct link between motor vehicle safety and DCL's alleged negligent hiring by failing to properly screen Mascar and/or Mr. Perez in its capacity as a transportation broker” and therefore “the Safety Regulatory Exception does not exempt the claim in this case from the FAAAA Preemption Provision.”

Additionally, the court found “the relationship between DCL's alleged negligence and any motor vehicle is simply too attenuated to fall within the Safety Regulatory Exception.” Finding Plaintiff’s state law negligent hiring claims were not exempted from preemption by the “Safety Regulatory Exception,” the Court granted defendant DCL’s motion to dismiss for failure to state a claim.

Schriner v. Gerard, 2024 WL 3824800, 2024 U.S. Dist. LEXIS 145154, C.A. No. 23-206-D (W.D. Okla. Aug. 14, 2024).

This case arises from a motor vehicle collision in which Plaintiff’s vehicle was struck while parked on the shoulder of the road after Defendant’s tractor trailer left the roadway. Plaintiff filed action against several defendants, including RXO, against which Plaintiff asserted two claims; vicarious liability and negligence in selecting the motor carrier for the shipment. RXO moved to dismiss the claims against it. Reviewing the allegations of the Complaint, the Court found that RXO was a broker, not a motor carrier.

Therefore, Plaintiff’s state negligence claims were preempted by FAAAA. The Court then turned to the Safety Regulatory Exception, and, as many others have done before, examined the issue in light of Ye v. GlobalTranz Enterprises, Inc., 74 F. 4th 453 (7th Cir. 2023) and Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023. The Court found that “the connection here-between a broker hiring standard and motor vehicles is – too attenuated to be saved” by the Safety Regulatory Exception. As such, Plaintiff’s claims were expressly preempted by FAAAA and not subject to the safety exception.

Additionally, the Court found even if the claims weren’t preempted, Plaintiff failed to plead sufficient factual allegations to state a claim against RXO. Therefore, the Court granted RXO’s Motion to Dismiss with prejudice.