With most of the transportation world monitoring the Supreme Court of the United States (SCOTUS) for word if it would take up the AB5 case, another equally important appeal unfortunately was rejected. C. H. Robinson, the multimodal and third-party logistics giant, is now liable for the injuries received by a man who is now a quadriplegic.
Miller vs. C.H. Robinson
The tale begins back in early December 2016, when ice and snow had made I-80 outside Elko, Nevada very hazardous. Michael Miller, the now quadriplegic victim, was 25 years old at the time, traveling through the area.
A driver from a company known as Rheas Trans Inc. and/or RT Service was selected by C.H. Robinson to transport a 13,000-pound load of ramen noodles from Sacramento, California to a Costco Wholesale facility in Salt Lake City, Utah. According to Miller’s testimony, he believed the driver was traveling “too fast for conditions.” The truck driver lost control, began to slide, crossed the median, and overturned in the opposite lane.
Miller’s case alleges C.H. Robinson had data showing it knew of the safety record of the hauler. Rheas Trans Inc. had a 40% Out of Service (OOS) ratio when inspected. The company also had numerous Hours of Service (HOS) and log book violations. This incident was before the electronic logging device mandate (ELD) regulations were put into effect.
The Federal Aviation Administration Authorization Act of 1994
C.H. Robinson argued before the court that the company was exempt from prosecution because of the Federal Aviation Administration Authorization Act of 1994. Also known as F4A, it is the law that blocks companies from state and local laws regarding “price, routes, and services…of a broker, unless one of the exceptions applies.” That is where the safety exception takes center stage.
The “safety exception,” which provides that the preemption provision does not “restrict” the “safety regulatory authority of a State with respect to motor vehicles.” See 49 U.S.C. 14501(c)(2)(A) from Cornell Law. Robinson claimed that since the driver was hired “as part of its service,” that the company was shielded by this exemption. And the U.S. Federal District Court for the District of Nevada agreed and dismissed the case.
U.S. Court of Appeals for the 9th Circuit
At the end of September 2020, Miller got a second chance, when the Ninth Circuit Courts of Appeals decided on his appeal of the District Court decision. The three-judge panel “repealed and remanded” the case after finding that the safety exemption did apply. The judges said that C.H. Robinson’s “negligence of verifying the safety of Rheas Trans. Inc.” was related to causing the incident.
“In enacting that exception, Congress intended to preserve the States’ broad power over safety, a power that includes the ability to regulate conduct not only through legislative and administrative enactments, but also through common-law damages awards. Miller’s claim also has the requisite ‘connection with’ motor vehicles because it arises out of a motor vehicle accident.”
– U.S. Ninth Circuit Court of Appeals
The Solicitor General of the United States
C.H. Robinson vowed to continue its fight on this case, moving on to the Supreme Court. Along the way, the Solicitor General, also known as “The Tenth Justice,” made comments filed in the docket that SCOTUS should reject certiorari and not hear the case.
Scopelitis, a trucking-focused law firm, remarked, “Although the SG’s [Solicitor General’s] brief is very influential and often tracks the Court’s ultimate determination, the ultimate decision remains with the Court and takes four Justices to vote to hear the case.”
Certiorari rejected, “throw wide the gates”
Now we are back to the present day. On June 27, 2022, the final nail was driven into the coffin. SCOTUS released “their orders,” the list of cases granted or rejected certiorari. Unfortunately, C.H. Robinson vs. Miller had been rejected. That now leaves Robinson firmly on the hook for damages against Miller, and opens a very dangerous door for brokers and 3PLs.
The settlement phase of the case will now begin and Miller’s legal team has eyes on the deep pockets of C.H. Robinson. Every brokerage and trucking company will be watching as the wheels start turning and legal maneuvering to mitigate the damage begins.
Brokers are now having to take extra precautions as to whom to hire. Additional time and effort will now have to be made running background checks on all carriers to make sure they are compliant. Legal advisors will be generating new guidelines that drivers will have to deal with in order to keep working with that brokerage.
New ground has undoubtedly been broken. It will be interesting to see how companies of all types react and adapt to the new landscape. You cannot just go and hire John Doe off the street anymore. Big game-hunting lawyers will be loading up for the mammoth-sized wallets of mega-brokers.
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1 Comment
Every time something happens that results in brokers being held responsible for their actions they scream and whinge like two year olds. Good on SCOTUS. Why shouldn’t brokers be held responsible like the rest of us are? Brokers are a festering pustule on the buttocks of the transportation industry.