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Texas Federal Courts join the nationwide trend ruling that FAAAA preempts state law-based negligence claims  

6/18/24

By: Christopher G. Donnelly

Freight brokers across Texas and the country were delivered two significant recent wins in the Eastern and Southern Districts of Texas.  

In the Eastern District case, Hamby, et al. v. Wilson, et al., a trucker, defendant Wilson, was involved in a rear-end accident with a passenger truck, which resulted in the deaths of the driver and the passenger. The driver’s estate brought an action against Wilson, his employer Euro Express, LLC (“Euro”), and two other entities, J.B. Hunt Transport, Inc. (“J.B. Hunt”) and Great Hauler, Inc., which the estate alleged brokered the freight load involved. In addition to the claims against Wilson and Euro, the estate’s claims against the brokers included negligence, gross negligence, negligent entrustment, negligent hiring, negligent retention, negligent training, negligent supervision, and negligent brokering. J.B. Hunt moved for summary judgment on the grounds that the claims of negligent brokering, selection, and monitoring of the motor carrier are preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). 

The Southern District case, Morales, et al. v. OK Trans, Inc. et al., involved another wrongful death action arising from a tractor-trailer owned and operated by defendant motor carrier OK Trans, Inc. Plaintiff also named as defendants the broker, Pennske Transportation Management, LLC (“PTM”) and Liberty Lane, LLC (“Liberty”), a motor carrier that subcontracted to the motor carrier OK Trans. Plaintiffs allege that the broker, PTM, negligently selected Liberty and knew or should have known that its qualifications and procedures for subcontracting with motor carriers, such as OK Trans, were deficient. PTM, like J.B. Hunt in the Hamby case, moved for summary judgment on FAAAA preemption grounds.  

The Fifth Circuit has not yet directly addressed the issue of FAAAA preemption. Thus the Courts in both Hamby and Morales ultimately adopted the Circuit Court majority opinions of the Eleventh Circuit (Aspen American Insurance Company v. Landstar Ranger, Inc.) and the Seventh Circuit (Ye v. GlobalTranz Enterprises, Inc.). The FAAAA expressly preempts the enforcement of state laws that are “related to a price, route, or service of any … [freight] brokers with respect to the transportation of property.” Both the Eastern District and Southern District Courts held that the plain language of the FAAAA preempted the respective Plaintiffs’ state law negligence claims, as the negligent brokering claims go directly to the services of a broker.  

Additionally, both Courts rejected the Plaintiffs’ arguments that their negligence claims are exempt from preemption under the FAAAA “safety exception” and, in turn, the Circuit Court minority view adopted by the Ninth Circuit (Miller v. C.H. Robinson Worldwide, Inc.). The “safety exception” of the FAAAA identifies very specific circumstances where state laws “with respect to motor vehicles” are shielded from preemption and are free to be regulated by the states. Both the Eastern District and Southern District concluded, as the Circuit Courts did in Aspen and Ye that the safety exception excepts from preemption only state laws or regulations that are directly related to motor vehicle safety.  

The clear trend nationwide has favored FAAAA preemption of state law negligence claims against freight brokers. With these two new District Court opinions, the Fifth Circuit may take up the issue directly. Until then, the trend continues to bolster the defenses of freight brokers across the country.  

Please do not hesitate to contact Christopher G. Donnelly at cdonnelly@fmglaw.com or your local FMG relationship partner to discuss this important opinion or for any related Tort questions.