Insurance
Why Justices Must Act To End Freight Broker Liability Split
For some time, trucking and logistics companies have operated pursuant to the guidance of the Interstate Commerce Commission Termination Act and the Federal Aviation Administration Authorization Act, which, in part, protect brokers from liability at common law, pursuant to Title 49 of the U.S. Code, Section 14501(c)(1).
The section reads, in pertinent part, that states "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier, or any motor private carrier, broker, or freight forwarder with respect to the transportation of property."[1]
This provision has long protected freight brokers from liability at common law for personal injuries arising out of motor vehicle accidents. But in the past five years, this issue has been brought to the forefront due to developing circuit splits.
The split came to a head in the U.S. Court of Appeals for the Sixth Circuit's July 8 decision in Cox v. Total Quality Logistics Inc., in which the court held that "where a negligent hiring claim against a broker substantively concerns motor vehicles and motor vehicle safety, that claim is within 'the safety regulatory authority of a State with respect to motor vehicles.'"
Total Quality Logistics has submitted its petition for a writ of certiorari to the U.S. Supreme Court, supported by amicus briefs from the U.S. Chamber of Commerce and Transportation Intermediaries Association Inc. The petition is now pending, and it is widely expected that the court will grant certiorari and hear the case.
The applicability of the ICCTA and FAAAA in these matters was first called into question approximately five years ago when the U.S. Court of Appeals for the Ninth Circuit, in Miller v. C.H. Robinson Worldwide Inc., while agreeing that selecting a motor carrier fell within the broker's services, disagreed with the U.S. District Court for the District of Arizona's finding of federal preemption, and widened Section 14501(c)(2)'s safety exception.[2]
The Ninth Circuit established common-law broker liability across nine states by finding "that negligence claims against brokers, to the extent that they arise out of motor vehicle accidents, have the requisite 'connection with' motor vehicles. Therefore, the safety exception applies."[3]
Section 14501(c)(2) states that Subsection (1) "shall not restrict the safety regulatory authority of a State with respect to motor vehicles." But, before Miller, this exception did not encompass broker activities in selecting transporters when the brokers themselves were not operating motor vehicles.
Despite this ruling, both the U.S. Court of Appeals for the Seventh Circuit and the U.S. Court of Appeals for the Eleventh Circuit upheld federal preemption on what were essentially identical common-law negligence claims.
In 2023, the Seventh Circuit held in Ye v. GlobalTranz Enterprises Inc. that states were prohibited "from enacting or enforcing law relating to intrastate rates, intrastate routes, or intrastate service of any freight forwarder or broker."[4]
The court in Ye specifically found that the plaintiff's attempt to bring a negligent hiring claim against GlobalTranz went "a bridge too far," and that "[t]he Act's text makes clear that Congress views motor vehicle safety regulations separately and apart from those provisions imposing obligations on brokers."[5]
The Seventh Circuit disagreed with the Ninth Circuit's rationale in Miller, arguing that the Ninth Circuit "unduly emphasized Congress's stated deregulatory purpose in passing the Act," and that this could not "overcome the clear statutory mandate that the exception ... saves only those safety regulations directly concerning motor vehicles."[6]
Aspen American Insurance Co. v. Landstar Ranger Inc., decided by the Eleventh Circuit in 2023, and Ye sustained federal preemption on this issue in six Southeast and Midwestern states. The aggrieved parties in Ye and Miller each sought review with the Supreme Court and were denied certiorari — despite the fact that the Ye court acknowledged the circuit split.
Confronted with this split — and the precedent that district courts within the Sixth Circuit repeatedly found for federal preemption — the Sixth Circuit in Cox widened the divide. The court held that Cox's claim that Total Quality Logistics "negligently hired an unsafe motor carrier to transport goods by motor vehicle" fell within a "specific class of common law negligence claims," reaching the conclusion that those claims fell within a state's regulatory authority.[7]
This is diametrically opposed to the holdings in Ye and Aspen, which articulated the same legal theory that the broker entity was allegedly "negligent in hiring an unsafe motor carrier whose driver caused a highway accident."[8] Though this circuit split already existed due to the decision in Miller, the practical impact of this split is far more pronounced.
The states covered by the Seventh and Eleventh Circuits do not border any state within the jurisdiction of the Ninth Circuit. The Sixth Circuit, however, is an amalgam of jurisdictions, with Michigan and Ohio in the Midwest and Kentucky and Tennessee in the Southeast — the two regions covered by the Seventh and Eleventh Circuits, respectively.
The Cox decision now creates seven distinct instances of conflicting laws between two bordering states that fall within the jurisdiction of the Sixth, Seventh and Eleventh Circuits.
For the law to change for brokers when freight is carried across the border between Michigan and Wisconsin, or between Tennessee and Georgia, is untenable. Brokers will see their exposure to liability shift literally while freight remains in transport.
This is why it appears likely that the Supreme Court has little choice but to resolve this disagreement and issue a final determination on whether federal preemption for broker liability in personal injury matters still exists pursuant to the ICCTA and FAAAA.
It is important to acknowledge that, while there remain courts that interpret Section 14501(c) as preempting broker liability, this protection does not extend to motor carriers of passengers. Section 14501(a) does not include similar language to Subsection (c) applying the preemption to brokers in the motor carrier industry.
That Subsection (a) does not mention brokers in any respect is noteworthy. Brokers generally were more ubiquitous in the freight industry as opposed to the passenger industry, but that is changing. Companies are utilizing technology to create brokerlike services for commercial passenger transportation.
That the statute does not mention this in any respect is likely more reflective of the newness of this industry. It is unlikely any court would extend the protection in Subsection (c) to brokers of passenger motor carriers, and such a change would require legislative action in the future.
In any case, the Supreme Court's ultimate resolution of this question will undoubtedly have far-reaching effects on the transportation industry.
Steven Saal is a partner at Lucosky Brookman LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Cox v. Total Quality Logistics Inc. , 2025 U.S.App. LEXIS 16650 at *24 (6th Cir. July 8, 2025) (citing 49 U.S.C. § 14501(c)(2)(A))
[2] 976 F.3d 1016 (9th Cir. 2020).
[3] Miller, 976 F.3d at 1031.
[4] Ye v. GlobalTranz Enterprises Inc. , 74 F.4th 453, 460 (7th Cir. 2023) (internal quotations omitted); see also Aspen Am. Ins. Co. v. Landstar Ranger Inc. , 65 F.4th 1261, 1272 (11th Cir. 2023).
[5] Ye, 74 F.4th at 462.
[6] Id. at 465.
[7] Cox, 2025 U.S.App. LEXIS 16650 at *24.
[8] Ye, 74 F.4th at 464–65.
Read more at: https://www.law360.com/articles/2415312?copied=1
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