Impact of Sperl v. CH Robinson Worldwide inc. on Broker's Vicarious Liability for Trucking Driver's Negligence

Transportation Broker responsible for $23 million in damages for truck driver's negligence!!!*

Procedural History

Plaintiffs filed a lawsuit against C.H. Robinson (CHR), a broker between motor carriers and shippers, and several other entities and individuals for wrongful death and personal injuries they sustained due to DeAn Henry’s negligent operation of a tractor-trailer.

At trial, the jury found that CHR was vicariously liable for the actions of Henry and entered judgement for Plaintiffs for $23.8 million.

CHR sought a judgement not withstanding the verdict but were denied. CHR then appealed to the Third District Appellate Court of Illinois.

Facts

On April 1, 2004, DeAn Henry was driving a tractor-trailer with a load of potatoes from Idaho to CHR’s warehouse in Illinois. As she was traveling on Interstate 55, she noticed stopped traffic ahead of her but was unable to stop in time, causing a multiple car accident along with two deaths and serious injuries. Henry owned the tractor she was driving and leased it to Dragonfly, a co-defendant and motor carrier.

Plaintiffs sued Henry, CHR, and Dragonfly for wrongful death and personal injuries. Henry and Dragonfly admitted liability but CHR denied fault based on the lack of an agency relationship with Henry.

Evidence showed that CHR was a logistics company and federally licensed freight broker but was not licensed as a motor carrier. CHR did not own tractor-trailers nor employ drivers. Instead, CHR used contracts with carriers to provide transportation for its customers who needed goods transported. Basically, CHR acted as a middleman between the transportation companies and buyers of goods to be transported. CHR used numerous federally licensed carriers to haul the goods, primarily perishable products for both CHR’s own products and CHR’s customers.

Dragonfly was often used as a carrier by CHR and had a standard industry contract with CHR which stated that the relationship between CHR and Dragonfly was that of an independent contractor and Dragonfly would employ, retain, or lease on its own behalf operators of commercial vehicles.

Henry leased her tractor to Dragonfly and was given permission by Dragonfly to use its carrier authority to book and deliver loads on her own. If Henry booked a load, she kept the profit. If Dragonfly dispatched Henry, Dragonfly kept 5% of the profit.

In March 2004, Henry called Troy Pleasants, a transportation manager for CHR, and requested a load. Pleasants offered Henry a load of potatoes to be delivered to a CHR warehouse for repackaging and additional transport. Pleasants told Henry that CHR required a refrigerated trailer that was at least 48 feet long. Henry accepted the load for $1,800, less a $700 advance for fuel costs. Payment was to be directly deposited into Henry’s personal bank account upon successful delivery.

CHR sent Dragonfly the load confirmation sheet (LCS) confirming the shipment and listing all the special instructions for the driver, including that the driver HAD to call the CHR transportation manager for dispatch along with 11 mandates that required almost constant contact with CHR and numerous fines for being late to deliver a load or failing to follow the communication guidelines.

At trial, Henry testified that Dragonfly did not dispatch her regarding the load, but that she communicated directly with CHR on the load and was in constant contact with CHR throughout her trip. Henry never saw the LCS that CHR sent to Dragonfly, but was familiar with the regulations of CHR and knew about the fines that could be imposed if she was late.

Defending a Daubert Challenge Against Defense Experts

Suppose you have hired an expert on hiring practices and your opponent wants to have him excluded under a Daubert challenge? How can you fight the challenge?

A few years ago, we were defending trucking industry sales policies and procedures regarding the use of alcohol and the operation of company vehicles. We retained an expert on the hiring  and supervising issues particular to the industry (particularly since the plaintiff was arguing that both the industry standards and company standards were being violated).

Our expert was retained to  help the jury to understand trucking industry standard practices and procedures regarding the operations of sales representatives and use of company vehicles. In light of the plaintiffs’ allegations that the trucking company's hiring practices were substandard, our expert’s extensive history in the specialized realm of trucking hiring practices would assist the jury to understand the appropriate standard of care.

1. The Daubert standard is flexible according to the nature of the expert.

Expert opinion testimony is permissible if "scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue." La. Code Evid. art. 702. An expert is one who, usually by education or experience, has a unique knowledge of the subject matter at issue and he or she is permitted to express personal opinions. Barrett v. T.L. James & Co., 28,170-CA at p. 12, (La.App. 2 Cir. 4/3/96), 671 So.2d 1186, 1194.

The trial court is vested with broad, albeit not unfettered, discretion in determining whether a witness qualifies to testify as an expert in his field. Id. To determine whether a witness is an expert, the court is guided by two primary concerns: whether the witness plans to testify to actual technical knowledge and whether such knowledge will assist the trier of fact in understanding or determining a fact in issue. Id.

The admission of expert testimony is proper when the following three factors are established:

(1) the expert is qualified to testify competently regarding the matters he intends to address,

(2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and

(3) the testimony assists the trier of fact through the application of scientific, technical or specialized expertise. Cheairs v. State, DOTD, 03-0680 (La.12/3/03), 861 So.2d 536.

The test of competency of an expert is his knowledge of the subject about which he is called upon to express an opinion. A combination of specialized training, work experience, and practical application of the expert's knowledge can combine to demonstrate that a person is an expert. State v. Taylor,, 42,627, at 10 (La.App. 2 Cir. 10/24/07), 968 So.2d 1135, 1143.

Louisiana Anti-Indemnification Statute May be in Jeapardy!

Shippers, particularly the paper and chemical companies, have had substantial influence in Louisiana. One area of influence in the past has been that trucking companies must indemnify shippers from liability, even under circumstances when the shipper may be at fault.

As in many other states, Louisiana recently enacted anti-indemnity provisions. The Louisiana anti-indemnity statute is: Louisiana Revised Statute 9:2780.1, which declares null, void, and unenforceable any provision in a motor carrier transportation or construction contract that purports to indemnify, defend, or hold harmless a company against damage resulting from the negligence or intentional acts or omissions of that company.

Further, any provision in a motor carrier transportation or construction contract that purports to require a company to procure liability insurance covering the acts or omissions or both of another company is null, void, and unenforceable. In addition, Louisiana law shall govern any motor carrier transportation contract for loading or unloading that occurs in Louisiana and any construction contract to be performed in Louisiana.

The law shall not apply to prohibited clauses in any motor carrier transportation or construction contract entered into prior to January 1, 2011. Also, the new law shall not apply to a contract providing indemnity when the contract was executed before January 1, 2011, and the contract governs a specific terminable performance of a specific job or activity.

Similar to Louisiana's new law, in March 2008, the Tennessee Legislature enacted a law that also declared void and unenforceable all provisions in a motor carrier transportation contract that purports to grant indemnity to a party against liability for damages resulting from the negligence of that party, its agents or employees against public policy. Relative to Tennessee's law, there is one exception for indemnity provisions contained in the Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America or in other agreements relating to intermodal chassis, containers or other intermodal equipment.

Depending upon the particular transaction involved and the motor carrier’s role in that transaction, the Louisiana and Tennessee statutes will either assist or hinder the motor carrier’s objectives in drafting the contract.

For example, a shipper entering into a contract governed by Louisiana or Tennessee law may no longer be able to demand indemnity against its own negligence in loading or securing cargo. Note that shippers typically demand not only indemnity, but also require the motor carrier to defend negligence actions brought against the shipper alleging such claims. It will be important to ensure that the motor carrier’s defense obligation does not exceed its indemnity obligation in drafting future contracts governed by Louisiana or Tennessee law.

Warning:

Some Louisiana legislators are attempting Anti-Indemnification Repeal – Again!  The LMTA reported that we will see another attempt by the Big Chemical Companies represented by the Louisiana Chemical Association (LCA) and Big Oil represented by the Mid-Continent Oil & Gas Association to repeal the anti-indemnification law passed in 2010.  And, even after two losses in court, LCA is continuing its appeal claiming that the law is unconstitutional.

There are three bills filed in the 2012 Legislature that would basically repeal Act 492.  The LCA lobbyists are telling legislators that they just want to “tweak” the law.  As reported by the LMTA, "Nothing could be further from the truth!" The following bills are being considered:

HB 444 – Rep. Neil Abramson (D-New Orleans) – reported to the House Civil Justice committee, Rep. Abramson is the Chairman.

HB 465 – Rep. Neil Abramson (D-New Orleans) – reported to the House Commerce Committee.

 

SB 540 – Sen. Arthur Morrell (D-New Orleans) – reported to the Senate Transportation Committee.

According to the Louisiana Motor Transport Association, "Rep. Neil Abramson (D-New Orleans) is the primary sponsor of the repeal effort and appears to be “committee shopping”.  Sen. Arthur Morrell (D-New Orleans) is their primary sponsor in the Senate.  Sen. Danny Martiny (R-Metairie) is still the voice for fairness and true tort reform…and our Champion in the Senate."

If this is an area of concern, contact your representative and note your position. In the meantime, if there is anything we can do to assist you in north Louisiana or northeast Texas, don't hesitate to call.

Mark Perkins

Perkins & Associates, LLC

401 Market Street, Suite 900

Shreveport, LA 71101

318-222-2426

Back from the Amazon -- did I miss anything?

For over ten days, I was travelling along the tributaries of the great Amazon River in the rain forest of northern Brazil. I was completely disconnected from society. No cellphone, no laptop, no Ipad. I had no access to Linked in, Facebook or e-mails.

It was great!

As I said last week, every now and then, it is really important to get away from the hectic pace and demands of litigation. I love the work I do for outstanding trucking and commercial interests, but I was glad to have the opportunity to get into the muck and mire to serve  some of the poorest people I have ever come in contact.

While in the Amazon, I was serving men, women and children who can do nothing for me. I may never see them again on this side of Heaven. How often do we take the time to do something completely selfless?

Hey, don't get me wrong: I'm no Saint and,  quite often, I am thinking about how I can win the case, pay my bills or improve my relationships with client. Yet, let's admit it: those pursuits are generally self-interest motivated.

I'm a advocate for capitalism and I would not want to live in a country where initiative and hard-work are not rewarded; however,  it's just good and right to do something occasionally (or often) for those who can do nothing in return.

Next week, I will get back on track with specific issues about the trucking industry.

One issue of particular importance is the growing trend in imposing liability on brokers and shippers in the trucking industry when they allegedly fail to investigate the reliability of a trucking company. Now with the CSA with us, you can expect this to be a major development among the plaintiff's bar so we defense lawyers need to get ahead of the trends and prepare winning defenses.

More on that later. 

In the meantime, I hope you enjoy some of the pictures from the Amazon.