Updates on Broker Liability In Trucking Defense Litigation

"The Impact of Sperl" posted on this blog in March 2012 remains one of the most viewed posts. Undoubtedly the impact of the Sperl decision of over $23 million against of the largest, if not THE largest, trucking broker remains a hot topic.


As recently reported by excellent panelists at the Trucking Industry Defense Association Annual Conference in San Antonio, Texas, aggressive plaintiffs, dissatisfied with the minimal cargo insurance ($750,000) mandated by the FMCSA, seeking additional "deep pockets" under innovative theories of liability. Brokers ordinarily are not liable for the negligent conduct of the independent contractors they hire, i.e. motor carriers.*

In recent years aggressive plaintiffs have concocted new theories upon which to fix liability on transportation brokers for casualty losses:

– Motor carrier violations of the FMSCRs
– Common law negligence
– Respondeat superior
– Vicarious liability–Negligent hiring/retention
– Negligent entrustment
– Joint venture /alter ego

Some Signs of Improvement

Kavulakv. Juodzevicius, 2014 U.S. Dist. LEXIS 4078(W.D.N.Y. 2014)

• Plaintiff alleged broker vicariously liable for negligence of motor carrier and its driver.


• No negligent selection claim.


• Court dismissed vicarious liability claim under New York law, due to absence of evidence that broker retained control over the manner and method by which driver operated the truck and delivered the shipment.

Scheinman v. Martin’s Bulk Milk Service, Inc., 2013 WL 6467525 (N.D. Ill. 2013)

• Severely injured plaintiff sued shipper and broker.
• A "Shipper-Motor Contract Carrier Agreement" existed between shipper International Paper Co. ("IPC") and broker Universal Am-Can Ltd. ("UACL"), but the agreement did not prohibit UACL from using another motor carrier.
• A brokerage agreement existed between UACL and defendant motor carrier, Martin’s Bulk Milk Service ("MBMS") under which MBMS agreed to operate as an independent contractor for shipments brokered by UACL.
• IPC did not direct or control carrier or its driver.
• Plaintiff alleged vicarious liability claims against shipper IPC and broker UACL.
• Plaintiff relied heavily on Sperlv. C.H. Robinsonand alleged IPC was liable because a principal-agent relationship existed as between IPC and MBMS’ driver.
• Court dismissed the claim, finding no evidence of direct control or any obligation on the part of IPC to control driver.
• The fact that shipper monitored progress of its shipment "no more creates an agency relationship than does the designation of overnight delivery on a Federal Express package."
• Court dismissed plaintiff’s argument that because IPC required truck drivers to comply with safety regulations established control "because the driver had an independent duty under federal law and regulation to comply with those rules."
• Court similarly ruled plaintiff did not show UACL had requisite control over driver to establish a principal-agent relationship.

McCombv. Bugarin, 2014 U.S. Dist. LEXIS 24157 (E.D. Ill. 2014)

• Wrongful death action against shipper, Central Steel, and motor carrier, ShandyTransportation, one of several motor carriers Central Steel used for many years and had handled between 12,000 and 20,000 loads for Central Steel prior to the one in question.
• Central Steel’s procedure in selecting potential motor carriers was to investigate their insurance, and verify FMCSA operating authority and that the carrier maintained a "satisfactory" safety rating. On date of the accident, motor carrier had a "satisfactory" safety rating, but it was 10 years old.
• Post-accident, discovered that all four trailer brakes were out of adjustment and that motor carrier’s vehicle maintenance score was 81.23, which Central Steel had not checked.
• Plaintiff did not allege the "application of deficient brakes" was a cause of the accident.
• Plaintiff’s expert, Dr. Thomas M. Corsi, opined Central Steel never should have hired the motor carrier with a poor safety score and maintenance rating which would have kept the truck off the road.
• Court granted Central Steel’s motion for summary judgment and explained the critical difference between "cause in fact" and "legal cause."
• The fact that the motor carrier would have kept the truck off the road for maintenance issues "does not constitute legal cause…[T]here must be a showing that the contractor’s particular incompetence caused the accident."
• "Plaintiff has failed to show that Central Steel’s selection of its contractors was even a ‘but for’ cause of Mrs. McComb’s death."
• Court granted Central Steel’s motion for summary judgment, dismissing the Plaintiff’s negligent selection claim against shipper.

A few more take-away points:

There is no legal duty for brokers or shippers to go beyond FMCSA registration information in selecting motor carriers.

Notwithstanding the misguided decisions cited above, courts are mistakenly imposing legal duties on brokers and shippers to drill down into the safety records of the motor carriers they hire and the drivers whom the carriers hire.

It is commercially unreasonable and in practice unworkable for brokers or shippers (in what is typically only a matter of minutes) to thoroughly drill down into and evaluate the minutiae of a motor carrier’s and its drivers’ safety records beyond the FMCSA-published safety ratings ("satisfactory", "conditional" or "unsatisfactory") notwithstanding third-party services claiming to provide such security.

Courts must be taught that the federal motor carrier and broker regulatory scheme established by Congress in the Motor Carrier Act vests in the FMCSA–not brokers, shippers or other users of transportation –the duty to qualify and register applicants as fit for operating as interstate motor carriers. 49 U.S.C. §§13901, 13902(a).

"[T]he secretary shall register a person to provide transportation . . . as a motor carrier if the Secretary finds that the person is willing and able to comply with

• (A) this part and the applicable regulations of the Secretary and the Board;
• (B) any safety regulationsimposed by the Secretary and the safety fitness requirements established by the Secretary under section 31144; and
• (C) the minimum financial responsibility requirements established by the Secretary pursuant to sections 13906 and 31138." (Emphasis added)

The FMCSA –not brokers or shippers –is the gatekeeper and watchdog for applicants seeking to register as interstate motor carriers under Title 49.

If a carrier were "unsafe" then why would it be registered with the FMCSA and in good standing to operate?

It is not the broker’s or shipper’s job to double-check the FMCSA’s work.

It is not the broker’s or shipper’s job to drill down into the safety fitness and qualifications or records of motor carriers whom the FMCSA has already registered and qualified to operate.

The FMCSA, not brokers or shippers, is the party charged with "finding" that the motor carrier applicant is willing, capable and competent to comply with "the applicable regulations" and "the safety fitness requirements established by" the FMCSA.

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* Panelists:
Pamela Johnston, Transplace;
Pat Gilroy, The Gilroy Law Firm;
Wesley Chused, Preti Flaherty