Hello All,

Crazy how school supplies have been out in stores for a few weeks now which reiterates that summer is flying by! Hope you all are getting a chance to enjoy the sun, festivals, activities and other summer fun.  

As you may have seen in an earlier Bits & Pieces, Pam Jones made a career detour and joined the CAB Team recently! She will be assisting me with some projects like these monthly newsletters.  

Here’s a comment from Pam:  

Hello All! Looking forward to meeting you if we haven’t already crossed paths! I’ve been a CAB user and love the system. Now, I am seeing even more ways the platform supports the industry, for instance with claims management. Those that know me, know I’m passionate about getting every driver home from every trip while protecting the traveling public. If you aren’t utilizing your platform to the fullest capabilities, check out our archived webinars or let’s talk and get some training scheduled.  

Now, let’s check out what’s currently up at CAB so you can get to those glue sticks and pencils before inventories run out.  

Happy rest of summer! 

Chad Krueger and Pam Jones 

CAB Live Training Sessions

Tuesday, August 8^th | 12p EST

Pam Jones will be hosting the monthly live webinar covering The CAB Report. Join us to hear more as we provide a detailed page by page overview of the CAB Report^®, the data contained within, and the features available. This is a great session for newer and experienced users. 

Tuesday, August 15^th | 12p EST Mike Sevret will be covering the Motor Carrier Advantage Safety Module demo. Check this session out to hear more features we’ve implemented into the fleets’ version as requested by clients. Check out the Tips & Tricks section for more details.

To register for the webinars, sign into your CAB account. Then click live training at the top of the page to access the webinar registration.

Explore all of our previously recorded live webinar sessions in our webinar library.

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks: Motor Carrier Advantage Enterprise Service

Many are aware of our initial version of Motor Carrier Advantage. The initial version of the resource has been available for over a year. Our users have asked for expanded capabilities and our development team responded with their typical excellence. Therefore, we’ve expanded Motor Carrier Advantage Safety Resource to include things like: Express Report, Safety Plan and additional Alerts. 

Below is a brief description of the three modules that are available in the new Motor Carrier Advantage Enterprise Service.

We’re currently offering a free trial of the Motor Carrier Advantage Safety module! Learn more at www.themcadvantage.com or reach out to Mike Severt. 

THIS MONTH WE REPORT

Brake Check Safety Week is Aug. 20-26. The Commercial Vehicle Safety Alliance (CVSA) will be focusing on brake lining/pad violations during this year’s Brake Safety Week. Read more…

CVSA Releases 2023 International Roadcheck Results. In May, 59,429 commercial motor vehicles were inspected in Canada, Mexico and the U.S. as part of the Commercial Vehicle Safety Alliance’s (CVSA) 72-hour International Roadcheck inspection. Eighty-one percent of the commercial motor vehicles and 94.5% of the commercial motor vehicle drivers inspected did not have any out-of-service violations. Read more…

US trucking firm Yellow shuts ops, to file for bankruptcy, Teamsters say. Cash-strapped U.S. trucking company Yellow Corp has ceased operations and is filing for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said. Read more…

New federal fines for Hours of Service, ELDs, range from $300 to $2,000. Truck drivers and carriers face 60 new federal fines for Hours-of-Service violations – including those specific to mandated electronic logging devices (ELDs). Read more…

Enforcement and awareness campaign aims to teach safe driving practices around commercial vehicles. Together, We Make I-81 Safer campaign is a multistate initiative helping to “discourage unsafe driving behaviors” that lead to crashes with commercial motor vehicles. The three-month campaign, which began in June and runs through August, will see “extra patrols and proactive traffic enforcement” along the entirety of the I-81 corridor. Read more…

Researchers say urine testing misses about 90% of actual drug use. Researchers at the University of Central Arkansas concluded that urinalysis, the primary means of Department of Transportation (DOT) truck driver drug screenings, misses about 90% of actual drug use. Read more…

Digital transformation in carrier safety: Striking a balance between tech & financial security. CCJ provides an overview of the principal technologies driving digital transformation in the commercial carrier industry from IoT to AI-powered predictive maintenance. Read more…

Gaming out crash preventability: An Opinion Piece by David Heller from the Truckload Carriers Association. “Professional truck drivers have earned the title of “most well-trained driver on our roads today,” but they often are placed in situations where nothing could have been done to prevent accidents. According to data and RDR submissions by motor carriers, this scenario has occurred nearly 28,000 times over the past three years…it is the responsibility of each carrier to provide information on the crashes that are being investigated. If FMCSA is unaware of the preventability question, it cannot possibly make a determination, another version of the you-can’t-win-if-you-don’t-play mentality.” Read more…

August 2023 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Baker v. Amazon Logistics, Inc., 2023 U.S. Dist. LEXIS 129651, C.A. No. 23-2078 (July 26, 2023). In this multiple-defendant personal injury action arising from a motor vehicle accident involving a tractor-trailer, the case was remanded to state court due to procedural deficiencies with the removal. Plaintiff sued approximately ten different defendants. Amazon removed the case to federal court on June 13, 2023, based upon alleged diversity of citizenship. One insurer defendant, Lancer, filed a consent to removal on June 26, 2023.  Another set of defendants filed a consent to removal on June 27, 2023. According to Fifth Circuit precedent, the “rule of unanimity” required for removal requires that each served defendant join in the notice of removal or that there be a “timely filed written indication from each served defendant, or from some person or entity purporting to formally act on its behalf in this respect and to have authority to do so, that it has actually consented to such action.” The court found that several defendants had been properly served yet failed to either join in Amazon’s removal or file notices of consent within the 30-day period for removal. The court rejected that emails between counsel for Amazon and counsel for those defendants indicating consent to removal was sufficient to meet the requirement and further noted that the emails were not placed into the court’s record within the 30-day period for removal. As such, the court remanded the case to state court.    

BROKER

Ye v. GlobalTranz Enters., 2023 U.S. App. LEXIS 181137, C.A. No. 22-1805 (7^th Cir. July 18, 2023). The Seventh Circuit Court of Appeals affirmed the lower trial court’s ruling that a tort plaintiff’s wrongful death claim against a freight broker alleging negligent selection of a motor carrier was expressly preempted by the Federal Aviation Administration Authorization Act, 49 U.S.C § 14501(c)(1) (“FAAAA”). The court specifically rejected that the safety exception to preemption provided in subsection 14501(c)(2) precluded preemption because Congress required motor carriers—not brokers—to bear responsibility for motor vehicle accidents. The court found the nature of the allegations struck at the core of the services provided by a freight broker—selling, providing, or arranging for, transportation by motor carrier for compensation—because the allegations challenged the adequacy of care the broker took or failed to take in hiring the motor carrier. The court found that enforcing such a claim via private cause of action would have a significant—not tenuous, remote, or peripheral—economic effect on broker services. In so holding, the court rejected the Ninth Circuit’s analysis in Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9^th Cir. 2020), which held the safety exception to FAAAA operated to prevent preemption of such claims. The safety exception under FAAAA provides that laws within a state’s “safety regulatory authority . . . with respect to motor vehicles” are not preempted. The court did not focus upon whether a state tort law is part of its “safety regulatory authority”, noting several other courts had found that to be the case, but instead based its ruling on the finding that a common law negligence claim enforced against a freight broker is not a law that is “with respect to motor vehicles.” Drawing from Congress’s definition of “motor vehicles”, the court concluded that the exception requires a direct link between a state’s law and motor vehicle safety and further found there was no such “direct link” between negligent hiring claims against brokers and motor vehicle safety. It further contrasted the specific mention of broker services in subsection 14501(c)(1)—providing for preemption, with the complete lack of mention of broker services in the safety exception contained within subsection 14501(c)(2), thereby finding the omission was intentional. Last, the court emphasized the overarching goal of Title 49 and related regulations is to regulate motor vehicle safety and the limited mention of brokers therein relating to records retention, advertising, and avoiding conflicts with shippers further enforces that the FMCSA “imposes safety standards on broker hiring or otherwise recognizes a relationship between brokers and motor vehicles.” The court concluded by pointing out three possible explanations for the differing ruling by the 9^th Circuit in Miller and explaining why the 9^th Circuit’s analysis on each of those points was, in the 7^th Circuit’s opinion, flawed. The conflicting rulings from different Circuit Court of Appeals may weigh in favor of the Supreme Court now taking up the issue, which it had previously declined to do on appeal from the 9^th Circuit decision in Miller. 

Pruitt v. Hansen & Adkins, Inc., 2023 U.S. Dist. LEXIS 119608, 2023 WL 4494192, C.A. No. 2:23-cv-167 (M.D. Ala. July 12, 2023). The federal court remanded a personal injury action against a freight broker alleging negligent hiring of a motor carrier to state court, finding that FAAAA, even if it preempted the state law causes of action, did not confer federal question jurisdiction before the federal court under the rare “complete preemption” doctrine. In so holding, the court distinguished between complete preemption and ordinary preemption. It explained that a case may not be removed to federal court premised upon a federal question defense, including the defense of preemption (i.e., ordinary preemption). 

CARGO

Landstar Ranger, Inc. v. Triple M Logistics, Inc., 2023 U.S. Dist. LEXIS 129554, C.A. No. 3:22-cv-00056-HES-LLL (M.D. Fla. June 28, 2023). In this stolen freight dispute, the court refused to allow a downstream motor carrier to benefit from limitations of liability contained in upstream contracts, finding that the motor carrier itself had affirmatively agreed to a higher limitation of liability. The case involved a stolen load of 28 pallets of computers.  Acer contracted with Expeditors for distribution services from Texas to Florida. The Acer-Expeditors agreement limited Expeditors’ liability to .50 cents per pound, absent a higher declaration of value by Acer. The Acer-Expeditors agreement allowed Expeditors to subcontract its obligations. Expeditors tendered the shipment to Landstar Ranger, another property broker. The Expeditors-Landstar agreement limited Landstar Ranger’s liability to $250,000. Landstar Ranger, in turn, contracted with Triple M as the for-hire motor carrier. The Landstar-Triple M agreement limited Triple M’s liability to $1,000,000 and further contained an integration clause confirming it constituted the entire agreement between Landstar Ranger and Triple M. The computers ultimately went missing while under Triple M’s exclusive control, and the total value of the missing cargo was determined to be $760,290.72. Expeditors paid Acer $160,000 (i.e., more than provided for under the limitation of liability in the Expeditors-Acer contract), and Landstar Ranger subsequently reimbursed Expeditors in that amount. Acer assigned Landstar Ranger its rights against Triple M, and Landstar Ranger subsequently filed suit against Triple M for $160,000. In defense, Triple M claimed it was entitled to the $.50 per pound limitation of liability contained in the Acer-Expeditors contract, meaning its liability would only total $8,685.00. Triple M argued that Landstar Ranger, as a freight broker, only had standing to bring a Carmack claim against it by virtue of the assignment from Acer and, as such, would be subject to the $.50 per pound limitation of liability that Acer accepted via the Acer-Expeditors agreement. In response, Landstar Ranger claimed it should be treated as a motor carrier entitled to pursue apportionment/contribution from Triple M—another motor carrier—pursuant to 49 U.S.C. § 14706(b) because Landstar Ranger “took legal responsibility for the computers” and, therefore, the Landstar-Triple M agreement with its $1 million limitation of liability applied. The court acknowledged Carmack does not apply to brokers but, relying upon statutory definitions and case authorities, explained that any entity that “agree[s] with the shipper to accept legal responsibility for that shipment” is not a broker. Looking to the Expeditors-Landstar agreement, the court found Landstar Ranger accepted responsibility for claims for loss or damage to cargo, and, therefore, constituted a motor carrier, not a broker, in connection with the shipment. In determining which of the various agreements and corresponding limitations of liability applied, the court relied upon the Eleventh Circuit’s decision in UPS Supply Chain Sols. Inc. v. Megatrux Transp., Inc., 750 F.3d 1282 (11^th Cir. 2014), which the court found established downstream carriers cannot benefit from upstream contracts when the carrier itself negotiates for greater liability and does not participate in negotiating the upstream contracts. Applying the Megatrux rule, the court found that, because Triple M was not involved in negotiations for any of the “upstream” contracts, it could not benefit from any limitations of liability contained therein. Moreover, since Triple M directly participated in negotiating the Landstar-Triple M agreement, with its $1,000,000 limitation of liability, it was bound by the terms of that agreement. The court, therefore, granted summary judgment in favor of Landstar Ranger in the amount of $160,000. 

Bunis v. Masha Mobile Moving & Storage, LLC, 2023 U.S. Dist. LEXIS 120012, 2023 WL 4494174, C.A. No. 23-1237 (E.D. Pa. July 12, 2023). In this action arising from alleged lost or damaged household goods, the court dismissed, as preempted by the Carmack Amendment, various state law causes of action. The plaintiff contracted with a household goods carrier to move her personal belongings from Pennsylvania to Illinois. As part of this contract, she purchased a series of premium services for “general packing and unpacking services, disassembly, packing and reassembly of several large furniture items, and specialty packaging and packing services for [her] lawn mowers and tools.” Between July 2021 and August 2022, the carrier packed the plaintiff’s belongings into twelve storage containers. It stored them until November 2022 at which time the plaintiff was completing her move to Illinois. Upon arrival in Illinois, the plaintiff’s goods appeared to have been tampered with, padlocks removed, certain items damaged, and numerous items were missing altogether. After the motor carrier’s insurer denied the claim, the plaintiff filed suit alleging a single claim under the Carmack Amendment, as well as causes of action for breach of contract, conversion, violating the Pennsylvania Unfair Trade Practices and Consumer Protection Law, unjust enrichment, fraud, and negligent infliction of emotional distress. The motor carrier moved to dismiss all causes of action other than the Carmack claim. The plaintiff contended that Carmack preemption did not extend the alleged actions that occurred solely within the geographical boundaries of Pennsylvania and that the intrastate packing, storage, and movement solely within Pennsylvania were independent of the eventual interstate move to Illinois.   Ultimately, the court rejected the plaintiff’s argument, finding that under the broad definition of “transportation” all the ancillary services fell within the purview of Carmack preemption. Moreover, it found the “temporary storage” in Pennsylvania was also part of the overall contracted interstate transportation, and, therefore, fell within Carmack preemption. 

Cariati Devs., Inc. v. XPO Logistics Freight, Inc., 2023 U.S. Dist. LEXIS 115119, C.A. No. 3:22-cv-0383 (D. Conn. July 5, 2023). In this action, the court held a negligence cause of action against multiple motor carriers was preempted by the Carmack Amendment. The plaintiff attempted to avoid Carmack preemption, arguing that the damages it alleged were separate and distinct from the loss or damage to the goods. Specifically, the plaintiff alleged “loss of a business contract” as well as “money spent on inventory to further perform the contract.” However, the court found “all damages allegedly flowed from the harm to or misdelivery of the [cargo] at issue[]” and, therefore, “[t]he negligence claim is essentially a claim for damages or loss of the goods in disguise.” Since all alleged damages flowed from the defendants’ alleged conduct in transporting the goods and resulting damage to and/or loss of the goods, Carmack preemption applied. 

COVERAGE

Allied Premier Ins. v. United Financial Casualty Co., 2023 Cal. LEXIS 4236, 2023 WL 4696261, C.A. No. S267746 (Cal. July 24, 2023). On a certified question from the Ninth Circuit Court of Appeals, the Supreme Court of California held that a commercial auto liability policy did not remain in effect until such time as the insurer cancels the Form E/F filing/endorsement/Certificate of Insurance on file with the California Department of Motor Vehicles as required by the California Motor Carriers of Property Permit Act, but rather, the policy’s cancellation date is determined by that provided under the policy itself. It was undisputed that at least one Certificate of Insurance on file with the CADMV had not been cancelled as of the date of the at-issue accident. The court explained the nuanced holding as follows: “[w]e hold an uncancelled certificate of insurance that remains on file with the DMV does not cause the corresponding insurance policy to remain in effect in perpetuity. But that is not to say that an uncancelled certificate of insurance imposes no obligation of any kind on the responsible insurer. The statutory scheme suggests otherwise.” However, the court did not reach the question of whether an uncancelled Certificate of Insurance would create any surety obligation upon an insurer in such circumstances, specifically noting that the Ninth Circuit had not certified that question to the court. 

WORKERS COMPENSATION

No cases of note to report. 

Happy (belated) Independence Day! 

We hope everyone had a safe and enjoyable Independence Day celebration last week! This is a great time for reflection and time with family. Cheers to the United States’ 245th anniversary! 

We would like to take this opportunity to let our CAB users know that we appreciate the faith and trust you put in our tools, resources, and team. We appreciate the opportunity to provide a solution that benefits your organization and the industry as a whole. We look forward to continued collaboration and as always, please do not hesitate to reach out with questions or potential enhancements. 

We hope everyone has a great month! 

Chad Krueger

CAB Live Training Sessions

We will be taking the month of July off from our live training sessions. Keep in mind, all our great training content is still available via our webinars page. 

Follow us on the CAB LinkedIn page and Facebook.

CAB’s Tips & Tricks: Alert Added to CAB Report and CAB List

Many are aware of the FMCSA’s Training Provider Registry that went live in February of 2022. The Training Provider Registry is an online database that aims to improve highway safety by: maintaining the list of registered training providers that have self-certified they meet federal training requirements; and retaining a record of all individuals who have completed the required entry-level driver training. Learn more about the Training Provider Registry here.

Shortly thereafter, we added this information to the CAB Alert List on the General Tab of the CAB Report, see below.

This information is provided to help our users understand if there is a relationship with a motor carrier that is also operating as a CDL Training Provider. The match is identified by phone number, email and/or address.

We have recently added this alert to the CAB List, Carrier Health Alerts as well. As you can see with my Carrier Health Alert, there are a number of motor carriers that are, or may be, affiliated with registered Entry Level Driver Training Providers.

THIS MONTH WE REPORT

FMCSA mulls ‘proficiency exams’ for new entrant carriers. FMCSA is considering whether to implement a proficiency examination as part of its revised New Entrant Safety Assurance Process. Which means that a rulemaking dormant since 2009 is back on the Federal Motor Carrier Safety Administration’s radar. Read more…

FMCSA, NHTSA announce proposal to require AEBs on heavy vehicles. The U.S. Department of Transportation is proposing that automatic emergency braking systems and electronic stability control systems be required on newly manufactured heavy vehicles. The Federal Motor Carrier Safety Administration and National Highway Traffic Safety Administration jointly announced that the agencies will publish a notice of proposed rulemaking in the next month or so. Read more…

FMCSA on-site audits are surging back in 2023. The total number of on-site audits increased by 54% from 2021, according to J. J. Keller & Associates Inc., the transportation industry’s trusted experts in safety compliance. Read more…

Despite Softer Freight Market: Weaker Freight Environment in 2022 Doesn’t Stop Growth for Largest Carriers. Most of the largest trucking companies in North America continued to grow their businesses last year even as spot market rates dropped, truck capacity loosened and bargaining power swung back toward shippers. Read more…

Cost of trucking hit record high last year, passes $2/mile for the first time. Trucking expenses climbed to a new high in 2022 for the second year in a row, according to the 2023 update of American Transportation Research Institute’s (ATRI) analysis of the operational costs of trucking. Read more…

TIA establishes anti-freight-fraud task force. In response to the rise in fraudulent activities within the transportation sector in recent years, brokerage trade group Transportation Intermediaries Association (TIA) has announced the establishment of the TIA Fraud Task Force. Read more…

Developing winning partnerships: a guide for implementing small fleet trucking solutions. In a recent article from CCJ, Guillermo Garcia documents steps smaller trucking companies can take to stay competitive. “These challenges include maintaining a profitable business, managing fleets efficiently, dealing with regulatory compliance, and competing with larger carriers that have more resources and infrastructure,” he adds. Read more…

FMCSA to Consider Broker-Shipper Transparency: OOIDA Seeks Rulemaking to Require Pricing Documents Be Shared With Truckers. The Federal Motor Carrier Safety Administration recently reported that the agency, “at the appropriate time,” will take up the issue of OOIDA’s 2020 transparency petition to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed. Read more…

ATRI Releases New Research that Evaluates the Impacts of Marijuana Legalization on the Trucking Industry and its Workforce. American Transportation Research Institute (ATRI) released a new report that assesses the impacts of marijuana legalization on the trucking industry. The report includes industry surveys that provide insight into motor carrier and truck driver perspectives on the consequences of marijuana legalization and current drug screening regulations. Read more…

ATRI’s Newest Operational Costs Research Details Spikes in Equipment, Wage, and Total Costs in Trucking. American Transportation Research Institute (ATRI) released its 2023 update to An Analysis of the Operational Costs of Trucking, reporting that total marginal costs climbed to a new high in 2022 for the second year in a row, increasing by 21.3 percent over 2021 to $2.251 per mile. Read more…

Opponents to AEB mandate point to false activation reports. Opponents to an automatic emergency braking system mandate noted reports of false activations in response to a the  forthcoming proposal from the FMCSA and NHTSA requiring automatic emergency braking systems and electronic stability control systems on new vehicles that weigh more than 10,000 pounds. Read more…

A game-winning drive? Truckers hopeful DRIVE Act will stop speed limiter mandate. After a flood of comments from truck drivers, FMCSA has delayed their announcement of the speed threshold for speed-limiting devices until later this summer. “You should start looking for it by the end of summer or early fall,” FMCSA Administrator Robin Hutcheson. Read more… 

July 2023 CAB Case Summaries
These case summaries are prepared by Robert “Rocky” C. Rogers, a Partner at Moseley Marcinack Law Group LLP.

AUTO

Ellis v. Klawonn, 2023 U.S. Dist. LEXIS 104332, 2023 WL 3993043, C.A. No. 4:21-cv-00977 (E.D. Tex. June 8, 2023). In this personal injury lawsuit arising from a motor vehicle accident, the CMV driver and motor carrier moved for summary judgment with respect to claims from negligence per se, negligence, and gross negligence on several different grounds, some of which plaintiff opposed and others which plaintiff did not oppose. Plaintiffs withdrew their claims against the motor carrier for negligent and grossly negligent hiring, training, and entrustment. With respect to the negligence per se claim against both the driver and the motor carrier, the Texas state statutes upon which plaintiff based its negligence per se do not give rise to such a claim because they merely incorporate an ordinary negligence standard. Moreover, with respect the FMCSRs cited by plaintiff, the court likewise held 49 C.F.R § 390.11 does not impose any standard of care and therefore cannot sustain a negligence per se cause of action.  With respect to the remaining FMCSRs, the court held there was insufficient evidence to establish the breach of any purported requirement that was a causal factor in plaintiff’s claimed damages. In granting summary judgment to the motor carrier and driver on the ordinary negligence claim, the court pointed out that the accident report solely cited plaintiff’s vehicle as a possible contributing factor to the accident. The court also stressed the complete lack of evidence from which a reasonable juror could find the CMV driver acted negligently in operating the CMV prior to the accident. The court, finding no negligence on the part of the driver or motor carrier, held it necessarily followed that the gross negligence claims must also be dismissed. 

Ruh v. Metal Recycling Servs., LLC, 2023 S.C. LEXIS 134, 2023 WL 4096213, App. No. 2022-000094 (S.C. June 21, 2023). In this case, the United States District Court for the District of South Carolina certified to the South Carolina Supreme Court the following question: Under South Carolina law, can an employer be subject to liability for harm caused by the negligent selection of an independent contractor? The court answered the question in the affirmative, explaining “Yes, the principal in an independent contractor relationship may be subject to liability for physical harm proximately caused by the principal’s own negligence in selecting the independent contractor[,]” but in so holding, placed certain limitations upon the scenarios that would trigger such liability. The claim at issue was against a shipper who selected a motor carrier to transport metal on behalf of the shipper, and the motor carrier was subsequently involved in an accident with the plaintiff. The plaintiff alleged the defendant shipper negligently selected the motor carrier and, therefore, was liable to the plaintiff. First, the court declined to formally adopt Restatement § 411, but did note the comments to that section may prove useful in future cases. The court further stressed the limited scope of its ruling, explaining “[t]o be clear, however, proving the negligence of the independent contractor will not result in the liability of the principal. Under our decision today, there can be no recovery against the principal unless the plaintiff separately proves the negligence of the principal in selecting that particular independent contractor and that the principal’s negligence was a proximate cause of the alleged injuries.”  The court explained the rule it set forth as follows: “First—as in any negligence action—the plaintiff must prove the defendant—in these cases the principal—did not exercise reasonable care. Second, the standard for reasonable care will vary depending on the degree to which the work involves a risk of physical harm unless done ‘skillfully and carefully.’ Third, the question of reasonable care relates only to selecting a ‘competent and careful contractor.’ Finally, the plaintiff must establish the negligence of the principal was a proximate cause of the physical harm. Each of these features—and others not anticipated here—should be analyzed in future cases to develop a standard that allows an injured plaintiff to recover from an at-fault principal when such a recovery is warranted by the facts and the law, while avoiding unwarranted liability for principals who act reasonably in hiring independent contractors.”  Further expanding upon this foregoing test, the court explained the standard for the liability of the principal is “reasonable care.” It went on to explain that the greater the risk of harm, the higher the care required of the principal. However, it was careful to note that merely hiring someone to transport goods by commercial motor vehicle does not necessarily require an onerous search into the qualifications of the contractor, stating “[c]ontinuing with the trucking example, competence for hauling paper products may be nothing more than a commercial driver’s license and a commercially sound vehicle, and carefulness may be indicated simply by not having a reputation for careless driving. Thus, hiring a trucking company to haul paper products may require no more than a surface level assessment of competence.” With respect to the “competent and careful” component of the test, the court explained “[w]hether a particular contractor is sufficiently competent and careful to perform the work safely will depend on the difficulty and danger associated with the particular work. ‘The words ‘competent and careful contractor’ denote a contractor who possesses the knowledge, skill, experience, and available equipment which a reasonable [principal] would realize that a contractor must have in order to do the work . . . without creating unreasonable risk of injury to others, and who also possesses the personal characteristics which are equally necessary.’” Last, the court stressed the requirement of proximate cause, meaning “it is necessary that harm shall result from some quality in the contractor which made it negligent for the employer to entrust the work to him. Sticking with the trucking example to illustrate the point, if a principal hires a contractor unqualified to handle emergencies that may arise while hauling toxic chemicals, the principal is negligent in hiring the contractor. But if the contractor causes an accident by negligently failing to yield the right of way, and the dangerous quality of his cargo plays no part in the accident or injury, then the plaintiff will be unable to establish cause-in-fact and thus unable to establish proximate cause. In this example, the principal may be liable for his negligence in selecting the contractor only when the contractor’s lack of qualifications to handle an emergency involving toxic chemicals is the cause-in-fact of the plaintiff’s injury.” Thus, while recognizing the theory of shipper liability for the alleged negligent hiring of a motor carrier, the court placed important restrictions upon when liability may be triggered under such theory. 

Gregory v. Chohan, 2023 Tex. LEXIS 528, 66 Tex. Sup.J. 1086, No. 21-0017 (Tex. June 16, 2023). The Supreme Court of Texas ordered a new trial, reversing a noneconomic damages award of just over $15 million (out of $16.8 million total award) and in the process clarifying the standard for review of noneconomic damages. The holding rejected the “shocks the conscience” standard as “too elastic for practical use in the great majority of cases.” When assessing mental anguish damages, a court must ensure there is evidence that the amount found is fair and reasonable compensation. The court further stressed that loss of companionship damages are intended as compensatory, not punitive or exemplary damages. With respect to the case before it, the court found that while there was certainly evidence to support a noneconomic damages award, there was nothing in the record supporting any rational connection between the injuries suffered and the amount awarded. Last, the court found that the trial court erred in excluding a potentially responsible third party from the jury charge. 

Robert v. Maurice, 2023 U.S. App. LEXIS 16365, 2023 WL 4235550, C.A. No. 22-30221 (5^th Cir. June 28, 2023). In this appeal, the Fifth Circuit affirmed the trial court’s judgment finding in favor of the plaintiff but awarding him no damages. At trial, over the objection of plaintiff’s counsel, evidence suggesting the plaintiff was part of a larger conspiracy to stage more than fifty vehicle accidents was admitted. On appeal, plaintiff argued admitting such evidence was in error. On appeal, the Fifth Circuit noted that, clearly, the jury had rejected the challenged evidence because they found the defendants caused or contributed to the accident. The jury merely found that the accident was not the cause of plaintiff’s injuries and, thus, awarded no damages. As such, even assuming arguendo admission of this evidence was in error, the court found plaintiff could show no prejudice. Therefore, the judgment of the trial court was affirmed. 

Farm Bureau Gen. Ins. v. Schneider Nat’l Carriers, Inc., 2023 U.S. Dist. LEXIS 108169, 2023 WL 4108494 (S.D. Ohio June 21, 2023). In this personal injury/subrogation action, the court granted a motor carrier and its driver summary judgment under Ohio’s Good Samaritan statute. The facts of the accident are as follows: around noon on a clear day, tort plaintiff was traveling on a two-lane 55 mph highway when he came upon a large roll of carpet padding lying in the opposite lane of travel. He stopped his car on the shoulder of the roadway, exited his vehicle, and began attempting to move the carpet padding from the roadway. A CMV driver came upon the scene and observed the tort plaintiff struggling to move the carpet padding—the tort plaintiff and the padding were still in the roadway. The CMV driver stopped his tractor-trailer in the lane of travel, and within a minute of stopping, got out to assist the tort plaintiff. Another driver traveling in the same direction as the CMV driver came upon the stopped CMV and swerved to avoid it, but in the process of doing so, struck the tort plaintiff. The tort plaintiff filed suit against the CMV driver, his motor carrier employer, and the other driver who struck the tort plaintiff. The CMV driver and the motor carrier argued for summary judgment in their favor under Ohio’s Good Samaritan statute. The court agreed, finding that each of the elements for the statute to apply were met under the circumstances. As such, it granted summary judgment to the CMV driver and motor carrier.

BROKER

Peterson v. Rodriguez, 2023 U.S. Dist. LEXIS 105540, 2023 WL 4053599, C.A. No. 23-1013 (D. Kan. June 16, 2023). In this personal injury negligence action arising from a multi-vehicle accident, the tort plaintiff sued two related entities—Hannebaum Trucking, LLC and Hannebaum Grain Co.—in Kansas state court, alleging Hannebaum Defendants negligently selected a motor carrier involved in the accident. The Hannebaum Defendants removed the action to federal court under 28 U.S.C. § 1331, contending that the action raised a federal question, namely whether the claims against the Hannebaum Defendants are completely preempted by FAAAA, 49 U.S.C. § 14501(c)(1) & (b)(1). The tort plaintiffs moved to remand the action to state court. The court first explained that, in order for removal to be appropriate, there must be complete preemption under the federal statute. However, with respect to FAAAA, the court noted there have been numerous “carve outs” to preemption under FAAAA, including state laws affecting carrier prices, routes, and services that are only tenuous, remote, or peripheral, and safety exception to FAAAA preemption for personal injury claims, which preclude a finding of complete preemption under FAAAA. As such, the court agreed that remand was appropriate. See also Gregg v. Rodriguez, 2023 U.S. Dist. LEXIS 105542, 2023 WL 4053590, C.A. No. 23-1031 (D. Kan. June 16, 2023).

Malone v. Russell, 2023 U.S. Dist. LEXIS 98028, 2023 WL 3854265 (N.D. Tex. June 6, 2023). In this personal injury action, the Texas federal court remanded the case back to the state court, finding a lack of complete preemption and no significant federal issue that would give rise to the federal court retaining jurisdiction over the matter. The broker defendants removed the case to federal court, citing FAAAA. However, the court stressed numerous other decisions holding FAAAA preemption is not “complete preemption” as required to sustain federal subject matter jurisdiction. For the same reasons, the court held that the case did not present a significant federal issue whereby the rights of the respective parties would have to be decided under federal law. As such, it remanded the action to state court. 

CARGO

Waters v. Del. Moving & Storage, Inc., 2023 Del. Super. Lexis 307, C.A. No. N21C-05-130 (Del. Super. Ct. June 28, 2023). In this dispute over damage to personal property, the trial court granted summary judgment in favor of the moving and storage company and denied summary judgment to the property owner/plaintiff. The plaintiff’s home was damaged by a fallen tree, and plaintiff hired Contractor to repair the damage to her home. Contractor, in turn, hired the moving and storage company as a subcontractor to remove the plaintiff’s personal property from the home and store it while Contractor was performing the home repairs. An “estimator” for the moving and storage company came to the plaintiff’s residence a week or so before the planned moving/storage to calculate the number of boxes needed for packing. The estimator did not assess the value of the property at that time, but instead used its standard $20,000 valuation for jobs involving Contractor. The moving and storage company emailed the estimate, including the $20,000 valuation to the Contractor, but it was undisputed Contractor did not email the estimate to the plaintiff/property owner. The day of the moving/storage, after the property had been loaded onto the truck, the moving and storage company’s employee presented plaintiff/property owner with a one-page document titled “Moving Contract” for plaintiff/property owner’s signature. The Moving Contract had a place for plaintiff/property owner’s signature and included valuation options for the property and explanations for each valuation option. It listed Contractor on the first page. The $20,000 valuation was circled, and corresponding premium/deductible indicated, but there were also spaces for declaring different values and associated premiums.  Plaintiff/property owner signed next to the $20,000 valuation that had already been circled. The Moving Contract also included a notice on the bottom of the page, indicating “[u]nless a greater value is stated herein, the customer declares, that the value, in case of loss or damage . . . and the liability of the mover, for each or any piece or package and the contents thereof, does not exceed and is limited to sixty (60 cents) per pound per article . . . such customer having been given the opportunity to declare a higher valuation, without limitation, in case of loss or damage from any cause which would make the mover liable and to pay the higher rates based thereon.”  Plaintiff/property owner claimed she was not allowed to read the Moving Contract in full and was not advised she could change the valuation amount.  Plaintiff/property owner filed suit, claiming $53,757 in damages to her property. First, the court held that the valuation provision was consistent with general bailment law because it was conspicuous, clear, and unambiguous, and therefore was enforceable. In so holding, the court rejected that the Moving Contract was a contract of adhesion, and further rejected that the terms were unconscionable as a matter of law. Accordingly, the court granted the moving and storage company summary judgment that its liability to plaintiff/property owner was limited to $20,000.

AMRO Fabricating Corp. v. Aslan Express, LLC, 2023 US. Dist. LEXIS 105981, 2023 WL 4087400 (S.D. Tex. June 20, 2023). AMRO hired Smokey Point Distribution, which AMRO alleges is a motor carrier, to transport heavy equipment from the Port of Houston to California. AMRO assumed Smokey Point would perform the transport itself, but instead Smokey Point engaged Morris Export Services, which picked up the equipment from the Port of Houston and brought it to a Houston warehouse, measured it, and provided those measurements to Smokey Point. Smokey Point alleged the measurements provided were incorrect. Aslan Express thereafter picked up the equipment from the Houston warehouse and began transporting it to California but struck a bridge overpass while en route. AMRO sued Smokey Point and Aslan Express as the original carrier and delivering carrier, respectively. AMRO answered and filed a third-party complaint against Bruzzone Shipping, Morris Export and two other companies. Smokey Point alleged via the third-party complaint that AMRO, Bruzzone, Morris and another company provided Smokey Point incorrect measurements and should have categorized the load as “high load” subject to additional logistical considerations.  The third-party complaint against Bruzzone sought contribution for Smokey Point’s potential liability to AMRO and further alleged negligence, violations of the Texas Deceptive Trade Practices Act, and liability under the Carmack Amendment. Bruzzone moved to dismiss the third-party complaint in its entirety.  First, the court held Smokey Point’s attempt to implead Bruzzone via Rule 14(c) was procedurally improper because that rule only applies to maritime or admiralty contracts, and while there was a maritime component to the shipment, the third-party complaint only addressed the overland portion of the shipment. As such, impleader of Bruzzone was improper.  With respect the remaining claims, it was undisputed Bruzzone was not alleged to be a motor carrier subject to Carmack Amendment liability, and therefore no basis under the Carmack Amendment by which to hold Bruzzone liable to Smokey Point or AMRO.  Assuming Bruzzone was acting as the “shipper” then any such claims would be preempted, in the court’s view, because the alleged conduct by Bruzzone resulted in damage to the goods. Last, Bruzzone contended that if Smokey Point alternatively argued Bruzzone was a broker, FAAAA would preempt any causes of action against it, specifically arguing the recent case of Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4^th 1261 (4^th Cir. 2023). The court agreed, finding any claims against Bruzzone on the theory it was a broker would be preempted by FAAAA and the holding of Aspen Am. Ins. Co. As such, Bruzzone was dismissed from the lawsuit, subject to the right to amend the third-party complaint should Smokey Point discover additional or different facts establishing liability of Bruzzone via discovery. 

Yonak v. United Van Lines, LLC, 2023 U.S. Dist. LEXIS 100257, 2023 WL 3900503, C.A. No. 1:23CV0092 (N.D. Ohio June 8, 2023). In this lawsuit arising from alleged damage during the interstate transport of personal items, the court partially granted a motion to dismiss under Carmack preemption. The plaintiffs alleged they hired United Van Lines to move their personal belongings from Ohio to Florida but United contracted with its “local carrier” Dearman to perform the move. Plaintiffs allege United misled them because Dearman “was neither a subsidiary of, nor owned or controlled by United.” As a result, Plaintiffs alleged United merely acted as a broker. Plaintiffs filed their First Amended Complaint, alleging a federal claim for violation of the Carmack Amendment against Defendant Dearman as well as Ohio state law claims for violation of the Ohio Consumer Sales Practices Act against Dearman and United, Breach of Contract against United, Fraud against all Defendants and Unjust Enrichment against United. Both United and Dearman moved to dismiss all claims against them under Carmack and/or FAAAA preemption. With respect to United, the court indicated at the motion to dismiss stage, it must take all well-pleaded allegations as true, which included the allegation United operated as a broker. As such, Carmack preemption did not extend to United. However, insofar as the operative pleading alleged Dearman was the carrier, the state law causes of action against Dearman were preempted by Carmack because the damages alleged “arise from loss or damage to goods shipped interstate.” United separately moved for dismissal under FAAAA preemption, but the court held “this legislation also applies solely to carriers” and thus precluded dismissal at this stage due to the operating pleading alleging United acted solely as a broker.   

Stolt Tank Containers B.V. v. Chemtura Eur. GmbH (In re M/V MSC Flaminia), 2023 U.S. App. LEXIS 16612 (2^nd Cir. June 20, 2023). In this litigation arising from an explosion aboard an ocean vessel, the Court affirmed liability against various defendants under COGSA based upon certain theories, but reversed the trial court, finding COGSA did not support liability against the defendants under other theories. Deltech was the manufacturer of the goods.  Stolt was the NVOCC that made shipping arrangements for the goods. The suit alleged inadequate warnings were provided regarding safe handling of the goods, ultimately causing the explosion. The court explained “COGSA provides that a “shipper” of “inflammable, explosive, or dangerous” goods “shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment” when the “carrier” does not have knowledge of the “nature and character” of the goods[,]” but that “recovery under a strict liability theory is unavailable to a party with ‘notice of the general dangerousness’ of the cargo it agreed to transport. On the facts, the court found that, while the ocean carrier did not have specific knowledge of the specific conditions to which the cargo was exposed that made it “heat sensitive,” there was sufficient evidence to “conclude broadly” that the ocean carrier was on notice of the cargo’s dangerousness. However, it did find that the same defendants were liable under a failure to warn, as opposed to strict liability, theory of recovery to various parties. The court found there was sufficient evidence to affirm the trial court’s finding that the ocean carrier was without negligence in causing the explosion. 

COVERAGE

Frankenmuth Mut. Ins. Co. v. Sentry Cas. Co., 2023 Mich. App. LEXIS 4506, 2023 WL 4139549 (Mich. Ct. App. June 22, 2023). In an insurance dispute involving a Michigan resident truck driver who worked for an Illinois-based trucking company and who fell from a truck in Indiana, the Michigan Court of Appeals ruled the Illinois trucking company did not have to carry Michigan no-fault insurance.  It found that a truck primarily registered outside of Michigan with an apportioned registration under the International Registration Plan (IRP) that includes Michigan is not thereby compelled to carry Michigan no-fault insurance. Further, it found a Michigan state statute did not apply to require Michigan no-fault insurance because the truck involved in the fall was never operated in Michigan.

Pedroso v. Hanover Ins. Co., 2023 Mass App. Unpub. LEXIS 308, 102 Mass. App. Ct. 1123, 2023 WL 3985207 (Mass. Ct. App. June 14, 2023). In this insurance coverage action, the Appeals Court of Massachusetts affirmed the trial court’s decision in favor of the putative insured finding coverage under two separate CGL policies. The matter arose out of an accident involving a tractor-trailer that became stuck in snow and ice while attempting to unload product in the alley at the rear of a business location. Workers from several businesses that leased space in the building attempted to free the tractor-trailer, using a personal auto of one the lessees, but the lessee’s vehicle pinned two of the workers that were assisting. The injured parties and/or their estates filed suit, including claims against the owner of the building. The owner, in turn, sought defense and indemnification from policies of two of the lessees/tenants, said request being denied by both insurers. The owner thereafter filed a lawsuit against the insurers, raising claims for breach of contract and violation of Massachusetts’ unfair trade practices statute. The owner was an additional insured under each of the policies, but each policy had certain limiting language; one provided the owner was an additional insured “only with respect to . . . [p]remises you own, rent, lease or occupy” whereas the other provided the owner was an additional insured “only with respect to liability arising out of the ownership, maintenance or use of that part of the land or premises leased to you.” Both insurers argued the rear alley was not part of the premises leased to each of their respective insureds and was not common area, and therefore the polices did not provide coverage for the accident. The court, in construing the lease language, found the leases encompassed “the right to use the common areas for ingress and egress and parking” which would include the rear alley. As such, it rejected this basis of the insurers’ denial of coverage. One insurer also argued the auto exclusion contained in its CGL policy also excluded coverage. The exclusion provided the following losses were excluded from coverage: “‘Bodily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and ‘loading or unloading.’ This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the ‘occurrence’ which caused the ‘bodily injury’ or ‘property damage’ involved the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft that is owned or operated by or rented or loaned to any insured.” In rejecting the insurer’s argument, the court pointed out that the injuries did not arise out of the ownership, maintenance, use or entrustment of a motor vehicle owned or operated by or rented or loaned to the owner of the property—the putative insured under the policy. Since the tort lawsuit against the property owner did not allege negligent entrustment, the remaining provisions of the exclusion were inapplicable.  As such, the auto exclusion did not apply to remove the claim from coverage. Accordingly, the appeals court affirmed the trial court’s ruling in favor of the property owner/putative insured under each policy. 

WORKERS COMPENSATION

J.B. Hunt Transp., Inc. v. Lester, 2023 Tex. App. LEXIS 3967, 2023 WL 3876758, C.A. No. 2-23-00035-CV (Tex. Ct. App. June 8, 2023). In this appeal, the Texas appellate court reversed the trial court and upheld an arbitration provision. An employee of JB Hunt alleged she was injured while she was off-the-clock and in the sleeper berth, when her co-driver performed a “hard-brake.” She filed suit in Texas state court and J.B. Hunt moved to dismiss or in the alternative to compel arbitration. Prior to the accident, the employee had completed a document entitled “J.B. Hunt Texas Injury Benefit Plan” (the “Plan”). It contained what purported to be the signatures of the employee and an unidentified person representing J.B. Hunt. It required that arbitration be administered by the American Arbitration Association (AAA) and that the Federal Arbitration Act (FAA) “govern the interpretation, enforcement, and proceedings under the arbitration provisions of [the] Plan.” The Plan further provided that “[t]he Employer hereby adopts a mandatory company policy requiring that the following claims or disputes must be submitted to final and binding arbitration under this Appendix: . . . any legal or equitable claim by or with respect to an Employee for any form of physical or psychological damage, harm or death which relates to an accident, occupational disease, or cumulative trauma . . . . The determination of whether a claim is covered by this Appendix shall also be subject to arbitration under this Appendix. Neither an Employee nor an Employer shall be entitled to a bench or jury trial on any claim covered by this Appendix. . . . This binding arbitration will be the sole and exclusive remedy for resolving any such claim or dispute.

. . . . The arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this agreement including, but not limited to, any claim that all or any part of this agreement is void or voidable.” The court held that J.B. Hunt met its burden to establish the existence of a valid arbitration agreement, that the claims alleged in the lawsuit fell within the “broad scope” of the arbitration agreement, and that the employee had waived other alleged defenses to the enforceability of the arbitration provision by failing to raise them before the trial court.