The Broker

A broker or third-party logistics provider is an entity within the chain of transportation which does not haul loads but instead contracts with motor carriers to make hauls on behalf of shippers. Basically, shippers hire brokers/third-party logistics providers to select and hire motor carriers to transport their goods. If a broker does not exercise reasonable care in the selection and hiring of competent and careful motor carriers to make hauls it may be held liable under the theory of negligent hiring. Whether a broker can be held liable under the theory of negligent hiring of a motor carrier will be dependent upon common law in the state of jurisdiction. Many states have adopted Restatement (Second) of Torts §411 which addresses negligence in the selection of an independent contractor and provides that

“an employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the employer owes to third persons.”

In Alabama, our courts have indicated that one may be held liable for the negligent hiring of any independent contractor; but, there has been no official adoption of §411 of the Restatement (Second) of Torts. In states which follow §411, a broker may be liable for injuries caused by an incompetent trucking company hired by the broker if (1) injuries were caused by the incompetence of the trucking company and (2) the broker should have known that the trucking company was incompetent prior to hiring it for the haul. See Jones v. C.H. Robinson Worldwide, Inc., 558 F.Supp. 2d. 630 (2008); see also Owens v. Anthony, 2011 WL 6056407. The United States District Court for the Western District of Virginia held in Jones v. C.H. Robinson Worldwide, Inc. that a broker/third-party logistics provider could be subject to liability for the negligent failure to exercise reasonable care in the selection of a competent motor carrier to make a haul.[1] The Court in Jones stated that the exercise of reasonable care for a broker when hiring a trucking company to make a haul includes the utilization of any information which is readily available to the broker relative to the competency of the trucking company to safely transport goods on our highways. So, per the decision in Jones, brokers/third-party logistics providers must take into consideration information which is readily available concerning a trucking company’s competency (i.e. information about the trucking company which can be obtained from a quick search of the Federal Motor Carrier Safety Administration’s “FMCSA’s” website – which has information on all trucking companies) before hiring the trucking company to haul goods.

Recently, Martin & Helms represented the family of a man who was killed in a wreck caused by a trucking company who had a long history of traffic violations and violations of the FMCSA’s vehicle maintenance and fatigued driving safety regulations. Per the investigating state troopers, the fatal wreck was caused by driver fatigue, combined with vehicle safety maintenance problems including inoperable brakes and bad tires on both the tractor and trailer. The at-fault trucking company was hauling a load on behalf of a broker at the time of the wreck.

On behalf of our clients, Martin & Helms filed lawsuits against both the trucking company and the broker, C.H. Robinson Worldwide, Inc. In the case against the broker we were able to prove that a quick search of the FMCSA’s website would have shown the broker that the trucking company had recently been involved in wrecks and had failing safety scores assigned by the FMCSA in the categories of “Unsafe Driving” and “Vehicle Maintenance” for ten consecutive months before the wreck. We were also able to show that internal documents maintained by C.H. Robinson showed that the trucking company had been using old, worn tractors and trailers for several years, which frequently broke down resulting in canceled hauls and that several complaints had been recorded by C.H. Robinson employees concerning the trucking company’s multiple vehicle breakdowns. Based on this evidence, we argued on behalf of our client that C.H. Robinson knew or should have known of the trucking company’s incompetence in the area of vehicle maintenance safety and was, thus, negligent for hiring the trucking company. The U.S. District Court agreed that there was substantial enough evidence of the trucking company’s incompetency and C.H. Robinson’s knowledge of such incompetency to allow the case to proceed forward to trial against C.H. Robinson for the negligent hiring of an incompetent trucking company. See the memorandum opinion (link to memorandum opinion.) entered by the Honorable Elizabeth K. Dillon, U.S. District Judge for the Western District of Virginia, on July 27, 2017. The case settled for a confidential amount before trial.

Another potential theory of liability against brokers in trucking cases has involved liability claims under the doctrine of respondeat superior. The court in Sperl v. C.H. Robinson Inc. determined that an agency relationship existed between the broker, C.H. Robinson, and the truck driver based upon extensive evidence presented by the plaintiff of the control that C.H. Robinson maintained over the driver.[2] Therefore, in the Sperl case, C.H. Robinson was held to be vicariously liable under the doctrine of respondeat superior for the actions of the at-fault truck driver.

Recently in the case of Riley v. C.H. Robinson Co., et al. (link to document saved as “Riley v. CHR memo and opinion re MSJ”) in the Eastern District of Missouri the Court denied C.H. Robinson’s motion for summary judgment on the issue of agency in a broker liability case on the grounds that there was sufficient evidence to create a question of fact as to whether C.H. Robinson had maintained a level of control over the trucking company to create an employer/employee relationship.

[1] Jones v. C.H. Robinson Worldwide, Inc. 558 F.Supp. 2d. 630 (2008). (link to document saved as Jones v CH Robinson Summary Judgment)

[2] Sperl v. C.H. Robinson Worldwide, Inc., 946 N.E. 2d 463 (Ill. 2011) (link to document saved as “2011 Ill App Broker liable Sperl v. CH Robinson”)