Another Broker Liability Case Lands in the Fifth Circuit; The Stakes Keep Rising

A new lawsuit involving Penske companies in the Fifth Circuit could deepen the legal split on broker liability and influence whether the Supreme Court steps in. As the transportation industry awaits clarity, the legal pressure surrounding broker roles continues to build.

Broker Liability Heads to the Fifth Circuit

The Fifth Circuit is now hearing Crane vs. Liberty Lane, a case that challenges the extent to which brokers can be held liable when carriers they hire are involved in fatal crashes. The case stems from a 2018 accident in Texas involving a truck contracted through a chain of Penske-related entities and ultimately brokered to a carrier by an unauthorized subcontractor.

While Penske Logistics and its brokerage arm, Penske Transportation Management (PTM), were previously granted summary judgment and dismissed from the case, the plaintiffs are now appealing that decision.

“The new truck market dynamics in Oregon are not functioning properly.” – Leah Feldon, Oregon Department of Environmental Quality

A Potential Turning Point for Supreme Court Action

Legal observers are closely watching Crane vs. Liberty Lane because of its potential to widen the circuit court split over broker liability under the Federal Aviation Administration Authorization Act (F4A). If the Fifth Circuit rules in favor of the plaintiffs, it would tip the scales to a 3–2 divide among federal circuits—possibly prompting the Supreme Court to step in.

Currently, the justices are already considering whether to hear Caribe vs. Montgomery, a similar broker liability case involving C.H. Robinson. A third case, Cox vs. TQL, from the Sixth Circuit may also be seeking certiorari.

Summary Judgment and Legal Arguments

The core of the legal battle rests on whether the F4A’s preemption clause shields brokers from liability, or whether safety concerns override that protection.

• Penske’s Argument: The companies cited F4A preemption and the statutory employer doctrine. Penske Logistics said it was too far removed from the carrier to be liable. PTM, as broker, argued that its actions were protected under “price, route, and service” provisions.
• Plaintiff’s Argument: The appeal emphasizes the F4A’s safety exemption and argues that Congress never intended to immunize brokers from personal injury liability without providing alternative recourse. The brief also questions why freight forwarders and carriers carry mandatory insurance, while brokers do not.

“It is implausible that Congress immunized brokers from all liability for personal injury without substituting an alternative remedy,” the plaintiff's brief argues.

Why It Matters for the Industry

The Penske case is the latest in a growing list of legal challenges that continue to expose inconsistencies in how courts interpret broker liability. The lack of a unified standard leaves logistics firms, brokers, and shippers uncertain about legal exposure when accidents occur. A Supreme Court decision could bring long-awaited resolution.

Source: FreightWaves