🎣 Broker Liability’s Turning Point

Good Monday morning. Today we're taking you to law school, giving you a rundown on some of the biggest broker liability cases that have shaped the industry.

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🐔 WHAT’S COOKIN’ IN FREIGHT

🚂 Canadian Rail Resumes Amid Labor Dispute. Canada's rail operations resume Monday following government intervention. The Canada Industrial Relations Board ordered the binding arbitration that extended the expired labor agreement, along with preventing any future strikes or lockouts that could stop work. Teamsters plan to challenge the order in court. Labour Minister Steven MacKinnon pushed for this current resolution. The union is seeking better working conditions and compensation through collective bargaining. A meeting between parties is scheduled for August 29, with legal challenges and negotiations expected to continue.

🚛 Trucking Industry Showing Mixed Signals in Latest Data. The freight market is showing slow recovery amid persistent challenges. The ATA Tonnage Index rose slightly in July, suggesting a potential turnaround. Load-to-truck ratios varied across sectors, with flatbed seeing a significant increase. Spot rates remained under pressure, declining for dry van and flatbed. Trailer orders dropped sharply in June, while Class 8 truck orders fell below seasonal expectations in July.

📉 Jerome Powell Signals Rate Cuts Amid Labor Market Concerns. Federal Reserve Chair Jerome Powell hinted at upcoming interest rate cuts during his Jackson Hole speech. With unemployment at a 3-year high, Powell stated, "The time has come for policy to adjust." The Fed aims for a "soft landing," balancing inflation control with labor market strength. While inflation remains above the 2% target, it's steadily declining. Analysts expect rate cuts in September, potentially by 0.25 or 0.5 percent. Mike Beckwith sees the trucking industry's steady growth as a "leading indicator" of this economic shift. This pivot towards supporting employment could have wide-ranging effects on freight demand and consumer spending, directly impacting the trucking sector.

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How C.H. Robinson’s 2009 Lawsuit Changed Broker Liability

The freight brokerage industry was forever changed in 2009 when C.H. Robinson Worldwide, a leading freight broker, faced a $23.8 million jury verdict for its role in a fatal truck accident.

The Landmark Case: C.H. Robinson and the 2009 Verdict

In 2004, a truck driver for Toad L Dragonfly Express, a now-defunct Utah-based carrier, caused a tragic accident on Interstate 55 in Illinois, resulting in two fatalities and severe injuries to another person. The driver, DeAn Henry, had a suspended license and falsified logs. C.H. Robinson had brokered the load to Dragonfly Express, failing to fully vet the carrier’s safety record.

The jury found C.H. Robinson liable, alongside the carrier and the driver, under the theories of negligent hiring and vicarious liability.

The jury awarded $23.8 million in damages.

Understanding Negligent Hiring and Vicarious Liability

• Negligent Hiring: Brokers must do their homework when picking carriers. If they don’t, they could be on the hook for accidents.
• Vicarious Liability: If a broker is seen as controlling the carrier, they might be responsible for what happens on the road

In the C.H. Robinson case, the jury determined that by exerting a large degree of control over the transportation process—such as setting delivery schedules—C.H. Robinson had blurred the lines between independent contractor and agent.

Broker Liability 101: Other Cases You Should Know

• Schramm v. Foster (2004): A key case that set the stage for broker accountability (again, C.H. Robinson involved).
• Volkova v. C.H. Robinson Worldwide (2016): The jury found that C.H. Robinson had too much control in order for the driver to be considered an independent contractor.
• Allen Lund Company Case (2011): Another case where a broker got sued for hiring a carrier with a bad safety record.
• Miller v. C.H. Robinson Worldwide (2020): Showed brokers can be liable for the negligent selection of carriers.
• C.H. Robinson v. Miller (2022): A follow-up case where the courts allowed a lawsuit against C.H. Robinson to proceed under the “safety exception."

But it's not all bad news for brokers. Recent wins include:

TQL Wins: Another Victory for 3PLs in Broker Liability Case

TQL secures win in 11th Circuit Court, reinforcing 3PL protections against liability in carrier accidents. Here’s why it matters.

FreightCaviarAdriana Pulley

• TQL and the 11th Circuit Victory (2024): Court ruled that TQL was not liable for a fatal accident involving a carrier they hired.
• Cornejo v. Dakota Lines, Inc. (2023): An Illinois appellate court reversed an $18 million jury verdict against a broker.
• GlobalTranz and the 7th Circuit Dismissal (2023): The 7th Circuit dismissed a case against GlobalTranz.

The Industry-Wide Impact: A Shift in Practices

After the 2009 lawsuit, brokers stepped up their game:

1. Better background checks on carriers
2. Clearer contracts
3. More legal and safety training
4. Tech tools to track carrier compliance

Looking Ahead: The Lasting Impact

Years later, that 2009 case is still a big deal. It made brokers way more careful about who they work with and how they operate. Now, using tech to track safety and working with industry groups like the Transportation Intermediaries Association (TIA) is just part of the job.

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🌎 AROUND THE FREIGHT WEB

🚚Luke Bryan Tour Truck Stuck. A truck from Luke Bryan's tour got stuck under a low bridge in downtown Chicago. Ari Levy has more details for you here.

📉 Paccar Downgrades Projections. Paccar has reduced its sales projections for the trucking industry for the second time this year. Despite this, Paccar is committed to its long-term strategy.

👮 Texas Deputy Stops CMV. A Texas deputy stopped a commercial vehicle for being overweight, discovering the driver had no CDL and was using fake documents bought from Facebook Marketplace.

🔥 Fire at Rivian Plant. A fire at Rivian's Illinois facility damaged several electric vehicles. Fortunately, no injuries were reported. The cause of the fire is under investigation.

🎣 THE FREIGHT CAVIAR PODCAST

CEO of Revenova TMS

Our latest FreightCaviar Podcast features Charles Craigmile, President and CEO of TMS company Revenova. Tune in to hear his insights on innovation, team building, common industry pitfalls, and why some companies are stuck in 2014.

Catch the interview on YouTube, Spotify, or Apple Podcasts.

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