Supreme Court To Weigh Broker Liability; Industry Awaits Verdict

The issue of broker liability is once again heading toward the U.S. Supreme Court, this time with two cases on the table: Total Quality Logistics (TQL) v. Cox and Montgomery v. Caribe Transport II.

TIA Sounds Alarm on “Existential Threat”

TIA, in a brief filed through the Benesch Law Firm, has warned that inconsistent circuit court rulings are creating an “acute existential threat” for small and mid-sized brokers. The case stems from a Sixth Circuit ruling in Cox v. TQL, where a lower court’s decision in TQL’s favor was overturned, raising the question of whether brokers fall under the Federal Aviation Administration Authorization Act (FAAAA) safety exemption.

The TIA argues that forcing brokers to assume liability for safety outcomes—when the Federal Motor Carrier Safety Administration already authorizes and monitors carriers—would cripple smaller firms. “A small brokerage business employing a handful of employees lacks the resources to ‘outsmart’ the federal government’s decision to authorize a motor carrier to operate on the public road,” the brief states.

In its warning, the group also predicted market distortion if the Supreme Court does not intervene. Brokers, large and small, would be pressured to work only with established carriers, potentially “eliminating” smaller trucking firms from the market. The TIA brief called this a dangerous precedent that would “stunt potential growth in a crucial economic sector.”

Cox Attorneys Say: Let It “Percolate”

On the other side, attorneys for Robert Cox, the widower of Greta Cox, killed in a 2019 Oklahoma crash involving a truck hired by TQL, are urging the justices not to grant certiorari. In their brief, filed with the help of Public Citizen, they argue the issue should be allowed to “percolate” across circuits.

They point out that the Sixth Circuit’s ruling against TQL directly undercuts earlier appellate decisions, including Ye v. GlobalTranz and Gauthier v. TQL, both of which shielded brokers from negligence claims. The Cox team notes that the Sixth Circuit reasoned the FAAAA’s safety exception applies broadly to laws concerning motor vehicles, regardless of whether the regulated party directly owns trucks.

“Requiring that the regulated entity directly own or operate motor vehicles would impose an additional limitation beyond what the text of the [safety exception] requires,” the Cox brief quotes. Their view: other circuits may now reconsider past decisions in light of the Sixth Circuit’s analysis.

Two Cases, One Conference

Adding weight to the moment, the Supreme Court is set to consider both Cox v. TQL and Montgomery v. Caribe Transport II at the same conference. The latter, decided by the Seventh Circuit in favor of C.H. Robinson, found brokers were protected from liability under the FAAAA.

The split highlights exactly why many in the industry, and some brokers themselves, want the Court to intervene. Conflicting precedents leave brokers navigating what TIA calls a “dizzying array of conflicting standards” that vary by circuit, undermining Congress’s intent for deregulation.

Cox’s attorneys, however, argue the system should play out further in the lower courts. They caution that shielding brokers entirely from liability would “remove incentives for motor carriers to operate safely, with potentially devastating consequences.”

Source: FreightWaves 1 | 2