Supreme Court refuses to resolve truck broker liability

On January 13, 2025, the U.S. Supreme Court declined to hear Gauthier v. Total Quality Logistics, LLC, a case that could have resolved a significant and growing circuit split over whether freight brokers can be held liable for negligent hiring of trucking companies under state law. The Court’s denial of certiorari leaves unresolved questions about the scope of the Federal Aviation Administration Authorization Act (FAAAA) and perpetuates inconsistent legal standards for brokers across the country.

This decision is a critical moment for the trucking and logistics industries, as it highlights the ongoing uncertainty surrounding broker liability for injuries caused by third-party trucking companies.

The legal background

Truck brokers act as intermediaries, connecting shippers with motor carriers. A negligent hiring claim arises when a broker is accused of failing to properly vet a motor carrier, resulting in injuries caused by the carrier’s negligence. Plaintiffs often argue that brokers should be held responsible for selecting unsafe carriers.

However, the FAAAA complicates these claims. It preempts state laws that regulate a broker’s “services,” which many courts interpret to include decisions about hiring carriers. This preemption has created a divide among federal circuit courts, with some allowing state-law claims to proceed while others find them barred by the FAAAA.

Under state law, the standard of care for negligent hiring focuses on whether the broker acted reasonably when selecting a contractor. Federal law doesn’t explicitly recognize negligent hiring as a cause of action, but the Federal Motor Carrier Safety Regulations could impose responsibilities that inform a standard of care. Courts that recognize preemption usually set a lower standard of care because federal law doesn’t require in-depth vetting of motor carriers.

The Gauthier case

In Gauthier v. Total Quality Logistics, LLC, the plaintiff sued the freight broker Total Quality Logistics (TQL) for negligently hiring a motor carrier involved in a serious accident. The Eleventh Circuit ruled in favor of TQL, holding that the FAAAA preempts state-law negligent hiring claims because such claims are related to the broker’s services.

This decision aligned with the Seventh Circuit’s position but contradicted rulings from the Ninth and Eleventh Circuits, which have allowed such claims to proceed under state law. The Gauthier plaintiffs appealed to the Supreme Court, asking it to resolve the circuit split and provide clarity for the trucking industry.

On January 13, 2025, the Supreme Court declined to hear the case, leaving the eleventh circuit’s decision in place and the broader legal uncertainty unresolved.

The Circuit split: A persistent issue

The denial of certiorari in Gauthier ensures that the circuit split over broker liability persists:

1. Ninth circuit: Miller v. C.H. Robinson (2020)(rejected preemption)
   In this case, a motor carrier hired by C.H. Robinson caused a catastrophic crash. The plaintiff argued that C.H. Robinson negligently hired the carrier.
   The Ninth Circuit held that the FAAAA doesn’t preempt state-law negligent hiring claims because such claims aren’t “directly related” to the broker’s core services. This decision kept the door open for plaintiffs to hold brokers liable under state law.
2. Seventh circuit: Volkova v. C.H. Robinson (2022)(preemption)
   Contrary to the Ninth Circuit, the Seventh Circuit ruled that negligent hiring claims against brokers are preempted by the FAAAA. The court reasoned that evaluating such claims would require examining the broker’s services and therefore fell within the FAAAA’s scope of preemption.
3. Eleventh circuit: Aspen American Insurance Co. v. Landstar Ranger, Inc. (2022)(preemption)
   The Eleventh Circuit aligned with the Ninth Circuit, concluding that the FAAAA doesn’t preempt negligent hiring claims. The court emphasized that these claims are tort-based and don’t regulate the core services of brokers.
4. Fifth circuit: Recent trends (preemption)
   The Fifth Circuit has been generally favorable to preemption arguments, although it has not yet addressed negligent hiring in the same depth as other circuits. However, district courts within this circuit have applied FAAAA preemption broadly.

Why didn’t the Supreme Court take the case?

While the Supreme Court often intervenes to resolve circuit splits, several factors may have influenced its decision to deny review in Gauthier:

• Case-specific nuances: The Court may have found factual or procedural issues in the case that made it an imperfect vehicle for addressing the broader legal question.
• Preference for further development: The Court might prefer to wait for additional circuit decisions before taking up the issue, allowing for a more comprehensive understanding of the legal landscape.
• Judicial discretion: The Supreme Court accepts only a small percentage of cases, prioritizing those with the greatest national significance.

Implications for the trucking and logistics industries

The Supreme Court’s decision not to hear Gauthier leaves brokers, carriers and shippers facing continued uncertainty:

• For brokers: Brokers in circuits that allow state-law claims (e.g., Ninth Circuit) must remain vigilant, implementing rigorous vetting processes and improving risk management practices.
• For plaintiffs: Victims in jurisdictions that apply FAAAA preemption may find it more difficult to hold brokers responsible for negligent hiring.
• For the industry: The inconsistency in legal standards creates operational challenges, potentially driving up insurance costs and complicating compliance strategies.

Looking ahead

The denial of certiorari in Gauthier v. Total Quality Logistics, LLC isn’t the end of the road for this legal debate. As other cases emerge in jurisdictions with differing interpretations of the FAAAA, the Supreme Court may eventually feel compelled to step in. Until then, the trucking and logistics industries must navigate a patchwork of legal standards and remain proactive in mitigating potential liability.

For brokers and other stakeholders, staying informed about developments in this area is critical. Implementing robust safety and compliance protocols now can help minimize risks while this legal uncertainty continues.

Disclaimer

WTW hopes you found the general information provided in this publication informative and helpful. The information contained herein isn’t intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you’d like more information regarding your insurance coverage, please don’t hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).