Federal lawsuit filed in the Fifth Circuit highlights another instance of potential broker responsibility
In a significant development for the transportation industry, the Crane v. Liberty Lane case, currently before the Fifth Circuit Court, is set to challenge the existing precedent on broker liability under the Federal Aviation Administration Authorization Act (F4A).
The case centres around the question of whether freight brokers can be held liable for negligence claims involving carrier selection, despite the F4A's broad preemption of state laws related to brokers' price, route, or service. The key issue is whether brokers are shielded from such claims—especially under the F4A's safety exception, which allows some state claims that specifically address motor vehicle safety.
The case assumes importance as the U.S. circuits are currently split 2-2 on the issue. The Seventh and Eleventh Circuits hold that the F4A preempts broker liability for state claims related to carrier selection, while the Sixth and Ninth Circuits reject preemption under the safety exception and allow negligence claims against brokers to proceed.
If the Fifth Circuit in Crane sides with the plaintiffs, this would create a 3-2 circuit split favouring allowing broker liability, increasing pressure on the Supreme Court to resolve the issue. The case involves a fatal 2018 truck crash brokered by Penske Logistics, and plaintiffs argue brokers should not have blanket immunity while controlling critical transportation decisions affecting safety.
Plaintiffs emphasise that while carriers and freight forwarders must carry liability insurance, brokers are not required to, yet the F4A groups them similarly, implying brokers should not gain total immunity.
The potential impact on Caribe v. Montgomery, a Seventh Circuit case which reaffirmed broker immunity, could be significant. If Crane results in the Fifth Circuit allowing broker liability, this contrast could strengthen arguments for Supreme Court review of Caribe and similar cases. The existing circuit split and emerging cases like Crane and Cox v. TQL create significant legal uncertainty that the Supreme Court may seek to address soon.
As the legal landscape remains unsettled pending the Fifth Circuit's decision, the Crane v. Liberty Lane case is poised to potentially overturn or limit the precedent set by Caribe v. Montgomery, with broad implications for broker liability and the interpretation of the F4A’s safety exception.
[1] https://www.jdsupra.com/legalnews/the-fifth-circuit-takes-up-broker-11461254/ [2] https://www.law360.com/articles/1435639/penske-wants-to-dump-broker-liability-in-texas-truck-crash-case [3] https://www.transporttopics.com/news/penske-case-could-break-broker-liability-deadlock-attorneys-say/ [4] https://www.law360.com/articles/1407016/broker-liability-at-issue-in-penske-crash-suit-over-texas-truck-crash
- The Crane v. Liberty Lane case, a potential game-changer in the transportation industry, explores the financial implications of broker liability, questioning if freight brokers should be exempt from negligence claims concerning carrier selection, a matter currently contested under the Federal Aviation Administration Authorization Act (F4A).
- The ongoing Crane v. Liberty Lane case, investigating the scope of broker liability under the F4A, assumes substantial importance for the business community, as a ruling in favor of the plaintiffs could lead to a 3-2 circuit split favoring broker liability, potentially compelling the Supreme Court to intervene, and reshaping the industry's financial landscape.
