Eleventh Circuit Rules FAAAA Preemption Applies In Case Against Freight Broker For Negligent Selection

Robert D. Boroff By Robert D. Boroff

On April 13, 2023, the Eleventh Circuit Court of Appeals held that a plaintiff’s claim for negligent selection/hiring against a freight broker was: 1) preempted by the 1994 Federal Aviation Administration Authorization Act (“FAAAA”) found in 49 U.S.C. § 14501(c)(1), and 2) not saved by the “safety exception” found in 49 U.S.C. § 14501(c)(2)(A). See Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 11 Cir. No. 22-10740, ECF Doc. No. 33-1 (Apr. 13, 2023).

In Aspen Am. Ins., the shipper contracted with a freight broker to transport a load from Colorado to Maryland. The freight broker mistakenly dispatched the load to someone impersonating a motor carrier the freight broker had previously vetted and approved. The impersonator stole the load forcing the shipper to file a claim with its insurance company. The insurance company filed a lawsuit against the freight broker seeking to recoup the value of the stolen load. The insurance company alleged that the freight broker negligently selected a motor carrier by allowing the load to fall into the hands of the impersonator.

The United States District Court for the Middle District of Florida granted the freight broker’s motion to dismiss and the Eleventh Circuit affirmed on the basis that the FAAAA preempted the insurance company’s claim for negligent selection and the “safety exception” did not apply. The Eleventh Circuit reasoned that the “safety exception” did not apply because, even though the negligent selection/hiring claim constituted an exercise of Florida’s “safety regulatory authority,” that authority did not relate to “motor vehicles.” The “safety exception” applies only when the FAAAA “restrict(s) the safety regulatory authority of a State with respect to motor vehicles.”49 U.S.C. § 14501(c)(2)(A).

As previously reported, the only other circuit court to have addressed whether state law tort claims against a freight broker are preempted by the FAAAA is the Ninth Circuit Court of Appeals in Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016, 1020 (9th Cir. 2020). In Miller, the Ninth Circuit held that FAAAA preemption did not apply because the plaintiffs’ claims against the freight broker were saved by the “safety exception.” The Ninth Circuit concluded that “the safety regulatory of a state” encompasses plaintiffs’ state law tort claims and that such negligence claims “stem from motor vehicle accidents” so that they “are with respect to motor vehicles.” The freight broker in Miller filed a Petition for a Writ of Certiorari in the Supreme Court of the United States on April 8, 2021, and after the filing of numerous briefs, including amicus curiae briefs, the Supreme Court of the United States formally denied the freight broker’s Petition on June 27, 2022.

Though Aspen Am. Ins. involves a property damage/subrogation claim against a freight broker, as opposed to a bodily injury claim like Miller, we are hopeful the Supreme Court of the United States will agree to review this issue should the plaintiff in Aspen Am. Ins. file an appeal, which is not necessarily likely.  In the meantime, we continue to recommend that freight brokers assert the FAAAA preemption defense early, file dispositive motions, and consider filing appeals where appropriate so that other federal circuit courts can decide this issue.

As always, we will continue to monitor and provide more information as it develops. Contact us with any questions.