Western District of Oklahoma Holds That Plaintiff’s Negligent Selection Claim Against RXO is Preempted by the FAAAA and Not Saved by the “Safety Exception”

On August 14, 2024, the United States District Court for the Western District of Oklahoma held that Plaintiff’s claim negligent selection against a freight broker was: 1) preempted by the Federal Aviation Administration Authorization Act of 1994 (“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, Schriner v. Gerard, et al., 2024 WL 3824800 (W.D. Okla. August 14, 2024).

In Schriner, the plaintiff alleged RXO, as a broker, negligently selected the motor carrier, Century Trucking, Inc. (“Century”), to transport a load. A tractor-trailer that later hauled the subject load was involved in a motor vehicle accident. The plaintiff filed suit against numerous defendants, including RXO, claiming RXO maintained a principal-agent relationship with the motor carrier and driver, and RXO knew or should have known that the motor carrier and driver were incompetent to haul the subject load. RXO moved to dismiss the plaintiff’s state law negligence claims, arguing the claims were preempted by the FAAAA and not saved by the “safety exception.”

Before ruling on the FAAAA preemption question, the district court addressed the plaintiff’s argument that there was a factual dispute as to whether RXO was a motor carrier or broker and found that the plaintiff’s claim was not supported by sufficient factual allegations to state a claim for relief. Thus, the court rejected the plaintiff’s attempt to “skirt around” the preemption issue.

The court then held that the FAAAA preempted the plaintiff’s claim against RXO for negligent selection by examining the most recent appellate court decisions, all of which found that state law negligence claims are expressly preempted by the FAAAA, and concluded that the plaintiff’s allegations directly related to RXO’s services as a broker. With respect to the statute’s “safety exception”, the court followed the decisions of the Seventh Circuit and Eleventh Circuit to hold that the plaintiff’s claims were not saved by the exception. It found that a broad reading of the “safety exception” would in essence “swallow the rule of preemption related to brokers’ services” and thus, the plaintiff’s claims were not saved.

Lastly, the court dismissed the Plaintiff’s claims against RXO for vicarious liability (including theories of agency, statutory employment, and joint venture) and for negligent selection because the allegations were mere legal conclusions couched as factual allegations. Thus, the Court dismissed both claims for vicarious liability and negligent selection against RXO.

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 state and federal appellate courts decide this issue, and the Supreme Court of the United States may be inclined to accept a writ of certiorari.

Questions?