Eleventh Circuit Holds State-Law Negligence Claims Against Freight Broker Preempted By Federal Aviation Administration Authorization Act

By John P. Lock

April 26, 2023

Earlier this month, a panel of the U.S. Court of Appeals for the Eleventh Circuit ruled that the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 1450(c)(1)-(2), preempts state-law negligence claims against freight brokers.  This ruling represents a win for transportation brokers and creates a split in authority between Circuit Courts of Appeal that ultimately may be resolved by the U.S. Supreme Court.

Aspen American Insurance Company v. Landstar Ranger, Inc.

In Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 11 Cir. No. 22-10740, ECF Doc. No. 33-1 (April 13, 2023), a freight broker was retained by a shipper to hire a motor carrier to transport a high value load of cargo from Colorado to Maryland.  The broker unwittingly assigned the load movement to a company fraudulently posing as a broker-approved motor carrier.  The fraudulent motor carrier stole the shipment.

The shipper’s insurer, in turn, sued the broker, claiming that the broker was negligent under Florida law in its selection of the carrier.  The United States District Court for the Middle District of Florida dismissed the insurer’s negligence claims against the broker, holding that such claims were preempted by the FAAAA, which expressly bars state-law claims “related to a price, route, or service of any motor carrier…, broker, or freight forwarder with respect to the transportation of property.”  The District Court held inapplicable the FAAA’s “safety exception” providing that the statute’s preemption provision “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.”  

The shipper’s insurer appealed the dismissal of its negligence claims to the Eleventh Circuit Court of Appeals.  On April 13, 2023, the Eleventh Circuit affirmed the District Court’s decision. 

Of note, the Eleventh Circuit’s ruling in Aspen is in contrast with the Ninth Circuit Court of Appeals’ 2020 decision in Miller v. C.H. Robinson Worldwide, Inc., 976 F. 3d 1016 (9th Cir. 2020), in which the Court determined  that  state-law tort claims fell within the protections of the FAAA’s “safety exception.”  The United States Supreme Court denied certiorari on the Miller case.

A clear distinction exists between Aspen and Miller insofar as Aspen involved a loss of property whereas Miller involved bodily injury. While plaintiffs asserting direct negligence claims against freight brokers will likely point to this distinction, the Aspen Court seemingly perceived this to be distinction without a difference, expressly stating that “it makes little sense for the safety exception to turn on whether a plaintiff seeks damages for property loss or bodily injury – the common law negligence standard is the same no matter the damages a breach has caused.”   Aspen, 11 Cir. No. 22-10740 at 5.

Given this split in authority at the Circuit Court level, it is well within the Supreme Court’s role to provide an authoritative interpretation of the disputed statute.  However, in light of the amount in controversy in Aspen (approximately $500,000) relative to the cost of an appeal to the highest court, coupled with the Supreme Court’s selectivity in granting certiorari, it is far from certain that the Supreme Court will weigh in on this issue any time soon.  In the interim, freight brokers should continue to argue for FAAA preemption of state-law negligence claims based on the reasoning set forth by the Eleventh Circuit in Aspen.

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