Double Trouble: Navigating Claims for Personal Injury Based on Double-Brokering Violations

Awareness of this purported prohibition is now driving enterprising plaintiffs attorneys looking to expand the class of entities that may be held liable for catastrophic losses to bring claims predicating liability for personal injuries on double-brokering violations. This article discusses several theories that plaintiffs attorneys are advancing and why these theories will likely prove unsuccessful in most jurisdictions.

“Double-Brokering” Defined

“Double-brokering” is typically defined as the situation in which a motor carrier not otherwise registered as a broker obtains a load of freight from a broker and, rather than hauling that load itself, tenders that load to a different motor carrier in exchange for a fee.

The closest thing to an explicit prohibition on the practice of double-brokering came in MAP-21, which was passed in July 2012.¹ Section 32915 of the act, titled “Additional Motor Carrier Registration Requirements,” amended 49 U.S.C. § 13902 to include the following language: “A motor carrier may not broker transportation services unless the motor carrier has registered as a broker under this chapter.”² This is the specific provision from which the prohibition on double-brokering arose—although, by its terms alone, the nature and extent of the prohibition are unclear.

Three Types of Double-Brokering Claims for Personal Injuries

Plaintiffs try to bring double-brokering claims seeking to recover damages for personal injuries in three ways: (1) as a private right of action for violations of the registration provisions within the Federal Motor Carrier Safety Act (FMCSA) or Federal Motor Carrier Safety Regulations (FMCSR); (2) as a state-law negligence per se claim using the registration statutes or regulations as the applicable standard of care; or (3) as a state-law negligence claim using violations of the registration requirements as evidence of negligence, prima facie or otherwise.

This article explains why none of these three theories has been, or should be, recognized as a valid basis for imposing liability on transportation industry participants for personal injuries related to double-brokering violations.

Statutory and Regulatory Bases for Double-Brokering Liability

Superficially, at least three statutes contain language that could be read to support imposition of double-brokering liability for personal injuries. Plaintiffs attorneys have also relied on the definitional regulations within the FMCSR—e.g., those defining industry participants such as “broker,” “freight forwarder,” or “motor carrier”—to support double-brokering claims for personal injuries.

Section 14704. The first statute, 49 U.S.C. § 14704, contains two potential avenues for liability against brokers and carriers for certain defined wrongs. First, § 14704(a) provides a private right of action to a person injured because a carrier or broker did not “obey an order of the Secretary [of Transportation] or the [Surface Transportation] Board . . . except an order for the payment of money.”³ This first section is not likely to provide for liability generally because liability under its terms must spring from a violation of an order directed to a broker or carrier. Thus, if a particular broker or carrier is subject to an order governing double-brokering, it should not come as a surprise; and that order, and compliance with it, should be addressed on its own terms.

The second potential liability-creating component of this statute—§ 14704(a)(2)—expressly provides a remedy for a much broader swath of conduct. Under its terms, a “carrier or broker providing transportation or service subject to jurisdiction under chapter 135 is liable for damages sustained by a person as a result of an act or omission of that carrier or broker in violation of this part.”⁴ Although this section was written broadly, the legislative history associated with it reveals that personal injury plaintiffs are not within the class of individuals that Congress intended this provision to protect. Rather, Congress passed this statute to shift commercial dispute resolution from the 108-year-old Interstate Commerce Commission [ICC] to the courts, allowing private actions for “motor carrier leasing or lumping violations.”⁵ Thus, the statute is focused on “commercial disputes” rather than private claims for personal injuries.⁶

Section 14707. The second potential statutory basis for double-brokering claims arises from the combined force of 49 U.S.C. § 14707 and 49 U.S.C. § 13902(a)(1). Specifically, § 14707(a) provides that “[i]f a person provides transportation by motor vehicle or service in clear violation of section 13901–13904 or 13906, a person injured by the transportation or service may bring a civil action to enforce any such section.”⁷ Two facets of § 14707(a) are important. First, its terms purport to render actionable violations of the registration provisions in §§ 13901–13904. Second, only an industry participant that provides a service “in clear violation” of these registration requirements may be held liable under its plain terms.

Sections 13901 through 13904 set forth the registration requirements governing industry participants generally, including the general requirement to be registered if one wishes to act as a motor carrier, freight forwarder, or broker (§ 13901(a)); the specific registration requirements applicable to motor carriers (§ 13902(a)); the specific registration requirements for freight forwarders (§ 13903(a)); and the specific registration requirements for brokers (§ 13904(a)). Moreover, as noted above, § 13902(a)(6) specifically provides that “[a] motor carrier may not broker transportation services unless the motor carrier has registered as a broker under this chapter.”⁸

Notably, § 14707 does not provide a private right for violations of § 13905, which is the only section arguably implicating a personal injury plaintiff’s rights, as it expedites procedures to revoke registrations of motor carriers that are not operating safely.⁹ Specifically, it provides for, among other things, expedited procedures for the suspension of motor carriers, brokers, and freight forwarders for safety-related issues.¹⁰ The fact that Congress opted not to include the one statute in the series that specifically mentions safety-related concerns is indicative of its intent not to provide relief for personal injuries for double-brokering violations via 49 U.S.C. § 14707.

Section 14916. The final potential statutory basis for double-brokering violations is 49 U.S.C. § 14916. Section 14916(a) provides that “[a] person may provide interstate brokerage services as a broker only if that person . . . is registered under, and in compliance with,” the registration requirements.¹¹ Section 14916(c) provides a private right of action for unlawful brokerage actions and states that any entity that permits a violation of § 14916(a) “is liable . . . to the injured party for all valid claims incurred without regard to amount.”¹²

This section provides a personal injury plaintiff the least controversial basis for a double-brokering claim for personal injuries but may be the most difficult to defend for two reasons: it is not expressly limited to claims associated with any particular type of damage; and, unlike § 14704(a), there is no legislative history that courts and litigants have uncovered that explicitly limits its applicability to commercial disputes.

Definitional regulations. The last purported bases for double-brokering liability are the definitional regulations. One regulation that plaintiffs have used for this purpose is 49 C.F.R. § 371.2, which defines “broker,” “brokerage,” “brokerage service,” and “non-brokerage service.” This regulation defines “broker” as a “person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier” and clarifies that “[m]otor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.”¹³

Plaintiffs thus argue that a motor carrier that tenders a load it received as a motor carrier is not a “broker” within the meaning of this regulation, is therefore acting outside its remit as a motor carrier, and thereby can be held liable for double-brokering violations for not confining itself to the role assigned to it by the definitional regulations. By extension, plaintiffs also claim that the shipper that initiated the load at issue in the first instance, but did not ensure that the motor carrier to which it tendered the load did not broker the load to another carrier, may be held liable for personal injuries caused by the motor carrier to which the load was “re-brokered.”

Critically, § 371.2 is a definitional regulation only. It contains no mandatory, prohibitory, or liability-creating language at all. Indeed, by its terms, it does not purport to regulate anything; it merely supplies relevant definitions. It also contains no references to safety or the word “safe.”

Attacking Double-Brokering Claims

Lack of federal private right of action under the FMCSA and FMCSR. Plaintiffs often take advantage of notice pleading standards to keep their double-brokering claims opaque, thus leaving it to defendants to identify the actual purported bases for the claims and then attack them through dispositive motions. The first attack that defendants should bring against these claims is that no private right of action for double-brokering liability exists.

First, a close reading of the statutes and consideration of their animating purposes demonstrate that these statutes do not create private rights of action for personal injury plaintiffs. While § 14916 may be less clear on this point, falling as it does within the FMCSA and related statutes, one should conclude that it was designed to redress commercial injuries rather than personal injuries.

Second, and more importantly, the nearly unanimous view is that there is no private right of action for personal injuries resulting from violations of the FMCSR.¹⁴ For example, Judge Nancy Rosenstengel, who sits on the U.S. District Court for the Southern District of Illinois, weighed in on this issue last year and held definitively that the regulations do not create a private right of action for personal injuries. In her words, “[t]here is widespread consensus among federal district courts that there is no federal private right of action allowing personal injury or wrongful death plaintiffs to hold defendants liable for violations of the FMCSR.”¹⁵ Rosenstengel joined this consensus and “agree[d] that this lack of a federal private right of action evinces a Congressional intention to permit state-law claims implicating the [FMCSR] to be adjudicated by the state courts.”¹⁶

The primary—if not only—exception to this consensus is Marrier v. New Penn Motor Express, Inc.,¹⁷ where a district judge sitting in Vermont rejected a defendant’s argument that 49 U.S.C. § 14704(a)(2) applied solely to economic injuries. This decision has been sharply criticized and rejected by many courts that have addressed the same issue, and the consensus view is that Marrier was poorly reasoned and wrongly decided.¹⁸

Negligence per se and strict liability. A personal injury plaintiff may also use alleged violations of the aforementioned statutes or regulations in an attempt to support a negligence per se claim. Illinois serves as a good example of a jurisdiction where this type of double-brokering claim is unlikely to work because, in Illinois, courts construe negligence per se claims as strict liability claims.¹⁹ Thus, violations of state and federal statutes and regulations cannot serve as evidence of negligence per se “unless the legislature clearly intended to impose strict liability.”²⁰ Accordingly, negligence per se claims “are allowed for statutory violations only if the statute provides for strict liability if violated.”²¹

Sections 14704(a), 14707, 13902(a)(1), and 14916 do not contain any strict liability standards or language that could otherwise be construed as imposing strict liability.²² For that reason, a personal injury plaintiff could never succeed on state-law, strict liability claims predicated on violations of the three statutes mentioned above. Thus, in a state like Illinois, which conceives of negligence per se claims as sounding in strict liability only, these statutes cannot give rise to negligence per se claims as a matter of law.

Section 371.2, for its part, does not contain any liability-creating language, much less language from which one might infer an intent to impose strict liability. Thus, under negligence regimes similar to that in place in Illinois, § 371.2 cannot serve as the basis for any negligence per se claim either.

Evidence of negligence. Personal injury plaintiffs claim that violations of the statutes identified in this article serve as prima facie evidence of negligence, or can otherwise serve as evidence of negligence on a state common-law claim. Under many states’ laws, in order for a violation of a statute or regulation to serve as evidence of negligence, the plaintiff must plead and prove that the statute at issue “was intended to protect a class of persons to which [the plaintiff] belongs from the kind of injury that [the plaintiff] suffered.”²³ Thus, to succeed on a state-federal hybrid negligence claim predicated on double-brokering violations, a plaintiff would have to show that the registration statutes and regulations were intended to address and provide remedies for double-brokering violations that result in personal injuries to members of the motoring public. This showing should be impossible for a personal injury plaintiff to make.

First, as explained above, the legislative history associated with § 14704(a) unambiguously demonstrates that the statute was intended to govern commercial disputes between brokers and carriers, not personal injury disputes. The historical basis for this is simple—Congress meant to protect the ultimate motor carrier that transports the load from getting “stiffed” by someone.

Second, violations of the registration requirements in § 13902 cannot serve as the basis for a negligence claim seeking relief for personal injuries as a matter of law. As mentioned above, Congress expressly excluded § 13905 from the sections whose violations § 14707 makes actionable. This is solid evidence that Congress did not pass the registration requirements for the benefit of personal injury plaintiffs, but rather passed them for purposes of providing relief for competitive injuries among participants in the transportation industry.²⁴ As the registration requirements in § 13902 were not designed to protect personal injury plaintiffs, or to redress personal injuries at all, a personal injury plaintiff will not be able to meet two of the three elements needed to establish the requisite duty for negligence to attach in the first place.²⁵

Finally, to the extent that § 371.2 can be violated—which, as explained above, it can’t be—that violation could not serve as evidence of negligence. For one thing, this regulation was brought forward from the ICC after the agency was terminated at the end of 1995, and the ICC’s responsibility was primarily, if not wholly, economic in nature. In other words, the ICC was not focused on safety, which was an area traditionally left for the states to handle according to their own prerogatives. For another, as this section is definitional only, a finding that it was promulgated to provide a remedy for personal injuries resulting from double-brokering violations would be impossible.

State-federal hybrid negligence claims and federal preemption. Even if a court were to grant, for argument’s sake, that registration violations, or double-brokering violations, can serve as evidence of negligence, or to establish negligence per se, such claims would be preempted by federal law. Preemption under these circumstances would be effected through application of 49 U.S.C. § 14501(c)(1).

Section 14501(c)(1) generally prohibits a state from “enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.”²⁶ This provision was modeled on the Airline Deregulation Act, which had been previously interpreted by Congress, and thus courts interpret § 14501(c)(1) in accordance with similar interpretations of the Airline Deregulation Act.²⁷

The purpose of § 14501(c)(1) “was to free interstate shipping from a patchwork of state laws and regulations and to replace those rules with ‘competitive market forces.’”²⁸ In light of this identified purpose, the U.S. Supreme Court has said that this section preempts state laws “‘having a connection with or reference to’ carrier rates, routes, and services.”²⁹ This connection exists for preemption purposes “‘where it has a forbidden significant effect’ on rates, routes, or services.”³⁰ Thus, when allegations of negligence go to the core of services provided by transportation industry members and allege that a different, heightened, or more onerous practice should have been employed, the requisite impact on pricing and services necessary to establish preemption is satisfied.

At bottom, state-federal hybrid double-brokering claims go to the core of the services that motor carriers and brokers provide, and they attempt to work change in industry practice through enforcement of state-based restrictions on already regulated conduct. Thus, when properly analyzed, courts should conclude that double-brokering violations cannot be used as a mechanism to support personal injury claims.

Conclusion

Although double-brokering violations implicate economic concerns among transportation industry participants, personal injury plaintiffs advantageously claim that such behavior also establishes personal injury liability. However, as explained above, the statutory text and history, the regulatory text and history, and the requirements of the common law as regards negligence per se or hybrid claims combine to compel the conclusion that industry participants cannot be held liable for personal injuries resulting from or related to double-brokering violations.

Notes

1. Pub. L. No. 112-141, 126 Stat. 405 (2012).

2. Id. § 32915, 126 Stat. at 820 (codified at 49 U.S.C. § 13902(a)(6)).

3. Owner-Operator Indep. Drivers Ass’n v. New Prime, Inc., 192 F.3d 778, 782 (8th Cir. 1999) (quoting 49 U.S.C. § 14704(a)).

4. 49 U.S.C. § 14704(a)(2).

5. Stewart v. Mitchell Transp., 241 F. Supp. 2d 1216, 1220 (D. Kan. 2002); see also H.R. Rep. No. 104-311, at 81 (1995), as reprinted in 1995-2 U.S.C.C.A.N. 793, 794.

6. See, e.g., Stewart, 241 F. Supp. 2d at 1219 (“Section 14704(a)(2) creates a private right of action for damages in commercial disputes involving violations of the Motor Carrier Act and its regulations, but not for personal injury actions such as the one in the instant case.”).

7. 49 U.S.C. § 14707(a).

8. Id. § 13902(a)(6).

9. See Tierney v. Arrowhead Concrete Works, Inc., 791 N.W.2d 540, 547 (Minn. Ct. App. 2010).

10. E.g., 49 U.S.C. § 13905(f)(1).

11. Id. § 14916(a).

12. Id. § 14916(c).

13. 49 C.F.R. § 371.2.

14. E.g., Leon v. FedEx Ground Package Sys., Inc., No. CV 13-1005 JB/SCY, 2016 WL 836980, at *11 (D.N.M. Feb. 16, 2016) (“The Court concludes that there is no federal private right of action allowing personal injury or wrongful death plaintiffs to hold defendants liable for violations of the FMCSR.”) (collecting cases); Courtney v. Ivanov, 41 F. Supp. 3d 453, 457–58 (W.D. Pa. 2014) (same); Slagowski v. Cent. Wash. Asphalt, Inc., No. 2:11-CV-00142-APG, 2014 WL 4887807, at *7 (D. Nev. Sept. 30, 2014) (“Virtually all courts that have examined this issue have concluded there is no private right of action for personal injuries arising from a violation of the MCA or its safety regulations.”); Stewart v. Mitchell Transp., 241 F. Supp. 2d 1216, 1221 (D. Kan. 2002); Crosby v. Landstar, No. CIV. 04-1535-SLR, 2005 WL 1459484, at *2 (D. Del. June 21, 2005); Schramm v. Foster, 341 F. Supp. 2d 536, 547 (D. Md. 2004); Lipscomb v. Zurich Am. Ins. Co., No. 11-2555, 2012 WL 1902595, at *2–3 (E.D. La. May 25, 2012).

15. Dippel v. BestDrive, LLC, No. 3:19-CV-01135, 2020 WL 813971, at *3 (S.D. Ill. Feb. 19, 2020).

16. Id.

17. 140 F. Supp. 2d 326 (D. Vt. 2001).

18. E.g., Stewart, 241 F. Supp. 2d at 1219; Tierney v. Arrowhead Concrete Works, Inc., 791 N.W.2d 540, 545 (Minn. Ct. App. 2010) (collecting authorities rejecting Marrier and its reasoning).

19. E.g., Abbasi ex rel. Abbasi v. Paraskevoulakos, 718 N.E.2d 181, 186 (Ill. 1999); Test Drilling Serv. Co. v. Hanor Co., 322 F. Supp. 2d 957, 963 (C.D. Ill. 2003).

20. Abbasi, 718 N.E.2d at 186.

21. Hanor, 322 F. Supp. 2d at 963.

22. E.g., Aydlett v. Flat Rate Long Distance, Inc., No. CV 16-7712 PSG (JCX), 2017 WL 2992443, at *3 (C.D. Cal. May 11, 2017) (rejecting argument that FMCSA regulations impose strict liability and noting that “[p]laintiffs have not provided the Court with any federal case that has adopted such a strict compliance approach vis-à-vis the . . . FMCSA regulations”).

23. Kalata v. Anheuser-Busch Cos., 581 N.E.2d 656, 661 (Ill. 1991); Barthel v. Ill. Cent. Gulf R.R. Co., 384 N.E.2d 323, 326 (Ill. 1978); Camp v. TNT Logistics Corp., 553 F.3d 502, 506 (7th Cir. 2009).

24. See Tierney v. Arrowhead Concrete Works, Inc., 791 N.W.2d 540, 547 (Minn. Ct. App. 2010); Upshaw v. Andrade, No. 10-11517-JLT, 2012 WL 996783, at *5 (D. Mass. Mar. 2, 2012).

25. See Kalata, 581 N.E.2d at 661; Workman v. Dinkins, 442 F. Supp. 2d 543, 555–56 (N.D. Ill. 2006) (“A violation of a statute or ordinance designed to protect human life is prima facie evidence of negligence. . . . To establish a duty based on a statute or an ordinance designed to protect human life, the plaintiff must first show that: (1) the plaintiff is a member of the class of persons the statute or ordinance was designed to protect; and (2) the injury is the type of injury that the ordinance was intended to protect against.”).

26. Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 368, 370 (2008).

27. Krauss v. IRIS USA, Inc., No. CV 17-778, 2018 WL 2063839, at *3 (E.D. Pa. May 3, 2018).

28. Id.

29. Id. (citing Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992)).

30. Id.