Eleventh Circuit Ruling On Faaaa Preemption Of Freight Broker Tort Claims Sets Up Circuit Split

• Jurisdiction: United States,Federal
• Law Firm: Lewis Brisbois Bisgaard & Smith LLP
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Professional Negligence
• Author: Mr Todd A. Gray, Al Durrell and Joelle Nelson
• Published date: 02 May 2023

Houston, Texas (April 18, 2023) - This week, the Eleventh Circuit Court of Appeals issued a ruling that sets up a split in authority over whether freight broker tort claims are preempted by the Federal Aviation Administration Authorization Act (FAAAA) (40 U.S.C. ' 14501(c)(1), and whether those claims are excluded from preemption under the "safety exception" found in 49 U.S.C. ' 14501(c)(2)(A). Essentially, the court held that the construction of the statute's exception used specific and intentional language and thus does not accommodate general state law negligence claims, regardless of whether they are safety concerns and within the state's safety regulatory authority.

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 contracted to arrange transport for a load from Colorado to Maryland. The load was assigned to a company that the broker believed was one of its fully vetted and approved carriers. However, someone was impersonating the company and took the load without the knowledge of the broker. The shipper filed a claim with its insurance company (Aspen), which in turn filed suit against the broker for allowing the load to be obtained by the impersonator, who stole the goods. Specifically, Aspen asserted the typical negligent hiring, supervision, and retention, and negligent entrustment claims against the broker.

At the trial court level, the United States District Court for the Middle District of Florida granted the broker's motion to dismiss based on FAAAA preemption and the inapplicability of the safety exception, holding that the "safety exception" applies only when the FAAAA "restrict(s) the safety regulatory authority of a State with respect to motor vehicles.

Specifically, in Aspen, the court stated:

That Aspen's state law claims seek to enforce a standard that is within "the safety regulatory authority of a state" is necessary, but not sufficient, to sidestep FAAAA preemption. That standard must also be "with respect to motor vehicles." And, here, we agree with Landstar that it is not . . .. Accordingly, if an indirect connection between a state law and a motor vehicle satisfied the safety exception, then the phrase "with respect to motor vehicles" would have no meaningful operative effect. That interpretation would thus violate the "basic premise of statutory construction . . . that a statute is to be...