Transportation Freight Brokers: Argue F4A Preemption but Take Additional Precautions

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Transportation Freight Brokers: Argue F4A Preemption but Take Additional Precautions Article

When a roadway accident occurs during the shipment of goods, each party involved in the logistics chain can face varying levels of exposure for resulting injuries and damages. Freight brokers know there can be multiple parties in this chain. With increasing frequency, aggrieved parties are filing lawsuits against the shipper, freight broker, motor carrier, and driver. In transportation casualty defense, long gone are the days of two party litigation.

As the middle man in the chain, the freight broker does not transport property or take possession of property.[1] It simply arranges for transportation of the shipper’s goods by a motor carrier. In recent years, freight brokers have increasingly found themselves the target of lawsuits despite their limited connection to the shipment.[2] This is largely because motor carriers are required to have only $750,000 in available insurance coverage. Injured parties naturally want to expand the universe of coverage to increase their recovery potential. So, they add in the freight broker.  If coverage is still not enough, they add in the shipper.

These claims are typically flimsy, but that does not stop the defense costs from adding up. To further complicate broker claims, courts have been all over the place in the application of the express preemption provision of the Federal Aviation Administration Authorization Act (F4A).[3] Recently, a series of key decisions in the 9th, 11th, and 7th Circuits offer some clarity on F4A preemption of claims against brokers.

By way of background, F4A was enacted in 1994 by Congress as the culmination of a push to deregulate interstate commerce – in particular the commercial transportation industries. This movement began with the Airline Deregulation Act of 1978. In 1980, Congress extended deregulation to the trucking industry through the Motor Carrier Act.[4] F4A ultimately operates to synthesize all the deregulation of that era into one place (which is how the brokerage industry wound up with one of its most important code sections tucked away in an Act with “Aviation” in the title).

The two key provisions of F4A are found under 49 U.S.C. § 14501(c).  First, § 14501(c)(1) – the preemption provision, which states (with emphasis added):

(1) General Rule.—Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

The second key provision, § 14501(c)(2), is a safety exception (emphasis added):

(2) Matters not covered.—Paragraph (1)—

(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization[.]

As the recent cases show, there is general agreement on what sorts of claims might be preempted under the general preemption provision. The major disputes center around what falls within the safety exception.

Miller, Aspen, and Ye – the Current State-of-Play

In Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir., 2020), the Ninth Circuit Court of Appeals considered whether F4A preempted the plaintiff’s negligent selection claims against a broker. The plaintiff sustained injuries in a tractor-trailer accident and sued the freight broker, C.H. Robinson for negligently selecting an unsafe motor carrier.[5] The court held that because the plaintiff’s claims directly challenged a “core service” of the broker—selecting the motor carrier—that the claim was related to broker services and thus preempted.[6] However, despite holding that F4A preempts negligent selection claims against a broker, the court went on to hold first that, in enacting the exception, Congress intended to preserve the States’ broad power over safety, which included the ability to regulate conduct not only through legislative and administrative enactments, but also through common law damages; and then that the plaintiff’s claim also had the requisite “connection with” motor vehicles because it arose out of a motor vehicle accident.  Thus, the plaintiff’s claim was saved from preemption by the safety exception.

In Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir., 2023), the Eleventh Circuit Court of Appeals considered whether F4A preempted negligent selection claims by a shipper’s insurance company against a broker (Landstar) who unknowingly hired a scam motor carrier company who stole the shipper’s product. The insurer covering the shipment (Aspen American) sued Landstar, claiming it was negligent in its selection of the scammer. Like the Miller court, the Aspen court also held that negligent selection claims relate to the broker’s arranging for transportation—a “core service” of the broker—thus preempting such claims.[7] Importantly, the Eleventh Circuit held that the F4A safety exception—which states that the preemption provision “shall not restrict the safety regulatory authority of a State with respect to motor vehicles,” was inapplicable to negligence claims against a broker. The logic behind this holding is important as it can be used in not just a stolen goods claim, but also applied in the personal injury context—the court specifically reasoned that an indirect connection to motor vehicles (here, hiring/selecting a motor carrier) does not render the activity “with respect to motor vehicles” for the purposes of the safety exception.[8]

One of the latest[9], and most thorough, decisions on the application of F4A preemption and the safety exception is Ying Ye v. GlobalTranz Enters., 74 F.4th 453 (7th Cir., 2023), in which the Seventh Circuit Court of Appeals considered whether F4A preempted a plaintiff’s negligent hiring claims against a broker in the context of a common law wrongful death claim. GlobalTranz hired Global Sunrise, a motor carrier, to provide shipping services. The Global Sunrise truck collided with Mr. Lin, Ying Ye’s husband, causing his death and giving rise to the underlying lawsuit. Ye asserted GlobalTranz was negligent in selecting Global Sunrise because it knew, or should have known, that Global Sunrise was an unsafe company with a history of hours of service and unsafe driving violations. Ye also alleged that GlobalTranz exercised sufficient control over Global Sunrise such that it was vicariously liable for the negligence of Global Sunrise and its driver.

In its preemption analysis, the Seventh Circuit used a two-part test to determine whether preemption applied: (1) did the negligent hiring claim arise under a state law or regulation, and (2) did the law have an economic effect on the rates, routes, or services of the broker. Based on those factors, the court held that common law negligence claims fall “comfortably” within the “law or regulation” language of the preemption statute.[10] The court observed that “enforcement of such a claim . . . would have a significant economic effect on broker services [because it would] impose . . . a new and clear duty of care on brokers.”[11] In analyzing whether the safety exception applied, the court followed the Aspen court’s lead in holding that a common law negligence claim enforced against a broker is not a law that is “with respect to motor vehicles.”[12]

“Core service of the broker” seems to be the magic words in determining whether F4A preemption applies in a case. All three of the circuits who have looked at the issue agree that the act of hiring, selecting, or otherwise retaining a motor carrier lies at the core of the broker’s services; claims arising out of those activities (i.e., negligent hiring, retention, selection, etc.) are thus preempted by § 14501(c)(1). It then becomes a circuit-level, district-level, or even judge-level determination as to whether a plaintiff’s claims in a given case are subject to the safety exception (§ 14501(c)(2)) so as to pull them from the jaws of preemption.

The winning arguments on the defense side are set out in Aspen and Ye and generally focus on how attenuated the “with respect to motor vehicles” language is compared to what brokers actually do (e.g., there is no direct link between negligent hiring claims against brokers and motor vehicle safety). Indeed, the Federal Motor Carrier Safety Regulations place the onus of motor vehicle safety squarely on the motor carrier and the driver.[13]

Best Practices, Indemnity Agreements, and Additional Insurance Coverage as Added Protection

In the face of an uncertain preemption defense, brokers should implement policies and procedures to protect against the merits of third party claims. To limit exposure under the vicarious liability theory, brokers should be careful not to exert control over the retained motor carrier’s conduct.  Doing so, can label a broker a de facto motor carrier. Whether a broker can be liable as a motor carrier depends on the specific circumstances of the transportation arrangement at issue. The Third Circuit Court of Appeals adopted a 4-part. This test asks (1) whether the broker promised to personally perform the transport and therefore legally bound itself to transport; (2) the type of services the broker offers; (3) whether the broker held itself out to the public as the actual transporter of goods; and (4) whether the broker’s only role was to secure a third party to ship the goods.[14] This test is simply one approach. The key takeaway is for brokers to let motor carriers do their job and transport the cargo without much restraint. Doing so necessitates that brokers retain reliable motor carriers.

In order to defend against negligent hiring claims, brokers need to ensure that the motor carriers they select have a Satisfactory safety rating with the Department of Transportation. Brokers should avoid hiring motor carriers with Conditional or Unsatisfactory ratings and maintain a system to determine if an approved carrier’s rating changes. If the carrier is unrated, as most carriers are, the broker should conduct a thorough investigation of the carrier’s safety history and document the carrier file.

Unfortunately, maintaining all of these checks and balances can still result in a lawsuit. In order to escape oppressive litigation costs involved in defending these multi-party lawsuits, brokers need to utilize indemnity agreements. The broker should require the motor carrier to defend, hold harmless, and indemnify the broker (and its shipping customer) against any and all liability, claims, and damages to persons or property arising out of the motor carrier’s operation.

An indemnity agreement is a contractual provision in which one party (the indemnitor) agrees to pay for or protect the other party (the indemnitee) from certain losses or damages. Indemnity provisions are typically interpreted under general principles of contract construction, meaning courts seek to ascertain and give effect to the intentions of the parties. To do this, courts examine the entire contract, the language used in the indemnity provision, the objectives of the parties, and the circumstances under which the contract was entered.

Generally, there are three forms of indemnity agreements: limited, intermediate, and broad. In a limited indemnity agreement, the indemnitor agrees to indemnify the indemnitee for the indemnitor’s own negligence. All states allow limited indemnity provisions. In an intermediate indemnity agreement, the indemnitor agrees to indemnify the indemnitee for the concurrent negligence of both parties. There are two types of intermediate indemnity: (1) full indemnity, where the indemnitor agrees to indemnify the indemnitee for all loss when both parties are at fault. This allows an indemnitor who is 1% at fault to indemnify an indemnitee who is 99% at fault; and (2) partial indemnity, where the indemnitor agrees to indemnify the indemnitee only for loss attributable to the indemnitor itself; the indemnitor’s obligation is capped at its percentage of negligence.

In a broad indemnity agreement, the indemnitor agrees to indemnify the indemnitee for all liabilities regardless of whether the liability is solely attributable to the indemnitee. It provides the most protection to an indemnitee because the indemnitor assumes the entire risk. But note, gross negligence or willful misconduct of the indemnitee will generally relieve the indemnitor of its obligation. On public policy grounds, courts do not favor indemnity agreements that relieve the indemnitee from liability for its own negligence. As such, a majority of states have enacted motor carrier transportation anti-indemnity laws prohibiting overly broad provisions.[15]

These statutes take one of two forms: (1) they prohibit requirements in indemnification agreements where the motor carrier must indemnify the non-motor carrier (shipper or broker) for liability arising out of the non-motor carrier’s negligent or intentional acts[16]; or (2) they prohibit indemnification provisions in motor carrier contracts that have the effect of indemnifying an indemnitee for the indemnitee’s negligent or intentional acts.[17] However, a small number of states limit indemnification for either party in both directions.[18] Many states do not differentiate between gross negligence and negligence, so it is important to follow state law when making these distinctions.

Indemnification agreements are important, but an indemnity agreement with a motor carrier who cannot afford to support the broker’s defense is not worth much more than the paper it is written on. Therefore, brokers should require motor carriers to list the broker as an additional insured under the motor carrier’s applicable insurance policy. It is important for brokers to check that all additional insured contractual provisions are actually being satisfied. Doing so will trigger the insurer’s duty to defend the broker in the event a claim is filed against it. This approach provides extra protection for a freight broker and is especially important when a broker enters into an indemnity agreement with a motor carrier of limited assets.

Understanding the limits and scope of indemnification agreements is essential to ensuring that such agreements are structured in a way that they will hold up if challenged. The additional insured inclusion can also accomplish the same goal, which is ultimately to keep brokers from paying expensive litigation costs when roped into claims against motor carriers based on the alleged negligence of the motor carrier.


F4A preemption is a powerful tool for transportation brokers to avoid costly personal injury or similar claims, however the law in this area is still unnervingly unsettled. So far the score is two circuits to one in favor of preemption of such claims, but it is still a crap shoot across most of the country. Until the law in the area is settled, brokers should take additional precautions. Hiring reputable motor carriers and trusting them to transport will go a long in protecting against broker claims. Indemnity and additional insured provisions in contracts with motor carriers can further save brokers the headache and expense of facing uncertain litigation.

Gentry Locke’s Trucking & Transportation Defense team understands the complex industry issues companies transporting cargo and people face. Gentry Locke is proud to counsel top-25 truckload carriers, freight brokers, family-owned trucking companies, shippers, and delivery service partners. Reach out to or for any transportation-related needs.

[1] FMCSA Website, Types of Operating Authority | FMCSA ( (last updated July 28, 2022); see also 49 CFR § 371.2(a)
[2] These claims generally take the form of negligent hiring/selection/retention, or vicarious liability (based on the argument that a freight broker is the “statutory employer” of the motor carrier and its driver).
[3] Specifically, 49 U.S.C. § 14501(c).
[4] See Dan’s City Used Cars v. Pelkey, 569 U.S. 251, 256 (2013) (discussing legislative history and application of preemption).
[5] Miller, 976 F.3d at 1020.
[6] Id. at 1023-25.
[7] Aspen Am. Ins., 65 F.4th at 1267.
[8] Id. at 1272.
[9] Since Ye¸ district courts in the 8th and 3rd Circuits followed Ye.  See, from the 8th Circuit, Girardeau v. Hobbs, 2023 U.S. Dist. LEXIS 146196 at *3-*5 (E.D. Mo., Aug. 21, 2023) (granting broker’s Motion to Dismiss negligent hiring/selection claim, finding Ye’s thorough reasoning highly persuasive, though still allowing a vicarious liability claim to go forward as the broker “performed actions beyond those typical of a mere broker”); see also from the 3rd Circuit, Lee v. Golf Transp. Inc., 2023 U.S. Dist. LEXIS 200143 (M.D. Pa., Nov. 7, 2023) (awarding summary judgment to broker defendant based on F4A preemption of plaintiff’s claims rooted in state law negligence, discussing and relying on Ye in determining that the plaintiff’s claims related to broker services and were thus preempted).
[10] Ying Ye, 74 F.4th 458-459.
[11] Id. at 459.
[12] Id. at 460.
[13] 49 CFR § 390.11; 49 CFR § 392, et seq.
[14] Tryg Ins. v. C.H. Robinson Worldwide, Inc., 2017 WL 5725057, at *6–7 (D.N.J. Nov. 28, 2017) aff’d, 767 Fed. App’x 284 (3rd Cir. 2019).
[15] State Anti-Indemnity Motor Transportation Statutes Update, SmithAmundsen LLC, State Anti-Indemnity Motor Transportation Statutes Update – Lexology (Dec. 11, 2015) (detailing anti-indemnity statutes enacted in 42 states). Since 2015, Ohio and New York have also adopted anti-indemnification provisions for transportation agreements.  See Ohio Rev. Code Ann. § 2305.52; N.Y. Gen. Bus. Law § 398-e.
[16] See State Anti-Indemnity Motor Transportation Statutes Update; see also Fla. Stat. Ann. § 316.302 ; Ga. Code Ann. § 40-1-113; 625 Ill. Comp. Stat. 5/18c-4105.
[17] See State Anti-Indemnity Motor Transportation Statutes Update; see also Conn. Gen. Stat. Ann. § 52-572x; Iowa Code Ann. § 325B.1; Kan. Stat. Ann. § 16-121; La. Stat. Ann. § 2780.1.
[18] See State Anti-Indemnity Motor Transportation Statutes Update; see also Ala. Code § 37-3-23.1; Ariz. Rev. Stat. Ann. § 44-1379.

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These articles are provided for general informational purposes only and are marketing publications of Gentry Locke. They do not constitute legal advice or a legal opinion on any specific facts or circumstances. You are urged to consult your own lawyer concerning your situation and specific legal questions you may have.