C.H. Robinson vows appeal of $604 million verdict

Bozeman's team now has to wait for the Dallas County court in Texas to formally enter the final judgment so an appeal can be filed against the verdict. (C.H. Robinson Worldwide)

C.H. Robinson Worldwide said July 29 it is confident it will overturn a recent $604 million negligent-hiring verdict on appeal.

Lipe v. Lupus Superior asked whether the brokerage giant, as well as motor carrier Lupus Superior, were liable for negligence related to a crash that killed three people and injured two others. The resulting $604 million verdict was delivered July 24. The ruling came three months after the Supreme Court ruled freight brokers can be sued for negligent hiring under state law.

“Last week, a jury in Texas issued an advisory verdict that we strongly disagree with and will immediately appeal if the jury’s verdict is entered as final,” C.H. Robinson CEO Dave Bozeman said during a call with investors. “C.H. Robinson did not act negligently.”

Bozeman noted that the carrier was federally authorized and had safely delivered nearly 270 loads for the company. He also stressed that accidents and the loss of life are tragic regardless of culpability. His team now has to wait for the Dallas County court in Texas to formally enter the final judgment so an appeal can be filed against the verdict.

Bozeman argued the verdict also highlighted the need for federal action regarding broker liability.

“The extreme nature of this verdict means it is even more imperative that Congress and the federal government act with urgency to establish clear and proper accountabilities,” Bozeman said. “Events like this also reinforce why scale and financial strength matter.”

Bozeman added that customers and carriers rely on providers that have the resources and financial stability to manage complex legal and regulatory environments without losing the ability to invest in service, technology, safety and compliance. He also pointed out that his company does not employ drivers but rather works with motor carriers.

“We really believe this case was decided based on emotion rather than the law,” Bozeman said. “We believe the law and the facts support our position, and we strongly disagree with the jury’s verdict in this case […]. We are very confident in the facts and the law on appeal.”

Bozeman said the verdict illustrates the legal and financial risks associated with arranging freight transportation. He noted that the advisory verdict is only one step in the legal process. He stressed that it doesn’t determine what the ultimate payout will be, if anything. The final outcome remains subject to post-trial motions, appeals and other legal proceedings.

Bozeman said the company and its insurers declined to settle based on the plaintiffs’ demands.

“We and our insurance carriers, who had appellate counsel present at the proceedings, expect to be successful on appeal,” he said.

Bozeman addressed the verdict during a call focused primarily on second-quarter earnings. The Eden Prairie, Minn.-based company posted net income of $186.8 million, or $1.56 per diluted share, for the three months ending June 30. That compared with $152.5 million, $1.26, during the same time the prior year. Total revenue increased 19.3% to $4.93 billion from $4.14 billion.

“Our Lean AI strategy isn’t just about generating higher productivity,” Bozeman said. “First and foremost, it needs to result in better service to our customers and carriers. Our scores related to customer satisfaction are exceptionally strong.”

Bozeman also expects strong worker performance to translate into higher incentive compensation that will push personnel expenses toward the higher end of the company’s forecast range of $1.25 billion to $1.35 billion. The forecast assumes incentive compensation over the next two quarters will track sequential earnings and seasonal demand trends.

Results by segment

• North American Surface Transportation segment revenue increased 23.1% to $3.59 billion from $2.92 billion. Income from operations increased 15.8% to $189.9 million from $164 million.
• Global Forwarding segment revenue increased 12.4% to $896.6 million from $797.8 million. Income from operations increased 18.8% to $61 million from $51.3 million.

“As much as the whole industry tries to be safe, as much as we all work to continuously improve our vetting, there will inherently be trucking accidents,” Bozeman said. “Nuclear verdicts such as this are a transportation issue overall, not just a Robinson issue, not just a brokerage issue.”

C.H. Robinson ranks No. 2 on the Transport Topics Top 100 list of the largest logistics companies in North America.