Jury Finds Freight Broker Liable for $23.8 Million Fatality Award

By Jonathan S. Reiskin, Associate News Editor

This story appears in the April 6 print edition of Transport Topics.

An Illinois jury has awarded $23.8 million in damages against leading freight broker C.H. Robinson Worldwide in a dual-fatality 2004 truck accident case involving a motor carrier hired to haul a load of potatoes.

On March 20, a jury in Joliet, Ill., found C.H. Robinson among those liable for the accident on Interstate 55 in Will County that killed two men and badly injured another. Also found liable was the now-defunct trucking company to which Robinson had brokered the freight and the owner-operator who was hauling the load.

The award has raised concerns about the potential liability companies that broker freight could face when the carriers they contract with run into problems.

Local newspaper accounts said the driver, DeAn Henry of Kanab, Utah, was operating the truck on a suspended license and that she had falsified her hours-of-service logbook. In 2005, she pleaded guilty to the logbook charge, as well as following too closely. She was driving for Toad L Dragonfly Express, a Utah trucking company no longer in business.

C.H. Robinson argued that it should not be held liable, as it had merely booked the load with Dragonfly Express, the motor carrier that hired Henry.

"This was a tragic accident that resulted in some very real losses to the families of those involved. The driver of the truck, and the carrier for whom the driver was working, have admitted they were negligent and that they are responsible for the damages caused by their actions," C.H. Robinson said in a written statement on March 30.

"We do not believe that the facts of this case or the law support holding C.H. Robinson liable for the carrier's and driver's negligence, and we are disappointed with the jury's decision and the damages awarded. There have been no allegations that C.H. Robinson was negligent or that our actions were unsafe. We will continue to pursue relief from the verdict through all available legal means," the company said.

Attorney Kevin Casey, who represented Dragonfly Express and Henry, said April 1 that he was not at liberty to discuss the case because of post-trial motions now being made and appeals expected to come.

Attorneys for the three plaintiffs in Illinois were contacted for this story, but they declined to comment.

Freight brokers meeting in San Antonio, Texas, for their annual conference discussed legal liability, among other industry issues, said Transportation Intermediaries Association President Robert Voltmann, who was profoundly displeased with the jury's verdict.

"There have been several cases of this genre and they're all very troubling. The shipper hired Robinson, who hired a motor carrier with [Department of Transportation] operating authority that ran on roads built with DOT money," he said.

"This was a tragic accident, and I don't know if the driver was at fault, but how was Robinson at fault?" Voltmann asked.

He said TIA would like to see the minimum for auto liability policies raised well above $1 million per accident, and the association also recommends that brokers run carriers through a rigorous screening process.

Voltmann also said he thinks plaintiffs' lawyers ultimately want to hold shippers responsible for accidents arising from the transportation of their goods.

"That's where the really deep pockets are," he warned.

Legal liability related to traffic accidents for brokers who do not own or operate equipment is a fairly new development, said Robert Digges, deputy chief counsel for American Trucking Associations and an experienced litigator.

"The general rule is that a broker is not responsible for the negligent action of an independent contractor motor carrier.

However, there has been a trend in recent years for plaintiffs to go after brokers on negligent retention or entrustment grounds for allegedly contracting with a motor carrier that has a poor safety record," Digges said.

Based in Eden Prairie, Minn., Robinson is a potentially appealing target. In 2008 the company reported net income of $359.2 million on gross revenue of $8.58 billion and net revenue of $1.37 billion.

Freight brokerage is Robinson's largest business line; almost 75% of its 2008 net revenue came from brokerage.

Global Logistics & Supply Chain Strategies magazine estimated in its February issue that Robinson generated 21% of the industry's net revenue for domestic U.S. transportation management and 45% of its operating income.

The Chicago Tribune said the jury verdict was the largest award in a Will County civil case in at least 50 years, although Clerk of Court Pamela McGuire told Transport Topics she could neither confirm nor deny that assessment.

Ronald Usem, a Minnesota attorney who often works on transportation issues, said the two arguments that have been used most frequently to draw freight brokers into the chain of liability are negligent hiring and vicarious liability.

If a broker is oblivious or indifferent to a trucking company's safety record, the broker could be found to be negligent, he said. Vicarious liability arises if the trucking company is considered part of the brokerage, rather than an independent contractor.

Usem said Robinson was involved in a similar and important case in 2004 - Schramm v. Foster. Ultimately, the case was settled out of court, but before settlement, a federal district judge in Maryland did offer some guidance on the subject in response to a request for summary judgment.

Tamara Goorevitz, a transportation attorney in Baltimore, said one of the lessons from the Schramm case is that brokers should be careful not to exercise too much control over trucking companies.

"It's all about control. The more you exercise control as a broker, the court will ask, 'Is this an employee or a contractor,' " said Goorevitz. Like Usem, she has lectured to brokers on how to minimize risk and legal liability. One such piece of advice, she said, is for the broker to give the carrier or driver room to do his job.

"Any time a broker is found liable when he didn't haul the load is extraordinary, to my mind," said Goorevitz.