GREGORY LOYD, Plaintiff, v. PAUL SALAZAR d/b/a RAS TRUCKING, et al., Defendants.
Case No. CIV-17-977-D
IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA
September 20, 2019
ORDER
Before the Court is Defendant AG Source, Inc.‘s Motion to Dismiss Plaintiff‘s Amended Complaint [Doc. No. 44], filed pursuant to
Plaintiff brings a common law negligence action to recover damages for personal injuries suffered in a motor vehicle accident. Defendant AG Source, Inc. (“AGS“) is a freight broker who allegedly selected an unsafe motor carrier, Defendant Paul Salazar d/b/a RAS Trucking, to transport property, and the carrier‘s employee allegedly caused the trucking accident that injured Plaintiff. AGS asserts that two federal statutes preempt any negligence claim based on its brokerage services: the Interstate Commerce Commission Termination Act (ICCTA),
Standard of Decision
“To survive a motion to dismiss [under
Plaintiff‘s Allegations
The Amended Complaint states that Plaintiff (an Oklahoma citizen) was severely injured in a highway accident involving a semitrailer-tractor truck operated by Defendant Robiet Leon Carrazana (a Texas citizen) while employed by Defendant Salazar (a Texas citizen), whose sole proprietorship was a licensed motor carrier, U.S. DOT No. 2354708. According to Plaintiff, “Carrazana was transporting freight brokered to Salazar by [AGS],” and AGS (a Kansas citizen) is a licensed freight broker, U.S. DOT No. 228140 (MC No. 413830). See Am. Compl. [Doc. No. 33] ¶¶ 4, 8. “Prior to [AGS] brokering the load to Salazar, the U.S. Department of Transportation assigned Salazar a ‘Conditional’ rating as a motor carrier due to serious violations, including hours of service violations, record retention violations, and operating without required authority.” Id. ¶ 9.
Plaintiff asserts as his “Fourth Cause of Action” a claim against AGS of “Negligent Hiring of a Motor Carrier/Negligent Brokering.” Id. at 4 (ECF page numbering). Plaintiff alleges that AGS “is a freight broker whose enterprise involves selecting motor carriers as an integral part of its business” and it “owed a duty to the motoring public to select a competent motor carrier to haul the load Carrazana was transporting at the time of the accident.” Id. ¶¶ 24-25. According to Plaintiff, AGS “knew or should have known that Salazar was an unsafe motor carrier, and that Salazar utilized incompetent, unsafe, and careless drivers – such as Carrazana – and Salazar regularly entrusted its vehicles to such drivers.” Id. ¶ 26. Specifically, AGS “negligently, recklessly, and/or intentionally ignored Salazar‘s repeated unlawful and unsafe conduct, including – but, not limited to – hours of service violations and operating commercial motor vehicles unsafely.” Id. ¶ 27. Plaintiff claims that AGS‘s “negligent hiring of Salazar by entrusting the freight to Salazar constitutes gross negligence or amounts to the wanton and reckless disregard of the rights and safety of Loyd, entitling him to both compensatory and exemplary damages.” Id. ¶ 28.
Discussion
By its Motion, AGS raises a claim of “express preemption, which occurs when the language of the federal statute reveals an express congressional intent to preempt state law.” See Mount Olivet Cemetery Ass‘n v. Salt Lake City, 164 F.3d 480, 486 (10th Cir. 1998); see also US Airways, Inc. v. O‘Donnell, 627 F.3d 1318, 1324 (10th Cir. 2010). The parties’ arguments regarding this claim present three legal issues: 1) Whether Plaintiff‘s negligent brokering claim is preempted by the ITTCA,
A. ITTCA Preemption
As part of a change in federal regulatory policy toward the transportation industry, Congress passed statutes that deregulated trucking and prevented states from imposing their own regulations. As pertinent here, the ITTCA includes the following provision:
(b) Freight forwarders and brokers.--
(1) General rule. -- Subject to paragraph (2) of this subsection [regarding
Hawaii], no State or political subdivision thereof and no intrastate agency . . . shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker.
According to the Supreme Court, “[t]he [preemption] question, at bottom, is one of statutory intent, and we accordingly begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383 (1992) (internal quotations omitted). By its terms, the ITTCA preempts state laws “relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker.” Id. (emphasis added). AGS‘s preemption argument regarding this statute necessarily requires that the Court either disregard this language and extend it to interstate services of a freight broker, or find that AGS was performing intrastate services when it brokered the freight shipment in this case. See Reply Br. at 2-3.
Upon consideration, the Court finds that AGS‘s first argument is contrary to the Supreme Court‘s teaching: “Where, as in this case, Congress has superseded state [laws] by statute, our task is to identify the domain expressly preempted. To do so, we first focus on the statutory language, which necessarily contains the best evidence of Congress’ preemptive intent.” See Dan‘s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260 (2013) (internal quotations omitted). Unlike other provisions of
Turning to AGS‘s intrastate services argument, the Court finds that it is unsupported by the allegations of the Amended Complaint. Plaintiff has not included in his pleading any facts that would identify the nature of AGS‘s brokerage services as either intrastate or interstate in nature. Plaintiff argues that they necessarily were interstate because the motor carrier, Salazar (acting through Carrazana), was transporting a freight shipment between two states. See Pl.‘s Resp. Br. at 2, 4.4 AGS urges the Court to focus on the brokerage services themselves, and although not well articulated, AGS seems to argue that the services were performed within the state where AGS was located. See Reply Br. at 2. AGS presents no authority for any presumption or rule that a broker‘s services are locally performed. According to pertinent facts shown by the Amended Complaint (and not disputed by any defendant), AGS and the motor carrier
In short, the Court finds that AGS has failed to carry its burden to show that Plaintiff‘s negligence claim against it is preempted by
B. FAAAA Preemption
Congress enacted the FAAAA to protect freight shipments from state regulations as follows:
(c) Motor carriers of property. (1) General rule. – Except as provided in paragraphs (2) and (3), a State . . . 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 . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.
(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.
Congress’ use of words “related to” a price, route, or service expresses a broad preemptive purpose “and embraces state laws ‘having a connection with or reference to’ carrier [or broker] ‘rates, routes, or services,’ whether directly or indirectly.” See Dan‘s City Used Cars, 569 U.S. at 260 (quoting Rowe, 552 U.S. at 370 (internal quotation omitted)). “At the same time, the breadth of the words ‘related to’ does not mean the sky is the limit.” Id. The Supreme Court has “cautioned that § 14501(c)(1) does not preempt state laws affecting carrier prices, routes, and services in only a tenuous, remote, or peripheral manner.” Id. at 261 (internal quotation omitted).
Federal district courts are sharply divided on how to apply these guiding principles to personal injury claims alleging negligence by brokers in selecting motor carriers for the transportation of property.5 There is no question that a common law negligence claim embodies a state law that may be preempted under proper circumstances. See Northwest, Inc. v. Ginsberg, 572 U.S. 273, 281-82 (2014) (“[S]tate common-law rules fall comfortably within the language of the ADA pre-emption provision” because it “applies to state ‘law[s], regulation[s], or other provision[s] having the force and effect of law,‘” and “[i]t is routine to call common-law rules ‘provisions.‘“) (quoting
Some district courts have simply refused to hold that personal injury claims are preempted, largely relying on ADA cases to justify such a rule. See, e.g., Scott v. Milosevic, 372 F. Supp. 3d 758, 769 (N.D. Iowa 2019) (citing Charas v. Trans World Airlines, Inc., 160 F.3d 1259, 1266 (9th Cir. 1998) (en banc) (Congress enacted the ADA to insulate the airline industry from state economic regulation; “[i]t did not intend to immunize the airlines from liability for personal injuries caused by their tortious conduct“)); Hodges v. Delta Airlines, Inc., 44 F.3d 334, 338 (5th Cir. 1995) (en banc) (“[N]either the ADA nor its legislative history indicates that Congress intended to displace the application of state tort law to personal physical injury inflicted by aircraft operations, or that Congress even considered such preemption.“) (footnote omitted)). This rule is supported by broad statements of opinion that, in enacting the ADA, “Congress did not intend to preempt passengers’ run-of-the-mill personal injury claims.” Charas, 160 F.3d at 1261.6
In Charas, the conclusion flowed from narrowly construing the term “service” of an air carrier to encompass “such things as the frequency and scheduling of transportation” but to exclude passenger services such as “the dispensing of food and drinks, flight attendant assistance, or the like.” Id. at 1265-66.7 Other opinions reflect a more nuanced approach, defining the term “services” of air carriers broadly to “include items such as ticketing, boarding procedures, provision of food and drink, and baggage handling” but concluding that “enforcement of tort remedies for personal physical injury ordinarily has no ‘express reference’ to services as defined above.” See Hodges, 44 F.3d at 339 (citing Morales, 504 U.S. at 388).8 Many court opinions regarding the
More persuasive to the Court are cases that focus on the language of
central function of hiring motor carriers, which involves the transportation of property” and is preempted by
In this case, Plaintiff claims that AGS is liable for his injuries based on its “negligent hiring of Salazar” as the motor carrier for the freight shipment that Carrazana was hauling. See Am. Compl. ¶ 28. Plaintiff specifically alleges AGS was a
C. FAAAA‘s Safety Exception
A state law may be saved from preemption if it falls within an exception provided by
Plaintiff‘s position has some support among district courts that have considered the safety exception of
A number exceptions are listed in
In contrast to specific exceptions, Plaintiff proposes that “safety regulatory authority of a State with respect to motor vehicles” should encompass a negligent brokering claim, like his, that implicates highway safety. In the Court‘s view, Plaintiff‘s proposal is contrary to Congress’ intent in providing specific exceptions to federal preemption; such a broad reading would allow the exception to swallow the rule of preemption related to brokers’ services.
Congress expressly limited the exception by specifying that protected safety regulations are ones “with respect to motor vehicles.” The phrase “with respect to” signals that an exempt regulation must concern motor vehicles, and narrows the scope of the exception. See Dan‘s City Used Cars, 569 U.S. at 261 (FAAAA limited the parallel ADA preemption provision by adding “with respect to transportation of property“). “The term ‘motor vehicle’ means a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation . . . .” See
In reaching this conclusion, the Court is mindful of the Supreme Court‘s teaching in City of Columbus v. Ours Garage and Wrecker Service, Inc., 536 U.S. 424, 440 (2002), that “[a] congressional decision to enact both a general policy that furthers a particular goal [of deregulation] and a specific exception that might tend against that goal does not invariably call for the narrowest possible construction of the exception.” In Ours Garage, the Supreme Court addressed the safety exception of
Congress’ clear purpose in § 14501(c)(2)(A) is to ensure that its preemption of States’ economic authority over motor carriers of property, § 14501(c)(1), “not restrict” the preexisting and traditional state police power over safety. That power typically includes the choice to delegate the State‘s “safety regulatory authority” to localities. Forcing a State to refrain from doing so would effectively “restrict” that very authority.
Following Ours Garage, district courts have disagreed on whether a common law negligence claim falls within a state‘s traditional police power over safety. See Finley, 2018 WL 5284616 at *6 (common law liability is traditional exercise of police power); Miller, 2018 WL 5981840 at *4 (private action does not enforce state police power). This Court is willing to assume that a state-law tort claim imposing a common law duty on a freight broker might be viewed as an exercise of a state‘s police power and, under proper circumstances, a negligent brokering claim might be viewed as safety regulation. The Court finds, however, that reading the safety exception to include a negligence claim like the one asserted here – alleging that AGS overlooked Salazar‘s “conditional” rating as a motor carrier and selected an unsafe motor carrier that used incompetent or careless drivers and entrusted its vehicles to such drivers (see Am. Compl. ¶¶ 9, 24-26) – would be an unwarranted extension of the exception to encompass a safety regulation concerning motor carriers rather than one concerning motor vehicles.
For these reasons, the Court concludes that Plaintiff‘s negligent brokering claim against AGS is not saved from federal preemption by the safety regulatory exception of
IT IS THEREFORE ORDERED that Defendant AG Source, Inc.‘s Motion to Dismiss Plaintiff‘s Amended Complaint [Doc. No. 44] is GRANTED. The action against Defendant AG Source, Inc. is dismissed, and the case shall proceed against only Defendants Raul Salazar d/b/a RAS Trucking and Robiet Leon Carrazana.
IT IS SO ORDERED this 20th day of September, 2019.
TIMOTHY D. DeGIUSTI
Chief United States District Judge