A Dallas County, Texas court has held C.H. Robinson responsible for $604 million in damages tied to Lipe v. Lupus Superior, a case stemming from a fatal March 2021 truck accident in Mississippi. The ruling follows a unanimous mid-May U.S. Supreme Court decision in Montgomery v. Caribe Transport II that allowed state-law negligent hiring claims against brokers to proceed. C.H. Robinson Chief Legal Officer Dorothy Capers said the company disagrees with the judgment and will appeal, noting the carrier had delivered nearly 270 loads and held a Satisfactory FMCSA rating. Baird analyst Daniel Moore said the fault split leaves CHRW answerable for 68% of responsibility, above Texas's 50% joint-and-several threshold, but expects the award to be materially reduced on appeal.
Following a July ruling made by a Dallas County, Texas jury in an advisory verdict against Eden Prairie, Minn.-based global third-party logistics (3PL) services provider and freight forwarder C.H. Robinson and also two other defendants in “a lawsuit related to a trucking accident involving an independent motor carrier,” with compensatory damages of $604 million that could be assessed against C.H. Robinson, late last week the Dallas County court ruled against Robinson, holding the company responsible for $604 million in damages.
The verdict is related to Lipe v. Lupus Superior, in which the carrier at issue was reportedly above the intervention threshold in two Safety Measurement System (SMS) BASIC categories criteria that would potentially place it among what the Federal Motor Carrier Safety Administration (FMCSA) deems to be “high-risk” motor carriers that are prioritized for investigation, stated the Transportation Intermediaries Association (TIA). And Baird analyst Daniel Moore wrote that this lawsuit arose from a fatal March 2021 truck accident in Mississippi, which alleged that C.H. Robinson negligently selected an unsafe motor carrier.
This follows a mid-May ruling by the United States Supreme Court, in Montgomery v. Caribe Transport II, LLC, which, in a unanimous ruling stated that the Federal Aviation Administration Authorization (FAAAA) does not preempt state-law negligent hiring claims against freight brokers when those claims fall within the Act’s safety exception.
C.H. Robinson rejects judgment, pins appeal hopes on facts and law
In a statement provided to LM, Dorothy Capers, Chief Legal Officer at C.H. Robinson, said that the company strongly disagrees with the judgment in Lipe v. Lupus Superior and what it called the misinformation presented at trial, with the company remaining confident in its appeal.
“Nothing about our rejection of the judgment diminishes the profound loss suffered by the families in this case,” said Capers. “But C.H. Robinson did not cause or contribute to the accident, and accountability must be grounded in the facts and the law. The carrier had safely delivered nearly 270 loads for our customers and held a Satisfactory FMCSA safety rating both when we selected it and after a federal review of this accident. The carrier is an independent company, and the driver worked for them. C.H. Robinson does not employ drivers.”
Capers continued that safety is core to how the company operates and always has been, adding that C.H. Robinson goes beyond federal requirements and applies multiple layers of safety and risk criteria that it continuously re-evaluates and strengthens.
“The extreme nature of this judgment underscores why a clear national standard for what constitutes a safe carrier is needed now. America’s freight network should not be governed by safety standards determined after the fact, state by state and courtroom by courtroom. This legal landscape will continue to push small trucking companies out of the market, increase supply chain costs and drive up prices for everyday Americans. We urge Congress and federal regulators to create a national standard that enhances highway safety, creates consistent accountability and supports the uninterrupted flow of goods across the United States.”
Supreme Court ruling raises bar for broker carrier vetting
Going back to the Supreme Court’s decision in mid-May, for Montgomery v. Caribe Transport II, LLC, there has been a large amount of attention by industry stakeholders placed on higher expectations for carrier vetting, with freight brokers expected to demonstrate reasonable care when selecting motor carriers. Another key takeaway has been that relying solely on FMCSA safety data is no longer considered sufficient and that brokers should use multiple sources of information.
In a July statement, Chris Burroughs, TIA President & CEO, said that shippers, brokers, and the public rely on the Federal Motor Carrier Safety Administration (FMCSA) to ensure motor carrier compliance and safety.
“While the agency operates under significant resource constraints, it has made meaningful efforts to address complex safety challenges,” said Burroughs. “However, this incident dramatically highlights the urgent need for greater transparency and modernization in the system and a longstanding and well-documented issue in the motor carrier safety rating process. The carrier involved in this $600+ million verdict, Lupus Superior, has maintained a ‘Satisfactory’ safety rating since 2014—which was reaffirmed by the FMCSA in 2021 and most recently this past April. This suggested adequate safety management controls were in place, yet in this case, the jury was given access to data regarding this particular carrier’s prior incident and safety record that is not available to the public, including brokers.”
Burroughs added that the safety of America’s roads is TIA’s utmost priority, while observing that the industry requires a clear, consistent framework for evaluating motor carrier safety, supported by the agency responsible for oversight.
“To that end, TIA has formally petitioned FMCSA to establish a clear motor carrier selection standard and to make the so-called ‘high-risk’ carrier list publicly available,” he said. “In addition, raising the standards for entry into the industry—for both motor carriers and brokers—must be addressed without delay. Meaningful reform is necessary to improve safety outcomes and restore confidence in the system.”
Baird: fault split intact, appeal likely to cut award
In a research note, Baird analyst Daniel Moore observed that the court’s judgement leaves the damages and the jury’s fault allocation unchanged: the driver at 45%, Lupus Superior at 32%, and CHRW at 23%.
“The court found CH answerable for 68% of responsibility, 23% direct and 45% vicarious, above the 50% threshold for joint and several liabilities under Texas law,” wrote Moore. “That finding rests on the borrowed-employee finding and, independently, the mission/control finding. We continue to believe the borrowed-employee finding was unlikely to survive judicial scrutiny and that the award is likely to be materially reduced on appeal. It is, however, consistent with the risk we flagged that a newer civil judge is generally more deferential to the jury and less willing to rein in a nuclear figure.”
Source: Logistics Management
Compiled from international media by the SCI.AI editorial team.
