Expanding Freight Broker Liability in Trucking Cases

There has been an unfortunate trend over the past few years to find freight brokers vicariously liable for the negligent conduct of truck drivers on the road. Most state and federal courts have refused to extend liability for the driver's conduct beyond the trucking carrier, but Illinois is going in the other direction. Even though brokers and shippers rarely get involved in how the driver operates his or her truck, they can become liable if there is sufficient evidence of “control.” Our office saw this dynamic play out in a recent Cook County trial, and brokers and insurers need to take notice.

This trend began in 2011 with Sperl v. C.H. Robinson Worldwide, Inc., 408 Ill.App.3d 1051 (3d Dist. 2011). The appellate court affirmed the jury's finding of agency between the driver and the broker, holding the broker vicariously liable for a $23 million award in favor of two decedents and another injured plaintiff. The broker was found to be the driver's principal despite a contract that made clear that the trucking carrier and its drivers were independent contractors. The court based its finding on a load confirmation sheet that contained special instructions for the driver to “stay in constant communication” and check the temperature of the product. There was also a system of fines imposed by the broker for non-compliance by the driver. The “extensive requirements, coupled with [the driver's] fine-based compliance, directed [the driver's] conduct during the entire transportation process” and demonstrated the right to control, according to the court.

There was a similar decision from Cook County last year. In Hoffman v. Crane, 2014 IL App (1st) 122793-U, the broker was found to be vicariously liable because it had the ability to enforce its own rules in a carrier manual, could deny loads to a driver if he didn't comply with the rules, and issued professionalism requirements like getting haircuts. The jury returned a verdict in excess of $27 million, $24.5 million of which was for the 50-year-old plaintiff-driver for paraplegia, and specifically found the truck driver to be acting within the scope of his agency to the broker and the trucking carrier.

This past August, the same appellate district from the Hoffman case handed down McHale v. W.D. Trucking, Inc., 2015 IL App (1st) 132625. The plaintiff's decedent in McHale was struck by a tractor-trailer as she stood on the shoulder by her disabled vehicle. The jury returned an award of $8 million to the decedent's husband and two children, and found the driver to be the broker's agent. The court found that there was a “litany of … requirements set by [the broker] with which [the trucking carrier] needed to comply,” and that this provided a sufficient basis to support the jury's decision. The court pointed to language in the contract between the broker and the shipper – not between the broker and trucking carrier – where the broker had “sole and exclusive control” over transportation and was required to ensure the routes complied with the shipper's requirements. The broker's monitoring of the trucking carrier's compliance through progress calls and monthly reports established agency with the driver.

The explanation for this trend is quite simple. Trucking carriers often carry an inadequate amount of liability insurance to cover the loss from an accident. This places the brokers, shippers and even buyers next in line to satisfy the shortfall. These companies typically have contracts, confirmation sheets, bills of lading, invoices and a history of doing business together that can be used against them to establish control over the driver, even though they are not directly involved with how the driver operates the truck. The cases outlined above make it more difficult to obtain summary judgment, and the brokers have not been faring well before juries. It is important to remember that a trial on vicarious liability focuses not on whether the broker did anything to cause the accident on the road, but whether it exercised enough control to make the driver its agent.

Shippers have done better than brokers in these types of cases. See, e.g., Dowe v. Birmingham Steel Corp., 2011 IL App (1st) 091997 (finding no agency between steel company shipper and driver because shipper had no duty to prevent driver from leaving steel mill while impaired by fatigue). Federal court also remains a more favorable venue than state court. See, e.g., Scheinman v. Martin's Bulk Milk Service, Inc., 2013 WL 6467525 (N.D. Ill.) (granting summary judgment and distinguishing Sperl because shipper and broker did not exercise sufficient control over manner in which driver performed work). But if you find yourself in state court, be aware that the road to a vicarious-liability verdict has become much easier for plaintiff.