FAAAA Preemption Found Quickly in Wake of Ye, Aspen
Pittsburgh, Pa. (February 5, 2024) – As we previously reported, there have been several Circuit opinions confirming that the Federal Aviation Authorization Administration Act preempts state law tort claims against freight brokers. The monumental impact of these opinions can be seen in a recent set of decisive federal district court decisions. These decisions demonstrate that not only is the scope of FAAAA preemption broad, but that preemption can be established early in the proceedings at the motion to dismiss stage.
Mays v. Uber Freight, LLC, et al.
2024 U.S. Dist. LEXIS 15434*; WL 332917 (W.D. N.C. Jan 29, 2024)
In Mays, Uber Freight, LLC, was hired to arrange an interstate shipment. Uber Freight, in turn, contracted with a motor carrier, Pop Trucking, for the transportation of the shipment. During transport, Pop Trucking’s driver rear-ended the Mays. Thereafter, the Mays filed suit against Uber Freight and Pop Trucking in the U.S. District Court for the Western District of North Carolina.
The Mays plaintiffs advanced state common law claims of wrongful death, negligence, and negligent hiring, training, supervision, and retention against Uber Freight. The Mays plaintiffs further alleged that although Uber Freight hired Pop Trucking to execute the shipment, Uber Freight was a carrier under the FAAAA because it held itself out as providing motor vehicle transportation for compensation. In support, the complaints cited Uber Freight’s motor carrier and DOT numbers.
Uber Freight filed a motion to dismiss in response to the complaint, arguing that it is a broker and that, as such, the FAAAA preempts the tort claims levied against it. In support of its motion, Uber Freight attached its broker-motor vehicle carrier agreement with Pop Trucking, the rate confirmation, and its DOT ‘Company Snapshot.’
The Mays court granted Uber Freight’s motion and dismissed the claims against it. As an important threshold matter, the court found it may consider the extraneous materials included in Uber Freight’s motion based on well-worn exceptions to such prohibitions at this stage in the litigation. The court found that the rate sheet and contract could be considered as integral to the complaint and that, as a government record, it could take judicial notice of the DOT Snapshot.
Turning to the merits, the court first found that there was no support for the Mays plaintiffs’ claim that Uber Freight held itself out as a motor carrier; notwithstanding, Uber Freight’s name appearing on the bill of lading and Uber Freight’s federal motor carrier registration status. Instead, the court emphasized, the broker-motor carrier agreement between Uber Freight and Pop Trucking effectively identified the former as the broker and the latter as the motor carrier.
Remarkably, the court then held that the allegations of the complaint established that the FAAAA preempted the tort claims advanced against Uber Freight. The court first found that the negligence and negligent hiring claims were sufficiently related to Uber Freight’s “rates, prices, or services” to trigger FAAAA preemption. In doing so, the court emphasized its agreement with the reasoning of the three appellate courts to consider the issue — Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020); Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023); Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023).
The court then found that the FAAAA’s safety exception did not apply to the claims against Uber Freight. Relying on Ye’s textual analysis of this provision, the court emphasized that the safety exception applied to motor carriers, not brokers. The court further stressed that although the exception for motor carriers could apply through vicarious liability, the Mays complaints failed to contain any material allegations that Uber Freight, as a broker, possessed the requisite level of control over Pop Trucking. Accordingly, the Mays Court dismissed all claims against the broker.
Tischauser v. Donnelly Transp., Inc.
2023 U.S. Dist. LEXIS 215815 *; 2023 WL 8436321 (E.D. Wis. Dec. 4, 2023)
Tischauser is a similar decision from the U.S. District Court for the Eastern District of Wisconsin, where the Seventh Circuit’s decision in Ye controls. In Tischauser, Mode Transportation, Inc., was sued for its conduct as a freight broker, following a collision between the contracted motor carrier and the plaintiffs. In the complaint, the plaintiffs advanced the typical claims against Mode, including: i) negligent selection/hiring, training, or supervision; ii) agency/vicarious liability; and iii) joint enterprise/venture.
Mode moved to dismiss the claims on the grounds that direct liability was preempted by the FAAAA and that the plaintiffs failed to state claims of vicarious liability. After the motion was fully briefed, the Seventh Circuit issued its decision in Ye. In light of Ye, the court held a hearing on Mode’s motion; at the conclusion of which, the court granted Mode’s motion from the bench and dismissed the tort claims against it.
In a subsequent written opinion, the court set forth its reasoning. Like the Mays Court, the Tischauser Court found that the underlying complaint alleged all elements necessary to conclude that the FAAAA preempted the claims against Mode. In reaching this conclusion, the district court relied on Ye heavily. The court was also quick to point out that although Ye dealt specifically with only negligent hiring and vicarious liability claims under Illinois law — and, thus, did not address the plaintiffs’ Wisconsin common law claims, “nothing in Ye suggests that either the jurisdictional provenance of a plaintiff’s tort claims or the precise nature of those tort claims should alter the outcome.”
The court went on to find that the plaintiffs failed to allege facts sufficient to state any claim of vicarious liability against Mode. The court noted that there was no suggestion that Mode maintained meaningful control over the motor carrier’s driver and that Mode and the motor carrier entered into a contract where services were provided in return for a set payment, i.e., there was no profit sharing, and, thus, the complaint failed to allege a joint enterprise.
Mays and Tischauser offer great news for freight brokers across the nation. These decisions demonstrate convincingly that the recent Circuit opinions are not limited to the specific state law claims reviewed in each case but, instead, stand for the principle that FAAAA preemption applies to most, if not all, common law claims against freight brokers. The significance of such a reading is that is permits a court to find FAAAA preemption at the early motion to dismiss stage. Thus, sparing brokers from the unnecessary time and expense of protracted litigation. Accordingly, brokers should not only continue to raise FAAAA preemption when confronted with state tort claims, they should consider doing so at the preliminary stages of litigation.
For more information on these cases, contact the authors of this alert. To learn more about Lewis Brisbois' capabilities in this area, visit our Transportation Practice page.
Todd A. Gray, Managing Partner - Pittsburgh and Co-Chair of National Transportation Practice
Joelle Nelson, Partner and Co-Chair of National General Liability Practice and Transportation Practice
Joseph McGuire, Associate