Being in a five star crash rated car means very little when you are hit by a tractor trailer truck. Tractor trailer truck wrecks almost always involve catastrophic injuries or death. If the trucking company happens to be a “mom and pop” operation, the minimum mandatory insurance coverage by the truck company, which can be as low as $750,000.00, is probably insufficient.
In such cases, the truck lawyer should examine the bill of lading for the subject load and determine whether the the load was brokered by a “middle man” company. A broker is defined as a “person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier.” Transportation brokers may also be referred to as third party logistics providers.
Brokers earn the difference between the amount the shipper allocated to ship the load and the amount the broker pays to the motor carrier. This obviously creates an incentive for brokers to hire small, financially insecure motor carriers. One study examined the relationship between a motor carrier’s financial condition and its safety performance and reached the predictable conclusion that a weak financial position in a previous year is associated with a poorer safety performance in a subsequent year. A financially unstable carrier is likely to pay less on vehicle maintenance and pay less attention to driver hours of service regulations.
Virginia truck attorney, Michael Phelan, spoke recently at the Virginia Trial Lawyers Association Tractor Trailer Retreat on the topic of Broker and Shipper liability. The Virginia Supreme Court recognizes a cause of action for negligent hiring of an independent truck company by a transportation broker. The Court recognizes that the operation of a tractor trailer truck upon Virginia’s public highways involves such a risk of physical harm that the broker has a duty to hire a competent and safe trucking company to haul the load. If a shipper bypasses the broker/third party logistics provider and directly hires its motor carriers, it has the same duty of inquiry in selecting a competent and safe carrier.
Mr. Phelan’s presentation to trucking lawyers across the state focused on how to prove that a broker knew or should have known that the trucking company it hired to haul the load was incompetent and unsafe. Sources of such proof include old-fashioned investigation of the trucking company and driver, the broker’s own files, and the motor carrier safety information made available to the public by the Federal Motor Carrier Safety Administration on its website. Mr. Phelan and his co-counsel recently won a broker liability case at the summary judgment and Daubert stage in two cases arising from a tractor trailer crash in Wythe County, Virginia. In those cases, the truck broker hired a fly-by-night truck company owned by a husband and wife. The husband, while driving fatigued due to Hours of Service violations, crashed through the median guard rail on I-81 and caused two fatalities and one catastrophic injury. Many of the truck’s brakes were inoperable; its tires were bald; and it’s air suspension system had been capped off. We proved that the broker should have known that this truck company used failed to maintain its equipment, had multiple equipment breakdowns, allowed its two drivers to drive fatigued, and allowed one of its drivers to drive on a suspended CDL.
49 C.F.R. 371.2
Britto, et al., “The Relationship between Motor Carrier Financial Performance and Safety Performance,” Transportation Journal, Vol. 49, No. 4, pp. 42-51 (Fall 2010).
Jones v. C.H. Robinson Worldwide, Inc., 558 F. Supp.2d 630 (W.D.Va. 2008).