Two cases moving through the federal courts on broker liability have been added to the litigation now being closely watched by the 3PL industry following the Supreme Court’s Montgomery decision.

One case involves J.B. Hunt as a defendant in the U.S. District Court for Arizona, where the company and the plaintiffs are awaiting a ruling on J.B. Hunt’s request for summary judgment. If the motion is granted, it could end J.B. Hunt’s role as a defendant.

The second case is in the U.S. District Court for Nevada, where Judge Anne Traum earlier this month denied summary judgment requests from both sides. That case, Hardy vs. Singh, names AONE Brokerage Company LLC as a defendant and also raises the issue of broker liability in a double-brokering scenario.

In recent weeks, the revived issue of broker liability after Montgomery has also surfaced in cases involving C.H. Robinson (NASDAQ: CHRW), which is appealing a recent verdict of more than $600 million, and companies in the Penske (NYSE: PAG) network, where the Fifth Circuit reversed an earlier dismissal of its brokerage arm from a lawsuit involving a fatal crash in Texas.

In the J.B. Hunt (NASDAQ: JBHT) case, a group of plaintiffs, mostly family members of people killed or injured in an October 2023 crash, sued J.B. Hunt, Borderlands — the carrier hauling the load after being hired by J.B. Hunt’s brokerage arm — and Shokhijakhon Bekmuradov, the truck driver involved in the crash.

Bekmuradov was an employee driver of Borderlands.

Is J.B. Hunt liable for a double-brokered load?

The plaintiffs’ complaint alleges that J.B. Hunt is liable for negligent hiring, supervision, entrustment and retention of Borderlanders.

“J.B. Hunt knew or should have known that Borderlanders had a history of hiring inexperienced and incompetent drivers that put the motoring public at risk of catastrophic injury or death,” the lawsuit says.

Unlike the C.H. Robinson case, where the carrier it hired, Lupus Superior, had a Satisfactory rating from the Federal Motor Carrier Safety Administration (FMCSA), none of the legal documents in the J.B. Hunt case indicate that Borderlanders had any FMCSA rating.

According to the plaintiffs, however, Borderlanders had “a history of ‘safety assessment’ alerts, frequent crashes, and inspection violations, including for improper lane changes, failure to obey traffic control devices, and inability to speak English.”

Before the Supreme Court’s Montgomery decision, brokers in cases like this would likely have argued that the Federal Aviation Administration Authorization Act (F4A) preempted state action affecting a “price, route or service.” But in Montgomery vs. Caribe Transport II, the unanimous Supreme Court held that brokers are not protected under F4A from the “safety exception,” which allows liability and negligence cases “with respect to motor vehicles.” The Court also found that brokers fell under the definition of “motor vehicles.”

Awaiting the judge’s ruling in Arizona

J.B. Hunt asked for summary judgment in June. The plaintiffs responded earlier this month, and the court’s decision is now pending.

“Under the Outsource Carrier Agreement (OCA) and Carrier Confirmation, for loads tendered by J.B. Hunt, Borderlanders agrees it is responsible for hiring, supervising, training, assigning and dispatching its commercial drivers and employees, including Bekmuradov,” J.B. Hunt said in its motion for summary judgment. “It is undisputed that Borderlanders acted as the sole motor carrier for this load.”

The company said its role was that of a broker, not a carrier, and argued that “there is simply no basis for finding J.B. Hunt vicariously liable for Bekmuradov’s actions on these facts.”

The plaintiffs counter that J.B. Hunt, by hiring Borderlanders, “ignored (its) dangerous history of safety alerts, crashes and inspection violations.” They also note that Bekmuradov did not speak English.

The response further states that J.B. Hunt “held itself out as the carrier to (Lincare, the shipper whose freight was being hauled), who believed that J.B. Hunt would be transporting the load on a J.B. Hunt truck.”

Rejection in Nevada

In the Nevada case, Judge Anne Traum on Aug. 11 denied summary judgment motions filed by both plaintiffs and defendants, although the plaintiffs’ request was contingent on AONE Brokerage Company LLC prevailing on its petition.

The case stems from a July 2022 crash in Nevada involving a truck driven by Bhupinder Singh, the owner of GRK Transport. Singh’s truck skidded on a Nevada road and struck a pickup truck traveling in the opposite direction on a two-lane highway. One passenger in the pickup truck was killed and the other was injured.

The freight load — hay — had been booked by AONE, which tendered the load to Lucky Transport. Lucky then brokered it to GRK and Singh.

What did the 3PL know about double brokering?

Judge Traum’s ruling included several observations about the claims and counterclaims in the lawsuit. She said “there is evidence to show that AONE breached their duty of care when they continued to do business with Lucky even though they knew that Lucky was subcontracting their loads.”

The judge also noted that federal regulations prohibit anyone without a brokerage license, such as Lucky, from acting as a broker.

By placing the load with GRK after AONE brokered it to Lucky, Lucky could be viewed as brokering the load without having that license.

“Plaintiffs argue that AONE breached the standard of care because (quoting the lawsuit) ‘Lucky, as a matter of normal practice, subbed loads out to GRK despite having no broker authority and AONE knew it,'” Judge Traum wrote.

AONE argued that “the intervening bad acts of Lucky and (driver) Bhupinder Singh cut off the chain of causation as a matter of law.”

Judge Traum was not persuaded that AONE had shown it was not negligent. “If AONE breached its duty to contract with a safe carrier, there is evidence to show that the breach could be the legal cause of the Plaintiffs’ injuries,” she wrote.

She later added that “AONE contracting with Lucky could have been unreasonable because illegal double brokering can put more high-risk drivers on the road.”

In rejecting Lucky’s similar motion, the judge said the company’s argument depended on AONE first winning summary judgment.

“Lucky’s motion for summary judgement against AONE’s crossclaims is premised on AONE winning summary judgment,” Judge Traum said. “Since AONE has not been granted summary judgment, Lucky’s motion against the crossclaims is denied.”