Vicarious liability
44 Commercial Carrier Journal August 2008 Q How does a small broker or carrier protect itself against vicarious liabil-ity when tendering freight to an outside carrier? A Vicarious liability remains one of the most troubling issues facing intermediaries in transportation. When small undercapital-ized motor carriers with only $1 million in insur-ance are involved in crashes that cause significant injuries, plaintiffs lawyers often try to reach deep pockets up the supply chain by naming the intermediary or the shipper as a party defen-dant. These attorneys rely on vicarious liability and state law theories such as negligent hiring, assumption of duty, joint venture or agent/princi-pal theories. The case law is mixed at best, and judges tend to let the issue go to the jury unless they can find as a matter of law that there is no issue of fact upon which a reasonable man could find for the plaintiff. There is no easy vaccination that can inoculate an intermediary against a finding of vicarious liability, but some of the cases are instructive in showing what you should avoid. All too frequently, to satisfy shipper demands, inter-mediaries agree to assume carrier-like duties and accept the role of a service provider. Assuming such carrier-like duties can lead to factual disputes with adverse consequences over the role of the intermediary as a pure broker or arranger of transportation. The recent decision in Jones v. C.H. Robinson Worldwide Inc. (2008 U.S. Dist. Lexis 45325; W.D. Va. June 10, 2008) again confirms, I believe, that the best practice is for a third-party logistician to define its role clearly as that of a property broker who agrees to retain a carrier that is licensed, authorized and insured in accordance with Federal Motor Carrier Safety Administration regulations. Regulations prohibit brokers from representing themselves as carriers. The common but mistaken practice of naming the broker as the carrier on the bill of lading at time of pickup only confuses the broker's actual role in the transaction and makes it more likely that an injured party will name it as defendant in a lawsuit. At the urging of plaintiff's bar, I think that the courts have misapplied the federal safety regulations to infer wrongly that a shipper or intermediary has some obligation to second-guess the Department of Transportation when Forced to second-guess DOT Vicarious liability means carriers must tender wisely n Department of Transportation issued an alert regarding another round of fraudulent letters sent to current and potential DOT contractors requesting banking account information in order to be eligible for contract offerings. DOT says it does not require any confidential information to verify registration. For more information, go to http://osdbuweb.dot.gov/fraudalert.cfm. n Texas Gov. Rick Perry directed the Texas Department of Public Safety to work with the U.S. Border Patrol in the Texas Hold 'Em initiative to revoke the commer-cial driver licenses of truckers who know-ingly smuggle illegal weapons, drugs or humans across the Texas-Mexico border. n The American Transportation Research Institute said the latest version of its idling regulations compendium and cab card for drivers includes new idling regulations in Florida, Maine and South Carolina. The compendium and cab card are available on ATRI's website, www.atri-online.org. n Mustafa Redzic, owner of Bosna Truck Driving School in Missouri, was sentenced June 16 in federal court to 75 months imprisonment and 36 months supervised release for his involvement in a scheme involving fraudulent com-mercial drivers' license testing. The Department of Transportation's Inspector General's Office says in early 2004, Redzic and state driver's license examiner Tony Parr devised a scheme whereby Redzic would send customers to Parr's testing facility for abbreviated CDL tests. More than 600 student drivers were licensed under the scheme in a 15-month period. in brief law henry seaton hseaton@ccjmagazine.com Federal safety regulations should preempt state law.