Imperative for Due Diligence in Selecting Motor Carriers
Recently,an Oregon jury returned a verdict of nearly $5.2 million to the family of a man who was killed by a commercial motor vehicle. The verdict in Linhart v Heyl Logistics, LLC, No. 10-3100- ‘PA, 2012 WL 325844 (D. Or. Feb. 1, 2012) is significant because it continues the trend of claims against transportation broker on a negligent hiring theory, and it included punitive damages.
This is believed to be the first verdict in the country awarding punitive damages against a transportation broker for negligent hiring.
The recent trend of verdicts suggests that the negligent hiring theory of liability will continue to serve as a viable theory of recovery for plaintiffs. Even though trucking brokers were hit with unfavorable decisions in Schramm v. Foster (341 F. Supp. 2d 536, (D. MD. 2004), Jones v. C.H. Robinson (558 F. Supp. 2d 630 (W.D. Va. 2008)), and now Linhart, among others, a review of those circumstances give us guideans on how prudent broker will not get caught in the negligent hiring trap.
Linhart merely serves as a reminder that brokers utilizing best practices will not be the targets of these negligent hiring claims, and that liability will not follow when basic due diligence is employed.
In Heyl Logistics, it was apparent that Heyl performed no due diligence prior to hiring Washington Transportation to haul the cargo for Nestle. Had even the most basic of diligence been performed, Heyl would have learned that Washington Transportation did not have insurance or other financial responsibility under Federal Motor Carrier Safety Regulations. Also, Heyl did not have Department of Transportation (DOT) operating authority because it had been revoked!
On September 25, 2006, Washington Transportation’s truck driver was coming off of a crystal methamphetamine high and falling asleep at the wheel.
Accepting the premise that even the slightest due diligence would have revealed the major violations described above, the jury returned a verdict of $5.2 million, which included punitive damages. The jury sent a clear message that a broker has duty to the motoring public to ensure that basic qualification required by the FMCSR.
Any broker who paid attention to the Schramn decision and cases that followed was already aware of this principle so don’t overreact to the Linhart decision. Just be wise.
The broker should take appropriate measures to ensure that:
the motor carrier is carrying adequate insurance in compliance with FMCSR Part 387;
the motor carrier has valid operating authority;
no predecessor companies had their authority revoked;
keep a file on each motor carrier it hires, maintaining within that file updated information about the motor carrier’s insurance (personal injury, property damage and cargo coverage), operating authority and scores for the carrier in the seven behavior analysis and safety improvement categories under the Federal Motor Carrier Safety Administration’s 2010 Compliance, Safety, and Accountability program;
the broker-motor carrier agreement should include a requirement that the motor carrier inform the broker as soon as practicable when the status of their financial responsibility compliance, or operating authority changes.
We hope this information is helpful to you. As always, if there is anything we can be of assistance in North Louisiana or Northeast Texas, you can contact us any time of the day or night.
For more information about the firm, see our website at www.perkinsfirm.com or contact me at 318-222-2426.
Perkins & Associates, LLC