Do Federal Laws Preempt State Law Claims Alleging Negligent Hiring, Training, Retention, and Supervision?
The short answer: maybe. There’s no harm in trying.
Recently, I read a very interesting article in the Transportation Law Journal by Aubrey Holloway about this issue of a federal law possibly preempting state law claims for negligent hiring issues. All credit for the this blog is given to Aubrey and one of my associate attorneys, Tara Hoffman, who I asked to elaborate on Aubrey’s article.
Let’s begin the discussion with a brief restatement of the federal law that may apply. I have emphasized some phrases.
I. The Federal Aviation Administration Authorization Act – 49 U.S.C.A §14501 (c) states:
(1) General Rule: Except as provided in paragraphs (2) and (3), a State … may not enact or enforce a law, regulation, or other provision having the force and effect of a law related to a price, route, or service of any motor carrier or any other motor private carrier, broker, or freight forwarder with respect to the transportation of property.
(2) Matters not covered – Paragraph 1 –
(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization;
(B) does not apply to the intrastate transportation of household goods; and
(C) (paraphrasing) does not apply to tow truck services.
(3) State standard transportation practices –
(A) Continuation – Paragraph 1 shall not affect any authority of a State… to enact or enforce a law, regulation, or other provision, with respect to the intrastate transportation of property by motor carriers, related to –
(i) uniform cargo liability rules,
(ii) uniform bills of lading or receipts for property being transported,
(iii) uniform cargo credit rules
(iv) antitrust immunity for joint line rates or routes, classifications, milage guides, and pooling, or
(v) antitrust immunity for agent-van line operations, if such law, regulation, or provision meets the requirements of subparagraph (B).
II. Congressional Intent to Preempt
Congressional intent determines if a federal law preempts certain state laws or actions. Owens v. Anthony, 2011 WL 6056409, 2-11-0033 (M.D. Tenn 2011).
The Federal Aviation Administration Authorization Act provides that a state may not enact or enforce a law or regulation related to a price, route, or service of any motor carrier with respect to the transportation of privacy. 49 U.S.C.A §14501(c)(1).
In Rowe v. New Hampshire Motor Transportation Association, 552 U.S. 362, the Supreme Court found that state enforcement actions having “a connection with or reference to” carrier rates, routes or serves are preempted and that such preemption may occur even if a state law’s effect on rates, routes, or services is only indirect. Federal law may not preempt state laws that affect rates in only a tenuous, remote, or peripheral manner. Section 14501(c) requires the Court to determine whether the provision directly or indirectly binds the carrier to a particular price, route, or service and thereby interferes with competitive market forces within the industry.
The above preemption is a general one with several exceptions.
One of which, and the one that relates most closely to personal injury cases, is the rule in regard to a State’s safety regulatory authority by expressly stating that “paragraph 1 shall not restrict regulatory authority of a State with respect to motor vehicles…” 49 U.S.C.A §14501(c)(2). To determine if this exception applies, the Court must decide whether the provision at issue is intended to be, and is, genuinely responsive to motor vehicle safety. American Trucking Association v. City of Los Angeles, 559 F. 3d 1046 (9th Cir. 2009).
In Chatelaine, Inc. V. Twin Modal, Inc., 737 F. Supp. 2d 638 (N.D. Texas 2010), the court found that 49 U.S.C.A §14501 broadly interprets state law claims regulating interstate transportation of goods and state law claims other than breach of contract are preempted. In Chatelaine, the non-contract claims were for negligence, violation of the Texas Deceptive Trade Practices Act, negligent hiring, and actual loss.
A recent Middle District of Tennessee case, however, held that the federal statute did not preempt state tort claims because the negligence issues presented involved highway safety which is expressly excluded from the preemption statute. Owens, 2011 WL 6056409. This findings that led to this holding are not flawless and could create alternative holdings by other courts. The district court stated that it must determine if the plaintiffs’ negligence claims were related to the price, route, or service of the defendant, but the court never actually made that determination. Instead, the court stated that it “agree[d] with the numerous courts which have found that personal injury negligence claims are not preempted by the FAAAA. Additionally, the court did not outline the analysis applied in determining whether a state action was done under the safety regulatory authority of the state as required by Loyal Tire & Auto Center, Inc. v. Town of Woodbury, 445 F. 3d 136 (C.A. 2 NY 2006). Loyal Tire states that the court must determine whether the legislative body’s purpose and intent was to create a regulation that is genuinely responsive to safety concerns. In Owens, such determination did not take place.
If you want some ideas on how to apply the federal law to argue preemption of the state law claims, read on.
To determine if 49 U.S.C.A §14501(c) preempts a state tort claim, the first inquiry is whether the tort claim relates to the price, route, or service of a motor carrier. A tort claim against motor carriers for negligent hiring, retention, supervision, and training of drivers could be preempted by a showing that such acts are related to a motor carrier’s service. Granted, for that argument to be made, defense counsel will have to prove that the motor carrier is compliant with existing statutes and regulations regarding those very things. Such compliance could be found to be related to a carrier’s service as motor carriers tend to transport goods while assuring that they are upholding the federal statutes regulating transportation.
A successful argument for preemption will have to be based on the definition of “service” and how the carrier’s actions relate to that “service.”
Next, the motor carrier will have to prove that the state’s regulatory authority on safety is not in issue. The Loyal Tire analysis will have to be applied. Owens held that negligent hiring, training, retention, and supervision are part of a state’s authority to regulate safety, however, Owens did not adequately rely on cases, interpret the definition of “service,” nor apply the broad scope of the FAAAA preemptions. Also, Owens did not apply the analysis of Loyal Tire to determine if the claims fell under the safety regulatory exception.
The Loyal Tire requirements
The Supreme Court held in Loyal Tire that in making the determination of whether a regulation falls within the safety exception of 49 U.S.C.A §14501(c)(2)(A), the court “must consider any specific expressions of legislative intent in the statute itself as well as the legislative history, and [the court] must assess any purported safety justifications asserted by the state or municipality in light of the existing record evidence.” 445 F. 3d at 145.
The legislative intent we are interested in would be for the statute under which the plaintiff is suing. If the intent of the statute is “genuinely responsive to safety concerns,” then it may not be preempted. A statute’s intent being only “in the interest of public safety” is not enough, by itself, to show the legislation is genuinely responsive to public safety concerns. Id. at 146.
Contrasting Owens v. Anthony
Loyal Tire is a case regarding statutes relating to tow truck services, whereas Owens is a personal injury case arising out of an automobile accident. While this difference may make Owens more likely to apply to any trucking accident, Owens has some shortcomings.
Most importantly, the Owens court did not perform the analysis required by Loyal Tire nor did it actually find if the plaintiff’s negligence claims were related to the price, route, or service of the defendant and then go on to see if the safety exception applied.
Additionally, Owens is a federal case out of the Middle District of Tennessee whereas Loyal Tire is a United States Supreme Court case. Owens can only be persuasive authority (unless you’re in the Middle District of Tennessee).
Owens does cite several cases that have held that personal injury negligence claims were not preempted by the FAAAA but all of those cases were based on personal air travel and not automobile accidents. The cases that Owens used for support are also flawed in that none of them provide a definition of “service” in the context of the FAAAA and motor carriers and clearly, an airline that provides personal air travel is not equitable to a motor carrier.
To obtain a different result than Owens, one would need to argue that tort claims against motor carriers for negligent hiring, training, supervision, and retention of drivers are related to a motor carrier’s service and that a carrier is compliant with existing statutes and regulations related to a service, price or route.
I am interested to know if anyone has attempted to remove a case from a local state court because of the federal laws that would PREEMPT claims against a motor carrier that involve a separate cause of action for negligent hiring, supervision or retention.