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TIA Warns Federal Carrier-Selection Rules Remain Years Away
TIA chief Chris Burroughs says FMCSA carrier-selection guidance is the near-term hope, as C.H. Robinson's verdict exceeds $700m and grows at 6% a year.
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- Trucking & Rail
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- Elena Vasquez
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Key points05
- C.H. Robinson's nuclear verdict, originally $603 million, now exceeds $700 million and accrues interest at more than 6% per year.
- TIA petitioned FMCSA for a carrier-selection rulemaking between the Montgomery vs. Caribe decision and the Lipe vs. Lupus Superior verdict.
- Burroughs says FMCSA guidance listing five or six pre-hire checks could serve as a pseudo carrier-selection standard while rulemaking proceeds.
- Post-verdict broker insurance renewals spiked for two to four weeks but have not risen at double-digit rates.
- C.H. Robinson CEO Dave Bozeman will appeal rather than settle, Burroughs said.
A nuclear verdict against C.H. Robinson has swollen past $700 million and is accruing interest at more than 6% per year — and the federal rulemaking that brokers hoped would protect them from the next one is not coming soon. Chris Burroughs, president of the Transportation Intermediaries Association (TIA), told the FreightWaves Broker Compliance Symposium in Chattanooga on Monday that the agency-led standard his organization petitioned for after two adverse court rulings would take a long time to arrive, given that earlier efforts repeatedly stalled.
"It's no secret that carrier selection has been problematic for a very long time," Burroughs said in an on-stage interview at the symposium. "I've been at TIA for 15 years, and we were having these arguments when I first started — that we've got to figure out and provide more clarity and eliminate the confusion that exists in the carrier selection process."
Why the stakes suddenly rose
The legal ground shifted twice within weeks. In Montgomery vs. Caribe, the Supreme Court stripped brokers of the liability and negligence protection they had mostly enjoyed under the Federal Aviation Administration Authorization Act (F4A). Not long after, a Dallas County jury hit C.H. Robinson (NASDAQ: CHRW) with a verdict that began at $603 million in the case of Lipe vs. Lupus Superior — a Texas judge has since upheld it, pushing the figure above $700 million.
The case stings brokers for a second reason. The carrier involved carried a Satisfactory safety rating from the Federal Motor Carrier Safety Administration (FMCSA) at the time it was hired. If compliance with the regulator's own rating no longer shields a broker from a nine-figure judgment, the industry argues, only a federal standard defining proper carrier vetting can.
TIA filed its petition for a federal rulemaking in the window between the Montgomery decision and the Lipe verdict.
What is TIA actually asking FMCSA to do?
Burroughs recapped a long history of failed legislative and regulatory attempts to produce courtroom-defensible guidance on carrier selection. Negotiations with the association of trial lawyers, he said, kept collapsing — a dynamic he compared to Lucy pulling the football away from Charlie Brown.
The launch of Compliance, Safety, Accountability (CSA) scores in 2010 was once seen as the breakthrough. "That was supposed to be the answer, to tie a data-driven product to a safety rating," Burroughs said. "Ultimately, that never happened." Industry urgency also softened when brokers began winning cases under F4A protection in subsequent years.
The current petition takes a different route: it asks FMCSA, not Congress, to set the standard. "You are the federal agency that's in charge of providing safety ratings to motor carriers," Burroughs said of the message to the agency. "We want you to put forward a federal standard, taking it out of Congress' hands because of the dysfunction and putting it back in the agency's hands, where we believe it belongs." His caveat was blunt: "Rulemaking takes a long time."
A faster fix could be agency guidance rather than a formal rule — a document listing, in his words, "the five or six things, whatever they come up with, that should be checked prior to selecting a trucking company," functioning as a pseudo carrier-selection standard. TIA has also asked FMCSA to publish its private internal list of high-risk carriers.
The plaintiffs' bar, Burroughs noted, is increasingly funded by venture capital companies drawn to brokerage litigation. "They're seeing blood in the water," he said. Paul Clement, who represented Shawn Montgomery before the Supreme Court, was described as the "Michael Jordan" of Supreme Court advocates; Burroughs declined, with a smile, to estimate Clement's hourly rate.
Can C.H. Robinson escape a $700m judgment?
The Lipe ruling carries a deeper threat than the dollar figure. The court found that the driver killed in the crash was essentially a C.H. Robinson employee — a finding that, if it stands as precedent, could expose brokers to far wider vicarious-liability claims.
That creates a dilemma. The judgment grows at more than 6% annually from its original $603 million, so settling would stop the bleeding — but it would leave the employment-relationship finding intact as case law.
Burroughs said C.H. Robinson's leadership has chosen the fight. "I've talked to (CEO) Dave Bozeman and (chief legal officer) Dorothy Capers," he said. "They're clearly going through the appeal process. They're not going to settle the case." Based on those conversations, he expressed confidence the company can win on appeal.
Is broker insurance pricing spiraling?
The feared insurance shock after the twin rulings has so far failed to materialize. Burroughs said that immediately after the decisions there was "a two-to-four-week period where rates were extremely high in terms of renewal," and TIA members who renewed just before that window "hit the lottery" on timing. The market has since calmed.
"We're not seeing any sort of massive, drastic increase in terms of insurance rates at double digits," Burroughs said.
For now, brokers operate without a federal vetting standard while the highest-stakes test of their liability exposure works through the Texas appeals courts — a process that, like the rulemaking TIA wants, will take years rather than months.
Original: getfreightdata.com
More from Elena Vasquez
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News editor covering people, launches and day-to-day practice in Ocean and air freight, container shipping at Waybill Wire.
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