Penske firms reversed twice on appeals, Montgomery a factor
A circuit court handed down two decisions that negatively impact Penske-related companies. The post Penske firms reversed twice on appeals, Montgomery a factor appeared first on FreightWaves.
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The Fifth Circuit Court of Appeals has reversed two earlier lower court decisions that were initially victories for companies in the sprawling Penske empire, with one of the reversals tied directly to the Supreme Court decision in Montgomery vs. Caribe Transport II.
In a decision handed down earlier this week, the Court of Appeals for the Fifth Circuit found that an earlier dismissal of broker Penske Transportation Management (PTM) from the case of Morales et. al vs. OK Trans et.
al, an action based on a lower court’s interpretation of the Federal Aviation Administration Authorization Act (F4A), needed to be reversed because of the precedent set in Montgomery. The decisions that went against Penske companies are now under the case of Crane vs. Liberty Lane, an outgrowth of the original lawsuit.
The Morales lawsuit was filed in the Southern District of Texas after the fatal accident in December 2018 that killed Lydon Dean Meyer. He was driving a pickup truck struck by an OK Trans truck that had jackknifed and slid across the road. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.
defineSlot('/21776187881/FW-Responsive-Main_Content-Slot1', [[300, 100], [320, 50], [728, 90], [468, 60]], 'div-gpt-ad-1709668545404-0'). defineSizeMapping(gptSizeMaps. banner1). addService(googletag. pubads()); googletag. pubads(). enableSingleRequest(); googletag. pubads(). collapseEmptyDivs(); googletag. enableServices(); }); googletag. cmd.
push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); Montgomery makes quick work in the appeal The section in the six-page appellate court decision dealing with the PTM reversal is brief. It notes that the district court in May 2024 had granted PTM’s request for summary judgment to be dismissed from the case.
The district court’s argument was that the F4A’s provision that a state could not undertake action under the law that would affect a “price, route or service” included protecting a broker who had hired a carrier involved in an accident.
The plaintiffs’ argument in the appeal to the Fifth Circuit was that such an action could be pursued against a 3PL under the “safety exception” of F4A which permits a legal case if it involves safety issues.
Over several years, disputes and conflicts in several circuit courts that led to Montgomery centered on whether the safety exception could pull a broker into a state lawsuit. The Supreme Court ended that conflict in May when it unanimously said that yes, the safety exception’s language applying it “with respect to motor vehicles” meant brokers as well.
Montgomery was cited by the Fifth Circuit without much comment in its reversal of the earlier district court decision to dismiss PTM as a defendant in the case. Several stops in the road to the crash window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.
defineSlot('/21776187881/fw-responsive-main_content-slot3', [[728, 90], [468, 60], [320, 50], [300, 100]], 'div-gpt-ad-1665767553440-0'). defineSizeMapping(gptSizeMaps. banner1). addService(googletag. pubads()); googletag. pubads(). enableSingleRequest(); googletag. pubads(). collapseEmptyDivs(); googletag. enableServices(); }); googletag. cmd.
push(function() {googletag. display('div-gpt-ad-1665767553440-0'); }); The driver and the carrier were on the road only after a series of transactions where the assignment of the freight went through several different hands, including two Penske-owned firms,including PTM. The appellate court’s decision impacting Penske Logistics is more complex.
Penske Logistics is part of Penske Transportation Solutions. That company in turn is owned by a combination of Penske Corp. , which is privately held, Mitsui & Co. , and publicly-traded Penske Automotive Group (NYSE: PAG). Mitsui and Penske Corp have made an offer to buy that portion of Penske Automotive they do not already own.
A spokesman for Penske declined comment on the circuit court decision. As a supply chain solutions company, Penske Logistics provides service as a carrier. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.
defineSlot('/21776187881/fw-responsive-main_content-slot4', [[300, 100], [320, 50], [728, 90], [468, 60]], 'div-gpt-ad-1709668086344-0'). defineSizeMapping(gptSizeMaps. banner1). addService(googletag. pubads()); googletag. pubads(). enableSingleRequest(); googletag. pubads(). collapseEmptyDivs(); googletag. enableServices(); }); googletag. cmd.
push(function() {googletag. display('div-gpt-ad-1709668086344-0'); }); According to a recap of what happened leading up to the death of Meyer, automotive seating manufacturer Adient hired Penske Logistics to move its products.
But Penske, using the services of PTM which the court described as its “affiliate broker,” subcontracted out the work to another carrier, Liberty Lane. Liberty Lane then subcontracted out the Adient shipment to a company called OK Trans. That carrier in turn hired Satnam Singh Leh
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