C.H Robinson hit with huge nuclear verdict in a post-Montgomery world

One of the largest nuclear verdicts in history against trucking was handed down Thursday in a Dallas courtroom, a more than $600 million judgement that has quickly thrust C. H. Robinson into the post-Montgomery legal landscape.

A jury in Dallas County Court handed down a verdict of approximately $604 million in a case involving a March 2021 crash in Jackson, Mississippi. The case was filed in the Texas courtroom because the carrier whose truck was involved in the wreck, Lupus Superior, is based there. C. H.

Robinson (NASDAQ: CHRW) hired Lupus Superior to move products from Arizona Beverages. Three persons were killed in the crash alongside numerous injuries to other automobile passengers in a pileup that occurred after a Lupus Superior truck driven by its employee, Gorgonio Gonzalez, plowed into several cars. Gonzalez also was killed in the crash.

The lead named plaintiff in the case is the estate of Peyton Lipe, who was one of the deceased. The verdict in Lipe vs. Lupus Superior is less than the roughly $900 million verdict from 2021 against a pair of companies, Kahkashan Carriers of Canada and AJD Business Services of New York.

But those companies were essentially ghosts, not putting up a defense and apparently no longer existing by the time of the trial in Florida. The case of Lipe vs. Lupus Superior in Texas is different. C. H. Robinson is also a defendant, has deep pockets and put up a robust defense. Lupus Superior is a legitimate carrier.

The size of the nuclear verdict is just one part of the case’s impact. The second is the presence of C. H. Robinson (NASDAQ: CHRW) as a defendant–coincidentally one of the original defendants in Montgomery vs. Caribe Transport II before being excised from the case by a lower court–could make the case of Lipe vs.

Lupus Superior a legal milestone for the brokerage sector. What FMCSA said about the carrier C. H. Robinson’s defense included the fact that Lupus Superior had a satisfactory grade from the Federal Motor Carrier Safety Administration (FMCSA) before and after the fatal crash. But that defense did not sway the jury.

That argument is an example of what the brokerage industry has said over the years regarding the question of its responsibilities in hiring a carrier: brokers need to rely on ratings such as a satisfactory classification from FMCSA in order to get its job done.

Asking it to vet every carrier with the same degree of authority and resources that FMCSA has is an impossible task, and what FMCSA rates a carrier should be seen as providing some degree of approval and possible defense in any subsequent litigation. A court rejecting that argument is a major concern for the brokerage industry in the post-Montgomery world.

In a prepared statement supplied to FreightWaves late Thursday, C. H. Robinson said it would appeal the decision. “C. H. Robinson should not be held liable and did not act negligently,” it said. “The carrier had safely delivered nearly 270 loads for our customers and held a Satisfactory FMCSA rating when we selected it.

That rating remained Satisfactory following a federal review of this accident. The carrier is an independent motor carrier, and the driver worked for them. C. H. Robinson does not employ drivers.” Driver’s employer? The reference to C. H.

Robinson as a possible employer of the driver refers to the fact that the jury also found that Gonzalez–who was not an independent owner operator and was an employee of Lucas Superior–was “operating the vehicle in the furtherance of a mission for the benefit of C. H. Robinson and subject to control by C. H. Robinson as to the details of the mission.”

That wording is from the question posed to the jury in the judge’s charge. A finding that a driver employed by a carrier hired by a broker to move freight is also effectively an employee of the broker, if it held up through the appellate process, would create yet another legal precedent in the post-Montgomery brokerage ecosystem that could burden 3PLs. As C.

H. Robinson said in its request for a directed verdict, “plaintiffs want to extend liability for this crash from Gonzalez to Lupus Superior, and then from Lupus Superior to C. H. Robinson, but no valid legal theory allows that here.” C. H.

Robinson opened its statement by noting that “we extend our deepest sympathies to everyone affected by this tragic accident. Every loss of life on our nation’s highways is one too many.” Why did the driver crash?

The death of Lupus Superior driver Gonzalez in the crash made the defense in the case more difficult, according to legal sources, because nobody knows why he plowed into several cars, resulting in deaths and injuries.

It is unknown–and never will be–whether he fell asleep, was distracted by a cell phone or had a medical emergency (as he reportedly had complained earlier in the day about feeling ill). Legal sources close to the case say the way the jury verdict was distributed among the three key defendants is likely to leave C. H. Robinson holding the bag for