Penske Lawsuit SHOCKS Brokers: Who’s Liable for Freight?

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6}#fwtv_1XLQ5yfmDnM. fwtv-panel p{margin:0 0 12px}#fwtv_1XLQ5yfmDnM. fwtv-transcript p{margin:0 0 12px}SummaryView TranscriptThe latest BLS data shows a surprisingly ‘boring’ month for trucking jobs, with only 100 added. Dive into what this means for fleets and owner-operators, and why the industry might not be ‘overcorrecting’ as feared.

We also break down the volatile oil market, current diesel prices, and the complex Penske lawsuit that’s shaking up broker liability. Get the crucial updates supply chain pros need to know.

The Fifth Circuit Court of Appeals has reinstated liability claims against two Penske entities in connection with a fatal 2018 jackknife crash in Texas, dealing a significant blow to carriers and brokers who assumed that tendering a load down the chain extinguished their legal exposure.

The six-page ruling has broad implications for how carriers and brokers structure freight transactions and vet downstream partners. The load — originating from an automotive seat manufacturer — traveled through at least four parties before the fatal accident. Penske Logistics, the asset-based carrier, first received the tender.

It passed the load to Penske Transportation Management (PTM), its managed transportation and brokerage arm, which then handed it to Liberty Lane, which in turn brokered it to OK Trans, the carrier whose driver was involved in the crash that killed a motorist. The Fifth Circuit took two distinct actions. It reinstated PTM as a defendant, citing the U. S.

Supreme Court’s Charas v. Trans Air precedent commonly referred to in freight as the Montgomery decision, which eliminated the Federal Aviation Administration Authorization Act’s safety-exception shield for brokers.

The court also reversed a Southern District of Texas summary judgment that had protected Penske Logistics from vicarious liability as the employer of the downstream driver. “When a carrier takes on a load, as it moves down the chain, it still has responsibility. It does not wipe its hands of it.”

— John Kingston, citing attorney Mark Blubaw of Benesh Kingston, a senior journalist who covers freight markets, noted that the ruling — though only six pages — signals that a carrier’s lack of knowledge about re-brokering further down the chain is unlikely to serve as a defense.

“Based on my thin reading of what the judge said, I don’t think that’s going to make any difference,” he said. The case adds to a growing body of Texas litigation reshaping freight liability.

Kingston also flagged a separate Texas ruling this week involving Atlas Freight, where plaintiffs attempted to extend shipper liability but were rejected — the second such failed attempt in the state following an earlier Home Depot case.

Texas state Supreme Court rulings have generally trended pro-business on liability caps, but federal district and appellate courts in the state have proven less predictable. The Penske ruling is expected to prompt re-litigation in other brokerage cases where defendants had previously won dismissal under the FAAAA’s safety exception.

Kingston said he expects “a lot of others” where brokers previously protected will now be pulled back into active lawsuits and returned to federal district courts for further proceedings. The Fifth Circuit reinstated liability claims against both Penske Logistics and Penske Transportation Management in a 2018 fatal Texas crash case.

The court ruled carriers retain vicarious liability as a load moves down a multi-party brokerage chain, even without knowledge of re-brokering. A separate Texas ruling this week rejected shipper liability claims against Atlas Freight, marking the second such defeat for plaintiffs in that state.

Speaker 1 [0:00] Talking about jobs, John Kingston, how you doing, sir? Speaker 2 [0:04] Not bad, yourself? Doing well. Speaker 1 [0:07] So let’s talk about the jobs market right now. You are, have been reporting on the jobs market. Tell us, what does it look like in overall jobs and in freight specifically? Speaker 2 [0:16] Boring, very boring this month.

Jobs in truck transportation were up 100 jobs, that’s it. And they, and after all the machinations of the past few months, the number of