Last week, a Dallas County Court jury handed down a $604 million verdict against a broker and a carrier in Lipe v. Lupus Superior LLC & C.H. Robinson Company, Inc. The accident occurred in March of 2021 when a truck driver employed by Lupus Superior failed to brake and rear-ended vehicles stopped in traffic on I-20 in Jackson, Mississippi. As a result of the collision, there were 3 fatalities and 14 additional individuals were injured. The nuclear verdict was not due to punitive damages, but rather compensatory damages, including mental anguish, loss of consortium, and other damages. Liability theories against C.H. Robinson (CHR) included negligent selection and vicarious liability associated with allegations that CHR controlled the carrier’s driver’s actions at the time of the accident.
Plaintiffs’ attorneys presented evidence that CHR scheduled, tracked, and permitted the driver to continue driving despite the driver reporting that he was sick. CHR tried to cast doubt on the sickness claim given the driver’s 600-mile detour and disabled tracking device. Plaintiffs’ attorneys convinced the jury that CHR had the right to call the driver, reschedule the delivery, and tell the driver to stop driving. In addition, plaintiffs’ attorneys argued that CHR, through its load confirmation document, notified Lupus Superior that fines and penalties for late delivery were applicable and that late delivery could impact future business opportunities, which plaintiffs’ attorneys characterized as coercive.
Lupus Superior had a Satisfactory Safety Fitness Determination issued in 2014, which was confirmed by additional recent reviews, including one post-accident. Lupus Superior was above FMCSA intervention thresholds in both the Unsafe Driving BASIC and Hours of Service BASIC, and both BASICs had been in that status for a lengthy period of time approaching or exceeding one year. Plaintiffs’ expert testified that less than 1% of motor carriers have two or more above-threshold BASIC scores, an argument that appears to be based on the number of carriers that have no BASIC scores due to insufficient data. CHR allegedly did not use BASICs in its vetting criteria at the time.
The case is reportedly likely to be appealed. CHR was assessed 23% of the fault, with the deceased driver assessed 45% and Lupus Superior assessed 32%. Plaintiffs’ attorneys argued that CHR should be 51% liable, apparently attempting to make CHR jointly and severally liable for the entire $604 million award. However, the joint and several liability associated with attributing the driver’s fault to CHR would appear to leave CHR potentially facing the full weight of the nuclear verdict if the verdict is not overturned or settled.
As a result of this Texas verdict, issued on the heels of the U.S. Supreme Court’s May 14th decision in Montgomery v. Caribe Transport II, LLC, negligent selection and entrustment claims are top of mind more than ever throughout the industry. We would expect to see an uptick in these types of claims leveled against logistics companies.
Any company that selects motor carriers to transport freight should re-evaluate its current practices to confirm those practices are on as solid footing as possible—or, if companies do not have such practices, adopt them as soon as possible. Companies should also immediately assess insurance coverage and the extent to which that coverage extends to these types of claims. The Firm has a Broker Health Check Review process to assist companies with reviewing insurance coverage and current carrier selection practices and, where a written policy is not in place, establishing those practices in the first instance. The Broker Health Check Review includes a menu of options for assessing current vetting criteria and procedures, written agreements with third-party motor carriers, and the company’s current carrier base. The Firm can also support logistics clients by providing a practical, targeted assessment of more material risks and recommendations in this changing legal landscape.
