Aspen American Insurance Company v. Landstar Ranger, Inc.

65 F.4th 1261
Court of Appeals for the Eleventh Circuit·Decided April 13, 2023·No. 22-10740·Published·Cited by 54 cases

Opinion

[PUBLISH]

In the United States Court of Appeals For the Eleventh Circuit

No. 22-10740

ASPEN AMERICAN INSURANCE COMPANY, Tessco Technologies Inc., Plaintiff-Appellant, versus LANDSTAR RANGER, INC.,

Defendant-Appellee.

Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 3:21-cv-00578-BJD-LLL

2 Opinion of the Court 22-10740

Before WILSON, JORDAN, and BRASHER, Circuit Judges. BRASHER, Circuit Judge:

In this appeal, we must decide whether the express preemption provision of the Federal Aviation Administration Authorization Act (“FAAAA”) bars Florida negligence claims against a transportation broker based on the broker’s selection of a motor carrier and, if it does, whether the Act’s “safety exception” allows those claims to proceed. See 49 U.S.C. § 14501(c)(1)–(2).

Tessco Technologies Inc. hired Landstar Ranger, Inc. as a transportation broker to secure a motor carrier to transport an expensive load of Tessco’s cargo to a purchaser across state lines. But Landstar mistakenly turned the shipment over to a thief posing as a Landstar-registered carrier, who ran off with Tessco’s shipment. Tessco’s insurer, Aspen American Insurance Company, sued Landstar , claiming Landstar was negligent under Florida law in its selection of the carrier.

The district court dismissed Aspen’s negligence claims against Landstar, concluding those claims were expressly preempted by the FAAAA, which bars state-law claims “related to a price, route, or service of any motor carrier . . . , broker, or freight forwarder with respect to the transportation of property.” Id. § 14501(c)(1). The court also determined that the statute’s safety exception—which states that the preemption provision “shall not restrict the safety regulatory authority of a State with respect to

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motor vehicles,” id. § 14501(c)(2)—was inapplicable to negligence claims against a broker based on stolen goods. We affirm.

I.

The domestic trucking industry consists of several players, including the shipper, the broker, and the motor carrier. The shipper is the “person who . . . owns the goods being transported”— like a manufacturer, retailer, or distributor. See 49 U.S.C. § 13102(13) (defining “individual shipper”). The motor carrier is the truck driver—the person who transports the goods from the shipper to the purchaser. See id. § 13102(14) (defining “motor carrier”). The broker is the person who connects the shipper and carrier; he acts as the middleman between the two to arrange for the transportation of the shipper’s goods by the carrier by, for instance, negotiating rates and routes. See id. § 13102(2) (defining “broker”); 49 C.F.R. § 371.2(a) (same).

The following facts come from Aspen’s complaint. In this appeal from a dismissal for failure to state a claim, we accept these factual allegations as true and construe them in the light most favorable to Aspen. Newbauer v. Carnival Corp., 26 F.4th 931, 934 (11th Cir. 2022). Landstar Ranger, Inc. is a transportation broker. To provide motor-carrier services to Landstar’s shippers, carriers must register with Landstar and submit bids through its online system . As part of the registration process, carriers create an online profile, where they input company information such as the carrier ’s physical address, point of contact, email address, and phone

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number. Landstar’s “protocol” when dispatching a shipment to a carrier is to verify that the carrier’s company information matches the data in Landstar’s online system.

One shipper, Tessco Technologies, Inc., hired Landstar to arrange the transportation of an expensive shipment of cargo (valued at over half a million dollars) from Colorado to Maryland. Landstar selected L&P Transportation LLC to transport Tessco’s shipment. L&P was a Landstar-registered carrier, and its online profile included detailed company information.

But Landstar did not follow its usual carrier-verification protocols when dispatching Tessco’s shipment. When it came time for Landstar to turn the shipment over to L&P for transport, Landstar received a call from someone named “James” claiming to represent L&P and attempting to collect the scheduled shipment. Despite noticing discrepancies between the company information provided by “James” and that listed for L&P in Landstar’s system, Landstar dispatched Tessco’s shipment to James. Unsurprisingly, James was a fraud, and he stole Tessco’s cargo.

Tessco filed a claim with its insurance provider, Aspen American Insurance Company, to recover the cost of the cargo. Aspen paid the claim and sued Landstar in the Middle District of Florida, seeking damages caused by Landstar’s allegedly negligent selection of a motor carrier. Aspen alleges that Landstar breached its duty as a transportation broker “to retain a reputable motor carrier ” to transport Tessco’s shipment by “ignoring its own protocols and the information readily available in its system” and was thus

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either “grossly negligent” or “negligent” in its selection of the carrier .

The district court dismissed Aspen’s suit as expressly preempted by the FAAAA, 49 U.S.C. § 14501(c)(1). And it rejected Aspen’s argument that the statute’s so-called “safety exception,” id. § 14501(c)(2), shielded Aspen’s negligence claims from preemption.

Aspen appealed.

II.

We review a district court’s dismissal on federal preemption grounds de novo. Lawson-Ross v. Great Lakes Higher Educ. Corp., 955 F.3d 908, 915 (11th Cir. 2020).

III.

The FAAAA’s express preemption provision provides, in relevant part, that “States may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . , broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). But the Act also contains certain exceptions to its preemptive scope. Relevant here is the statute’s safety exception , which states that the preemption provision “shall not restrict the safety regulatory authority of a State with respect to motor vehicles .” Id. § 14501(c)(2). On appeal, Aspen argues that its negligence claims do not fall within the FAAAA’s preemption provision and that, even if they do, they may nonetheless proceed because

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they fall within the Act’s safety exception. We address these arguments in turn.

A.

We start with the scope of the FAAAA’s preemption provision . The Supremacy Clause of the United States Constitution preempts—that is, invalidates—state laws that “interfere with, or are contrary to” federal law. Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 211 (1824). We recognize three types of federal preemption: express preemption, field preemption, and conflict preemption.1 Marrache v. Bacardi U.S.A., Inc., 17 F.4th 1084, 1094 (11th Cir. 2021). Express preemption, the only category at issue here, occurs when Congress displaces state law “by so stating in express terms.” Taylor v. Polhill, 964 F.3d 975, 981 (11th Cir. 2020) (quoting Hillsborough County v. Automated Med. Lab’ys, Inc., 471 U.S. 707, 713 (1985)). In such a case, “the task of statutory construction must in the first instance focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent .” CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993).

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Aspen American Insurance Company v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023).

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