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Ruling against Aspen affirmed in truck theft


A federal appeals court on Thursday affirmed a lower court ruling against an Aspen Insurance Holdings Ltd. unit in litigation with a transportation broker over a stolen truck, stating a federal statute does not apply.

Auburn Hills, Michigan-based Tesco Technologies Inc. hired Jacksonville, Florida-based transportation broker Landstar Ranger Inc. to secure a truck to transport a load of Tesco’s cargo valued at more than half a million dollars from Colorado to Maryland, according to the ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Aspen American Insurance Co., Tesco Technologies Inc. v. Landstar Ranger Inc.

Landstar selected Carthage, Missouri-based L&P Transportation LLC to transport the shipment. But Landstar did not follow its usual carrier verification protocols when it dispatched Tesco’s shipment, the ruling said. 

When it came time for Landstar to turn the shipment over to L&P for transport, it received a call from “James” claiming to represent L&P.  Despite discrepancies between the company information provided by “James” and that listed for L&P in Landstar’s system, Landstar dispatched Tesco’s shipment to James.  “Unsurprisingly, James was a fraud, and he stole Tesco’s cargo,” the ruling said.

Tesco filed a claim with its insurer Aspen.  Aspen paid it, then sued Landstar in U.S. District Court in Jacksonville, Florida, seeking damages for Landstar’s alleged negligence.

The district court dismissed Aspen’s suit as expressly preempted by a Federal Aviation Administration Authorization Act provision, which bars state law claims related to a broker with respect to transportation of property.

Its ruling was affirmed by a three-judge appeals court panel. “The FAAAA expressly preempts Aspen’s claims unless they fall within one of the Act’s preemption exceptions,” the ruling said, in holding they do not and that a safety exception was not applicable.

Landstar attorney J.W. Taylor, managing partner of Taylor Johnson PL in Winter Haven, Florida, said in a statement, “Congress’ primary intent in enacting the FAAAA was to prevent the states from re-regulating trucking and this decision is consistent with that intent. Transportation brokers should not and cannot be held to a patchwork of state standards in conducting their business across the United States. That is the essence of the FAAAA and now transportation brokers will have a Federal Circuit-level opinion to rely upon when attempting to dismiss suits for cargo loss or damage brought against them under a state’s common law. This is a great win for transportation brokers and the transportation industry at-large.”

Aspen attorney Robert Borak, a partner with Spector Rubin PA in Miami, said, “The ruling provides clarity going forward to the transportation and insurance community. It will be interesting to see the next steps and whether the Supreme Court takes this on.”