Fifth Circuit Strips Broker Immunity in Garza v. Coyote — Carriers, Brokers and Shippers All Get Repriced This Quarter.
The 5-4 en banc ruling out of New Orleans Wednesday joins the Ninth Circuit in holding that FAAAA preemption does not shield freight brokers from state-law negligent selection claims. Markel and Falcon have already signaled mid-cycle premium hikes. TIA's emergency legislative push is back on. Here's what every freight buyer should do before Monday.
The Fifth Circuit's en banc ruling in Garza v. Coyote Logistics, handed down Wednesday afternoon 9-7 in New Orleans, removes the last major federal-circuit shield brokers had against state-law negligent carrier selection claims. The court explicitly aligns with the Ninth Circuit's 2020 reasoning in Miller v. C.H. Robinson — that the FAAAA's preemption of state laws "related to a price, route, or service" does not reach the safety-regulation carve-out invoked by injured plaintiffs.
The practical effect is immediate. Three things have already happened in the 36 hours since the ruling published.