Criminal Liability for Freight Brokers

by G. Spencer Mynko, Esq.

Broker Liability is a relatively new invention of politicians and plaintiff’s lawyers to gain access to another set of pockets to plunder (that may come across as being a bit harsh, but I couldn’t resist writing a sentence that included politicians, plaintiffs, plunder and pockets). However, I must be clear: FREIGHT BROKERS ARE INCREASINGLY BEING HELD RESPONSIBLE FOR CIVILAND CRIMINAL LIABILITY.
What are the basics of broker liability? A broker is an entity that does not transport the load but deals with the shipper and motor carrier in arranging the transportation. A broker is often the “middle man” between the shipper and motor carrier. Traditionally, brokers have avoided liability for any injuries caused by the driver transporting the load by demonstrating that the motor carrier was an independent contractor. Because the broker is not the employer of the driver, it cannot be held liable under a theory of agency or vicarious liability.
However,a broker can be liable under a negligent hiring theory if the broker did not screen the motor carrier and failed to investigate the carrier’s safety record. Prior to hiring a motor carrier to transport a load, a broker must at a minimum check the general safety statistics and evaluations of the carrier and review any internal records of the carrier’s safety performance. A failure to properly evaluate a carrier’s safety record will subject the broker to liability for negligent hiring.
However, holding broker’s liable in civil matters for motor carrier misdeeds is nothing new. But a recent matter we handled for a client opened our eyes to criminal liability for brokers. This particular case dealt with an overweight ticket, but it made me think about Brokers facing criminal charges for the conduct of shippers and/or carriers. 
This particular case came out of Long Beach. However, i’m confident similar crackdowns will be taking place in all of California’s major port cities. In this particular case, a truck was pulled over by Long Beach Police because it appeared grossly overweight (The back end of the trailer was riding way low).  The driver and the carrier were both cited for hauling an overweight and oversize load, and both were charged with misdemeanors. This did not involve a simple infraction, but actual criminal liability instead. But this is where things get interesting (Or troubling, depending on where you stand).
The City Attorney’s office who was prosecuting this case came across the broker’s name on the bill of lading. Based on that fact alone, the City Attorney decided to charge the broker criminally as well. Specifically, the broker was charged with the same violations the driver and carrier were charged with: violations of Vehicle Code section 35551, and Vehicle Code section 35784.5.  The critical language in the statute the prosecutor was relying on goes like this: “Any person convicted of transporting an extra legal load on a Highway, or causing or directing the operation or driving on a highway… shall be punished by a fine… or imprisonment…”  It was the city attorney’s position that the broker “caused” the extra legal load to be transported on a highway.
Personally, I felt the prosecutor was overreaching. It is my opinion that it is completely unrealistic to hold brokers responsible for either shippers or carriers who knowingly break the law by hauling overweight loads. After all, brokers coordinate the transport of thousands upon thousands of shipments, and they are in no reasonable position to monitor the conduct of the carriers and shippers they work with. Indeed, to do so could turn the industry on its ear by holding them responsible for criminal conduct that is practically out of their control. I can hear the protests of freight brokers brokering loads from Oakland to San Diego and all points in between, crying out in unison : “I had nothing to do with that! It’s not my fault!”
Well, I gave that pitch to the city attorney hoping to persuade him that it was completely unfair, unjust and unreasonable to charge my client with a crime that involved conduct beyond their control.
The city attorney was not moved. My pleadings fell upon deaf ears, and the young and ernest prosecutor informed me that the city is cracking down hard on overweight loads and they are more concerned with Public Safety than the realities of the transportation business.
Because of his staunch position, I offered to settle the case by simply reducing the charge from a misdemeanor to an infraction and allowing my client to pay a fine. “No deal”, said the protector of the vulnerable public. He went on to tell me your client has to plead guilty to a misdemeanor. I said, no way is my client pleading guilty to a crime they didn’t commit, and I’ll see you at the arraignment when I plead my client not guilty.
In this particular case, I actually went to court to plead my client not guilty, and apparently in the few days since I had spoken with the city attorney over the telephone, he changed his tune and allowed my client to simply get away with a fine and agreed to drop the criminal charges. In the end, The pursuit of money for the City of Long Beach was more important than the pursuit of justice.
However, he did tell me of a recent case where a broker was “actually convicted” of similar conduct. He also told me that case is being appealed. You can bet I am going to be on the lookout to see what the Court of Appeals does in that situation.
California law states: if a carrier is assessed an overweight fine, it may ask that “any other person who directs the loading, maintenance, or operation of the vehicle” be made a codefendant (Cal. Vehicle Code § 40001(f) (emphasis added)). Cal. Vehicle Code §  40001 (a) states it is “unlawful for the owner, or any other person, employing or otherwise directing the driver of any vehicle to cause the operation of the vehicle upon a highway in any manner contrary to law”.  Brokers Beware. This language will be used against you.

Could this concept of criminal liability be expanded to hold brokers liable for other criminal conduct of shippers and carriers? Considering how the State of California systematically targets all participants in the transportation industry for a wide variety of civil and criminal penalties, pocket plundering by politicians and plaintiff’s lawyers is bound to persist.

Whatever issue maybe confronting you and your trucking company, we hope you will contact us for guidance and to keep your business in business with the help of Transportation Attorneys.  We specialize in all facets of transportation law.