Trucking Groups Warn Penske Liability Ruling Could Raise Freight Costs

Two major trucking associations are asking the full Fifth Circuit Court of Appeals to reconsider a panel decision that could broaden liability when one carrier hires another to move freight. FreightWaves reported August 31 that the American Trucking Associations and Truckload Carriers Association filed a joint amicus brief seeking an en banc rehearing after an August 4 ruling involving Penske-related companies.

The underlying case followed a fatal 2018 Texas crash. The shipment moved through a chain that included shipper Adient, Penske Logistics, brokerage affiliate Penske Transportation Management, Liberty Lane and OK Trans. FreightWaves reported that Liberty Lane double-brokered the load to OK Trans without Penske's knowledge. The appellate panel reversed earlier rulings favorable to the Penske entities and sent the case back to federal district court.

ATA and TCA object to the panel's reasoning that Penske Logistics could be treated as the driver's statutory employer. Their filing argues that federal leasing rules apply when equipment operates under another carrier's authority, not when a separately authorized motor carrier provides transportation using its own authority. The associations warn that a broader interpretation could discourage carriers from supplementing capacity through other qualified carriers and could increase insurance costs.

The rehearing request is pending, and the appellate decision does not establish final liability in every subcontracted load. Carriers should avoid treating the associations' forecast as settled law. Still, the case reinforces the need for written authority checks, contracts that prohibit unauthorized rebrokering, verified insurance, dispatch documentation and rapid notice when custody changes. Brokers and motor carriers should have transportation counsel review agreements and state-specific exposure before assuming that federal authority alone eliminates upstream liability.