Texas judge upholds $604 million nuclear verdict against C.H. Robinson in fatal-crash case

A Texas judge has affirmed the more than $600 million jury verdict against C.H. Robinson in a fatal-crash case, according to FreightWaves on Oct. 16.

Judge Dianne Jones of Dallas County Court on Friday affirmed the July verdict of $604,025,000 against C.H. Robinson in Lipe v. Lupus Superior. The case stems from a March 2021 crash in Jackson, Mississippi, that killed three people, including Gorgonio Gonzalez, an employee driver of carrier Lupus Superior, which C.H. Robinson had hired to move a load for Arizona Beverages, and Jennifer Lipe, whose estate is the lead named plaintiff. The case was heard in Texas because Lupus Superior is headquartered there.

The dollar figure is not the only problem for the brokerage industry. In answering a question in the jury charge, the jury found that Gonzalez was operating the vehicle in the furtherance of a mission for the benefit of C.H. Robinson and subject to control by C.H. Robinson as to the details of the mission. FreightWaves reported that if that finding is upheld on appeal, it would extend the liability shift that began in May, when the Supreme Court's Montgomery decision removed the industry's Federal Aviation Administration Authorization Act defense, toward a precedent that a carrier's driver is effectively controlled by the broker that hired the carrier.

The judgment also grows with interest. TD Cowen analyst Jason Seidl noted in a report after the affirmation that Judge Jones also affirmed approximately $107 million in pre-judgment interest, at an interest rate of 6.75%, and that a multi-year appeal would imply an even larger compounded charge if the appeal fails. FreightWaves noted there is no known precedent for a verdict of this size against a publicly traded company with an investment-grade credit rating; C.H. Robinson's end-of-second-quarter balance sheet was $5.8 billion, with cash and cash equivalents of $154.9 million.

In a statement released late Friday, C.H. Robinson chief legal officer Dorothy Capers expressed sympathy for the families and said the company did not cause or contribute to the accident. She said Lupus Superior had a Satisfactory rating from the Federal Motor Carrier Safety Administration and had safely delivered nearly 270 loads for the company's customers, that the carrier is an independent company and the driver worked for it, and that the judgment underscores the need for a clear national standard for what constitutes a safe carrier. The company is expected to appeal.