Brokers Face RICO Suit Over Cheap Freight, but a 2006 Supreme Court Case May Shut It Down
(The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.) As if C.H. Robinson did not have enough going on with its recent acquisition announcement with RXO, six trucking companies sued the global 3PL as well as Total Quality Logistics in Texas federal […] The post Brokers Face RICO Suit Over Cheap Freight, but a 2006…
Six trucking companies have filed a lawsuit against C.H. Robinson and its subsidiary Total Quality Logistics, alleging the companies engaged in illegal activities to undercut competitors through forced labor, fake logs, and safety shortcuts. The plaintiffs claim the brokers used unsafe carriers and low bids to win contracts, resulting in lost revenue and damages.
The case hinges on a 2006 Supreme Court decision in Anza v. Ideal Steel Supply Corp., which ruled that plaintiffs cannot recover under RICO when the direct victim is not the direct defendant. The carriers argue the brokers' actions caused them to lose business, while the defendants contend the injuries are too indirect. The lawsuit also raises questions about the defendants' own safety and maintenance records, as they have not been free of issues.
A motion to dismiss is expected based on the Anza precedent, but the outcome depends on whether the plaintiffs can establish a direct link between the defendants' actions and the plaintiffs' lost contracts.
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