Crane v. Penske

A truck is on the road under somebody’s authority. When the driver’s paycheck comes from a company three contracts down from the one that took the shipment, the federal leasing rules, not the payroll, decide who answers for him.

The rule

When one authorized motor carrier leases equipment from another carrier that owns it or holds it under a lease, federal regulation requires a written agreement providing that “control and responsibility for the operation of the equipment shall be that of the lessee” from the moment the lessee takes possession (49 C.F.R. § 376.22). The Fifth Circuit has read that assumption of control and responsibility, since the 1970s, to make the carrier that took it the driver’s statutory employer, answerable for his negligence the way an employer answers for an employee, and it has held that the doctrine does not wait on the paperwork: an oral lease will do, and the question is whether there was a lease for the tractor when the crash happened. Separately, the federal statute that bars the states from regulating a motor carrier’s or a broker’s prices, routes, or services saves the states’ safety authority with respect to motor vehicles. In May 2026 the Supreme Court held in Montgomery v. Caribe Transport II that a negligent-hiring claim against a freight broker falls inside that safety exception and survives.

The facts

A shipper hired Penske Logistics, a motor carrier, to move its goods. Penske passed the job through its affiliate broker, Penske Transportation Management, to another carrier, Liberty Lane, which had its own broker affiliate hire a third carrier, OK Trans, which supplied the truck and the driver. On the way to Laredo to pick up cargo, the tractor-trailer jackknifed, crossed into oncoming traffic, and struck a vehicle, killing the man driving it. His child and his parents sued. The district court held that Liberty Lane was the driver’s statutory employer, because it had the agreement with OK Trans for the truck and the driver, but that Penske was not, because Penske had no agreement with OK Trans. It also held the negligent-hiring claim against the Penske broker preempted by federal law.

The holding

Reversed on both counts. Penske, a carrier, engaged Liberty Lane, a carrier that had leased the truck from OK Trans; that is an arrangement between authorized carriers under section 376.22, which required Penske to take control and responsibility for the operation of the equipment. Under the circuit’s precedent, that assumption of control and responsibility made Penske the driver’s statutory employer, in the panel’s words, “regardless of whether Penske and Liberty Lane complied with the formal regulatory requirements.” The district court’s distinction, that Penske’s contract ran to Liberty Lane rather than to OK Trans, did not matter. As for the broker, Montgomery came down while the appeal was pending and took the preemption ruling out from under it; the broker’s fallback, that it owed no duty under Texas law, was left for the district court, which had not reached it.

Why it matters

The defense of a commercial-vehicle case often opens with an organizational chart: the shipper hired a carrier, the carrier hired a broker, the broker hired a carrier, and the driver worked for someone at the bottom. Crane says the chart is not the answer. The carrier whose arrangement put the truck on the road took control and responsibility of it by federal regulation, and that is what makes it the employer, not who signed the driver’s checks, which is the same principle Respondeat Superior starts from. And after Montgomery, the broker that chose the carrier can be asked the ordinary-care question in a Texas courtroom. For a family in a case like this one, the defendants are found in the leases, the load documents, and the broker’s file, not in the crash report; the trucking company liability page covers how that paper gets collected, and the Webb County page covers the corridor this load was headed for.

Crane v. Penske Transportation Management, L.L.C., No. 25-40012 (5th Cir. Aug. 4, 2026) (Engelhardt, J., joined by Wiener and Oldham, JJ.), applying 49 C.F.R. § 376.22 and Montgomery v. Caribe Transport II, LLC, 608 U.S. ___ (May 14, 2026). Read from the opinion. Analyzed here for the lawyering, not the politics. This is general information, not legal advice.