TQL has filed its first formal response to a racketeering lawsuit brought by a group of motor carriers against the third-party logistics providers C.H. Robinson and TQL. The company is seeking to have the case dismissed, arguing that the plaintiffs have failed to demonstrate unlawful conduct and that the dispute has been brought before the wrong court.
The response consists of three separate motions submitted on Monday to the US District Court for the Eastern District of Texas. TQL’s defence rests on two main arguments: its alleged business practices do not constitute racketeering or false advertising under the Racketeer Influenced and Corrupt Organizations Act (RICO), and the litigation should instead be heard in Ohio under the terms of its carrier contracts. A third motion specifically challenges the inclusion of IWS Motor Freight in the proceedings.
C.H. Robinson, the other major 3PL named in the lawsuit, has not yet filed its response. If the Texas court accepts TQL’s argument concerning jurisdiction and venue, it could resolve the procedural issue without reaching the substance of the carriers’ allegations.
TQL seeks to move the dispute to Ohio
At the heart of TQL’s procedural challenge are the agreements signed by the plaintiffs when entering into carrier contracts with the company. According to TQL, Stevens Trucking, Western Flyer Express, Christenson Transportation, E.O.S. and the other named carriers agreed to litigate disputes with the broker exclusively in state court in Clermont County, Ohio.
Located in the Cincinnati suburbs, Clermont County is also where TQL is based. The company is asking the court to enforce those contractual provisions before examining the merits of the case, noting that the agreements explicitly select Ohio law.
The broker is also seeking to remove IWS Motor Freight from the proceedings. TQL argues that IWS is not based in Texas, has no direct contractual relationship with the company and has conducted no business with it.
A second motion filed on Monday provides the first public indication of how TQL intends to contest the substance of the allegations, beyond its objection to the chosen venue.
A series of legal disputes for TQL
The RICO litigation comes amid a busy period on the legal front for TQL. In September, the company secured a victory in a Colorado liability trial stemming from a fatal incident involving a truck it had hired, after being dismissed as a defendant in the case.
TQL also presented oral arguments in its dispute with carrier Pink Cheetah, a case addressing the issue of transparency in freight brokerage. That litigation has drawn attention to the broader debate over brokers’ disclosure obligations and the information available to carriers.
Despite the wider legal implications of broker-related lawsuits, the Supreme Court precedent established in Montgomery v. Caribe Transport II does not apply to the current RICO proceedings.
TQL attributes carriers’ losses to market competition
In its central argument, TQL rejects the claim that the actions of the two major brokers amount to a conspiracy. Instead, it characterises the carriers’ complaints as a dispute arising from losing freight contracts to competitors offering lower prices.
According to the company, the plaintiffs are attempting to recast the consequences of commercial competition and their own business difficulties as racketeering and false advertising. TQL argues that the lawsuit does not identify a single specific act by the broker that directly caused the loss of an individual customer account.
The company also seeks to distinguish its own conduct from that of C.H. Robinson. It points out that many of the lost accounts cited in the complaint were connected to the carriers’ business relationships with C.H. Robinson. However, TQL does not use this distinction to accuse its co-defendant of improper conduct.
The broker maintains that declining freight rates, carrier non-compliance and a weakening freight market are not, in themselves, evidence of racketeering or false advertising.
Shipper losses do not establish a RICO violation, TQL argues
The carriers’ complaint identifies several shippers that previously used their services but subsequently stopped doing so, including Johnson Controls, Kroger and Kraft Heinz.
TQL argues that listing these losses does not establish a direct link between the alleged statutory violations and the financial harm claimed by the plaintiffs. In its view, the aggregate figures presented in the lawsuit fail to identify which losses were specifically caused by an unlawful act attributable to TQL.
The company also criticises what it describes as the use of anecdotes presented as facts. According to its filing, the complaint includes general allegations about the freight industry, the practices of other brokers and injuries involving third-party drivers. TQL contends that these elements do not establish the specific legal claims brought against it and instead distract from what it considers a lack of factual evidence.
The broker further characterises many of the carriers’ allegations as inferences rather than demonstrated facts. Complaints about low freight rates, it argues, do not establish fraudulent intent merely because carriers believe those rates are evidence of forced labour or because subsequent non-compliance allegedly contradicts earlier promises.
Disputed are allegedly falsified records
The lawsuit also mentions allegedly falsified records. TQL replies that the documents were received by the company and not created by it.
Receiving a falsified record alone does not prove that TQL knowingly participated in the falsification, the broker said. The company disputes the suggestion that the records show its involvement in unlawful activity.
TQL also disputes the plaintiffs’ broader theory regarding the relationship between carrier operating practices, freight pricing and lost business.
Some operators are said to force workers or go around regulations under the carriers’ account, cutting down on their operating costs. Then brokers buy capacity at lower prices which helps freight prices and shipper benchmarks fall. Plaintiffs say that this dynamic ultimately results in compliant carriers losing bids or operating at reduced margins.
TQL argues that this chain of alleged events does not demonstrate any specific illegal conduct by the broker that directly resulted in any particular plaintiff losing an account, experiencing margin erosion, or otherwise suffering a decline in revenue.
TQL Questions Claims Against Licensed Carriers
The broker also contends that the carriers have failed to adequately explain how the use of motor carriers licensed and approved by the US Department of Transportation would amount to fraud or a violation of statute.
TQL points out an important aspect: The plaintiffs’ own business models, at least half of which involves carriers who are also licensed freight brokers with the Federal Motor Carrier Safety Administration (FMCSA).
The company argues that this point should make the plaintiffs aware of how the freight brokerage business works, including the purchase of transportation capacity and the competitive pressures that impact freight rates.
TQL argues that the fact that lower prices, shrinking margins, or business losses exist does not demonstrate that a broker “engaged in racketeering or made false advertising statements.” Its motions seek to insulate the carriers’ economic complaints from the unique legal demands of the RICO statute.
Another challenge is targeted at IWS Motor Freight
TQL’s third motion is directed specifically at IWS Motor Freight. The broker says IWS should not be included in the case because it had no direct contract with TQL and did no business with the company.
The motion also reasserts that IWS is not headquartered in Texas, bolstering TQL’s assertion that the carrier’s involvement in the proceedings is unwarranted.
The court must now address TQL’s procedural objections and its substantive arguments on the claims. The outcome could determine whether the case is tried in Texas, sent to Ohio, or dismissed on other grounds. C.H. Robinson has not yet responded, making TQL’s filings the first formal defense by either of the two big brokers named in the suit.
