The U.S. Supreme Court issued a unanimous decision in holding that state-law claims alleging a freight broker negligently hired/selected a motor carrier to transport goods are not preempted by the Federal Aviation Administration Authorization Act (FAAAA) because they fall within the statute’s safety regulatory authority exception with respect to motor vehicles. The Court reversed the Seventh Circuit decision in Montgomery v. Caribe Transport II, LLC et al., and remanded for further proceedings.
What the Court Held
The plaintiff alleged that a transportation broker, C.H. Robinson, was liable for injuries caused by a motor carrier, Caribe Transport II, LLC, because the broker negligently hired an allegedly unsafe carrier to move freight. The district court and Seventh Circuit had held the claim was expressly preempted by the FAAAA and not saved by the safety exception. The Supreme Court disagreed and held the safety exception applies, meaning the negligent-hiring claim may proceed under state law.
In reaching that conclusion, the Court reasoned that:
- state common-law duties (including negligence standards) are part of a state’s authority to regulate safety; and
- a negligent-hiring/selection claim concerns motor vehicles because it targets the broker’s selection of the carrier that will operate trucks on the highways.
Why This Matters for Brokers
Although Montgomery arose from an accident in Illinois, the Supreme Court’s interpretation of the FAAAA applies nationwide. Practically, this means that in transportation matters that involve freight brokers, plaintiffs can be expected to plead negligent selection/negligent hiring claims against an additional defendant, thereby expanding the pool of available insurance coverage for recovery.
Stated differently: the decision increases the likelihood that broker defendants will face discovery and litigation on theories that the broker should have used reasonable care in selecting a carrier for a load - particularly where the plaintiff alleges the broker ignored red flags about carrier safety.
Key Takeaways for Risk Management
The Supreme Court has now made clear that the FAAAA’s safety exception can preserve state-law negligent-selection claims against brokers, meaning broker liability exposure in personal-injury trucking cases is likely to expand in practice. In light of the holding, brokers should assume that their carrier selection practices may be scrutinized under state negligence standards and consider strengthening defensibility on “reasonable care” and causation.
Recommended steps include:
- Carrier vetting: Document a consistent, repeatable carrier-qualification process (e.g., verifying operating authority and reviewing available safety indicators before tender).
- Escalation protocols: Create written triggers for enhanced review (e.g., adverse safety ratings, recent crashes, out-of-service patterns, insurance lapses).
- Contracting and allocation: Review broker-carrier agreements and shipper contracts for indemnity, insurance, and defense provisions (while recognizing contractual provisions do not eliminate tort exposure).
- Recordkeeping: Maintain a clear audit trail showing what was reviewed and why the carrier was selected for the load.
- Claims playbook: Prepare an early-response strategy for litigation (preservation, tender/indemnity demands, and a consistent narrative of reasonable selection practices).
Bressler Amery & Ross can review current carrier-selection procedure for defensibility and propose targeted updates to contracts, onboarding, and documentation practices to reduce litigation risk.
MaryJane Dobbs
973.966.9682
Christina M. Zarcone
973.236.0192