Supreme Court Clarifies FAAAA Safety Exception
The United States Supreme Court’s unanimous decision in Montgomery v. Caribe Transport II, LLC is a significant ruling for freight brokers, motor carriers, shippers, logistics companies and businesses that rely on third-party transportation networks. The Court held that a state-law negligent-hiring claim against a freight broker is not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA) when the claim falls within the statute’s safety exception for state authority with respect to motor vehicles.
The case arose from a serious trucking accident in Illinois. Shawn Montgomery alleged that C.H. Robinson, acting as a transportation broker, negligently selected Caribe Transport II, LLC to haul a load despite alleged safety-related red flags. Lower courts dismissed the claim against C.H. Robinson on federal preemption grounds, concluding that the FAAAA barred state-law claims related to broker services. The Supreme Court reversed and remanded, allowing the negligent-hiring theory to proceed.
The ruling does not mean that freight brokers are automatically liable for accidents involving carriers they select, nor does it determine whether C.H. Robinson was negligent. Instead, the decision answers a threshold legal question: whether federal law categorically prevents injured parties from bringing state-law negligent-selection claims against brokers. The Court’s answer was no.
Increased Scrutiny and Litigation Risk
For businesses, the practical implication is straightforward: broker selection may now receive significantly closer scrutiny in personal-injury litigation. Plaintiffs are likely to examine what a broker knew, or reasonably should have known, about a carrier’s safety history, driver qualifications, crash record, inspection history, authority status, insurance and compliance profile before assigning a load. The Court emphasized that requiring ordinary care in selecting a carrier concerns motor vehicles because the selection determines which trucks and drivers are placed on the road.
This ruling also weakens a defense strategy that many brokers have relied upon in similar cases: early dismissal based on FAAAA preemption. While preemption will remain relevant in claims that directly regulate broker prices, routes or services unrelated to safety, Montgomery makes clear that state-law safety-based claims occupy different ground. In practical terms, more cases may proceed beyond the pleading stage into discovery, increasing litigation costs and pressure to settle.
Practical Takeaways for Businesses
Freight brokers and logistics companies should respond by tightening carrier-vetting procedures. That includes documenting the basis for carrier selection, confirming operating authority and insurance, reviewing available safety data, maintaining written qualification standards, training employees on escalation procedures and ensuring that contracts align with actual business practices. Companies should also avoid overstating their control over carriers in contracts, websites or customer communications unless they are prepared for the legal consequences of those representations.
Shippers and manufacturers should also pay attention. Even if the ruling directly concerns brokers, businesses that outsource transportation should revisit indemnity provisions, insurance requirements, broker agreements and internal expectations regarding carrier safety. A lowest-cost selection model that ignores documented safety concerns may become harder to defend.
The bottom line is that Montgomery shifts risk analysis in the transportation industry. Federal deregulation remains important, but it does not provide blanket immunity for broker decisions that allegedly implicate roadway safety. Going forward, brokers should prioritize defensible processes, consistent documentation and rigorous carrier review.
Contact
For questions or concerns about how this ruling may impact your business, contact KJK Partner Dave Campbell (JDC@kjk.com).