The Supreme Court on Thursday ruled that federal law does not shield transportation brokers from state-level personal injury lawsuits, a decision that will likely have sweeping implications for how freight is managed nationwide.
The 9-0 ruling in Montgomery v. Caribe Transport II, LLC allows a lawsuit to proceed against C.H. Robinson, one of the country’s largest freight brokers. The case was brought by Shawn Montgomery, who lost a leg after being struck by a truck that C.H. Robinson had contracted to move a load through Illinois.
The ruling marks a far different outcome that what many legal experts had predicted and stands in contrast with the outcome C.H. Robinson CEO Dave Bozeman predicted to investors and analysts on the company's earnings call just a few weeks ago: "The Montgomery case is a case that we expect to win," he said.
During oral arguments in March, C.H. Robinson counsel Theodore Boutrous Jr. charged that brokers are merely middlemen who do not own or operate vehicles, adding that the role of the broker is to match “federally approved carriers with shippers,” and there is no duty on the part of the broker to ensure they match a load with a safe carrier. The fault of failing to provide a safe driver, he said, lies with the fleet and the driver as brokers simply choose carriers from a federally authorized pool.
Writing for the Court Thursday, Justice Amy Coney Barrett rejected the industry’s argument that the Federal Aviation Administration Authorization Act (FAAAA) of 1994 preempts such claims. While the federal law prevents states from regulating the "prices, routes, and services" of the trucking industry, Barrett wrote that it specifically preserves a state's "safety regulatory authority" regarding motor vehicles.
"A claim is 'with respect to motor vehicles' if it 'concerns' the vehicles used in transportation," Barrett wrote, noting that requiring a broker to exercise reasonable care when selecting a carrier directly concerns the safety of the trucks on the road.
Freight brokers match shippers with more than 780,000 motor carriers operating in the United States. Montgomery’s suit alleged that C.H. Robinson should have known the carrier it hired had a conditional safety rating and a history of driver qualification deficiencies.
In a concurring opinion joined by Justice Samuel Alito, Justice Brett Kavanaugh acknowledged industry concerns that the ruling could lead to higher insurance costs and unpredictable litigation. However, Kavanaugh emphasized that Congress intended the 1994 law to deregulate the economics of the industry, not to create a "black hole" where brokers face no safety accountability.
The justices noted it is not obvious why Congress included a safety exception in FAAAA (c) but not in (b), but added "it would be even odder to say that the alleged tort—the negligent hiring of an unsafe motor carrier whose truck caused injury—is not an exercise of 'the safety regulatory authority of a State with respect to motor vehicles.'... "Better to live with the mystery than to rewrite the statute."
The decision resolves a split among federal appeals courts that had left brokers in different parts of the country subject to varying liability standards and reverses a decision by the 7th U.S. Circuit Court of Appeals, remanding the case for further proceedings.
"Truck safety is a matter of life and death," Kavanaugh wrote, noting that nearly 5,000 people died in truck-related accidents in 2022. He added that brokers who perform "hard questions" and hire reputable carriers should still be able to successfully defend themselves in court.
