Supreme Court Rules That State Tort Claims Against Freight Brokers Are Not Preempted by the FAAAA
Brokers should promptly review their carrier-selection practices, insurance coverage, and compliance programs in light of the Supreme Court's unanimous decision in Montgomery v. Caribe Transport II, LLC, No. 24–1238 (May 14, 2026). The Court held that the Federal Aviation Administration Authorization Act ("FAAAA") does not preempt state-law negligent-hiring claims brought against transportation brokers, resolving a longstanding circuit split and significantly expanding brokers' potential exposure to tort liability.
Background
The case arose after petitioner Shawn Montgomery was severely injured in a trucking accident caused by a carrier that C.H. Robinson Worldwide, Inc.—a transportation broker—had selected despite the carrier's "conditional" safety rating and documented deficiencies in driver qualifications, hours of service, vehicle maintenance, and crash rates. The lower courts held that the FAAAA preempted Montgomery's negligent-hiring claim against C.H. Robinson and that the safety exception did not apply, deepening an existing circuit split that the Supreme Court granted certiorari to resolve.
The FAAAA, enacted in 1994 and amended in 1995, expressly preempts state laws "related to a price, route, or service" of any motor carrier or broker "with respect to the transportation of property." Critically, however, the statute provides that its preemption provision "shall not restrict the safety regulatory authority of a State with respect to motor vehicles." 49 U.S.C. § 14501(c)(2)(A). The central question before the Court was whether this safety exception permits negligent-hiring claims against freight brokers.
The Court's Analysis
The Safety Exception Saves Negligent-Hiring Claims
Justice Barrett, writing for a unanimous Court, held that even assuming the FAAAA's preemption provision would otherwise reach Montgomery's claim, the safety exception saves it from preemption.
The Court's reasoning proceeded in several steps. First, all parties agreed that common-law duties and standards of care form part of a state's authority to regulate safety. Negligent-hiring claims impose a duty of reasonable care in employing a contractor for work carrying a risk of physical harm.
Second, the Court interpreted the phrase "with respect to motor vehicles" in the safety exception according to its ordinary meaning—"concerns" or "regards"—consistent with the Court's prior construction of the same phrase in Dan's City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 261 (2013). The FAAAA defines "motor vehicle" as "a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation." 49 U.S.C. § 13102(16).
Applying these definitions, the Court concluded that requiring a broker like C.H. Robinson to exercise ordinary care in selecting a carrier "concerns" motor vehicles—most obviously, the trucks that will transport the goods. Montgomery's negligent-hiring claim therefore falls squarely within the safety exception.
C.H. Robinson's Counterarguments Rejected
The Court addressed and rejected three principal counterarguments:
First, C.H. Robinson and the United States argued that Montgomery's reading would cause the safety exception to "swallow" the entire preemption provision. The Court disagreed, explaining that the safety exception saves only a subset of preempted claims—those involving regulations concerning motor vehicle safety—while state laws related to carrier prices, routes, and services that have no relationship to safety remain preempted.
Second, C.H. Robinson argued that the interpretation creates surplusage with other FAAAA provisions preserving state authority over route controls based on vehicle size, weight, or hazardous cargo. The Court found this surplusage exists under any reading, because the overlap comes from the reference to a state's regulatory authority over "safety," not from the phrase "with respect to motor vehicles."
Third, C.H. Robinson pointed to what it characterized as an anomaly between subsection (c) and subsection (b) of the FAAAA. Subsection (b), which preempts state regulation of intrastate rates, routes, and services of brokers, does not contain a safety exception. C.H. Robinson argued it would be incongruous for Congress to fully preempt intrastate broker regulation while only partially preempting interstate broker regulation. The Court acknowledged the apparent oddity but concluded: "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.'" The Court stated plainly, "Better to live with the mystery than to rewrite the statute."
Justice Kavanaugh's Concurrence
Justice Kavanaugh, joined by Justice Alito, filed a concurring opinion acknowledging that the case was "closer than the Court's opinion perhaps might suggest." Justice Kavanaugh highlighted the broader policy implications of the decision, noting that the FAAAA pursued economic deregulation, not safety deregulation, and that "it is hard to read the statute as written and conclude that Congress subtly sliced and diced state tort law so that trucking companies would be subject to state tort suits for accidents, but brokers would operate free of any such tort liability."
Justice Kavanaugh also observed that there is no meaningful federal safety regulation of brokers' selection of carriers. The Federal Motor Carrier Safety Administration requires brokers to select federally registered carriers but does not otherwise impose safety standards on broker hiring practices. In Justice Kavanaugh's view, "it is doubtful that Congress, through such indirect language in an economic-deregulation statute, would allow brokers to operate in a black hole with no meaningful safety-related regulation."
Key Takeaways for Freight Brokers
The Montgomery decision alters the legal landscape for transportation brokers. Brokers should be aware of the following practical implications:
State tort claims are now permissible. The unanimous ruling makes clear that the FAAAA's safety exception permits state-law negligent-hiring claims against brokers who arrange transportation with unsafe carriers. Brokers can no longer rely on federal preemption as a categorical defense to such claims.
Due diligence in carrier selection is critical. The decision places a premium on brokers exercising reasonable care in vetting and selecting motor carriers. As the Court noted, Montgomery's claim was grounded in the allegation that C.H. Robinson selected a carrier with a deficient safety record, including failures related to driver qualifications, hours of service, vehicle maintenance, and crash rates. Brokers should implement robust carrier-vetting protocols that take into account carriers' safety ratings, inspection records, and compliance history.
Reasonable conduct remains a defense. The Court and the concurrence both emphasized that brokers who act reasonably should be able to defend successfully against tort suits. As plaintiff's own counsel acknowledged during oral argument, brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." The proximate-cause requirement in typical state tort law should also help protect brokers from excessive liability.
Increased litigation and insurance costs are anticipated. Justice Kavanaugh's concurrence acknowledged that the costs of litigation, insurance, and more substantial carrier inquiries "will cascade through the economy and be paid in part by American consumers in the form of higher prices." Brokers should review their insurance coverage and consider whether current policies adequately address the potential for negligent-hiring claims.
Legislative relief remains a possibility. Justice Kavanaugh noted that brokers "may of course (among other possibilities) ask Congress and the President to change federal law." Brokers and industry associations may wish to monitor and engage in legislative efforts to address the implications of this ruling.
Conclusion
The Supreme Court's unanimous decision in Montgomery v. Caribe Transport II, LLC represents a watershed moment for the freight brokerage industry. By holding that the FAAAA's safety exception permits state-law negligent-hiring claims against brokers, the Court has opened a significant new avenue of potential liability.
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