Download this article in PDF format.
U.S. freight brokers have long been shielded from many state-level negligent hiring lawsuits tied to the carriers they select to transport freight. These operators work in the middle of the logistics chain, shepherding goods from point A to point B without ever touching the freight. Because of this, they’ve largely avoided liability claims tied to crashes and accidents involving the carriers they hire.
That changed in May, when the Supreme Court of the United States ruled in the case of Montgomery v. Caribe Transport II, LLC. The plaintiff, Shawn Montgomery, suffered severe injuries, including the amputation of his lower leg, when a truck driven by Yosniel Varela-Mojena struck his stopped tractor trailer in Illinois. Varela-Mojena was hauling plastic pots for Caribe Transport II. C.H. Robinson Worldwide, Inc. who brokered the shipment, and Montgomery claimed it negligently hired Varela-Mojena and Caribe Transport, despite the carrier’s safety rating.
According to SCOTUSblog, the case dates back to 2017, when Montgomery pulled over on a highway due to a mechanical issue and a tractor-trailer driven by Varela-Mojena veered off the road and rear-ended Montgomery’s stopped vehicle. Montgomery sued C.H. Robinson, among others, arguing that the broker was liable because it knew—or it should have known—that Caribe II was an unsafe choice to ship its goods.
The lower courts had previously blocked Montgomery’s negligent hiring claim under the Federal Aviation Administration Authorization Act of 1994’s (FAAAA) preemption provision, but SCOTUS ruled that the law’s safety exception allows the claim to move forward. According to law firm Cozen O’Connor, SCOTUS reasoned that claims falling within the FAAAA’s safety exception fall under a state’s safety regulatory authority with respect to motor vehicles, and are therefore not preempted as district and appellate courts have previously held.
“Now, a state-law negligent-hiring and/or negligent-selection claim against a transportation broker survives in certain contexts,” the firm explains, “when it had otherwise been extinguished.”
A SCOTUS SURPRISE
In simple terms, SCOTUS’ ruling allows some state negligent hiring claims against freight brokers to proceed when they relate to motor vehicle safety. Brokers won’t be automatically liable for every incident, but the ruling may bring more attention to safety ratings, vetting practices and the documentation behind carrier assignments.
The freight industry was quick to respond to the unanimous ruling. “This is like asking travel agents to evaluate the safety of a given airline despite the fact that the airline has been licensed to fly by the federal government,” Chris Burroughs, president and CEO of the Transportation Intermediaries Association told AP. “We are working with our members to assess potential next steps to mitigate the consequences of the Supreme Court’s decision.”
C.H. Robinson said the decision does not mean brokers will be “routinely subject” to lawsuits. “We will keep working with policymakers, advocates, carriers, our customers, and others across the industry to strengthen the national safety system and advance practices that reduce accidents on America’s roads,” Dorothy Capers, chief legal officer, told AP, which says the ruling could have “far reaching effects if brokers can be held liable for the actions of the trucking companies they hire.”
In “SCOTUS shocker: High court says brokers are accountable for hiring unsafe carriers,” Jason Cannon says the ruling “marks an outcome far different from 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.’”
Heavy Duty Trucking says the industry has been moving in this direction for years anyway. “When you start thinking about it, due care has long existed before any of these regulations,” trucking safety consultant Rob Carpenter told the publication. “When it comes down to just inherently doing your diligence to mitigate whatever issues come your way or come the way of others, that’s long been a principle of personal responsibility.”
Carpenter says the ruling’s impact will “vary dramatically depending on the type of carrier involved.” Larger carriers with established shipper relationships and documented safety programs may feel less pressure, while the owner-operator who relies 100% on the spot market and broker freight may face more scrutiny from brokers before any loads are assigned.
