The U.S. Supreme Court will hear oral arguments on March 4 in a landmark case that will determine if freight brokers can be held liable under state laws for accidents involving the federally licensed motor carriers.
At issue is whether the Federal Aviation Administration Authorization Act (F4A) of 1994 preempts state negligence lawsuits against freight brokers for hiring unsafe motor carriers.
Legal experts say the outcome of the case, Montgomery v. Caribe Transport II, LLC, will have significant ramifications for the freight transportation industry and interstate commerce.
“The freight industry is understandably in favor of the rule barring claims as it reduces litigation risk and, thereby, insurance rates and freight costs,” said Dr. J. Kirk McGill, a partner at law firm Hall Estill. “Shippers are likely mostly lined up with the industry as those costs would be passed — in whole or in part — onto them in the form of increased prices for freight. On the other side are the individual injured by negligent motor carriers and their families, along with the organizations representing their interests.”
The case stems from a 2017 accident involving Shawn Montgomery. He was legally parked on the shoulder of an Illinois highway in his truck when he was hit by a truck operated by Caribe Transport.
Montgomery not only sued the motor carrier but also the freight broker that selected the carrier responsible for his injuries. The broker, C.H. Robinson, which manages 37 million shipments annually, argued that it was protected from liability under F4A.
That argument initially was rejected by the district court in Illinois. But a federal district court and the Seventh Circuit Court of Appeals ruled against Montgomery, citing the F4A. Montgomery appealed to the nation’s highest court, which agreed to take the case.
C.H. Robinson wrote in its brief filed with the Supreme Court that freight brokers do not own vehicles or employ drivers and liability should remain with the carriers who have direct control over highway safety. A fragmented system across states would create conflicting rules for the same shipment.
The U.S. solicitor general filed a brief in support of C.H. Robinson, stating that the federal government’s view is that F4A preempts broker liability claims with no safety exceptions. The Transportation Intermediaries Association was among the other groups backing C.H. Robinson. They wrote that expanding liability would increase shipping costs and disrupt supply chain efficiency, without improving safety.
On the flip side, a group of 29 states and the District of Columbia have joined to support Montgomery. They believe Congress never intended to eliminate state tort laws that allow people to sue for harm caused by negligence and not preempted by the FAAAA.
A decision in the case is expected before the Supreme Court’s recess at the start of the summer.
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