The nation’s highest court delivered a major blow to freight brokers Thursday, ruling they can be sued for putting unsafe carriers on the road.
In a unanimous decision, the Supreme Court ruled in favor of a truck driver, Shawn Montgomery, who had sued C.H. Robinson for a crash with another truck that left him an amputee. The ruling resolves a split among federal courts and opens the door for negligent-hiring lawsuits against brokers to proceed nationwide.
For years, brokers have argued that federal preemption laws protect them from state negligent hiring lawsuits tied to truck crashes. Thursday’s ruling strips away much of that defense and opens the door for more cases targeting how brokers vet carriers.
At the center of the case is the Federal Aviation Administration Authorization Act (FAAAA), which prevents states from interfering with trucking prices, routes and services. Although the law broadly limits states’ ability to regulate the trucking industry, it carves out an exception for motor vehicle safety.
While most federal courts agree that broker liability lawsuits touch on prices, routes and services, courts have split on whether those claims also fall under the FAAAA’s safety exception. Some courts said hiring an unsafe carrier directly concerns motor vehicle safety. Others ruled brokers are too far removed from the truck itself to qualify. Consequently, a broker could be held liable for a crash in one part of the country but off the hook in another.
Thursday’s Supreme Court ruling settles that debate.
“Here, requiring C.H. Robinson to exercise ordinary care in selecting a carrier ‘concerns’ motor vehicles—most obviously, the trucks that will transport the goods,” Justice Amy Coney Barrett wrote in the opinion. “Montgomery’s negligent-hiring claim thus falls within the (FAAAA’s) safety exception, which saves it from preemption. C.H. Robinson’s counterarguments are unpersuasive.”
Effectively, the ruling means brokers can no longer rely on federal preemption as a blanket defense against negligent hiring claims. However, brokers are not automatically liable for any crash. As Justices Brett Kavanaugh and Sam Alito pointed out in their joint concurring statement, Plaintiffs still have to prove that the broker should have known that motor carrier was unsafe. If brokers hire a motor carrier with a proven safety record, they could be taken off the hook.
“Importantly, the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents,” Kavanaugh and Alito wrote. “As even plaintiff ’s counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. In plaintiff ’s counsel’s words, the 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.’” LL
In a response to the decision, C.H. Robinson said it was “disappointed with the outcome.”
“Our hearts continue to go out to the victims of truck accidents,” Dorothy Capers, chief legal officer at C.H. Robinson, said. “Safety is foundational to who we are—our employees and their families travel these same roads, and our business depends on safe freight delivery. While we are disappointed in the Court’s decision, we will continue to operate responsibly, support stronger federal enforcement, and work constructively with regulators, carriers, and customers to strengthen the national safety system and support safe, reliable transportation across the country. As Justices Kavanaugh and Alito stated in the concurrence, ‘Importantly, the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents.’”
What the Supreme Court ruling means for brokers and carriers moving forward remains to be seen. Even the justices siding against brokers acknowledged the economic fallout could be significant.
“In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits,” Kavanaugh and Alito wrote. “Moreover, the costs of litigation and insurance, as well as the costs of brokers’ conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. But those countervailing points ultimately do not carry the day in determining how broadly to construe the vague ‘with respect to motor vehicles’ language in (FAAAA).” LL
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