On Friday, October 3, the Supreme Court granted certiorari in Montgomery v. Caribe Transport II, LLC, et al., No. 24-1238, setting the stage for the Court’s resolution of a vitally important issue to the U.S. freight industry: whether freight brokers and other entities that hire motor carriers can be held liable for the alleged negligent selection of a motor carrier following a highway accident. Firm client C.H. Robinson prevailed below at the Seventh Circuit and is the respondent in Montgomery.
More than 30 years ago, Congress enacted the Federal Aviation Administration Authorization Act (FAAAA) to preempt state laws related to motor carrier prices, routes, and services. In the FAAAA, like in comparable provisions of the Airline Deregulation Act of 1978 (ADA), Congress sought to protect the deregulation of transportation services. In both cases, Congress recognized that interfering state laws could erode the economic benefits of deregulation. At the same time, Congress recognized the preexisting authority of the States to regulate motor vehicle safety on the highways and so included a “safety exception” in the preemption provision’s savings clause, which saves from preemption a State’s exercise of its safety regulatory authority with respect to motor vehicles.
Current circuit decisions are split on the applicability of the safety exception to negligent hiring claims against brokers. The Ninth and Sixth Circuits have ruled that the safety exception “saves” these claims from preemption because such claims are at least indirectly connected to motor vehicle safety. The Seventh and Eleventh Circuits have determined that such claims remain preempted because they are not directly connected to motor vehicles.
In July, Thompson Coburn’s Warren Dean and Katie Kraft filed a response brief on behalf of C.H. Robinson, urging the Court to consider and affirm the Seventh Circuit’s decision that the FAAAA preempts state common-law negligent selection claims against freight brokers. C.H. Robinson’s cert-stage brief in Montgomery argued that the FAAAA’s statutory text and legislative history and Supreme Court precedent confirm that the safety exception in the FAAAA’s savings clause does not save these claims and that to find otherwise, as the Ninth and Sixth Circuits have done, enables the States to establish a patchwork of varying fitness standards for motor carriers in interstate commerce through their tort systems in direct contravention of Congress’s deregulatory objectives. The brief asked the Court to review the question, affirm the Seventh Circuit, and uphold deregulation.
The order granting certiorari offers the Supreme Court the opportunity to affirm the Seventh Circuit and overrule contrary precedent that drastically limited the scope of FAAAA preemption.
C.H. Robinson is one of the largest freight brokerage firms in the world and a leader in the freight transportation, third-party logistics, and supply chain management industries, particularly in North American surface transportation.
