A 9-0 Supreme Court ruling in Montgomery v. Caribe Transport II holds that FAAAA preemption does not bar state negligent-hiring claims against freight brokers, ending a four-circuit split.
A unanimous Supreme Court ruled May 14 that state negligent-hiring claims against freight brokers survive federal preemption under the Federal Aviation Administration Authorization Act, a decision that exposes the freight brokerage industry to tort liability it had largely avoided for years [1]. The Court held that such claims fall within the FAAAA's safety exception, which preserves state authority to regulate motor vehicle safety, and therefore are not displaced by the statute's broad preemption of state laws affecting broker "prices, routes, or services" [1]. Justice Amy Coney Barrett authored the opinion for all nine justices [1].
The case, *Montgomery v. Caribe Transport II, LLC*, arose as a direct vehicle for resolving a durable four-circuit split [1]. The Sixth and Ninth Circuits had permitted negligent-hiring claims against freight brokers to proceed under the safety exception; the Seventh and Eleventh Circuits had barred them as preempted [1]. The Supreme Court granted certiorari to settle that conflict, and the resulting ruling establishes a uniform national rule [1]. Caribe Transport II, LLC was the named carrier defendant, and the litigation had drawn attention from freight brokers, insurers, and shippers tracking the preemption question [2].
The substantive significance is considerable. For roughly two decades, freight brokers operating in circuits that read the FAAAA preemption clause broadly had structured their contractual relationships, carrier vetting practices, and insurance arrangements on the assumption that negligent-hiring tort claims could not reach them in federal court [2]. That assumption is now invalid in every circuit. The safety exception, as construed by the Court, applies when a state law claim is genuinely aimed at motor vehicle safety rather than economic regulation of the brokerage market, and negligent-hiring claims satisfy that standard because they target the decision to engage an unsafe carrier [1]. Justice Barrett's analysis focused on the statutory text of the exception and its relationship to the preemption clause's core commercial purpose [1].
The practical consequences will ripple through an industry that moves goods across nearly every supply chain in the American economy [2]. Brokers will face pressure to document carrier qualification processes more rigorously, since those records will now be discoverable in negligent-hiring suits [2]. Insurers are expected to reprice broker liability coverage, and shippers may encounter revised contractual indemnification demands as brokers seek to shift newly confirmed exposure downstream [2]. Litigation filings against brokers in previously hostile circuits are expected to accelerate in the near term, as plaintiffs' counsel moves cases that had been held in abeyance pending the Court's resolution of the split [1].