Supreme Court Holds Negligent Selection Claims Against Brokers Are Not Preempted

In a much-anticipated but surprisingly unanimous opinion issued on May 14 in Montgomery v. Caribe Transport II, LLC, the Supreme Court held a state law claim that a broker negligently selected or hired a motor carrier is not preempted by a federal deregulatory statute (the “FAAAA”), 49 U.S.C. § 14501. The decision resolves a split in the United States Courts of Appeals, where the Seventh and Eleventh Circuits held such claims preempted and the Sixth and Ninth Circuits held such claims were not.

As part of deregulation of the trucking industry, Congress enacted a law, the FAAAA, preempting state laws related to prices, routes, and services of motor carriers and, relevant to this case, brokers. That law also contained an exception from preemption for the safety regulatory authority of a State with respect to motor vehicles (though, oddly, there is no safety exception for intrastate prices, routes, and services of a broker). Before the Court was the question of whether a negligent selection claim against a broker arranging an interstate move is saved from preemption by the safety exception. Specifically, does such a claim fall within the exercise of a State’s safety regulatory authority “with respect to motor vehicles.”  The Court held that the federal statute’s safety exception applies to claims that concern the vehicles used in transportation and thus includes a claim that a broker failed to exercise reasonable care in selecting a carrier to transport goods via truck.

A concurring opinion written by Justice Kavanaugh and joined by Justice Alito acknowledged the practical reality that a “broker may not always (or even often) be in a good position to objectively assess the relative safety of different trucking companies.” The concurring opinion recognized that brokers do not own or lease the trucks or hire the drivers. As Justice Kavanagh notes, state tort law can be unpredictable with litigation and insurance costs being passed on to consumers. Nevertheless, the decision underscores the importance to brokers of a sound and reasonable carrier vetting procedure that is faithfully followed.

Absent intervention by a legislature, what a broker must reasonably do to vet carriers it contracts with will evolve with case law that is fact-dependent and varies by state. However, some level of carrier screening will be necessary, as it has been in many jurisdictions prior to this decision. As with many business decisions, it will involve a balancing of legal and business risks.

FMCSA’s MOTUS Registration System Launch: Motor Carrier Access Updates

The Federal Motor Carrier Safety Administration (FMCSA) will launch the Motus Registration System, replacing several legacy platforms, including the Unified Registration System (URS). FMCSA expects to grant full access to motor carriers and brokers in late May and required all carriers to complete key actions by May 14, 2026. If you have not already done so, you can still complete these key actions in the existing system. Doing so before the “go live” date will be critical to keep access to your account.

What Is MOTUS?
Motus, meaning movement in Latin, is FMCSA’s unified online system for USDOT Numbers and operating authority registration. It is intended to replace parts of URS, the Licensing and Insurance system, and other legacy platforms with a secure, single platform.

Late‑May 2026 Go‑Live for Motor Carriers
Supporting companies have had limited access to Motus since December of 2025. FMCSA recently announced that motor carriers, brokers, and freight forwarders will gain access in late May 2026. Once live, Motus will be the primary system for registration updates and authority management.

Action by May 14, 2026
In advance of the Phase II launch, FMCSA issued a formal notice requiring all carriers to update and verify their registration information in the FMCSA Portal no later than May 14, 2026. You can still complete these actions after the May 14^th date but should do so as soon as possible to keep access to your account.

• Confirm FMCSA Portal account is active.
• If your account has been disabled or archived, reach out to FMCSA’s contact center. At http://www.fmcsa.dot.gov/registration/ask-fmcsa
• Ensure company information, operating classification, and contact details including individuals authorized to access your record are accurate
• Verify that the correct Company Official is designated, as only the FMCSA Portal Company Official using the same FMCSA Portal login.gov email will be permitted to claim an account in Motus for the first time.
• Update records using the Biennial Update (MCS‑150) function if needed

What Is Not Changing (for Now)
At launch, Motus will not eliminate MC/FF/MX numbers, introduce Safety Registration, or change BOC‑3 filing requirements. Those issues remain subject to future rulemaking.

Our Take
The May 14 deadline was not optional housekeeping—it was a prerequisite to a smooth transition. If you missed the deadline, complete the actions as soon as possible to avoid access issues on the “go-live” date.

If you have questions about Motus readiness or risk mitigation, we are actively advising clients on transition planning.

Non-Domiciled Final Rule — D.C. Circuit keeps FMCSA’s Final Rule in Place While the Case Proceeds

On May 5, 2026, the D.C. Circuit denied petitioners’ emergency request to stay the Federal Motor Carrier Safety Administration’s (FMCSA) Final Rule on non-domiciled CDL drivers. The Final Rule limits eligibility for non-domiciled commercial driver’s licenses (CDLs) to certain visa categories, including H-2A, H-2B, and E-2. The court concluded that petitioners did not meet the high standard for a stay, especially the requirement to show a strong likelihood of success on the merits.

The court accepted FMCSA’s safety rationale: states generally cannot obtain foreign driving records to evaluate non-domiciled applicants, and an applicant’s prior unsafe driving record can indicate future crash risk. The court also agreed that H-2A, H-2B, and E-2 visa holders undergo government vetting (including consular processing and Department of Labor checks) that FMCSA treated as a practical substitute for domestic driving-history review. In addition, the court acknowledged FMCSA’s concerns that state licensing staff frequently misread Employment Authorization Documents (EADs), leading to inconsistent eligibility decisions. Finally, the court found that FMCSA reasonably weighed public-safety considerations against drivers’ reliance interests.

The court expedited the briefing schedule with oral argument set for September 2026. FMCSA’s Final Rule remains in effect during briefing and argument.

In responding to the decision, transportation providers should consider the following:

• Consider staffing and recruiting impacts under the Final Rule now. Current non-domiciled licenses remain valid until expiration, but those licenses will not be renewable unless the driver meets the requirements of the Final Rule.
• Build non-domiciled verification/expiration tracking into your driver qualification and onboarding process.
• Monitor timing for potential changes: briefing runs June–July 2026 and oral argument is scheduled for September 2026; a decision after argument could affect eligibility rules with limited lead time.
• Establish a defensible and audit-ready documentation process for drivers impacted by the Final Rule.

TSA Clarifies Authority

The Transportation Security Administration (TSA) has restructured and reinforced its inspection authority over regulated businesses, including Indirect Air Carriers (IACs) and Certified Cargo Screening Facilities (CCSFs). Historically, TSA’s inspection authority depended on the operations involved. For example, the agency’s inspection authority over IACs, previously located at 49 C.F.R. § 1548.3, was somewhat narrower than its authority over CCSFs, previously located at 49 C.F.R. § 1549.3.

TSA has removed both regulations and replaced them with a new consolidated regulation, located at 49 C.F.R. § 1503.207, that more closely tracks the authority it previously held over CCSFs and makes clear that TSA may inspect all property, facilities, equipment, operations, and records necessary to carry out its transportation-security responsibilities. The new regulations further authorize TSA to conduct inspections without advance notice and without a subpoena.

While this change may not noticeably impact how TSA conducts inspections on a day-to-day basis, it does signal an expansion of the agency’s inspection authority, at least with respect to IACs. As always, the Scopelitis Air Cargo Team is available to assist IACs, CCSFs, and others regulated by TSA to navigate regulatory inspections and, if needed, the resulting enforcement cases.

Spotlight on Insurance & Risk Management in the Transportation Industry

Transportation companies operate in a complex risk environment shaped by evolving regulations, intricate business relationships, and inherent operational exposures. A strong insurance and risk management program is essential to limit financial risk and support long-term stability.

Strategic Risk Management Solutions

Scopelitis advises transportation companies, insurers, and insurance professionals on the design and implementation of cost-effective insurance and risk strategies. The Firm helps clients design and evaluate insurance and alternative risk arrangements, including:

• Auto Liability and Non-trucking liability
• Occupational accident programs
• Contingent coverages
• Broker liability products
• Loss-sensitive programs (high-deductible and retrospective premium structures)
• Risk retention and risk purchasing groups
• Domestic and offshore captive insurance arrangements

The Firm also advises on reducing claim exposure, managing reserves, and limiting collateral obligations, including claim-fund deposits and letters of credit.

Regulatory Compliance and Coverage Analysis

Transportation insurance programs operate in a highly regulated environment. Scopelitis advises clients on state and federal insurance compliance while identifying operational risks across areas such as:

• Workers’ compensation coverage and premium audits (NCCI rules and state requirements)
• State and federal self-insurance qualification (including the FMCSA self-insurance program)
• Insurance arrangements that may implicate unauthorized insurance or unlicensed brokerage
• ACA compliance for health insurance and employee welfare benefit programs
• Arrangements that may constitute inappropriate Multiple Employer Welfare Arrangements (MEWAs)

By combining legal insight with industry-specific knowledge, the Firm helps clients proactively manage risk and align insurance programs with business and financial realities.

Coverage Disputes

Insurance disputes in transportation often involve shippers, brokers, carriers, insurers, and regulatory requirements, as well as complex policies. Scopelitis represents clients in pre-suit negotiations, alternative dispute resolution, and litigation in state and federal courts nationwide, including matters involving:

• Indemnification disputes and tenders of defense
• Insurance coverage evaluations
• Coverage denials and disclaimer disputes
• Reservation of Rights responses
• Review of customer, broker, carrier, and third-party insurance obligations
• Declaratory judgment actions involving insurance policy interpretation and enforcement

A Preventive and Collaborative Approach

The Scopelitis Insurance and Risk Management Practice emphasizes preventive planning and practical problem-solving to avoid litigation when possible. The Firm works with transportation insurance professionals and industry participants to resolve regulatory issues, coverage disputes, premium disagreements, and other insurance-related challenges. This collaborative approach helps transportation companies manage risk, strengthen resilience, and align insurance programs with long-term business goals. Reach out to Greg Feary, Jeff Toole, Shannon Cohen, Donald Devitt, Kelli Block, or Jannie Steck with questions.