Supreme Court Hears Argument in Pivotal Broker Accident Liability Case

On March 4, the U.S. Supreme Court heard oral argument in an important case impacting broker liability for truck accident claims, Montgomery v. Caribe Transport II, LLC. The question before the Court is whether a federal deregulatory statute, 49 U.S.C. § 14501 (FAAAA), that preempts state laws relating to prices, routes, or services of motor carriers and brokers, preempts state common law claims against a broker for negligent selection of a carrier or driver, or whether the common law claims are saved from preemption by the so-called safety exception to the FAAAA, which preserves measures within the “safety regulatory authority of a State with respect to motor vehicles”.

At the Court of Appeals level, both the Ninth Circuit and Sixth Circuit have held that state common-law claims for negligent selection against a broker are covered by the general preemption clause but are not subject to federal preemption because such claims fall within the safety exception. The Seventh Circuit and Eleventh Circuit, on the other hand, have held that negligent selection claims against brokers, who merely arrange transportation but do not operate motor vehicles, are not saved from preemption by the safety exception, because under such circumstances, the broker does not have a direct connection to the motor vehicles. In several prior cases, the losing party sought Supreme Court review, which was denied until this case (in a rarity, even the prevailing broker party below supported Supreme Court review of the case).

The oral argument largely focused on how to interpret the FAAAA’s safety exception and whether a direct connection to motor vehicles was required or whether the appropriate question is whether the broker’s selection of a carrier was a proximate cause of the tort.

It is difficult to predict the outcome of a case based on the questions raised during oral argument. Here, the oral argument seemed to underscore that the justices believe they face a difficult question. Importantly, the case is unlikely to address other potential accident claims against brokers based on different theories of vicarious liability or joint enterprise. Additionally, barring a broad Supreme Court opinion, the decision is unlikely to resolve whether the FAAAA preempts state-law claims against brokers for cargo theft or loss.

As for the timing of a decision, that is difficult to predict, but the term ends at the end of June, and most opinions are published before the end of the term in which oral argument is held (though it sometimes slips into early July).

FMCSA’s New Rule on Non-Domiciled CDLs Changes CDL Eligibility for roughly 200,000 drivers.

FMCSA’s final rule effective March 16, 2026, upends CDL eligibility requirements for current non-domiciled CDL drivers. The final rule is virtually identical to the previous interim final rule and limits eligibility for non-domiciled CDLs to H-2A, H-2B, and E-2 Visa holders. Non-domiciled CDLs remain valid until the next licensing action, e.g., upgrade or renewal.

Several groups including local governments, Teamsters California and the AFL-CIO, immediately challenged the rule in the federal D.C. Circuit Court of Appeals and requested an emergency stay. The court has not yet ruled on the request for stay and recently challengers also asked the Court to accelerate the briefing schedule.

Unless a stay is granted or the rule is overturned by the Court, states must follow it. Likely it will take time for states to modify their systems and train personnel to accommodate the new rule. Until they do, states cannot issue any non-domiciled CDL. And the 25 jurisdictions subject to a non-compliance letter cannot issue any non-domiciled CDL until FMCSA says they can.

Before changing your hiring practices weigh all risks carefully including the risk of employment litigation. Because the rule specifically allows drivers holding properly issued non-domiciled CDLs to operate until their license expires, those drivers are qualified under the federal regulations.

Acting against drivers based solely on a future risk they may not be able to renew their licenses could be viewed as discriminatory. At least one discrimination lawsuit has been filed arising from treatment of non-domiciled drivers. To avoid similar claims, focus on whether your drivers currently meet all federal and company safety requirements.

 

TSA Proposes Updates to Security Programs

The Transportation Security Administration (TSA) has notified members of the air-cargo community that it intends to update the Indirect Air Carrier Standard Security Program (IACSSP) and Certified Cargo Screening Standard Security Program (CCSSSP). The proposed changes may impact, among other things which individuals are required to obtain Security Threat Assessments (STAs), when a customer may be treated as a “shipper,” the ability of IACs to utilize designated pickup locations, and cybersecurity reporting requirements. The specific changes are classified as Sensitive Security Information (SSI) and cannot be shared in this article, but clients are advised to review TSA’s notification of the changes posted to the Indirect Air Carrier Management System (IACMS). While there is no formal timeline for when the agency will finalize the updates and issue new versions of the IACSSP and CCSSSP, clients are encouraged to analyze the potential impact on their air-cargo operations. The Scopelitis Air Cargo Team is available to assist in that process.

Warehouse Group Updates Standard Terms

With the assistance of the Scopelitis Law Firm, the International Warehouse Logistics Association (IWLA) periodically updates its standard terms to reflect evolving industry practices and issues commonly encountered in negotiations and litigation. Industry members have experienced an uptick in issues related to nonpayment, rising economic pricing trends, bankruptcy, data privacy, and technical issues with the warehouse management system.

To address these issues, the updated terms provide warehouses with greater flexibility to exercise their lien rights, suspend services, or terminate the contract in the event of bankruptcy, all of which may allow operators the ability to proactively deal with non-paying depositors. The revisions further allow the warehouse additional latitude to adjust pricing based on volume and broader economic conditions and clarify data privacy obligations and standards related to the warehouse management systems.

Spotlight: Warehouse Legal Liability

The Scopelitis Warehouse Legal Liability Practice Group is based out of the Firm’s Chicago office and is led by career warehouse industry advocate Kevin Phillips, along with fellow partners Eric Meyers, Caroline Milner, and Michael Reed.  The Firm’s warehouse practice group, which consists of more than ten attorneys, handles contracts and litigation for warehouse and logistics companies, large and small.

Befitting for a premier transportation and logistics firm, Scopelitis boasts the largest group of attorneys in one law firm devoted to defending and counseling warehouse companies.  The practice group regularly handles client needs across the United States involving:

• Negotiating and litigating warehouse contracts;
• Business disputes;
• Instituting and enforcing the warehouse lien;
• Lender lien waivers and bailee agreements;
• Product damage claims;
• Infestations of products involving multiple distribution centers;
• Claims involving chemical contamination of food-grade products;
• Food spoliation, cross contamination and allergen contamination;
• Inventory shortage disputes;
• Rodent and insect infestation;
• Mis-shipment;
• Water sprinkler claims;
• Real estate contracts and disputes;
• Billing claims;
• Insurance disputes;
• Data privacy agreements and cyber disputes;
• Arbitration litigation.

Scopelitis is also the retained counsel for the International Warehouse Logistics Association (IWLA), the Global Cold Chain Alliance (GCCA), and International Association of Refrigerated Warehouses (IARW).  The Firm is the exclusive counsel for drafting the leading warehouse industry terms and conditions for these associations and recently completed, in collaboration with the IWLA, the 2026 update to the IWLA’s terms and conditions.

In addition to its active contracts and litigation practice, the practice group regularly presents at various warehousing and logistics conferences.  While “on the road,” the warehouse practice group not only showcases its industry expertise at these events but also prioritizes meeting and connecting with clients and industry leaders.  This “in-person” connection of the practice group allows Scopelitis’ client service to remain grounded in delivering sound legal analysis and remaining acutely devoted to solving the problems of its clients.

Scopelitis Quarterly Headline Roundup: April 2026

• Supreme Court Hears Argument on a Circuit Split Over the FAA’s “Transportation Worker” Exemption
• Video Briefing: Trends in Warehouse Customer Disputes
• AI Searches Ruled Discoverable in Federal Criminal Proceeding
• PHMSA Proposes Updates to Hazardous Materials Regulations to Align with International Standards
• California Employment Law Updates
• Delaware’s New Statewide DBA Registry Takes Effect on February 2, 2026
• Illinois’ Workplace Transparency Act Changes
• New York Governor Vetoes LLC Transparency Act Amendment