In a unanimous opinion issued today 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 effectively reverses the status of such claims, which were heretofore considered preempted, in the U.S. Courts of Appeal for the Seventh and Eleventh Circuits. 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.

Justice Kavanaugh, joined by Justice Alito, wrote a concurring opinion that described the issue as a close one but also recognized that “broker may not always (or even often) be in a good position to objectively assess the relative safety of different trucking companies.” As Justice Kavanaugh’s concurring opinion 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.

Contact Scopelitis Partners Greg Feary, Nathaniel Saylor, Prasad Sharma, or Jay Starrett with questions.