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).
A quarterly newsletter of legal news for the clients and friends of Scopelitis, Garvin, Light, Hanson & Feary
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
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).
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.