A defining moment for broker liability

Federal appellate courts are presently split on the question of whether a freight broker can be subject to a state law liability claim for the negligent selection of a motor carrier under the “safety exception” to the Federal Aviation Administration Authorization Act (“FAAAA”). Through the matter of Montgomery v. Caribe Transport II, LLC, the United States Supreme Court has agreed to finally decide the aforementioned question and its ruling has the potential to greatly impact and reshape the legal landscape governing broker liability in the commercial trucking industry.

The FAAAA preempts state law claims against a broker with respect to the transportation of property. However, the FAAAA’s “safety exception” preserves a state’s regulatory authority over motor vehicle safety from the FAAAA’s broad preemptive scope. Specifically, the safety exception states that the FAAAA’s preemption “shall not restrict the safety regulatory authority of a State with respect to motor vehicles…” 49 U.S.C. § 14501(c)(2)(a). The division between federal courts is on whether this provision preserves claims with a direct relationship to motor vehicles or if a mere indirect relationship will suffice.

Presently, the Seventh Circuit (Illinois, Indiana, Wisconsin) and the Eleventh Circuit (Alabama, Florida, Georgia) have held that state law claims against a broker for negligent selection of a motor carrier do not fall under the FAAAA’s safety exception since they lack a direct relationship to motor vehicles and are thus preempted. However, in direct contrast, the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington) has held that such claims are preserved from the FAAAA’s preemption because they are at least indirectly connected to motor vehicles. Recently, the Sixth Circuit (Kentucky, Michigan, Ohio and Tennessee) aligned itself with the Ninth Circuit and held that a claim against a broker for negligent hiring of a motor carrier with a record of unsafe motor vehicle operation substantively concerned motor vehicles and motor vehicle safety, thereby being preserved under the FAAAA’s safety exception. This ongoing split in the interpretation of the safety exception leaves brokers facing a patchwork of liability rules depending on the state in which a suit for negligent hiring is brought, with the broker being effectively immune from such claims in certain states, while facing liability and losses in others.

The Supreme Court’s decision, expected before the end of the Supreme Court’s term in late June or early July 2026, will have a significant impact on everyone in the commercial trucking industry. Should the Supreme Court affirm the Seventh Circuit’s decision that negligent selection claims do not fall under the safety exception, brokers will have near immunity from such state law claims nationwide. However, should the Supreme Court align itself with the Ninth Circuit and hold that the safety exception does preserve a state law claim against a broker for the negligent selection of a motor carrier, brokers could face substantial exposure in forthcoming litigation. Under this new legal landscape, a broker would have to navigate various state law standards to appropriately select and vet a motor carrier under heightened scrutiny.

The commercial trucking industry’s best practices continue to evolve, with brokers and carriers implementing a heightened emphasis on safety ratings and records, carrier qualifications, and compliance history to stay competitive while mitigating potential risks. The Supreme Court’s forthcoming decision presents yet another opportunity for brokers and carriers alike to re-evaluate their current policies and procedures and strengthen the language in their contracts in preparation for either outcome. For example, brokers today can begin to benefit from more stringent carrier vetting procedures and a review and revision of their contracts with motor carriers to clarify independent contractor relationships and risk transfer provisions. Similarly, motor carriers can re-evaluate their driver hiring procedures and enforce a stronger safety culture, given that motor carriers with the highest safety ratings will be more appealing to brokers.

Here at Mathis Law Group, we specialize in providing tailored legal services that address each company’s unique and specific concerns so that you can focus on what you do best – getting goods where they need to go. Our commitment to your success means we will be there when you need us most, offering expert advice, proactive risk management, and experienced legal representation.

To schedule a consultation to discuss how we can best help you protect your business and keep you on the road to success and out of the courtroom, reach out via phone, email, or our website https://www.mathislawgroup.com/.