In a unanimous opinion authored by Justice Barrett, the Supreme Court held that state-law negligent-hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act (FAAAA) because such claims fall within the Act’s safety exception preserving state authority “with respect to motor vehicles.” The Court concluded that requiring a broker to exercise reasonable care in selecting a motor carrier “concerns” motor vehicles and therefore fits the safety exception, reversing the Seventh Circuit and remanding for further proceedings.
This ruling opens the door nationwide to negligent-hiring theories against brokers, reshaping pleadings, discovery, insurance planning, and defense strategies across the logistics sector.
Before today, several courts—following decisions such as Ye—had dismissed broker negligent-hiring claims as expressly preempted. With today’s ruling, the Supreme Court has now squarely held that the FAAAA’s safety exception can save those claims.
Background: Prior State of the Law
The FAAAA broadly preempts state laws “related to a price, route, or service” of motor carriers and brokers in the transportation of property, but preserves state “safety regulatory authority…with respect to motor vehicles.” The district court and Seventh Circuit had held Montgomery’s negligent-hiring claim against a broker (C.H. Robinson) was preempted and not within the safety exception, aligning with a split among the circuits. The Supreme Court reversed, holding negligent-hiring claims of this type fall within the safety exception because they concern motor vehicles, while emphasizing that purely economic regulations unrelated to safety remain preempted. The Court rejected arguments that including brokers within the safety exception would create surplusage or conflict with subsection (b)’s intrastate broker/forwarder preemption, concluding the text of §14501(c)(2)(A) controls. Justice Kavanaugh, joined by Justice Alito, concurred, underscoring that although contextual considerations made the case close, negligent selection claims against brokers are not preempted and brokers acting reasonably should often defeat liability.
Practical Implications
Plaintiffs will increasingly assert negligent hiring/selection, supervision, and potentially negligent entrustment against brokers, alongside traditional carrier negligence and vicarious liability. As federal law only requires comparatively modest insurance requirements for trucking companies, plaintiffs now have access to another, potentially deeper pocket, in commercial motor vehicle accidents.
Brokers should expect expanded requests into broker carrier-vetting policies, safety rating usage, selection criteria, prior incident data, communications with carriers, and load tender practices. Reassessment of broker liability limits, endorsements, and tender/indemnity provisions with carriers, shippers, and forwarders should happen immediately. Brokers should work aggressively to ensure additional insured status and contractual risk allocation with selected motor carriers.
From a defense prospective, early motions will pivot from preemption to duty, breach, causation, and scope-of-duty defenses with an emphasis on reasonableness of selection, regulatory compliance, and intervening/superseding causes. Brokers should immediately prepare to tighten corporate separations to maintain clear role delineations between shippers, brokers, forwarders, and carriers. Document retention practices need to include fact-intensive vetting protocols focused on vetting, FMCSA data limitations, and proximate cause boundaries, consistent with the concurrence’s observation that reasonably acting brokers should often prevail. Justice Kavanaugh noted that brokers acting reasonably and hiring reputable carriers, combined with proximate cause requirements, should help shield brokers from excessive liability.
Today’s ruling is expected to have a direct impact on increased claims volume and settlement inflation. Litigation will now include more complex multi-defendant claims, more and deeper pockets, and increased litigation costs.
Proactive Steps for Clients
- Risk management and compliance - Adopt written carrier-selection protocols referencing objective safety criteria, with escalation procedures for adverse data. Implement periodic audits of approved-carrier lists; document decision-making and exception handling.
- Contracting - Update broker-carrier and broker-shipper agreements to refine indemnity, defense, and insurance provisions; require timely safety data-sharing; confirm contractual defense and indemnity provisions, additional insured, and waiver-of-subrogation terms.
- Vetting and selection - Leverage multi-source data (e.g., FMCSA registration/ratings and loss history available to you); define disqualifying events, and cooling-off periods; record contemporaneous rationale for selections.
- Documentation - Preserve tender records, communications, vetting checklists, and training logs; enable rapid litigation holds and claims file integrity.
- Training - Provide recurring training for brokerage staff on selection standards, red-flag recognition, and escalation.
“Today’s decision materially reshapes exposure for freight brokers,” said Andrew J. Mallon, partner and Trucking Industry Defense Association (TIDA) member at Wood Smith Henning & Berman LLP. “We are ready to help brokers, carriers, and logistics stakeholders recalibrate vetting protocols, contract terms, and defense strategies to meet this new landscape while maintaining operational efficiency.”
This article originally appeared on Wood Smith Henning & Berman LLP. www.wshblaw.com
About the Authors:
Melissa Osio Martinez is managing partner, Rio Grande Valley, TX at Wood Smith Henning & Berman LLP. mosiomartinez@wshblaw.com
Ryan Schoeb, Esq. is a partner at Wood Smith Henning & Berman LLP. rschoeb@wshblaw.com
Andrew J. Mallon is a partner at Wood Smith Henning & Berman LLP. amallon@wshblaw.com