U.S. Supreme Court allows negligent hiring lawsuit against freight brokers to proceed

The Supreme Court of the United States issued a landmark ruling that could transform the freight brokerage industry. On May 14, the nation’s highest court unanimously ruled in favor of Shawn Montgomery in the case Montgomery v. Caribe Transport II, LLC, allowing a negligent hiring lawsuit against logistics company C.H. Robinson Worldwide, Inc. to move forward. The decision establishes that logistics companies and freight brokers may face lawsuits under state laws for accidents involving the carriers they hire.

The case Montgomery v. Caribe Transport II, LLC originated from a serious accident that occurred in Illinois in 2017. While parked on the shoulder of a highway, Montgomery was struck by a truck owned by Caribe Transport II and operated by Yosniel Varela-Mojena. As a result of the crash, Montgomery lost part of one leg.

The shipment involved, a load of plastic flower pots, had been arranged by logistics company C.H. Robinson. In addition to suing Caribe Transport and the truck driver, Montgomery also filed a lawsuit against C.H. Robinson, alleging that the company acted negligently by hiring a carrier with poor safety records.

Negligent hiring lawsuit against freight brokers

According to Montgomery’s attorneys, the driver had previously been cited for reckless driving, and Caribe Transport had been involved in multiple accidents within a span of only a few months. Additionally, the carrier held a “conditional” safety rating issued by the Federal Motor Carrier Safety Administration (FMCSA) at the time it was hired.

The lawsuit argued that C.H. Robinson “knew or should have known” that hiring Caribe Transport created a foreseeable risk of accidents that could cause injuries to third parties.

C.H. Robinson argued that it was protected by the Federal Aviation Administration Authorization Act (FAAAA), a federal law that limits states’ ability to enforce regulations related to the prices, routes, or services of motor carriers and freight brokers.

Both the District Court and later the Seventh Circuit Court of Appeals agreed with that argument and dismissed the lawsuit. However, Montgomery appealed to the Supreme Court, arguing that his case fell within the FAAAA’s safety exception, which states that federal law does not restrict states’ authority to regulate safety matters related to motor vehicles.

In a unanimous opinion written by Justice Amy Coney Barrett, the Supreme Court concluded that negligent hiring claims are indeed related to motor vehicle safety and are therefore protected under the FAAAA’s safety exception.

Justice Barrett explained that requiring a freight broker to exercise reasonable care when selecting carriers is directly connected to the trucks operating on public highways and, consequently, to roadway safety.

Potential impact on the industry

The ruling represents a major development for the logistics and freight brokerage sector in the United States. Industry experts believe the decision could open the door to a wave of lawsuits against brokers and logistics companies for allegedly negligent hiring of carriers with poor safety histories.

More than two dozen states supported Montgomery’s position, arguing that allowing these types of lawsuits would strengthen roadway safety over the long term. In contrast, companies and trade organizations within the industry, as well as Amazon and the Trump administration during the litigation, warned that exposing brokers to varying state standards would create a complex regulatory “patchwork” for the sector.

With this decision, the Supreme Court made clear that logistics companies are not automatically shielded by federal law when their responsibility in selecting unsafe carriers is called into question.