Supreme Court Weighs Freight Broker Liability

The Supreme Court recently heard oral argument in Montgomery v. Caribe Transport II, LLC, a closely watched case that could reshape the liability landscape for freight brokers. At issue is whether the Federal Aviation Administration Authorization Act (FAAAA) preempts state-law negligent-selection claims against brokers when those claims arise from accidents involving motor carriers the brokers selected to transport interstate shipments.

For years, federal courts have split over how broadly to read the statute's safety exception, which preserves a state's "safety regulatory authority … with respect to motor vehicles."[1] The Court's decision could determine whether plaintiffs may pursue negligent-selection claims against brokers—or whether those claims are barred as an impermissible regulation of broker services in interstate commerce.

The practical implications are significant. The ruling may affect how brokers vet carriers, allocate risk contractually, maintain diligence records, and evaluate insurance coverage. More broadly, it will clarify the boundary between Congress's goal of deregulating freight brokerage services and states' traditional authority over roadway safety.

Key Takeaways

The Court's ruling should bring national clarity on whether brokers face state-law negligent-selection exposure for choosing the motor carriers that transport freight. For brokers and other market participants, the practical consequences are likely to include the following:

• Broker litigation exposure could shift significantly. If the Court adopts the narrower view of the FAAAA's safety exception, brokers may be better positioned to defeat negligent-selection claims on preemption grounds. On the other hand, if the Court adopts the broader view, plaintiffs likely will intensify scrutiny of broker carrier-selection practices, diligence records, and safety-related documentation.
• The decision will clarify the balance between federal deregulation and state safety authority. Petitioner-side briefing emphasizes states' traditional role in protecting roadway safety through common-law duties, while respondents and supporting amici argue that allowing state negligence claims to proceed would undercut Congress's goal of preventing state-by-state interference with broker services.
• Implications extend beyond freight brokers. Shippers, insurers, carriers, and litigants all have an interest in whether negligent-selection claims remain viable after trucking accidents. The Court's decision may influence contractual indemnity structures, insurance underwriting and placement, and broader compliance practices across the freight transportation ecosystem.

What Brokers Can Do Now

While the decision remains pending, brokers may want to reassess the defensibility of their carrier-selection processes and related risk-allocation tools. In particular, they should consider whether current practices would hold up if courts permit negligent-selection claims to proceed more broadly.

• Review carrier-vetting practices and documentation. A ruling allowing these claims to proceed could increase attention on what safety-related information a broker reviewed before tendering a load—and what the broker can prove it reviewed.

• Revisit contract language and risk-transfer provisions. Brokers, shippers, and carriers may want to review indemnity, insurance, notice, and responsibility-allocation provisions in broker-carrier and related agreements.

The Circuit Split

Across the board, the circuits largely agree on the starting point: Negligent-selection claims against brokers "relate to" broker services and therefore fall within the FAAAA's broad preemption framework. The disagreement is over the scope of the statute's safety exception—specifically, whether such claims qualify as an exercise of a state's "safety regulatory authority … with respect to motor vehicles."[2]

The Seventh and Eleventh Circuits take the narrower view. In those courts, the safety exception applies only where the claim bears a sufficiently "direct link" to "motor vehicle safety," and negligent-selection claims against brokers are viewed as too attenuated because they challenge a broker's choice of carrier rather than the broker's own operation of a motor vehicle. Indeed, the Seventh Circuit in Ye v. GlobalTranz Enters., Inc., 74 F.4th 453, 459 (7th Cir. 2023) emphasized the safety exception does not mention brokers at all. The Eleventh Circuit adopted similar reasoning in Aspen American Insurance Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023), stressing brokers do not "provide motor vehicle transportation" and so negligent selection claims are "necessarily one step removed" from a "motor vehicle" and, thus, outside the safety exception.[3] These circuits stress that accepting an indirect connection would render the phrase "with respect to motor vehicles" meaningless and overlap with other preemption exceptions that Congress listed separately.[4]

The Ninth and Sixth Circuits take a broader approach, reading the statute's "with respect to" language to mean "relating to" or "concerns," and thus encompassing claims that promote motor vehicle safety without the "direct link" the Seventh and Eleventh Circuits require.[5] The Ninth Circuit in Miller emphasized that any "connection with motor vehicles" falls within the safety exception and so concluded that "negligence claims against brokers that arise out of motor vehicle accidents" are not preempted.[6] Most recently in Cox, the Sixth Circuit agreed with the Ninth, concluding that "motor vehicles are core to the services provided by brokers" and focusing on whether the substance of the claim "involves motor vehicles."[7]

In practical terms, the split turns on whether broker selection decisions are considered close enough to motor vehicle safety to fall within the FAAAA's safety exception.

Oral Argument

Several justices focused on whether the competing interpretations of the FAAAA produce a coherent, workable framework in practice. These justices questioned the apparent anomaly that negligent‑selection claims might be preempted for intrastate transportation yet preserved for interstate transportation, and probed how far brokers can realistically be expected to investigate carrier and driver safety without unduly narrowing the carrier pool. Those exchanges suggest the Court may be inclined toward a rule that avoids such anomalies and cabins broker duties within administrable, real‑world limits.

Conclusion

Whatever the outcome, Montgomery is likely to become the leading national decision on the scope of FAAAA preemption as applied to negligent-selection claims against freight brokers. A narrower reading of the FAAAA's safety exception could strengthen brokers' preemption defenses; a broader reading could increase scrutiny of carrier-selection practices, documentation, and contractual risk-transfer mechanisms. In the meantime, brokers should review vetting procedures, contract structure, and internal coordination among legal, risk, and operations teams. Freight brokers with questions about how the Supreme Court's decision may affect their carrier-selection practices, contracting, or risk-allocation strategies should consult experienced counsel.

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Mohammad B. Pathan and Caleah N. Whitten are counsel in the litigation group in the New York and Seattle offices of DWT. For more insights, reach out to Mohammad, Caleah, or another member of our litigation team or sign up for our alerts.