SCOTUS rules 9-0 against brokers in Montgomery case

The so-called safety exception of the Federal Aviation Administration Authorization Act (F4A) includes the freight brokerage industry in its umbrella, the Supreme Court ruled Thursday in the closely-watched case of Montgomery vs. Caribe Transport II. The decision of the court was unanimous.

Its immediate impact is that the Supreme Court decision clears up conflicting circuit court cases about whether a 3PL can be sued in state court for damages resulting from a crash involving a carrier the broker hired. With this decision, the circuit conflicts are essentially settled and the question has been answered: yes, they can. window.

googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag. defineSlot('/21776187881/FW-Responsive-Main_Content-Slot1', [[300, 100], [320, 50], [728, 90], [468, 60]], 'div-gpt-ad-1709668545404-0'). defineSizeMapping(gptSizeMaps. banner1). addService(googletag. pubads()); googletag. pubads(). enableSingleRequest(); googletag.

pubads(). collapseEmptyDivs(); googletag. enableServices(); }); googletag. cmd. push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); At issue was the phrase “with respect to motor vehicles” in F4A.

That wording in the safety exception allowed state action on issues of safety to proceed even where F4A otherwise barred state actions that might impact a “price, route or service.” Does “respect to motor vehicles” include the broker that hired the carrier driving that vehicle?

The 9-0 vote, stunning not necessarily in its outcome but in its unanimity, emphatically answers that brokers are subject to tort action in a state court for incidents involving carriers they hired. The decision remands the Montgomery case back to the Seventh Circuit.

It is that court, and a lower Illinois federal court before that, which had ruled that brokers were not covered by F4A and its “with respect to motor vehicles” decision, and therefore state action against a broker was blocked by the rest of the law. With that action, presumably C. H. Robinson (NASDAQ: CHRW) will return to the case as a defendant. It was C.

H. Robinson that booked Caribe Transport II and was one of the defendants in the original case filed by Shawn Montgomery, the truck driver who was on the side of the road when struck by a Caribe truck. His leg needed to be amputated and Montgomery suffered other injuries as well. C. H.

Robinson led the defense of the case before the Supreme Court in early March oral arguments. The timing of Thursday’s decision took some attorneys by surprise, as they had assumed the decision might not come down until late June.

In the opinion penned by Amy Comey Barrett, who some attorneys, based on her questioning during oral arguments, assumed might be a swing vote in the decision, the summation passage said “the preemption question thus boils down to whether negligent-hiring claims of the type Montgomery presses are claims ‘with respect to motor vehicles.’

We conclude that they are.” Defining ‘with respect to’ window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag. defineSlot('/21776187881/fw-responsive-main_content-slot3', [[728, 90], [468, 60], [320, 50], [300, 100]], 'div-gpt-ad-1665767553440-0'). defineSizeMapping(gptSizeMaps. banner1). addService(googletag.

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display('div-gpt-ad-1665767553440-0'); }); After reviewing dictionary definitions of “with respect to,” Judge Barrett then notes that F4A says a motor vehicle is a “machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.”

“Putting the pieces together, a claim is ‘with respect to motor vehicles’ if it ‘concerns’ or ‘regards’ the vehicles used in transportation,” Justice Barrett writes. “Applying that interpretation here is straightforward,” Justice Barrett adds. “Montgomery alleges that C. H.

Robinson failed to exercise reasonable care when it hired Caribe Transport, which had a subpar safety rating from federal regulators, to transport goods via truck. Based on that safety rating, Montgomery claims that C. H. Robinson knew (or should have known) that choosing Caribe Transport to move goods was reasonably likely to cause an accident. Requiring C.

H. Robinson to exercise ordinary care in selecting a carrier therefore ‘concerns’ motor vehicles—most obviously, the trucks that will transport the goods. So Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Rebutting C. H. Robinson’s arguments Justice Barrett’s decision tackled several of C. H.

Robinson’s arguments. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag. defineSlot('/21776187881/fw-responsive-main_content-slot4', [[300, 100], [320, 50], [728, 90], [468, 60]], 'div-gpt-ad-1709668086344-0'). defineSize