A unanimous Supreme Court ruled on Thursday in Montgomery v. Caribe Transport II that federal law does not shield freight brokers from state lawsuits claiming they negligently hired dangerous motor carriers.
The case began on Dec. 7, 2017, when Shawn Montgomery suffered severe injuries from an accident on Illinois Interstate 70, leading to the amputation of his leg and permanent disfigurement. Montgomery had pulled over due to a mechanical issue when a tractor-trailer driven by Yosniel Varela-Mojena apparently veered off the road and rear-ended Montgomery’s stopped vehicle. Varela-Mojena was hauling a load of plastic pots for his employer, Caribe Transport II, an Indiana-based interstate motor carrier, and the shipment had been arranged by freight broker C.H. Robinson Worldwide, Inc., and its affiliates, under a carrier agreement with Caribe II.
Montgomery sued C.H. Robinson, among others, arguing that the broker was liable because it knew, or should have known, that Caribe II was an unsafe choice to ship its goods. The lawsuit rested on the allegation of negligent hiring (i.e., when you engage a contractor for work that poses a physical risk to others, you have a duty to exercise reasonable care in making that choice). Specifically, Montgomery alleged that federal regulators had given the carrier a “conditional” safety rating when C.H. Robinson hired it, finding Caribe II deficient in such areas as driver qualification, hours of service, and crash rates.
C.H. Robinson moved to dismiss, arguing the suit was blocked by the Federal Aviation Administration Authorization Act of 1994. The FAAAA – a product of Congress’ effort to deregulate the trucking industry – preempts (that is, supersedes), in Section 14501(c)(1), state laws “related to a price, route, or service” of motor carriers or brokers “with respect to the transportation of property.” A negligent-hiring lawsuit, the company argued, is squarely covered by that. The district court and the U.S. Court of Appeals for the 7th Circuit agreed, while the U.S. Courts of Appeals for the 6th and 9th Circuits had ruled the other way.
Writing for the 9-0 court, Justice Amy Coney Barrett held that C.H. Robinson’s argument collided with an exception in the FAAAA. Namely, pursuant to Section 14501(c)(2)(A), the FAAAA’s preemption provision does not apply to “the safety regulatory authority of a State with respect to motor vehicles.” Barrett noted that “[a]ll agree that common-law duties and standards of care form part of a State’s authority to regulate safety.” Barrett then interpreted “with respect to” – a phrase the FAAAA did not define – to mean “concerns” or “regards” based on the ordinary dictionary definitions of these terms. A “motor vehicle,” under the FAAAA, is defined as “a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.” A claim is therefore “with respect to motor vehicles” if it concerns the trucks used to move goods, as was the case here, Barrett explained.
Barrett also addressed three counterarguments from C.H. Robinson and the federal government. First, the company warned, Barrett’s reading would allow the safety exception to swallow the preemption clause whole – by siding with Montgomery, everything else that Congress had deemed preempted would now be subject to the safety exception. Barrett disagreed, explaining the safety exception covers only a subset of preempted state laws, specifically those “concerning motor vehicle safety.” State regulations governing what “a carrier may charge or which highways it may traverse,” she noted, would remain preempted.
Second, C.H. Robinson argued, Barrett’s reading creates surplusage, or redundancy, in the statute. Given that the FAAAA preserves a state’s regulatory authority with respect to both motor vehicles and the imposition of route controls based on the vehicle or cargo, having a specific safety carveout (as sought out by Montgomery) would be unnecessary. Barrett replied that the alleged overlap exists regardless of how the disputed phrase is defined, also noting that “the provisions can be harmonized: A State’s choice to impose route controls or weight limits may serve ends other than safety.”
Third, the company pointed to the structural oddity of a separate FAAAA subsection which fully preempts state regulation of brokers for intrastate shipping but contains no safety exception. Why, they asked, would Congress shield brokers from state oversight for in-state trips but not interstate ones? On this, Barrett noted that while “[i]t is not obvious why Congress included a safety exception” in one subsection but not the other, “it would be even odder to say that the alleged tort—the negligent hiring of an unsafe motor carrier whose truck caused injury—is not an exercise of ‘the safety regulatory authority of a State with respect to motor vehicles’” under the relevant provision. That text “controls,” Barrett explained. “Better to live with the mystery than to rewrite the statute.”
Justice Brett Kavanaugh, joined by Justice Samuel Alito, concurred separately to note that the case was “closer than the Court’s opinion perhaps might suggest.” Kavanaugh walked through the competing arguments at length, acknowledging that the statute’s insurance provisions and its intrastate preemption clause both cut in the company’s favor. However, he noted, he found the overall architecture of the statute decisive, since Congress in 1994 was pursuing economic deregulation of trucking, not safety deregulation. Kavanaugh also stressed that the ruling should not be understood as opening brokers to routine liability. Brokers that act reasonably and select reputable carriers “should be able to successfully defend against state tort suits,” he emphasized.
