The U.S. Supreme Court issued an important unanimous decision yesterday with significant implications for the transportation and logistics industry. That decision, Montgomery v. Caribe Transport II, LLC, No. 24-1238 (May 14, 2026), holds that negligent-hiring claims against transportation brokers are not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA).
The case arose from a collision between two trucks on an Illinois highway, one of which was stopped on the side of the road. The motor carrier that struck the parked truck held a “conditional” FMCSA safety rating reflecting deficiencies in driver qualifications, vehicle maintenance, and crash rate. Notwithstanding these, the broker engaged the motor carrier for the shipment at issue and, based on this, the plaintiff sued the broker for negligent hiring.
THE HOLDING
The issue before the Supreme Court originated in a statutory federal preemption provision covering laws “related to a price, route, or service” of brokers and carriers. The provision, however, contains a safety exception preserving state authority “with respect to motor vehicles.” The Court held that a negligent-hiring claim based on a carrier’s poor safety record plainly falls within that exception and is not preempted.
Four federal Courts of Appeals had addressed the question and divided evenly. Two circuits held that the safety exception required a “direct link” to motor vehicles and, consequently, did not apply to transportation brokers. Two others had reached the opposite conclusion. The Supreme Court resolved this split, rejecting the “direct link” requirement in favor of the ordinary meaning of the statutory phrase “with respect to motor vehicles.” The Court interpreted this to require that the claim just “concerned” motor vehicles, a looser standard that allows negligent hiring claims in collision cases like the one at issue. In doing so, the Court was careful to note the exception’s limits: it “saves only a subset of preempted claims: those involving regulations concerning motor vehicle safety.” State laws governing prices, routes, or services with no relationship to safety remain fully preempted.
ANTICIPATED IMPACTS
The decision opens the door to pursuing brokers as defendants in jurisdictions where those claims were previously dismissed on preemption grounds. In the wake of this decision, brokers should review their carrier vetting procedures and how that vetting is documented. Brokers who conduct reasonable due diligence should be well-positioned to defend against negligent-hiring claims.
While the decision resolves the circuit split on broker liability for negligent hiring, the boundary between preempted claims involving “rates, routes, and services” and viable “safety” claims will continue to be tested in the lower courts. We expect active litigation clarifying the scope of the “safety” exception to preemption, particularly regarding the decision’s impacts on negligent-hiring claims in adjacent areas like cargo damage and non-broker parties such as 3PLs, freight forwarders, and digital freight platforms.
For more information on this decision contact us at info@chaloslaw.com.
