How the SCOTUS’s Montgomery v. Caribe Transport Ruling Updates the Trucking Accident Litigation Playbook and Could Force Congressional Action

Authored By: Tyler J. Hall

In New Jersey, courts have generally allowed trucking accident victims to pursue claims against freight brokers based on negligence theories. Courts in other jurisdictions have been more skeptical of such claims, holding that the Federal Aviation Administration Authorization Act (FAAAA), which broadly preempts state regulation of motor carrier and broker prices, routes, and services, also preempts state-law negligence claims against brokers. 

In Montgomery v. Caribe Transport II, LLC, No. 24–1238, the U.S. Supreme Court clarified that such claims are permissible under the safety exception to the FAAAA’s preemption. While the decision maintains the status quo in New Jersey, the Court’s ruling should motivate the plaintiffs’ bar in trucking accident cases, as well as transportation brokers and their legal counsel when defending claims in such cases, to consider changes in how they litigate these cases in both New Jersey and across the country. The ruling may also prompt Congress to take action.

FAAAA Preemption, Broker Liability, and Montgomery v. Caribe Transport II, LLC

Congress enacted the FAAAA in 1994. The law, which through its motor-carrier provisions extended airline-style economic deregulation to interstate trucking, expressly preempts states from passing and enforcing laws or regulations that govern prices, routes, or services of motor carriers or brokers “with respect to the transportation of property.”

The FAAAA contains several exceptions to state-law preemption. One exception, known as the “safety exception,” declares that the FAAAA’s state law preemption does not “restrict the safety regulatory authority of a state with respect to motor vehicles,” including road and highway regulations or limitations based on the size or weight of commercial vehicles. 

Montgomery v. Caribe Transport II, LLC is an example of how individuals injured in a trucking accident can attempt to impose liability on brokers for their injuries. These individuals are often forced to bring brokers into lawsuits under various negligence theories as an added source of financial recovery because many trucking companies carry the federal minimum of $750,000 in accident liability insurance—an amount that has not changed in decades.

Although states like New Jersey also require carriers to insure trucks principally garaged in the state with at least $1.5 million of coverage, other states have lower limits. Because trucking accidents can cause catastrophic injuries, motor carriers with minimum federal or state liability insurance coverage can quickly exhaust their coverage when compensating injured accident victims. If an accident victim can show that a broker’s negligence contributed to an accident, they could access the broker’s insurance coverage and financial resources for compensation. 

Brokers connect motor carriers to companies seeking to ship their cargo via truck. Many smaller trucking companies depend heavily on the work they get from relationships facilitated by brokers. However, brokers’ roles also require them to conduct due diligence on the motor carriers bidding on contracts. The federal government maintains public online databases for motor carriers’ safety records—including up to two years of crash histories, inspection results, and out-of-service orders for vehicles and drivers, plus Federal Motor Carrier Safety Administration (FMCSA)-assigned safety ratings—that brokers can use to assess a carrier’s safety record. Brokers can also serve as a safeguard against so-called “chameleon carriers,” which are trucking companies that try to avoid the stigma of poor safety records by shutting down their business entities and reopening under new names and U.S. Department of Transportation (DOT) numbers.

(The line between brokers and motor carriers is not always bright. Many carriers hold authority from the U.S. DOT to operate as a broker, a motor carrier, or both, so the same entity may wear either hat depending on a particular load.)

In Montgomery, the U.S. Supreme Court unanimously overturned a Seventh Circuit ruling affirming a district court’s dismissal of trucking accident victim Shawn Montgomery’s lawsuit against a freight broker. The district court ruled that the FAAAA preempted the victim’s negligent hiring claim against the broker. The Court resolved the circuit split over the applicability of FAAAA preemption to state-law negligence claims, ruling that negligent-hiring claims against freight brokers fall within the safety exception to FAAAA preemption. 

The Court ruled that a negligence claim is “‘with respect to motor vehicles’ if it ‘concerns’ or ‘regards’ the vehicles used in transportation.” Thus, the Court held, requiring C.H. Robinson, the broker in the case, “to exercise ordinary care in selecting a carrier therefore ‘concerns’ motor vehicles—most obviously, the trucks that will transport the goods.” Montgomery confirms that the FAAAA’s safety exception acts as a sort of “savings clause” to permit safety-related claims against brokers despite the broad sweep of the FAAAA’s federal preemption. 

Montgomery Updates the Trucking Accident Litigation Playbook for Plaintiffs and Defendants Alike

Although Montgomery changed the law in many jurisdictions, the Court’s ruling maintains the status quo in New Jersey, whose courts had generally allowed trucking accident claims against brokers. Because the decision forecloses a federal preemption defense under the FAAAA for freight brokers facing negligent-hiring claims in truck accident cases, it may encourage more trucking accident victims to pursue injury claims against brokers, thereby expanding the pool of liable parties and the available financial relief. That being said, in New Jersey and across the U.S., Montgomery should persuade both plaintiffs and defense attorneys to update their trucking litigation playbook.

The plaintiffs’ bar’s playbook gains the elimination of defendants’ preemption leverage and the need to carefully frame claims and conduct additional pre-complaint investigation

Arguably, Montgomery’s biggest change to the trucking accident litigation playbook is eliminating the leverage defense attorneys had early in cases by threatening to file motions to dismiss certain negligence claims on preemption grounds. Personal injury attorneys with less experience in truck accident cases may have been reluctant to litigate federal preemption arguments, and either settled for defense costs or dropped their negligence claims entirely. Now, plaintiffs’ attorneys should feel more confident that negligence claims arising from safety issues will survive preemption-based motions to dismiss, strengthening their bargaining position in settlement negotiations. 

However, plaintiffs are not fully out of the preemption woods under Montgomery. Although trucking accident victims can assert safety-related negligence claims without preemption concerns, state-law claims against brokers arising from business practices likely remain preempted by the FAAAA. Thus, plaintiffs’ attorneys must carefully frame their negligence claims to ground them in motor vehicle safety. Allegations rooted in operational or economic issues, such as driver pay or HR practices, will likely be preempted.

While the safety exception preemption issue has been resolved in favor of plaintiffs, plaintiffs’ attorneys still have their work cut out for them: investigating the viability and strength of their client’s negligence claim against a broker. Their investigation should begin by reviewing the carrier’s publicly available safety records. Red flags in the carrier’s records can provide evidence that the broker knew, or should have known, the carrier posed a risk of causing an accident. 

This kind of vetting is faster than many practitioners assume. The FMCSA’s public databases can usually surface a carrier’s safety profile within a few minutes. If a broker can run that search before assigning a load, plaintiffs’ counsel can run the same search before deciding whether to bring the broker into the case. Plaintiffs’ counsel should also be wary of defense arguments that a carrier’s “satisfactory” rating or “unrated” status forecloses a negligent-hiring claim. A “satisfactory” designation may reflect a federal audit conducted a decade or more ago; an “unrated” designation simply means the carrier has never been audited. Neither tells the story of a carrier’s recent safety history the way two-year rolling crash and out-of-service data can.

That investigation, however, cuts both ways. Plaintiffs’ attorneys have an ethical duty not to pursue claims against brokers when facts uncovered during their pre-complaint investigation or in discovery show that a broker appropriately vetted a motor carrier. Dismissing brokers when the facts do not support a finding of negligence allows counsel to focus resources on pursuing stronger claims against liable drivers and motor carriers. 

This is not an academic concern. In a recent case at my firm, we named a broker as a defendant in a trucking accident case based on what initially appeared to be a viable negligent-hiring claim. Once discovery revealed that the broker had properly vetted the motor carrier, we voluntarily dismissed the broker and focused on our claims against the carrier and driver.

The Defense Bar’s Playbook Expands to Focus on Reframing Plaintiffs’ Claims to Preserve Preemption Defenses and Relying on Safety Investigations 

Post-Montgomery, counsel for brokers may wish to consider doubling down on their current options for limiting their clients’ liability in trucking accident cases. 

First, defense counsel can preserve their preemption defenses by pushing back harder against plaintiffs’ arguments that their claims are grounded in motor vehicle safety. If defense counsel can show that plaintiffs’ allegations are rooted in non-safety operational or economic issues, they can invoke FAAAA preemption. 

Second, defense counsel may need to frame their client’s investigation into a carrier’s safety record as robust and exceeding industry standards. This includes when the broker hired the carrier for the first time—and thus looked for red flags like accident histories, safety violations, or signs of a “chameleon carrier”—or regularly reviewed safety records for carriers in their rotation, since federal databases maintain two years of records on a rolling basis, updated monthly. 

Finally, defense counsel can invoke proximate-cause defenses where the carrier’s safety record was “clean.”

Regarding a broker’s safety investigation of a carrier, the standard to meet is what a reasonable broker would have done under the circumstances. As a practical floor, brokers may wish to conduct a thorough safety review at the time they first contract with a new carrier, refresh that review at least annually for carriers in regular rotation, and run a triggered review whenever the carrier is involved in a crash, reorganizes under a new name or U.S. DOT number, or shows worsening safety metrics. 

Thoroughly documenting a decision to hire a new motor carrier and periodic reviews of carriers’ safety records may give brokers the support they need to obtain dismissal of negligence claims against them. This documentation could include the broker’s safety criteria, its review policies (initial and ongoing), and response procedures for when a carrier’s safety metrics worsen.

Montgomery Could Drive Congress to Make Statutory Changes

As with other Supreme Court decisions regarding federal statutes, Montgomery could prompt Congress to take action.

First, Congress could decide that the Supreme Court has misinterpreted the scope of FAAAA preemption or the safety exception and amend the statute to exempt the types of state-law claims Montgomery permits. Second, Congress could go one step further and eliminate the safety exception, extending FAAAA preemption to the state-law negligence claims that Montgomery preserved. Third, Congress (and/or the U.S. DOT) could revise federal motor carrier insurance requirements, ensuring that motor carriers carry sufficient insurance to cover the typical losses resulting from their negligence or that of their drivers.

Of these possibilities, raising the federal insurance minimums may be the rare measure that could draw support from both sides of the aisle. The $750,000 floor has been in place for roughly four decades and bears little relationship to the cost of a catastrophic trucking case today. A meaningful increase—to, say, $2 million—would allow many catastrophic cases to settle within policy limits. Plaintiffs’ counsel would resolve more cases without protracted trials and appeals, while motor carriers, brokers, and their insurers would see fewer of so-called “nuclear verdicts,” which nobody on either side of the aisle welcomes.

For New Jersey courts and litigants, Montgomery is a non-event doctrinally. However, the decision is likely to update the trucking accident playbook for both plaintiffs and brokers inside the state and out, and could even prompt Congress to consider amending the FAAAA or changing motor carrier insurance requirements.

Tyler J. Hall, an attorney at RAM Law in New Brunswick, represents injury victims and their families in truck and bus crash litigation. He has been certified by the Supreme Court of New Jersey as a Civil Trial Attorney. He can be reached at thall@ram.law.