The GigReporter

The Federal Aviation Administration Authorization Act (“FAAAA”) forbids state governments from enacting or enforcing laws affecting the price, route, or services of motor carriers or brokers carrying property, with an exception carved out for safety-related laws. See 49 U.S.C. §14501. For years the federal circuit courts of appeals have been split on whether this law extends to state negligent hiring claims against brokers, and if so whether they are covered by the safety exception. The Supreme Court has now resolved the split, holding that such claims are covered by the safety exception and thus not preempted by federal law.

Montgomery v. Caribe Transport II, LLC, et al., No. 24–1238 arose from an alleged motor vehicle accident, wherein a truck driver working for Caribe Transport was alleged to have negligently injured the plaintiff in a trip coordinated by the broker C.H. Robinson Worldwide, Inc. The plaintiff made a negligent hiring claim against C.H. Robinson, alleging the Federal Motor Carrier Safety Administration had given Caribe a “conditional” safety rating because it was deficient with respect to training, maintenance, and crash rates, and that C.H. Robinson thus should have known not to broker work with Caribe. C.H. Robinson was granted a summary judgment on the negligent hiring claim based on controlling Seventh Circuit precedent that such claims were preempted by the FAAAA. However, on appeal the Supreme Court reversed that decision, finding that a negligent hiring claim falls squarely within the text of the FAAAA’s safety exception.

This decision leaves brokers nationwide exposed to various levels of risk, depending on the scope of negligent hiring laws in the states where they operate. Fortunately, SCI’s platform is designed to give logistics brokers exactly the kind of visibility into insurance coverage needed to manage these risks. SCI broker clients can verify the occupational accident and commercial auto liability insurance coverage of all the owner/operators they engage, not just master contractors or DSPs. Additionally, SCI’s HNO+ program offers even more options for mitigating these types of risks.