Lawsuits

Supreme Court: Freight Brokers Can Face State Negligence Suits

Is the Supreme Court's freight broker ruling a road safety win or a legal nightmare for the industry?

Published MAY 14

Supreme Court: Freight Brokers Can Face State Negligence Suits

Story

Above: Traffic in Bangor, Maine on May 7. Image credit: Graeme Sloan/Bloomberg/Getty Images

The Facts

The U.S. Supreme Court ruled unanimously Thursday that freight broker C.H. Robinson can be sued under state law for negligent hiring following a 2017 Illinois crash in which Shawn Montgomery lost part of his leg when a speeding truck struck his parked vehicle.
The Center Square
The Associated Press
Justice Amy Coney Barrett wrote the majority opinion, holding that the Federal Aviation Administration (FAA) Authorization Act's safety exception preserves states' authority to regulate motor vehicle safety, overturning two lower-court rulings that had dismissed Montgomery's claims.
The Center Square
Courthouse News Service
Justice Brett Kavanaugh, joined by Justice Samuel Alito, filed a concurrence warning that litigation and insurance costs for brokers "will cascade through the economy" but agreed that brokers should not operate with "no meaningful safety-related regulation."
Courthouse News Service
FreightWaves
C.H. Robinson, based in Eden Prairie, Minn., said that it's "disappointed" with the ruling but "respects" it and will continue selecting only carriers licensed by the Federal Motor Carrier Safety Administration (FMCSA). Shares of the company fell 4.5% to $156.39 on Thursday following the decision.
C.H. Robinson
Market Screener
The ruling doesn't establish automatic broker liability, as Barrett noted that the safety exception covers only claims involving motor vehicle safety. And Kavanaugh wrote that the decision shouldn't be read to mean that brokers will routinely be subject to state tort liability.
C.H. Robinson
FreightWaves

Sources Split

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CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

This is a wake-up call, not a death sentence, for freight brokers. While companies like C.H. Robinson will have to more rigorously vet who they hire or face real legal consequences in state courts, they were already keeping a close eye on the matter. This ruling strengthens road safety and pushes the industry toward the accountability standards brokers have been striving for all along.

C.H. Robinson

Pro Trucking Assoc Group on X

Narrative B

It's now clear that there's no legal escape hatch for brokers running on paperwork compliance and box-checking. Brokers who can't document carrier vetting with real-time, verified data are staring down settlement checks and skyrocketing insurance premiums. The old transactional brokerage model is finished — infrastructure and accountability are the only paths forward.

Eric Daugherty on X