Update – Navigating Liability: The Future Of Interstate Broker Regulation

Last October, our team highlighted the tension between the Federal Aviation Administration Authorization Act of 1994 (the “Act”), and state-based negligence hiring claims against transportation brokers. To recap, the Act broadly preempts state laws “related to the prices, routes, and services of the trucking industry.” Montgomery v. Caribe Transport II, LLC, No. 24-1238, slip op. at 1 (U.S. May 14, 2026). But it has a critical carveout: States retain authority to regulate safety “with respect to motor vehicles.” Id. It was an open question whether this carveout permitted state-based negligent hiring claims against freight brokers—that is, “the transportation industry’s matchmakers,” who “connect[] sellers of goods to the carriers who move them.” Id. After Montgomery v. Caribe Transport II, LLC, now we know, “It does.” Id. 

By unanimous agreement in Montgomery, the United States Supreme Court confirmed that the Act does not preempt state-law negligent hiring claims. Writing for the Court, Justice Barrett’s analysis proceeded with a basic observation on the nature of state “police power,” emphasizing that tort law is not merely remedial but regulatory: “common-law duties and standards of care form part of a State’s authority to regulate safety.” Id. at 4. As a result, negligent-hiring claims, which “impose a duty of reasonable care in employing a contractor for work carrying a risk of physical harm,” operate as a form of state safety regulation. Id. at 5. This understanding is critical because it brings traditional negligence law within the scope of the statutory exception. 

From there, the dispute “boil[ed] down to whether” such claims against brokers are those “with respect to motor vehicles.” Id. The Court resolved this issue through ordinary-meaning textualism. Because the statute does not define the phrase, the Court gave it its everyday meaning, explaining that “with respect to” means “referring to,” “concerning,” or “regarding.” Id. Merging the definition with the statutory definition of “motor vehicle,” the Court concluded that a claim falls within the exception if it “‘regards’ vehicles used in transportation.” Id.

Applying that framework, the result was “straightforward.” Id. A negligent-hiring claim against a broker concerns motor vehicles because it targets the selection of the trucks and carriers that will perform the transportation. Thus, requiring a broker to exercise reasonable care in choosing a carrier “‘concerns’ motor vehicles—most obviously, the trucks that will transport the goods.” Id. at 6. On that basis, the claim falls within the safety exception, which “saves it from preemption.” Id. at 6. 

In reaching its holding, the Court rejected arguments that such reading would “swallow” the statute’s preemption clause, clarifying that “the safety exception saves only a subset of preempted claims: those involving regulations concerning motor vehicle safety.” Id. (citing 49 U. S. C.§14501(c)(2)(A)). In other words, purely economic regulations, like “motor carrier prices, routes, and services” remain preempted. Id. The Court also rejected Respondents’ invitation to narrow the safety exception based on an anomaly within the statute. Respondents argued that reading the exception to cover brokers would create inconsistencies with another section of the statute related to “intrastate” transportation that lacked a similar safety exception. But the Court declined to “rewrite the text” to eliminate those tensions, concluding that even if the statutory scheme is confounding, “the text of subsection (c)(2)(A) controls.” Id. at 7. After all, in the Court’s view, it was “[b]etter to live with the mystery than to rewrite the statute.” Id.

In short, the Court preserved state-law negligence claims against brokers who select unsafe carriers, and brokers will now face real consequences of this new reality. Indeed, following Montgomery, brokers are now exposed to varying state-law standards, exacerbating a patchwork-compliance burden.

Complicating matters further, the Montgomery holding may have implications that are not yet fully understood. Though Montgomery involved brokers who coordinate interstate trucking, it remains unclear whether the decision will affect other transportation intermediaries, such as freight forwarders, operating in different commercial contexts. Modern maritime shipping, for example, is deeply intertwined with inland transportation logistics. As the Supreme Court has once observed, maritime commerce “is often inseparable from some land-based obligations,” especially in light of the fact that “[t]he international transportation industry clearly has moved into a new era—the age of multimodalism, door-to-door transport based on efficient use of all available modes of transportation by air, water, and land.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 25 (2004). 

It is likewise uncertain what effect, if any, Montgomery will have on broker liability in cases involving claims other than personal injury, including cargo loss or damage. Given that state law claims for negligent hiring are no longer categorically preempted, brokers may face potential exposure where cargo damage arises from roadway accidents involving motor carriers they selected. However, in cases involving theft (including increasingly sophisticated cargo theft schemes) or other non-accident losses, it remains unclear whether the statutory “safety” exception would apply, meaning brokers may still retain a viable preemption defense. Overall, it appears that while the Court struck down one theory of preemption in Montgomery, the broader game of legal whack-a-mole appears to have only just begun.

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