The Supreme Court Gets One Right

The specific issue may seem a bit arcane, the liability of freight brokers when they select unsafe trucking companies, but it a big deal, and hopefully we will see it further expanded to see the liability extended to other industries where contractors are used to deflect responsibility for the big actors.  

At issue is the Federal Aviation Administration Authorization Act (FAAAA) which preempts most state regulation of transportation, things like rates and scheduling, but the law does give the states authority to regulate safety and required insurance.

The lower courts appeared to ignore the black letter law on this, and conclude that the brokers were indemnified, but the Supreme Court actually went with the actual law on this one.

The U.S. Supreme Court unanimously held Thursday that federal law does not preempt a state lawsuit claiming a shipping broker hired an unsafe trucking company, leading to a crash and severe injuries.

The court said the 1994 Federal Aviation Administration Authorization Act preempts most state regulation of the trucking industry but contains a carve-out for state safety regulations "with respect to motor vehicles."

Justice Amy Coney Barrett, writing for the entire court, stated that the exception includes a state lawsuit accusing a shipping broker of negligently hiring a trucking company.

The decision revives a suit by Shawn Montgomery, who was on the side of an Illinois highway when his vehicle was struck by a Mack truck, leading to the amputation of a leg and other permanent injuries. Montgomery sued the driver, Yosniel Varela-Mojena; the trucking company, Caribe Transport II; and the broker that coordinated the shipment, C.H. Robinson Worldwide.

Montgomery alleged the broker knew or should have known about Caribe's poor safety rating from a federal regulator and that an accident was likely to occur.

A federal district court found that Montgomery's negligent hiring claim against C.H. Robinson was preempted by the FAAAA, a decision upheld by the U.S. Court of Appeals for the Seventh Circuit.

The Supreme Court said applying the language of the federal law's safety exception to Montgomery's claim was "straightforward."

"Requiring C.H. Robinson to exercise ordinary care in selecting a carrier... 'concerns' motor vehicles—most obviously, the trucks that will transport the goods," Barrett wrote. "So Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption."

Of note here, as significant proportion of Amazon delivery drivers are contractors, even though Amazon specifies the routes to the second and foot, hence the infamous Amazon piss bottles, and so this should apply to Amazon as well.

I would like to see this applied top subcontracting more generally, there are numerous instances where contractors are used to skirt wage and safety laws, but I'm not too hopeful.