Previously relied-upon preemption was struck down in Montgomery v. Caribe Transport II, LLC
As IAM has followed and briefly discussed on earlier membership calls and government affairs-centered panels, this morning, the U.S. Supreme Court issued a landmark decision on freight broker responsibility in Montgomery v. Caribe Transport.
The Court found that a company that negligently hired another company (i.e., lack of safety vetting for the motor carrier) to transport goods is not preempted by the Federal Aviation Administration Authorization Act (FA4), which largely restricts state-level regulations related to the price, route, or service of motor carriers and freight brokers.
In the 9-0 decision, the Court found that the F4A “safety exemption” does allow states retain authority to regulate safety “with respect to motor vehicles” under the Act. This decision gives states flexibility to further regulate safety, hold freight brokers accountable for negligent hiring practices (i.e., inadequate motor carrier vetting) and opens a range of potential liability and financial repercussions as a result.
Next Steps: IAM will follow all subsequent state legislation, regulations and broader rulemaking at the U.S. Federal Motor Carrier Safety Administration (FMCSA) as they continue to review broker transparency issues and any connected motor carrier requirements. Information on any regulatory comment periods will be provided to members once they are issued for comment. Please reach out to Bryan Vickers with IAM’s Regulatory Affairs team, bvickers@pacellp.com, 703-403-2882, with any questions or for additional information in the interim.