C.H. Robinson Pushes Supreme Court to Affirm Broker Liability Shield Under Federal Law

Chris Ugrate, Deputy General Counsel at C.H. Robinson, reported on his LinkedIn that Robinson is urging the U.S. Supreme Court to settle a long-standing legal debate over broker liability, filing a response in Montgomery v. Caribe Transport II LLC that calls for the Court to affirm federal preemption of state negligent selection claims against freight brokers.

At the heart of the case is whether brokers can be held liable under state tort law when a carrier they hire is involved in an accident. C.H. Robinson contends such claims are preempted by the Federal Aviation Administration Authorization Act of 1994 (F4A), which bars states from enforcing laws that impact a motor carrier’s “price, route, or service.”

“Preemption of state negligent selection claims against freight brokers is consistent with federal law—its text, legislative history, and prior decisions of the Supreme Court,” the company wrote in its filing. “It preserves competition in the industry and ensures the free flow of interstate commerce.”

Background: 7th Circuit Ruling in Robinson’s Favor

The case stems from a 2017 crash in Illinois involving a truck operated by Caribe Transport and brokered by C.H. Robinson. The injured driver, Shawn Montgomery, sued, arguing that Robinson bore liability due to an alleged agency relationship with the carrier.

But both the district court and the U.S. Court of Appeals for the 7th Circuit disagreed. The courts found that Caribe operated as an independent contractor—not as Robinson’s agent—and that the broker had no control over the manner of delivery, a key test in determining agency.

Judge Yandle of the district court wrote that “undisputed evidence shows that Caribe and [its driver] Varela-Mojena were not Robinson’s agents and vicarious liability does not attach.”

The 7th Circuit’s decision reaffirmed a growing body of case law protecting brokers from state liability claims under the F4A. However, since the decision was rendered in a circuit that had already ruled similarly in the Ye v. GlobalTranz case, it didn’t create new precedent nationally.

Industry Pushes for Supreme Court Resolution

There is now a patchwork of rulings across circuits. While the 7th and 11th Circuits have generally sided with brokers, the 9th Circuit has taken a narrower view of F4A preemption. That inconsistency has led industry stakeholders to seek clarity from the Supreme Court.

In Montgomery v. Caribe, both plaintiff and defendant have expressed interest in the Court resolving the issue. Their petition joins other cases like Gauthier v. TQL, which was recently listed as a “featured petition” by SCOTUSblog.

If the Court agrees to hear the case, it could provide long-awaited resolution on a question that directly affects how freight brokers manage legal risk in the hiring of motor carriers.

“A decision confirming preemption would provide critical clarity and protect the ability of brokers to facilitate commerce without facing inconsistent legal obligations across state lines,” C.H. Robinson stated.

Source: Chris Ugrate/LinkedIn | FreightWaves