June 2026 | Client Alert
On May 14, 2026, a unanimous Supreme Court held in Montgomery v. Caribe Transport II, LLC, No. 24-1238, that state negligent-hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). The decision removes a federal-preemption defense that brokers had used for years to defeat injury claims arising from their carrier-selection decisions.
Brokers are the transportation industry’s matchmakers—connecting sellers of goods to the carriers who move them. The FAAAA’s preemption provision prohibits states from enacting or enforcing laws related to a price, route, or service of any motor carrier or broker with respect to the transportation of property. But the FAAAA contains a safety exception providing that its preemption provision “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.”
In this case, after a Caribe Transport truck severely injured plaintiff Shawn Montgomery, he sued broker C.H. Robinson, alleging it knew or should have known from Caribe’s federal safety rating that hiring it posed an unreasonable risk. The Seventh Circuit held the claim preempted.
The Supreme Court reversed, holding that even if §14501(c)(1) would otherwise preempt the claim—a question it assumed but did not decide—the safety exception saves it, because requiring a broker to exercise ordinary care in selecting a carrier “concerns” motor vehicles within the meaning of the exception. Claims solely about pricing, routing, or service with no safety dimension remain preempted.
Justice Kavanaugh, joined by Justice Alito, concurred but cautioned that the case was “closer than the Court’s opinion perhaps might suggest.” Two points emphasized in the concurrence matter for clients:
- Brokers are not routinely liable. A broker that vets carriers carefully, asks hard questions about safety policies, and selects reputable carriers should be able to successfully defend from these types of claims. Proximate-cause requirements under state tort law provide an additional check.
- Legislative recourse remains. Brokers may seek a Congressional fix, but federal law does not currently preempt these claims.
The FAAAA’s preemption provision is part of Subtitle IV of Title 49, which under 48 U.S.C. § 751 does not apply to Puerto Rico. The First Circuit has confirmed that § 751’s carve-out is limited to intra-island transportation and does not preclude federal regulation of interstate commerce involving Puerto Rico. TAG/ICIB Services, Inc. v. Pan American Grain Co., 215 F.3d 172 (1st Cir. 2000); Herman v. Hector I. Nieves Transport, Inc., 244 F.3d 32 (1st Cir. 2001). The practical result is that, for interstate shipments between Puerto Rico and the mainland, the FAAAA applies and Montgomery controls; for intra-island shipments, Subtitle IV does not apply, and Puerto Rico law governs directly without a preemption overlay.
Regardless of which side of that divide a shipment falls on, exposure may exist. Article 1536 of the Civil Code of 2020 (31 L.P.R.A. § 10801)—the successor to former Article 1802—imposes liability on anyone who causes harm through fault or negligence. A negligent carrier-selection claim fits squarely within it. For an economy centered on freight, port logistics, and high-value manufacturing (including pharmaceutical and medical-device cargo), brokers, forwarders, shippers, carriers, and their insurers should expect these claims to be tested locally.
Practical steps industry participants can take in light of Montgomery may include vetting carriers carefully and documenting the process; reviewing indemnity, insurance, and liability-cap terms in transportation contracts, and confirming that liability coverage responds to negligent-hiring claims.
For any questions regarding this matter, please contact any of the attorneys in our Litigation Practice Group or your primary O’Neill & Borges attorney.
Authors: Carlos A. Valldejuly & José J. Colón García
This O’Neill & Borges Client Alert is prepared for general information purposes only. It does not constitute legal advice or a legal opinion; nor does it establish an attorney-client relation with the recipient. For further information or to establish an attorney-client relation please contact us at info@oneillborges.com or your prime contact attorney at O&B.