Broker Liability and the FAAAA: Supreme Court to Finally Weigh In

November 2025 • Source: Zarwin Baum

The Federal Aviation Administration Authorization Act (FAAAA) was enacted to create uniformity in the regulation of motor carriers and brokers, preempting a patchwork of state laws that could interfere with interstate commerce. However, in recent years, a sharp circuit split has emerged over whether the FAAAA preempts state-law negligent selection claims against freight brokers. This split has left brokers, shippers, insurers, and litigants in a state of uncertainty, with dramatically different outcomes depending on the jurisdiction.

The Supreme Court’s January 2024 denial of certiorari in Gauthier v. Total Quality Logistics, LLC left the issue unresolved, but the split has only deepened since then. With the Seventh Circuit’s Montgomery v. Caribe Transport II, LLC decision and a new Sixth Circuit opinion, the legal landscape is more fractured than ever. The time is ripe for Supreme Court intervention.

The Legal Framework: FAAAA Preemption and the Safety Exception

The FAAAA expressly preempts state laws “related to a price, route, or service of any motor carrier … or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). However, Congress carved out a “safety exception,” providing that the statute “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A).

Does this exception save state-law negligent selection claims against brokers from preemption?

The Circuit Split: Where the Courts Stand

Ninth Circuit: Safety Exception Applies

In Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020), the Ninth Circuit held that while negligent selection claims against brokers are “related to” broker services and thus fall within the scope of FAAAA preemption, the safety exception applies. The court reasoned that common-law tort claims are part of a state’s safety regulatory authority and that claims arising from motor vehicle accidents are “with respect to motor vehicles.” Thus, such claims are not preempted.

Seventh and Eleventh Circuits: Strict Preemption

By contrast, the Seventh Circuit Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023), Montgomery v. Caribe Transport II, LLC, 124 F.4th 1053 (7th Cir. 2025), and the Eleventh Circuit Aspen Am. Ins. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023), have held that the safety exception does not apply to broker negligent selection claims. Both circuits reasoned that such claims lack a “direct” link to motor vehicles, as required by their interpretation of the statutory language. As a result, brokers are immune from civil liability for negligent selection in these jurisdictions—even if they knowingly select unsafe carriers.

Sixth Circuit: Aligns with the Ninth

In July 2025, the Sixth Circuit in Cox v. Total Quality Logistics, Inc. joined the Ninth Circuit, holding that the safety exception does apply to negligent selection claims against brokers. The court rejected the “direct link” requirement, finding that the substance of the claim—alleging a broker’s failure to exercise reasonable care in selecting a safe carrier—plainly involves motor vehicles and motor vehicle safety.

State Courts and District Courts: Even More Division

State appellate courts and federal district courts are also split, with some following the Ninth and Sixth Circuits’ broader reading of the safety exception, and others adhering to the narrower approach of the Seventh and Eleventh Circuits. In Illinois, for example, a state appellate court recently held that negligent selection claims against brokers are not preempted, creating a direct conflict with the Seventh Circuit’s federal precedent.

Why This Matters: Practical Implications

Forum Shopping: Plaintiffs’ attorneys are incentivized to file in jurisdictions where the safety exception is recognized, while defense counsel must be vigilant about removal and venue strategy. Venue is a particularly important consideration in forums when there is a split between the Federal Circuit and State law. (i.e. Illinois where a negligent selection case would be expressly preempted under Ye in Illinois Federal Courts but permitted under the Illinois State law).
Insurance and Risk: Brokers face dramatically different liability exposures depending on the circuit, complicating insurance procurement and risk management.
Business Uncertainty: The lack of uniformity undermines the FAAAA’s goal of national consistency and creates operational headaches for brokers and shippers engaged in interstate commerce.

The Supreme Court’s Reluctance—But for How Long?

Despite multiple cert petitions, including Ye and Gauthier, the Supreme Court was reluctant to take up the issue.

However, in October of 2025, the Supreme Court finally agreed to address this issue via Montgomery, the 7th Circuit’s decision to uphold and apply Ye. The Circuit split appears to be widening as the 6th and 9th Circuits rely on the safety exception to allow Negligent Selection cases against brokers, while the 7th and 11th Circuits expressly reject the safety exception.

With the split now encompassing at least three circuits and conflicting state and federal decisions within the same states, the pressure on the Supreme Court to grant review is mounting. As the Montgomery petition argues, only the Supreme Court can restore uniformity and provide the clarity that the industry desperately needs.

The Future of FAAA Preemption of State Law Negligent Selection Claims

In light of the Supreme Court Granting certiorari in Montgomery it is expected that the Court will issue a decision by the end of the term in June of 2026. That ruling should provide some guidance moving forward and will likely shape future of state law negligence claims against a broker.

Righi Fitch Secures Summary Judgement in High-Stakes Utah Wrongful Death Case

October 2025 • Source: Righi Fitch

In a pivotal wrongful death case in Utah, Righi Fitch secured summary judgment on behalf of their client. The insurance carrier, facing a policy limits demand, stood firm. The case involved the tragic death of a father of two, a fact that significantly elevated the emotional and financial stakes. The decedent, a primary provider for his young family, left behind a widow and two minor children, amplifying the potential for a substantial jury award. Represented by Arnold & Itkin LLP, a nationally recognized plaintiffs’ firm that touts its billion-dollar verdicts and settlements. Plaintiff’s counsel aggressively pursued maximum compensation, leveraging the emotional weight of the family loss and the firm’s reputation to pressure the insurer into settling for policy limits.

Despite this pressure, the insurer, with the strategic guidance of Righi Fitch attorneys Beth Fitch, Benjamin Hodgson, and Nathan Whittaker, refused to capitulate. The defense team meticulously dismantled the plaintiff’s claims, leveraging early case positioning, rigorous factual analysis, and a proactive litigation strategy. Their efforts culminated in a decisive summary judgment, effectively neutralizing a case that posed significant financial exposure. This outcome underscores the power collaboration among client, carrier, and defense counsel and of disciplined, forward-thinking defense work in the face of emotionally charged, high-dollar litigation.

Christopher L. Parisi Wins Summary Judgment and Dismissal of New York Labor Law Case in Queens County

October 2025 • Source: Gallo Vitucci Klar LLP

Christopher L. Parisi, a Partner in our New York Labor Law construction practice, won summary judgment in the case Howard Ashman v. New York Convention Center Development Corporation d/b/a Jacob K. Javits Center, et al. (Supreme Court, Queens County). The Order dismissed the plaintiff’s claims against our clients, including common law negligence and claims pursuant to New York Labor Law Sections 200, 240(1), and 241(6). The dismissal was obtained prior to depositions and before significant discovery proceedings took place. In this case, the plaintiff alleges that he was injured in 2019 while working for a concrete subcontractor on the expansion project of the Jacob Javits Convention Center in Manhattan.

Our clients are a holding company and its subsidiary telecommunications installation company. In 2014, the telecommunications company had proposed an internet cabinet installation project at the Jacob Javits Center, which had not gone forward. This proposed project was not part of the Jacob Javits Center expansion project, which started years later.

When the telecommunications subsidiary was acquired by the holding company in 2017, a document was filed on ACRIS, New York City’s real estate records database, which recorded the transfer of non-possessory telecommunications utility easements from the subsidiary to the parent company. The Jacob Javits address had been listed in the utility easement transfer document, along with over two hundred-seventy other addresses.

In support of our Motion, we submitted a detailed client Affidavit that explained the meaning and purpose of the ACRIS document and established that our clients did not have an ownership interest in the project, or any control or involvement with the construction activities. In opposition to our Motion for Summary Judgment, plaintiff’s counsel argued that the Affidavit was defective and that the ACRIS document established our clients’ ownership interest or control over the property and expansion project. The Honorable Justice Frederick D.R. Sampson decided that our Motion and the Affidavit demonstrated that our clients “did not own the property, control, or supervise any of the work being performed, nor had Defendants performed any construction work at the premises.” In granting summary judgment, the Court held, “…it appears that moving Defendants were named herein due to a recorded non-possessory utility easement, which does not confer an ownership interest.”

Why Early Retention of Outside Counsel is Critical for Corporate Civil Defense

October 2025 • Source: Zarwin Baum

When a corporation faces a lawsuit stemming from an incident on its premises, the stakes are high. The initial response to such litigation can shape the trajectory of the case, influence exposure, and determine the scope of information that may be discoverable by opposing parties. One of the most effective strategies for protecting your company’s interests is the early retention of outside counsel.

The Privilege Advantage: Protecting Internal Investigations

Pennsylvania law provides robust protections for communications and documents generated in the course of internal investigations—if those investigations are conducted under the direction of legal counsel. Both the attorney-client privilege and the work product doctrine can shield sensitive information from discovery, but their application is highly fact-dependent.

Attorney-Client Privilege

The attorney-client privilege protects confidential communications between corporate employees and counsel when those communications are made for the purpose of obtaining legal advice. Courts look for clear evidence that:

The communication was made at the behest of counsel.
The purpose was to further counsel’s provision of legal advice to the corporation.
Confidentiality was maintained.

Case law such as Upjohn Co. v. United States and Newsuan v. Republic Services Inc. confirms that statements made by employees to corporate or outside counsel, specifically for legal advice, are privileged. However, courts are less likely to extend this protection if the investigation appears to be mere fact-gathering or if the attorney-client relationship is ambiguous. In cases where the communications were made between corporate counsel and corporate employees, the factual analysis was less clear cut and provided an opportunity for courts to rule in favor of disclosure. Whereas, cases involving outside counsel significantly favored the preservation of the privilege as the issues of the attorney-client relationship and purpose of the communications were more clearly defined and thus favored of upholding the privilege.

Work Product Doctrine

The work product doctrine offers even broader protection for materials prepared by attorneys, including notes, memoranda, and legal theories. In Estate of Paterno v. NCAA, the court held that documents prepared by outside counsel in the course of an investigation were protected “in their entirety,” as they reflected the attorney’s mental impressions and legal strategies.

Importantly, this protection is strongest when outside counsel is engaged specifically to represent the corporation in anticipation of litigation. Materials prepared by non-attorney representatives, such as claims adjusters, receive far less protection and may be discoverable unless they reflect legal strategy or mental impressions.

Why Outside Counsel Makes the Difference

Engaging outside counsel early in the process offers several critical advantages:

Clear Establishment of Privilege: Outside counsel’s involvement signals that the investigation is for legal purposes, not just business or fact-finding. This distinction is crucial for invoking privilege protections.
Broader Work Product Protection: Courts are more likely to protect documents and communications prepared by outside attorneys, safeguarding your company’s legal strategy.
Credibility and Independence: Outside counsel brings an independent perspective, which can be vital if the investigation’s integrity is challenged in court.
Strategic Guidance: Early legal advice helps shape the company’s response, ensures compliance with confidentiality protocols, and minimizes the risk of inadvertent waiver of privilege.

Practical Takeaways for Corporate Counsel

Act Quickly: Retain outside counsel as soon as an incident occurs or litigation is anticipated.
Document the Purpose: Ensure all communications and investigations are clearly documented as being conducted for the purpose of obtaining legal advice.
Maintain Confidentiality: Limit disclosure of privileged materials to those who need to know, and implement protocols to safeguard sensitive information.
Coordinate with In-House Counsel: Work collaboratively to ensure privilege is properly claimed and maintained throughout the process.

The early retention of outside counsel is not just a procedural step—it is a strategic imperative. By engaging experienced civil defense attorneys at the outset, corporations can maximize privilege protections, reinforce the integrity of their legal response, and position themselves for the strongest possible defense. Don’t wait until discovery demands arrive; act proactively to safeguard your company’s interests from day one.

Painting the Full Picture: Smarter Claim Investigations with Fraud Sniffr

October 2025 • Source: Fraud Sniffr

Understanding the full scope of a claimant’s activities is the major pathway to informed decision-making and successful claim defense. That’s why each investigative effort needs to align with the full scope of your case. Even when a subject tries to eliminate their digital footprints, Fraud Sniffr delivers a multi-angle, contextually rich view of behavior and lifestyle. Nothing tells a clearer story than verified connections and consistent timelines backed by metadata. Our reporting integrates social, employment, and even criminal records through OSINT content. The landscape is evolving; claimants are getting smarter about hiding, but so are we about finding. Through collaboration with human expertise and partnership, your team gets investigation results you can trust—even in the toughest cases.

By integrating three key pillars simultaneously—Social Media with Scan Now, Employment Search, and Criminal Records—you gain actionable insights to paint the full picture.

Social Media Activity: See what claimants personally share about their lifestyle, activities, and interests when they think no one is watching. This includes jobs, hobbies, or passions that are under-the-table and/or not reported via W-2 earnings, such as Etsy posts or flea market pop-ups.

Employment Search: We trace a claimant’s tax-reported work history, current employment status, and other income streams to paint an accurate picture of their documented professional life.

Criminal Records: A background review reveals any prior incidents/undisclosed arrests, or convictions that could be relevant to your case. Should the claimant have an income/work gap, and you do not know why, they could very well have been incarcerated in another state or jurisdiction.

The Result: Holistic approach provides a clearer and more complete narrative—not just about what a claimant does for work yet to be turned over, but also how they spend their personal time. Each information source complements the other, creating a powerful, fact-based timeline that helps you make data-driven decisions.

To discuss how our comprehensive solutions can support your team, please contact Fraud Sniffr at 410.779.3501.

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