Supreme Court revives suit against major logistics company with potentially big effects on industry

The Trump administration and companies such as Amazon had argued that letting the suit go forward would expose logistics companies to liability under a “patchwork” of state laws.

The Transportation Intermediaries Association, an industry group, said the decision was “deeply disappointing.”

“This is like asking travel agents to evaluate the safety of a given airline despite the fact that the airline has been licensed to fly by the federal government,” said Chris Burroughs, the group's president and CEO. “We are working with our members to assess potential next steps to mitigate the consequences of the Supreme Court’s decision."

Montgomery's lawyers say the trucker had been cited for careless driving in another crash months earlier and that the carrier he worked for had been involved with at least three crashes in a span of about five months. Montgomery's lawsuit said C.H. Robinson should share liability because it hired the carrier despite those problems.

Montgomery's appeal was backed by more than two dozen states. They said a win for him would help bolster safety in an industry that moves billions of tons of goods across billions of miles every year.

The company argued the suit, filed under state law, must be tossed out because brokers rely on the federal government to regulate carriers and federal law trumps state law.

But in an opinion by Justice Amy Coney Barrett, the Supreme Court disagreed. The justices found Montgomery's claims can move forward because they fall under an exception for safety regulations. The high court overturned a lower-court ruling in the company's favor.

The decision could increase insurance costs for freight brokers that eventually “cascade through the economy" and result in higher prices for consumers, Justice Brett Kavanaugh wrote in a concurrence joined by Justice Samuel Alito.

Still, “truck safety is a matter of life and death," Kavanaugh wrote.

C.H. Robinson, which is based in Eden Prairie, Minnesota, pointed to another part of his concurrence, where he said the decision does not mean brokers will be “routinely subject” to lawsuits.

“We will keep working with policymakers, advocates, carriers, our customers, and others across the industry to strengthen the national safety system and advance practices that reduce accidents on America’s roads," said Dorothy Capers, the company's chief legal officer.

The ruling could have far reaching effects if brokers can be held liable for the actions of the trucking companies they hire, said Brian Watt, who runs a freight logistics company in Florida.

Brokers will now have to focus more on the safety records of the truckers they contract with to haul all kinds of goods, including hazardous materials, instead of just looking for the cheapest and fastest option.

“More than 28,000 federally licensed brokers currently operate in the United States with virtually no meaningful federal safety oversight regarding how they select carriers,” Watt said in a post on LinkedIn. He said there are tougher standards for brokers that arrange shipments out of ports and on railroads, but that highway shipments face fewer restrictions.

The Transportation Department has been cracking down on the trucking industry over the past year by trying to force unqualified drivers, trucking companies and schools out of the industry.

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Associated Press writer Josh Funk in Omaha, Nebraska, contributed to this report.