That didn’t take long.
A broker liability case won by Echo Global Logistics in 2024 on the grounds of federal preemption of state action against 3PLs has been sent back to a lower court following last week’s decision in Montgomery vs Caribe Transport II.
Echo was a defendant in a case first filed by Angela Fuelling in 2022. Her husband James was killed in early January of that year when a truck hired by Echo and operated by S&J Logistics plowed into his pickup truck while he was stopped on interstate 85 in Cherokee County, South Carolina due to a traffic backup.
Both Echo Global and S&J were sued by Angela Fuelling. But in November 2024, the federal district court for South Carolina granted Echo Global’s request for summary judgement and removed it as a defendant, citing the Federal Aviation Administration Authorization Act (F4A) as barring state action against a transportation company that could affect a “price, route or service.”
The Fuelling case threatened to be one more entry in a basket of split circuit court rulings over brokers and the so-called safety exception in F4A. The exception permits state action against a transportation company over a safety issue “with respect to motor vehicles.” Some circuits said “motor vehicles” don’t include brokerages; others said it did.
That confusion ended last week with the unanimous Montgomery decision, which held that the safety exception does include brokers and they can be held liable or negligent for their hiring decisions.
Case had been at the Fourth Circuit
Angela Fuelling had appealed the summary judgement ruling to the U.S. Court of Appeals’ Fourth Circuit. This week, with the Montgomery precedent firmly in hand, the appellate court remanded the Fuelling case back to the federal district court for South Carolina.
In the brief order, the three-judge appellate panel said “The district court’s grant of summary judgment is vacated, and the case is remanded to the district court for further proceedings in light of Montgomery v. Caribe Transp. II.”
Laying out a playbook to sue brokers
What also didn’t take long was at least one plaintiff’s attorney touting their credentials to sue brokers in the new world created by Montgomery.
In a blog post published Thursday, the Florida-based law firm of Searcy Denney Scarola Barnhart & Shipley gave a preview of how a plaintiff’s attorney might pursue in the inevitable litigation that is going to arise in a post-Montgomery world.
“A $1 million policy does not begin to compensate a client whose life has been altered forever,” the law firm said, referring to the potential upper limit a plaintiff might be able to receive from a carrier in a lawsuit. “Without a second responsible defendant, the recovery is capped far below what the case is actually worth. Montgomery changes that math.”
The blog post is not fully up to date on the state of the brokerage industry. It cites four brokers as examples, two of whom have been sold in recent years and don’t operate under their name anymore: Coyote Logistics, sold to RXO in 2024 (NYSE: RXO) and Transplace, part of Uber Freight since 2021 (NYSE: UBER).
The law firm also cites C.H. Robinson (NASDAQ: CHRW) and Echo Global as examples of freight brokerages.
“In this post-Montgomery world, every catastrophic trucking case must now be screened for broker involvement at intake,” the law firm says.
Discussion post-Montgomery has often focused on brokers needing guidance on just what they will need to do to be seen as having accomplished what the law firm says is “a duty of reasonable care.”
It’s been noted in the wake of Montgomery that it may take several years for a body of law to develop enough to answer that question. But the Searcy law firm takes a stab at what it might mean. Reasonable care, the firm says, will require a brokerage to:
- Review FMCSA safety ratings before hiring a carrier
- Investigate carriers with “conditional” or “unsatisfactory” safety ratings
- Check CSA (Compliance, Safety, Accountability) BASIC scores
- Not knowingly hire carriers with documented histories of driver-qualification failures, hours-of-service violations, or poor crash records
“A broker negligent-hiring case is not an ordinary trucking case with a new defendant,” the law firm says in its pitch to potential clients. “It is multi-defendant litigation against billion-dollar corporate defendants represented by national defense firms with seven-figure budgets. These defendants fight hard and spend freely.”
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