Reported / Citable
Background
Grupo Gusi S. de P.R. de R.L. de C.V. contracted with Select Transport Partners, LLC to haul 24 pallets of frozen meat to Quirch Foods in Greensboro, North Carolina. Two motor carriers — Bans Transport LLC and KM Transport Inc. — were listed on the bills of lading. In June 2025, KM Transport received the shipment in Laredo, Texas, but the cargo never reached North Carolina. Instead, Bans Transport redirected the meat to a warehouse in South Gate, California, where it was immediately loaded onto an unknown truck and disappeared. Quirch Foods never received the goods, and the meat’s whereabouts remain unknown.
Grupo Gusi sued Select Transport for negligence (specifically negligent hiring of motor carriers), breach of bailment, and breach of contract. Select Transport moved to dismiss all three claims under Federal Rule of Civil Procedure 12(b)(6). Senior U.S. District Judge Lee H. Rosenthal granted the motion in part, dismissing the tort claims with prejudice and the contract claim without prejudice with leave to amend by July 10, 2026.
The Court’s Holding
The court held that Grupo’s negligent-hiring claim is preempted by the Federal Aviation Administration Authorization Act (FAAAA), 49 U.S.C. § 14501(c)(1), which bars state-law claims “related to a price, route, or service of any motor carrier . . . or . . . broker.” Because the negligent-hiring allegation — that Select Transport carelessly selected the motor carriers who diverted and lost the cargo — goes directly to Select Transport’s brokerage service of matching shippers with carriers, it falls squarely within the statute’s preemptive sweep. The court also found the safety exception inapplicable: applying the Supreme Court’s recent decision in Montgomery v. Caribe Transport II, LLC, 146 S. Ct. 1199 (2026), the court explained that the exception preserves state claims alleging a risk of physical harm, not claims grounded in fraud or cargo theft. The bailment claim failed on the same preemption analysis; because state law creates bailment duties and the gravamen of the claim was Select Transport’s failure to select adequate carriers, it too related to broker services and was not saved by the safety exception.
The breach-of-contract claim, however, is not preempted. Following the logic of American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995) — which excluded voluntary contractual undertakings from analogous preemption under the Airline Deregulation Act — and consistent with Fifth Circuit district-court precedent, the court held that contract claims enforcing the parties’ own bargain do not fall within § 14501(c)(1)’s preemption provision. Nevertheless, the court dismissed the contract claim without prejudice because Grupo failed to identify which specific provision of the contract Select Transport breached, as required to survive a motion to dismiss in the Fifth Circuit.
Key Takeaways
- Under the FAAAA and Caribe Transport, a shipper’s state-law negligent-hiring claim against a freight broker is preempted when the theory is that the broker selected a fraudulent or dishonest carrier — not that it selected an unsafe one likely to cause physical injury.
- State-law bailment claims against freight brokers are similarly preempted by the FAAAA when they rest on the broker’s failure to adequately select or supervise carriers, because such duties are created by state law and relate to broker services.
- Breach-of-contract claims against brokers survive FAAAA preemption under the Wolens doctrine, but plaintiffs must plead the specific contractual provision allegedly breached to survive a Rule 12(b)(6) motion in the Fifth Circuit.
- Cargo-theft victims who lack a viable contract theory may be left without a state-law remedy against brokers, underscoring the importance of precise contract drafting that expressly allocates responsibility for carrier vetting and cargo loss.
Why It Matters
This decision illustrates the expansive reach of FAAAA preemption in cargo-theft litigation and applies the Supreme Court’s 2026 Caribe Transport ruling to foreclose negligent-hiring claims rooted in a broker’s selection of a dishonest rather than physically dangerous carrier. The distinction between fraud-based and safety-based negligence may significantly limit the tort remedies available to shippers who suffer cargo theft at the hands of fictitious or rogue carriers — a type of fraud that has grown increasingly common in the trucking industry.
Equally significant is the court’s reaffirmation that contract claims survive FAAAA preemption, giving shippers a path to recovery if their broker agreements expressly address carrier vetting or guarantee delivery. Attorneys representing cargo owners should carefully review and strengthen the indemnification and carrier-selection provisions of their transportation contracts in light of this ruling.