The U.S. Supreme Court’s unanimous decision in Montgomery v. Caribe Transport II, LLC has significantly altered the legal landscape for freight brokers, transportation intermediaries, insurers, and litigants nationwide. In a ruling that will likely reshape trucking litigation for years to come, the Court held that state-law negligent hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act (“FAAAA”).
For years, brokers relied heavily on federal preemption arguments to defeat claims alleging negligent carrier selection. That defense is now substantially weakened. Although the decision does not impose automatic liability on brokers, it opens the door for plaintiffs to pursue state tort claims alleging that a broker failed to exercise reasonable care in selecting a motor carrier involved in a catastrophic accident.
At issue in Montgomery was a 2017 Illinois crash in which a truck operated by Caribe Transport struck another vehicle on the shoulder of Interstate 70, causing devastating injuries that resulted in the amputation of the plaintiff’s leg. The plaintiff alleged that freight broker C.H. Robinson negligently selected Caribe despite publicly available safety concerns and operational deficiencies. Lower courts previously held that the plaintiff’s claims were barred by the FAAAA, which generally preempts state laws “related to a price, route, or service” of brokers and motor carriers.
The Supreme Court disagreed.
Writing for a unanimous Court, Justice Amy Coney Barrett concluded that the FAAAA’s “safety exception” preserves state authority over claims concerning motor vehicle safety, including negligent hiring claims against freight brokers. The Court reasoned that requiring brokers to exercise ordinary care in selecting carriers directly relates to the safe operation of commercial motor vehicles on public highways.
In practical terms, the ruling means that freight brokers can no longer rely on blanket federal preemption arguments to avoid state-law negligence claims arising from carrier selection decisions. The decision reverses prior precedent from several federal courts that had broadly interpreted the FAAAA to shield brokers from liability tied to transportation services.
Importantly, the Court did not hold that brokers are strictly liable for every crash involving a carrier they retained. Rather, the applicable standard remains one of ordinary negligence. Plaintiffs must still prove that the broker failed to act reasonably under the circumstances and that the alleged failure contributed to the loss.
Nevertheless, the implications for transportation litigation are substantial.
The opinion effectively elevates carrier vetting and safety screening from a contractual or operational consideration into a central litigation issue. Plaintiffs’ attorneys will now focus heavily on what information brokers had access to at the time of dispatch, what safety data was reviewed, whether internal vetting procedures existed, and whether warning signs were ignored.
That discovery will likely include FMCSA safety data, SAFER reports, inspection histories, BASIC percentile scores, prior out-of-service violations, conditional safety ratings, authority age, crash histories, and communications between brokers and carriers. Documentation surrounding carrier onboarding and approval processes may become critical evidence in future negligent selection cases.
Justice Brett Kavanaugh’s concurrence, joined by Justice Samuel Alito, may prove equally significant moving forward. While agreeing with the outcome, Kavanaugh emphasized the broader regulatory gap underlying the dispute. He noted that federal law imposes minimum insurance requirements on motor carriers, but not on freight brokers, and observed that federal regulations governing broker-carrier selection practices remain relatively limited.
That observation is likely to become increasingly important as litigation evolves. The transportation industry now faces a situation in which brokers may face expanded tort exposure without a corresponding federal regulatory framework defining precisely what constitutes reasonable carrier vetting. As a result, standards of care may develop unevenly through state court litigation and jury verdicts rather than through comprehensive federal regulation.
This creates several immediate consequences for brokers, insurers, shippers, and third-party logistics providers.
First, insurance exposure is expected to increase considerably. Many brokerages historically maintained coverage structures designed around contractual and cargo-related risk rather than catastrophic bodily injury litigation. Following Montgomery, insurers and underwriters will likely reevaluate broker risk profiles, underwriting criteria, and premium structures. Brokers without formalized and documented carrier-vetting procedures may face heightened scrutiny and increased costs.
Second, operational practices throughout the brokerage industry will likely change. Carrier selection procedures that once focused primarily on active authority and insurance verification may no longer be sufficient. Brokers may increasingly adopt more robust due diligence measures, including enhanced safety monitoring, documented carrier review protocols, and ongoing compliance auditing.
Third, the ruling may affect parties beyond traditional licensed freight brokers. Although the Court addressed broker liability specifically, the reasoning underlying the decision could influence claims involving other entities participating in carrier selection, including shippers, logistics providers, digital freight platforms, and intermediaries exercising meaningful control over transportation decisions.
At the same time, several important questions remain unresolved.
The Supreme Court did not define the precise contours of reasonable care in broker selection. Nor did it establish what level of FMCSA data, safety history, or operational concern creates a duty to reject a carrier. Those issues will now be litigated extensively in state and federal courts across the country.
Additionally, the decision may not entirely eliminate preemption defenses in all transportation-related cases. Certain claims involving economic regulation, routing decisions, or broker services unrelated to safety may still fall within the FAAAA’s preemptive scope. Courts will continue drawing distinctions between claims genuinely tied to motor vehicle safety and claims more closely connected to economic regulation of brokerage services.
The decision also intensifies an already developing jurisdictional divide concerning transportation preemption and broker liability. While Montgomery resolves the negligent hiring issue at the federal level, substantial disputes remain regarding the extent to which federal transportation law displaces state tort theories in related contexts. Future litigation will likely address negligent retention, negligent supervision, vicarious liability, punitive damages, and the evidentiary use of FMCSA safety data.
For insurers and claims professionals, early investigation will become increasingly important in broker-involved catastrophic loss cases. Determining what vetting procedures existed, what information was available at dispatch, and how carrier selection decisions were made may materially affect both exposure evaluation and litigation strategy. Likewise, preservation of carrier qualification records, broker communications, and safety review documentation will be critical from the earliest stages of a claim.
The broader transportation industry is now entering a period of significant adjustment. The Supreme Court did not create a new tort theory; negligent hiring principles have existed for decades. What changed is the availability of a federal procedural defense that many brokers successfully relied upon to avoid litigating those claims on the merits.
As courts begin applying Montgomery, the practical boundaries of broker liability will develop incrementally through fact-specific litigation. Some cases will likely reinforce reasonable vetting practices, while others may produce expansive theories of liability in catastrophic-loss scenarios. Either way, the decision ensures that carrier selection practices will now occupy a far more prominent role in transportation litigation nationwide.
In the wake of Montgomery, the transportation industry faces a materially expanded litigation landscape in which freight brokers, logistics intermediaries, and their insurers may face increased scrutiny over carrier-selection practices and safety oversight. As courts begin applying the Supreme Court’s decision across varying factual and jurisdictional settings, early legal evaluation and coordinated claims strategy will be increasingly important. Matthiesen, Wickert & Lehrer, S.C. handles cargo and transportation claims in all 50 states and brings substantial experience in the evolving intersection of federal transportation law, FMCSA regulatory compliance, and broker liability exposure. From catastrophic trucking losses involving broker-arranged carriers to complex disputes concerning negligent selection and non-carrier liability theories, the firm understands the operational, regulatory, and litigation challenges now confronting the transportation industry. Because this area of law remains highly fact-sensitive and continues to develop in real time, the legal distinctions drawn at the outset of a case can significantly affect liability exposure, defense strategy, and ultimate recovery outcomes.
If you have questions regarding this new ruling and how it might affect you, contact Lance Jones at ljones@mwl-law.com. Early involvement can preserve evidence and clarify strategy.
