SCOTUS Reshapes Liability for Negligence Claims for Freight Industry

Introduction

On May 14, 2026, the United States Supreme Court unanimously held in Montgomery v. Caribe Transport II, LLC that a state-law negligent hiring claim against a freight broker is not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA) because such a claim falls within the statute’s safety exception. The decision removes the broad federal preemption defense that freight brokers have relied on for years to defeat negligent-selection claims at an early stage of litigation, and it will reshape liability exposure, underwriting practices, and commercial relationships throughout the freight transportation industry. 
What is the Role of the FAAAA?

Freight brokers serve as intermediaries between shippers and motor carriers, connecting parties that need goods moved with the carriers that supply trucks and drivers. Nearly 28,000 brokers arrange transportation for about one-third of all freight shipped in the United States by more than 780,000 carriers. In 1994, Congress passed the FAAAA to deregulate the trucking industry and promote interstate trade. The statute broadly preempts state laws “related to a price, route, or service” of a motor carrier or broker “with respect to the transportation of property.” But it also contains a carveout known as the “safety exception,” which preserves state authority to regulate motor vehicle safety. For years, freight brokers invoked the FAAAA’s preemption provision to resist state-law negligent hiring and negligent-selection claims arising from trucking casualty claims. However, the Supreme Court has now narrowed that defense through its landmark ruling in Montgomery.

The Case

Shawn Montgomery was pulled over on the side of a road in Illinois when he was struck and seriously injured by a Mack truck. Montgomery sued the freight broker that had coordinated the shipment, C.H. Robinson World-Wide, Inc. (C.H. Robinson), the motor carrier Caribe Transport II, LLC (Caribe Transport), and its driver. Montgomery alleged that C.H. Robinson negligently hired Caribe Transport because the carrier had only a “conditional” safety rating from the Federal Motor Carrier Safety Administration (FMCSA), with documented deficiencies in driver qualification, hours of service, vehicle maintenance, and crash rates. Montgomery argued that C.H. Robinson knew or should have known that selecting Caribe Transport was reasonably likely to cause crashes and injuries. 

The district court dismissed the negligent-hiring claim as preempted under the FAAAA, and the Seventh Circuit affirmed. The Supreme Court granted certiorari to decide whether the FAAAA’s safety exception permits negligent-hiring claims against brokers that coordinate shipments in the transportation industry. The Court unanimously reversed, holding that the safety exception saved Montgomery’s claim from preemption. Justice Barrett reasoned in the majority opinion that common-law duties and standards of care are part of a state’s authority to regulate safety, and that a broker’s exercise of care in selecting a carrier for the transportation of goods “concerns” motor vehicles.

Importantly, Justice Kavanaugh, joined by Justice Alito, provided an important concurrence, which indicated that the decision was “closer” than the majority opinion suggested. The concurrence opinion underscores some of the practical consequences of the decision. For example, the FAAAA requires minimum insurance coverage for motor carriers, but not for brokers. Should the same minimums now be carried by a freight broker? The FAAAA is silent, at least for now. Justice Kavanaugh also recognized that unknown litigation and insurance costs to freight brokers may cascade through the economy and be borne in part by consumers through higher prices. Ultimately, Justice Kavanaugh viewed the legislative intent of the FAAAA as an “economic deregulation statute, not a safety deregulation statute,” concluding that Congress didn’t intend to leave carriers exposed to state tort liability while giving brokers categorical immunity for negligently selecting an unsafe carrier involved in an accident. 

Freight Brokers are in the Crosshairs

Freight brokers face the most direct impact. With the broad preemption defense stripped, brokers can no longer defeat negligent-selection claims at the pleading stage in most jurisdictions. The most defensible carrier-selection programs will document review of available public safety data and establish escalation procedures for carriers with adverse indicators. Diligent brokers should preserve load-specific records showing what information was reviewed, what criteria were applied, who made the decision, and why a particular carrier was approved. The objective is not to guarantee accident-free transportation but to demonstrate reasonable care contemporaneously to the hiring, rather than reconstruct it years later in court.

The decision may also affect the broker market structure. Larger brokers with mature compliance systems, audit trails, and insurance programs may be better able to absorb the costs of enhanced vetting and litigation defense. Smaller brokers may face disproportionate pressure if underwriters, customers, or plaintiffs treat thin documentation as evidence of inadequate care, which over time may encourage industry consolidation, more standardized vetting tools, and greater reliance on larger carriers. 

Shippers Beware! 

Shippers should not view Montgomery as solely a broker problem. The decision’s logic focuses on the party that selects a carrier and has access to safety information bearing on that selection. In future litigation, brokers may point to the shipper’s role in the transaction, including what the shipper required, whether the shipper approved or rejected particular carriers, whether the shipper demanded expedited service that constrained carrier choice, and whether cost or speed was prioritized despite known safety concerns.

Shippers should revisit broker agreements, routing guides, bid documents, and internal communications. Agreements should clearly allocate responsibility for carrier vetting, define minimum safety criteria, require documentation of carrier-selection decisions, and align indemnity and insurance provisions with negligent-selection risk. Shippers should also avoid creating written records suggesting that cost, speed, or capacity concerns overrode known safety issues.

More Insurance and Cost Expected 

For insurers of freight brokers, Montgomery is an underwriting event. The Court has expanded the circumstances in which negligent-selection claims can proceed beyond preemption, and the concurrence expressly recognized that litigation and insurance costs may be significant even when brokers meet the standard of care and prevail. It will inevitably result in at least short-term transportation cost hikes related to insurance premiums. This is an unwelcome reality to a market that has been hammered with surging fuel costs and inflation.  

Freight brokers with robust written vetting policies, safety-data sources, escalation criteria, exception protocols, record-retention practices, and the historical safety profile of carriers frequently selected by the broker will likely benefit in the form of lower insurance premiums, and thus more competitive market pricing.  

Motor Carriers Face Heightened Commercial Practice Scrutiny

While Montgomery does not directly impact motor carriers, its impact will be far-reaching in the transportation industry. Brokers are simply going to require more vetting and enhanced commercial and operational comfort before retaining a motor carrier. Carriers with weak or poorly explained safety histories should expect more questions and more documentation requests from brokers regarding safety ratings, inspection results, corrective actions, driver qualification practices, hours-of-service compliance, maintenance programs, and recent crash history.

What Happens Next?

Some in the freight industry are alarmed that Montgomery is a potential extinction event for brokers, particularly smaller brokers without mature compliance systems, durable insurance programs, or the ability to absorb insurance and litigation-related expenses. However, similar to other landmark Supreme Court decisions, Montgomery will likely cause many state legislative bodies to address freight broker liability for negligent hiring exposure over the next several years. In the meantime, as brokers adapt to the Montgomery ruling by treating carrier selection as a core safety function, the ultimate legacy of the decision could be increased motor carrier safety on the roadways.  

** Research and contributions to this article were made by Adams & Reese summer associate, John Trapp, who is a third-year law student at the LSU Paul M. Herbert Law Center