Supreme Court Rules Freight Brokers Can Be Sued for Negligent Carrier Selection

WASHINGTON – The U.S. Supreme Court on May 14, 2026, unanimously ruled that freight brokers can be sued under state law for negligence in their selection of motor carriers, a landmark decision that removes a long-standing federal liability shield and exposes the industry to a new wave of litigation. The 9-0 ruling in Montgomery v. Caribe Transport II, LLC resolves a split among federal courts and fundamentally alters the risk landscape for the thousands of brokers who act as intermediaries in the nation’s supply chain. The decision, authored by Justice Amy Coney Barrett, affirms that federal law does not preempt personal injury claims filed against brokers at the state level. For decades, brokers have successfully argued that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) protected them from such lawsuits, contending that holding them liable for a carrier’s actions constituted a state-level regulation of a broker’s rates, routes, or services, which the act prohibits. The case originated from a lawsuit filed by truck driver Shawn Montgomery, who suffered a catastrophic injury resulting in the amputation of his leg after a crash with a truck hired by C.H. Robinson, one of the country's largest freight brokers. The Supreme Court’s decision allows Montgomery's lawsuit to proceed and sets a nationwide precedent. The court’s reasoning centered on a specific provision within the FAAAA known as the “safety exception.” This clause, 49 U.S.C. § 14501(c)(2)(A), preserves the states’ authority to regulate safety “with respect to motor vehicles.” Justice Barrett wrote for the court that a state’s requirement for a party to exercise ordinary care in selecting a transportation provider is directly related to motor vehicle safety. Therefore, a negligent-hiring claim against a broker falls squarely within this exception and is not preempted by federal law. Justice Brett Kavanaugh, joined by Justice Samuel Alito, filed a concurring opinion. While agreeing with the unanimous outcome, Kavanaugh suggested the case was closer than the majority opinion implied, but ultimately concluded that the safety exception applied. This ruling effectively dismantles a key legal defense that has insulated the brokerage industry from liability for crashes caused by the carriers they hire. The legal duty that applies to nearly every other industry—to exercise reasonable care when selecting a contractor whose work carries a risk of physical harm to others—now unambiguously applies to freight brokers in every state. The immediate impact is expected to be a significant increase in negligent-selection lawsuits against brokers. Legal experts anticipate that the first wave of post-Montgomery suits will be filed within weeks, targeting brokers who hired carriers with documented safety deficiencies. These may include carriers with conditional safety ratings, elevated scores in the Federal Motor Carrier Safety Administration’s (FMCSA) BASIC safety measurement system, prior out-of-service orders, or very new operating authority (less than 18 months). Discovery in these new cases will likely focus on the broker’s internal processes. Plaintiffs’ attorneys will seek carrier vetting policies, internal screening criteria, communications with carriers before dispatch, and records of any safety data the broker reviewed—or failed to review. According to legal analysis, the absence of a formal, documented carrier vetting process could itself be presented as evidence of negligence. The decision redistributes liability across the supply chain. Previously, shippers using brokers may have operated under the assumption that their broker’s federal preemption defense would insulate the entire transaction. That assumption is no longer valid. While shippers who select their own carriers have always been subject to negligent-hiring claims, the liability now clearly extends to the brokers they entrust with that selection. Operationally, brokers must now prioritize and document rigorous carrier safety vetting. Simply choosing the cheapest or most available truck is no longer a defensible business practice. Brokers are expected to utilize publicly available resources like the FMCSA’s Safety and Fitness Electronic Records (SAFER) System, which publishes every carrier’s authority status, safety rating, inspection history, crash record, and out-of-service percentages. A broker who can demonstrate they consulted this data and rejected carriers with elevated risk profiles will be in a much stronger defensive posture in the event of an incident. While this ruling is a shock to the system for many small and mid-sized brokers, our view is that it represents a necessary, if painful, alignment of risk with responsibility. The immediate focus will be on legal defense and operational changes, but the secondary financial impacts on insurance premiums, credit availability, and overall business valuation are just as critical. This is precisely the type of event where robust financial risk management becomes a core survival function, not a back-office task. We have seen how unforeseen liabilities can cascade through a company’s financial structure, and this ruling creates a significant new one. Proactive planning is essential to quantify, mitigate, and insure against these new operational exposures before an incident occurs. For companies navigating this new reality, the team at C&S Finance Group LLC at csfinancegroup.com can help build the framework to assess and manage this new liability landscape. Looking ahead, the logistics and transportation industries will be closely watching how lower courts interpret and apply this precedent in the expected surge of litigation. The ruling is also likely to drive up insurance costs for freight brokers and may lead to consolidation within the industry, as smaller firms may struggle to absorb the increased costs and administrative burdens associated with the new standard of care.