The United States Supreme Court’s recent unanimous decision in Montgomery v. Caribe Transport II, LLC is one of the most consequential for the logistics and transportation industry. The Court held that statelaw negligent hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA), creating potential liability pitfalls for freight brokers, motor carriers, insurers, and attorneys.
While the ruling does not automatically impose liability on freight brokers, it removes a powerful, and previously successful, preemption defense that brokers used to obtain early dismissals of negligence claims involving trucking accidents. With this defense impacted, brokers could find themselves as defendants in trucking accident cases and their carrier-selection practices will be discoverable and scrutinized.
The Background
The case stems from an Illinois trucking accident involving a motor carrier selected by freight broker C.H. Robinson. The plaintiff alleged that the broker negligently hired Caribe Transport despite warning signs in the carrier’s safety record, including a conditional safety rating and documented compliance deficiencies. The plaintiff argued that the broker knew, or should have known, that selecting the carrier created an unreasonable risk of harm to the public.
The broker argued that the claim was barred by the FAAAA, which broadly preempts state laws “related to” a broker’s prices, routes, or services. Lower courts agreed and dismissed the claim. The Supreme Court reversed.
The Court concluded that even if negligent hiring claims would otherwise fall within the FAAAA’s preemption provision, they are preserved by the statute’s “safety exception,” which states that federal law shall not restrict a state’s safety regulatory authority “with respect to motor vehicles.” According to the Court, a negligent hiring claim against a broker concerns motor vehicle safety because it directly relates to the selection of the trucks and carriers operating on public highways. In doing so, the Court established a nationwide rule permitting negligent hiring claims against freight brokers.
Why the Decision Matters
The immediate consequence of Montgomery is that freight brokers may no longer be able to secure early dismissals (depending on the facts) based on FAAAA preemption from lawsuits involving trucking accidents. Brokers face significant exposure to liability in cases involving severe injuries, fatalities, or significant property damage. Plaintiffs will pursue extensive discovery concerning carrier vetting, onboarding procedures, FMCSA data reviews, prior crashes, safety ratings, out-ofservice rates, insurance verification, and compliance histories. Producing this information could present significant litigation costs and risks to freight brokers.
Implications for Claims Handling
For claims professionals, Montgomery expands the range of entities whose conduct must be evaluated following a trucking loss.
Initial claims investigations rightly focus primarily on the driver and motor carrier. Going forward, claims handlers should also assess the broker’s role in selecting the carrier and determine what information was available at the time the transportation assignment was made with a particular focus on:
• FMCSA safety ratings and safety scores available when the load was tendered
• Prior crash history and out-of-service violations
• Carrier operating authority and regulatory compliance
• Documentation of carrier onboarding and approval processes
• Insurance verification procedures
• Internal broker communications regarding carrier selection Brokers must make every effort to preserve and catalog these materials as plaintiffs will argue deficiencies in carrier vetting demonstrate negligence independent of the driver’s conduct.
Underwriting and Coverage Considerations
Montgomery also has significant implications for underwriting and risk management.
Insurers have factored federal preemption into their evaluation of freight broker exposure. Montgomery changes that calculus as freight brokers now face prolonged litigation and significant exposure in accident cases.
Insurers should reevaluate:
• Broker liability underwriting criteria
• Carrier-selection requirements
• Risk-transfer provisions and indemnification agreements
• Additional insured structures
• Transportation professional liability products
• Exposure to nuclear verdicts arising from catastrophic trucking accidents
A Significant Decision--But Not Unlimited Liability
Importantly, the Supreme Court was careful to limit the scope of its holding.
In a concurring opinion, Justice Kavanaugh emphasized that “the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents.” Whether a broker acted negligently remains a factspecific inquiry subject to the applicable negligence standard.
Brokers that maintain robust carrierselection procedures, review available safety information, verify operating authority and insurance, and document their decision-making processes may still be well-positioned to obtain dismissal through summary judgment or prevail at trial. The existence of an accident alone does not establish that the broker acted unreasonably when selecting the carrier. Notably, the Court did not address the vicarious liability theory advanced by the plaintiff in the underlying action. Plaintiffs can still seek to hold brokers responsible for the negligence of a carrier or driver based on the nature and extent of the broker’s control over the carrier.
In many cases, the strongest defense may no longer be preemption, but rather a well-documented record demonstrating that the broker exercised reasonable care under the circumstances.
Looking Aheaed
Montgomery represents a major shift in transportation litigation. Freight brokers may now be within the scope of potential liability in serious trucking cases, and their carrier-selection decisions will receive unprecedented scrutiny.
For defense attorneys, the decision creates new challenges. Litigation will increasingly focus on operational practices, safety reviews, and broker due diligence rather than threshold preemption arguments. For claims professionals and underwriters, carrierselection protocols and documentation practices will become essential tools for evaluating and managing risk.
While the Supreme Court did not open the floodgates to automatic broker liability, it did expose brokers to certain risks in all jurisdictions. In the post-Montgomery landscape, the quality of a broker’s decisions—and the documentation supporting them—may determine whether a case is resolved through dispositive motion practice or proceeds before a jury.
About the Author:
John Anello is a partner at Callahan & Fusco, LLC. janello@callahanfusco.com