Montgomery v. Caribe Transport: The Ruling That Just Rewrote Freight Broker Liability

A unanimous Supreme Court decision has erased the legal shield brokers relied on for a decade. Here’s what’s already changed, and what’s still coming, for brokers, shippers, and carriers alike.

On May 14, 2026, the U.S. Supreme Court ruled 9-0 that freight brokers can be sued under state law for negligently hiring an unsafe motor carrier — reversing a decade of lower-court precedent and stripping brokers of the federal preemption defense they’d relied on to get these cases dismissed before a jury ever heard them. The case is formally styled Montgomery v. Caribe Transport II, LLC, but C.H. Robinson Worldwide — a company that connects roughly 75,000 customers with a network of about 450,000 contract carriers to move some $23 billion in freight a year, and the broker that arranged the shipment at the center of the case — was the real party defending the industry’s position all the way to the Supreme Court, which is why you’ll see it referred to informally as “the C.H. Robinson case” almost as often as by its official name.

What Actually Happened

The case traces back to December 7, 2017, when Shawn Montgomery was severely injured — including the amputation of his leg — after a tractor-trailer driven by Yosniel Varela-Mojena veered off Interstate 70 in Illinois and struck his stopped vehicle. Varela-Mojena was hauling a load of plastic pots for his employer, Caribe Transport II, LLC, a motor carrier; C.H. Robinson had arranged, or “brokered,” that shipment. Montgomery sued the driver, the carrier, and C.H. Robinson, alleging the broker was liable because it had negligently hired Caribe Transport, which held only a “conditional” federal safety rating at the time, with documented deficiencies in driver qualification, hours-of-service compliance, maintenance, and crash history.

The district court and the Seventh Circuit both sided with C.H. Robinson, holding that the Federal Aviation Administration Authorization Act (FAAAA) — a 1994 law that broadly preempts state regulation of motor carrier and broker prices, routes, and services — barred Montgomery’s negligent-hiring claim, and that the claim didn’t fall within the Act’s narrow “safety exception.” That followed the Seventh Circuit’s own 2023 precedent in Ye v. GlobalTranz Enterprises, which reached the same conclusion. The Eleventh Circuit had agreed in a separate case, but the Sixth and Ninth Circuits had gone the other way, creating a genuine split among federal courts over whether brokers could be sued at all. The Supreme Court granted certiorari on October 3, 2025, specifically to resolve it, and heard oral arguments on March 4, 2026, with thirteen amicus briefs — including one from the U.S. government — filed in support of C.H. Robinson’s position.

The Ruling Itself

The decision, arriving earlier than many attorneys expected, was unanimous. Writing for the Court, Justice Amy Coney Barrett held that the FAAAA’s safety exception — which preserves state authority to regulate safety “with respect to motor vehicles” — covers negligent-hiring claims against brokers, because requiring a broker to exercise ordinary care in selecting a carrier “concerns” the vehicles that will ultimately be on the road. The Court rejected C.H. Robinson’s argument that this reading would swallow the statute’s preemption clause whole, and acknowledged, without resolving, a genuine textual oddity the company had raised: a separate part of the FAAAA fully preempts state regulation of brokers’ intrastate business with no safety exception at all, an asymmetry Barrett addressed with a line likely to be cited in preemption litigation for years: “Better to live with the mystery than to rewrite the statute.”

Justice Kavanaugh, joined by Justice Alito, wrote separately to say the case was closer than the majority let on — the insurance asymmetry (carriers must carry minimum federal liability coverage; brokers don’t) and the intrastate anomaly were real points in the brokers’ favor. But he concluded that Congress, in a law aimed at economic deregulation rather than safety deregulation, was unlikely to have quietly shielded brokers from the same tort exposure carriers have always faced, and pointedly noted that the old preemption defense had created what he called a “black hole” of accountability, letting brokers book the cheapest available truck without ever having to check its safety record. Kavanaugh was also careful to note limits: he explicitly said the ruling shouldn’t be read as making brokers routinely liable every time a carrier they’ve hired is in a crash, and that brokers who act reasonably and select reputable carriers should still be able to defend these suits successfully.

What’s Already Happened, Eight Weeks In

The ripple effects started almost immediately. Just four days after the decision, the Fourth Circuit vacated a different broker’s summary judgment win in an unrelated case, Fuelling v. Echo Global Logistics, and remanded it for reconsideration “in light of Montgomery” — a fast, concrete signal that courts nationwide are actively reopening previously-dismissed broker cases, not just watching from the sidelines.

And the underlying case itself is moving again. The Supreme Court’s mandate didn’t resolve Montgomery’s lawsuit outright — it reversed the Seventh Circuit’s judgment and remanded the case back to that same appellate court, whose role at this stage is largely administrative: carrying out the Supreme Court’s instructions rather than re-litigating the merits. On June 30, 2026, attorneys for both Montgomery and the C.H. Robinson defendants filed a joint request asking the Seventh Circuit to send the case down to the original trial court, the U.S. District Court for the Southern District of Illinois, so the negligent-hiring claim can actually proceed. C.H. Robinson is expected to rejoin the case as a defendant once that happens. This isn’t unprecedented — a similar Ninth Circuit case against the company, Miller v. C.H. Robinson Worldwide, followed nearly the same path back in 2022 and settled within a few months of landing back in district court. At least one trucking-focused attorney has said a similar outcome here looks fairly likely, given Caribe Transport’s documented safety deficiencies.

C.H. Robinson’s own corporate response has been telling. Chief Legal Officer Dorothy Capers publicly framed the outcome as providing needed “clarity” for the industry, even though the substantive result went against the position the company had spent over a year defending, and said C.H. Robinson rolled out additional carrier safety and vetting criteria within about a week of the ruling. At an investor conference shortly after, CEO Dave Bozeman struck a notably calm tone: he said the company had genuinely expected to win, described its carrier-vetting process as among the strongest in the industry, disclosed that C.H. Robinson carries $137 million in auto liability and $86 million in general liability coverage, and predicted the ruling would accelerate consolidation toward “trusted, scaled” brokers — a category he clearly placed his own company in. Wall Street’s reaction backed that framing: Citi, Jefferies, and JPMorgan all turned more positive on C.H. Robinson’s stock in the weeks after the ruling, and independent analyst research noted the company’s insurance structure already looks closer to a carrier’s than a typical broker’s, even as it cautioned that it’s too soon to know how much the broader brokerage market’s premiums will actually move.

The Transportation Intermediaries Association, representing more than 1,500 brokers, took a starkly different tone, calling itself “deeply disappointed” and warning that a patchwork of state liability standards would raise costs throughout the supply chain. It’s since said it’s working with members on next steps.

One important caveat, from analysis published just days ago: while plaintiffs’ attorneys are already citing Montgomery to argue for expanded liability elsewhere in the supply chain, the ruling itself is narrow and broker-specific. It says nothing about shippers, who were never listed in the FAAAA’s preemption clause to begin with, and it doesn’t disturb the independent-contractor principles that continue to shield carriers and shippers from automatic vicarious liability for each other’s conduct. The headline — “every broker can now be sued” — is accurate. “Everyone in the supply chain is now exposed” is not, at least not yet.

What Comes Next

Insurance is the most immediate open question. Brokers have historically carried coverage built for cargo and contract disputes, not catastrophic bodily-injury litigation, and Kavanaugh’s own concurrence flagged that federal law has never required brokers to carry the kind of liability insurance it requires of carriers. Expect premiums to rise industry-wide, with the steepest increases falling on brokers who can’t show a documented, systematic vetting process — and comparatively smaller increases for those who can. That same insurance gap, combined with a federal minimum liability requirement for carriers that hasn’t been updated since the 1980s, is likely to keep pressure on Congress and FMCSA to act, whether through a rulemaking that gives brokers a defined vetting “safe harbor,” or broader legislative movement on carrier insurance minimums generally. Nothing here suggests that happens quickly.

In the meantime, carrier selection is shifting from a largely commercial decision into a documented compliance function. Several law firms advising brokers are now recommending the same basic checklist: verify operating authority and FMCSA registration before every engagement, document review of safety ratings and inspection history, confirm current insurance coverage, and keep contemporaneous records of the reasoning behind every carrier selected. The absence of that kind of documentation is, on its own, now treated as evidence in litigation. Expect the first wave of new suits to target brokers who dispatched carriers with visible red flags — conditional safety ratings, elevated BASIC percentile scores, recent out-of-service orders, or operating authority obtained only months earlier.

The consolidation pressure C.H. Robinson’s own executives predicted is worth taking seriously on its own terms: smaller, thinly capitalized brokers without mature compliance systems or insurance programs may struggle to absorb the cost step-up, which could accelerate an already-existing gap between large, well-resourced brokerages and everyone else. And several legal analyses point out that the Court’s underlying logic — that exercising ordinary care in selecting a carrier concerns the safety of the vehicles on the road — isn’t textually limited to companies holding formal broker authority. It’s a reasoning that could extend to freight forwarders, digital freight-matching platforms, and potentially even third-party carrier-vetting or scoring services that make similar selection-adjacent decisions.

If You’re a Broker or 3PL

• Treat carrier vetting as a documented, repeatable process, not a one-time authority check — safety ratings, BASIC scores, out-of-service history, and authority age should all be part of a written record for every carrier you select.

• Review your insurance coverage now, specifically whether your current policy responds to a negligent-selection tort claim and whether your limits reflect the post-Montgomery exposure environment, not the pre-Montgomery one.

• Don’t wait for your first lawsuit to formalize what you’re already doing informally — the absence of documentation is itself being used as evidence against brokers in early post-ruling litigation.

If You’re a Shipper or Distributor

• This decision doesn’t change your own direct liability framework, but it’s worth understanding how the brokers you use vet carriers on your behalf, since their new litigation and insurance costs will likely show up in your freight pricing over time.

• Ask your broker partners directly what’s changed in their vetting process since May 14 — the range of responses across the industry so far has been wide, from immediate proactive updates to a defensive, wait-and-see posture.

• Review the carrier-selection and indemnification language in your own transportation contracts; several firms are already recommending updates here for both brokers and the shippers who rely on them.

  
  

If You’re a Carrier

• Expect brokers to get more selective, not less. A clean safety rating, low BASIC percentile scores, and a stable operating history are becoming more valuable to brokers who are now personally exposed to the consequences of who they dispatch.

• Anticipate more documentation requests from broker partners than you’re used to — verifying your safety data is no longer a courtesy step for them, it’s part of their legal defense.

• If your operating authority is new or your safety profile is mixed, understand that you may see brokers route more freight toward carriers with longer, cleaner track records, at least until the market fully adjusts.

Montgomery didn’t invent a new legal theory. Negligent-hiring liability has existed under ordinary tort principles for generations, applied to everyone from construction contractors to security firms. What the decision did was remove the one federal shield that had kept those claims from ever reaching a jury against freight brokers in much of the country. Whatever seat you occupy in the supply chain, carrier selection has permanently shifted from a purely commercial decision into a documented safety function — whether the industry wanted that shift or not.

— Pat