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Broker Liability Ruling May Be Less Harsh Than Feared
Supreme Court Ruling Allows Safety-Based State Claims but Sets High Bar for Liability
Key Takeaways:
- The Supreme Court ruled May 14 that freight brokers can face some state negligence lawsuits, though analysts said the decision was narrower than many feared.
- Analysts said only safety-related claims may proceed, limiting the ruling’s scope while still raising concerns about higher compliance costs and truckload rates.
- Brokers, shippers and technology providers said the ruling likely will increase carrier vetting and reliance on documented safety and compliance data.
The Supreme Court opened the door to brokers being liable for negligence in state lawsuits, but it may not be as harsh as some have feared, according to experts.
Montgomery v. Caribe Transport II challenged whether federal law that restricts states from regulating brokerage services protects freight brokers from state lawsuits over negligent hirings. C.H. Robinson was accused of negligently hiring a motor carrier involved in an accident. The case made it to the highest court, with the new ruling May 14 overturning those protections.
“[The] unanimous Montgomery ruling creates adverse ramifications for the brokerage model,” Harrison Bauer, an analyst at Susquehanna International Group, wrote in a report. “However, the concurrence language isn’t as harsh to brokers as the title ruling might suggest. … Yet another regulatory item driving structural capacity change and [truckload] rate inflation.”
C.H. Robinson responds to Supreme Court decision and reinforces support for strong federal safety oversight https://t.co/CLky4wPbW7
— C.H. Robinson (@CHRobinson) May 14, 2026
The Federal Aviation Administration Authorization Act generally pre-empts states from regulating broker prices, routes and services. But it also contains a safety carve-out preserving state authority over motor vehicle safety, with the court ruling that requiring a broker to use ordinary care in selecting a carrier falls within that. SIG pointed out, however, that the ruling is narrow in scope since only safety-related lawsuits can move forward.
“This case presents the question whether a claim that one company negligently hired another to transport goods falls within that exception,” Justice Amy Coney Barrett wrote in the decision. “It does.”
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Barrett
Baird described the decision as having significant implications for broker and carrier liability under the federal law. The financial firm pointed out in a report that several federal appellate courts had previously shielded brokers from such claims. But the new decision rejected that as expansive reading, with the carve-out including traditional state tort duties for highway safety.
“The court did not explicitly state that brokers are automatically liable, which means that plaintiffs will still have to prove ordinary negligence elements under state law, including foreseeability,” wrote Daniel Moore, senior research analyst at Baird. “It must be proven that the broker knew, or should have known, that the carrier ultimately hired posed a safety risk.”
Shipping Behavior
Baird still expects the decision to influence shipping behavior. This could include more stringent vetting leading to higher spot rates in an already capacity-constrained operating environment. It expects that the economic implications are likely substantial and relatively straightforward in how the ruling raises broker litigation exposure.
“Insurance and compliance costs are likely to rise over time, and plaintiffs’ counsel will pursue more negligent-selection suits after major accidents,” Moore wrote. “We expect brokers and shippers to express the ruling through increased preference for large carriers with established safety practices and substantial insurance coverage.”
24-1238 Montgomery v. Caribe Transport II, LLC (05/14/2026)
Shawn Montgomery was injured when he was struck by a truck being operated by Caribe Transport II. He filed a lawsuit in 2019 claiming the accident was the result of negligence since the driver had been cited for carelessness in another crash months earlier, and because the carrier had been involved with at least three crashes in a span of about five months. C.H. Robinson was accused of sharing liability since it hired the carrier despite those issues.
“Our hearts continue to go out to the victims of truck accidents,” Dorothy Capers, chief legal officer at C.H. Robinson, said in a statement provided to Transport Topics. “Our employees and their families travel these same roads, and our business depends on safe freight delivery.”
C.H. Robinson had pointed out during the case that it relies on the federal government to license carriers and that being federally regulated means it can’t be sued under state law in that way. The company moved to dismiss the negligent-hiring counts against it under the FAAAA.
“While we are disappointed in the court’s decision, we will continue to operate responsibly,” Capers said. “As justices [Brett] Kavanaugh and [Samuel] Alito stated in the concurrence, ‘Importantly, 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.’ ”
Kavanaugh also warned in the concurring statement that the decision may increase insurance costs for freight brokers and thus prices for consumers.
'A Turning Point'
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McCandless
“The Supreme Court’s decision in Montgomery v. Caribe Transport is a turning point for how freight decisions get made, documented and defended,” said Jett McCandless, founder of Project44. “Going forward, shippers and brokers need to be able to demonstrate that carrier selection was based on objective, verifiable credentials.”
He added that this means documented safety records, real-time compliance data and audit trails that can hold up under legal scrutiny that his company has built services for.
“Companies that treat carrier selection as a documented, data-driven process will be in a fundamentally stronger position when their decisions are challenged than those who do not,” McCandless said.
