Freight Brokers May Face Liability for Negligent Hiring of Carriers
On May 14, 2026, the United State Supreme Court ruled that federal law does not shield freight brokers from state lawsuits based on negligent hiring of dangerous motor carriers.
Freight brokers need to update the motor carrier selection policies and review insurance coverages to protect them moving forward.
Background of Montgomery v. Caribe Transport II
Back in 2017, the plaintiff, Shawn Montgomery, experienced trouble in his tractor-trailer and pulled over to the side of the road. Then, a tractor-trailer driven by an employee of Caribe Transport II (the motor carrier) rear-ended Montgomery on the side of the road.
The shipment had been arranged by C. H. Robinson Worldwide, Inc. (the freight broker). Caribe Transport II had a “conditional” safety rating when it was hired by C.H. Robinson. A conditional safety rating means that the motor carrier lacks adequate safety management controls in place to ensure compliance with applicable safety fitness standard. Other safety rating levels include “satisfactory,” “unsatisfactory,” and “unrated.”
Montgomery’s injuries were significant and included the amputation of his leg and other permanent disfigurement. A very sympathetic plaintiff.
Montgomery sued the motor carrier and the freight broker. As to the freight broker, the plaintiff argued that it was liable for his injuries because it knew, or should have known, that the motor carrier was an unsafe choice to ship its good. In other words, C.H. Robinson was negligent when it hired Caribe Transport II to transport the goods of the shipper.
The Federal Aviation Administration Authorization Act of 1994
C. H. Robinson filed a motion to dismiss, arguing that the the state law was preempted by the FAAAA. In the FAAAA, Congress tried to deregulate the trucking industry, partly by preempting state laws relating to “price, route, or service” of motor carriers and brokers in Section 14501(c)(1).
The District Court and the 7th Circuit Court of Appeals agreed with C.H. Robinson, ruling that the state negligent hiring lawsuit was preempted by the federal law. However, the 6th and 9th Circuits had previously said no preemption, thus leaving a split in the Circuits and making it a case for the U.S. Supreme Court to resolve.
The U.S. Supreme Court Votes 9-0 Allowing State Law Claims to Proceed
In a surprisingly short opinion for the unanimous Court, Justice Amy Coney Barret wrote that the FAAAA preemption does not apply to a state’s safety regulatory authority with respect to motor vehicles. This includes the common law duties and standards of care. This means that states can regulate the safety standards for trucks on its highways and brokers can be held liable for negligent hiring of unsafe trucks that cause injury to others.
It is worth noting that issues relating to the price, route, and service remain preempted. Only the safety related issues can move forward.
Since this question came to the Court on a motion to dismiss, the case will now be sent down for discovery and potential trial. The outcome of this Supreme Court case does not mean that C.H. Robinson is liable for the negligent hiring – it means that it must now stand trial to determine whether it was in fact negligent or not. That’s a question of fact meant for a jury; not a question of law on preemption.
Take-Aways for Freight Brokers
1. Review Vetting and Selection Policies
The good news for freight brokers is that this ruling does not make the broker liable every time there is a crash. Accidents happen after all. But what freight brokers will need to do is make sure that they have policies in place to ensure carrier safety.
The broker’s policy should include checking FMCSA and other third-party data to show the carrier’s safety record. Freight brokers should not ignore a carrier’s safety record, whether because of actual knowledge or if it should have known.
This “should have known” standard is important for brokers to understand – if the data is out there but you don’t bother to check for it, you can still be found liable since the industry standard is to check.
Actual knowledge will sink any defense too. Remember, in discovery before the trial, your internal communications will be subject to review, as will your policies and criteria for inclusion and exclusion, along with exceptions.
2. Review and Update Insurance Policies
Freight brokers typically maintain general liability coverage and maybe even excess liability coverage. However, these policies may not cover negligent hiring state law claims since they were generally determined to be preempted prior to Caribe Transport. Freight brokers should talk to their insurance brokers to determine their current coverage as well as discuss future coverage and anticipated pricing.
Freight brokers should expect additional underwriting when it comes to their renewals or new coverage, specifically as it relates to the vetting and selection of carriers. That’s why I put the review as your first take-away, because you will need to update those policies before you talk to insurance.
3. Proactive Compliance Saves Lawsuits and Money
This is another example where the proper policies and procedures can save freight brokers from lawsuits and ultimately money.
Kimberly DeCarrera was the Chief Financial and Legal Officer (CFO/CLO) in a freight broker and has experience you need to help craft policies to comply with the new post-Caribe Transport II world. If you would like to discuss how being proactive can help your 3PL, contact DeCarrera Law to set up an appointment.