The freight brokerage industry just lost its most-used liability shield — unanimously, in the nation’s highest court. On May 14, 2026, the United States Supreme Court issued its ruling in Montgomery v. Caribe Transport II, holding 9-0 that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt state-law claims against freight brokers for negligent selection of motor carriers. The decision closes a legal escape route that brokers have relied on for more than a decade to dismiss lawsuits brought by crash victims and cargo claimants. For independent dispatchers, freight brokers, and carriers operating under broker arrangements, understanding this ruling is now a compliance and operational priority.
What the Court Ruled — and Why FAAAA Preemption No Longer Protects Brokers
Since the late 2000s, freight brokers facing negligent hiring lawsuits — typically filed after a crash involving a carrier the broker selected — have argued that state tort law is preempted by the FAAAA, which prohibits states from enacting laws “related to” a carrier’s price, route, or service. Federal circuit courts were sharply divided on whether this preemption applied to broker negligence claims. The Ninth Circuit had largely shielded brokers; the Seventh and Third Circuits had not. The Supreme Court took Montgomery v. Caribe Transport II specifically to resolve that split.
Writing for a unanimous Court, Justice Sotomayor held that a plaintiff’s state-law negligent hiring claim against a broker is not “related to” a broker’s service in the relevant FAAAA sense — it is a general duty-of-care obligation that applies to any party who selects a contractor. SCOTUSblog’s analysis of the decision describes the majority opinion as grounded in the Court’s prior holding in Northwest, Inc. v. Ginsberg (2014), which itself limited FAAAA preemption to laws that directly impose obligations on carriers’ services. The Court found broker vetting duties are categorically different and therefore not preempted.
C.H. Robinson’s Position, the Loss, and What the CLO Said
C.H. Robinson Worldwide, the largest freight broker in the United States, had been the most prominent industry voice predicting a favorable outcome. CEO Dave Bozeman had stated publicly ahead of oral arguments that the company expected to prevail on the preemption question. The 9-0 result was the sharpest possible rebuke of that position. FreightWaves reported that C.H. Robinson’s Chief Legal Officer Dorothy Capers issued a statement following the ruling acknowledging the decision while noting the company believes it will continue to prevail on the merits in individual cases, arguing that its carrier vetting program exceeds industry standards. The company’s stock dropped approximately 7% in after-hours trading on the day of the ruling, per CCJ Digital.
Justices Kavanaugh and Alito filed a notable concurrence. While joining the majority fully, they wrote separately to emphasize that the ruling should not be read to expose brokers to “routine” or frivolous negligent hiring litigation. The concurrence noted that plaintiffs must still prove the broker knew or should have known the selected carrier posed an unreasonable risk — a substantive standard that requires evidence of carrier safety deficiencies that a reasonable broker would have detected. Ogletree Deakins’ analysis of the concurrence suggests it was written specifically to give lower courts guidance on managing a potential wave of frivolous claims by requiring a robust causation showing at the pleading stage.
“The FAAAA does not preempt state-law claims premised on a broker’s failure to exercise reasonable care in selecting a motor carrier. The general duty of care that attaches to any party who engages a contractor for a dangerous activity is not a law ‘related to’ a carrier’s price, route, or service.”
Justice Sotomayor, writing for the Court — Montgomery v. Caribe Transport II, May 14, 2026 (via SCOTUSblog)
Industry Implications: What Brokers, Carriers, and Dispatchers Must Do Now
The immediate consequence is that negligent hiring lawsuits against freight brokers — previously dismissible in many federal circuits at the pleading stage via a FAAAA preemption motion — will now proceed to discovery and trial on the merits. According to Matthiesen Wickert & Lehrer, a firm specializing in transportation defense, plaintiff attorneys who have been building negligent broker dockets in anticipation of this ruling are expected to begin filing in volume within 60–90 days. The practical upshot for everyone in the freight brokerage chain: carrier vetting documentation is now litigation-grade evidence, not administrative paperwork.
- Upgrade carrier vetting documentation immediately: Every carrier you book should have a documented vetting record: SAFER report pull, insurance certificate verification, safety rating, and any negative history review. FMCSA SAFER provides free real-time access to carrier safety data. The Kavanaugh-Alito concurrence specifically flagged awareness of carrier safety deficiencies as the key plaintiff threshold — your records need to show you checked.
- Review and upgrade your liability insurance coverage: Brokers who have relied on FAAAA preemption to limit exposure may find their current policy limits inadequate under the new litigation environment. Consult your transportation insurance broker about contingent cargo and freight broker liability coverage levels. Landline Media reports insurers are already flagging premium adjustments for high-volume freight brokers.
- Do not book carriers with conditional or unsatisfactory FMCSA ratings: Under the negligence standard, booking a carrier with a known safety deficiency is the most direct route to liability. Conditional and unsatisfactory rated carriers are a red flag that plaintiff attorneys will use to establish that a broker should have known about risk.
- Consult counsel on your standard broker-carrier agreement language: Indemnification clauses in your carrier agreements will now be a primary line of defense. Cozen O’Connor’s transportation practice has published a post-ruling brief on recommended contract revisions for freight brokers.
What Comes Next: Legislation, Lower Court Decisions, and the 90-Day Litigation Wave
Congressional reaction has been swift but uncertain. The American Trucking Associations and the Transportation Intermediaries Association have both called for legislative intervention to restore a statutory preemption framework for broker negligent hiring claims. A bill is expected to be introduced in the Senate Commerce Committee within 30 days, but its prospects in the current Congress are unclear. In the meantime, lower courts will be applying the Montgomery standard across hundreds of pending cases. The 60-to-90-day window following the ruling is when plaintiff attorneys typically file the first wave of newly-viable claims — freight brokers of all sizes should treat the next three months as a heightened risk period and ensure their carrier documentation, insurance coverage, and contract language are litigation-ready before the first complaints land. The Transportation Intermediaries Association’s broker liability resource page is being updated in real time with post-ruling guidance and should be monitored closely.
