On May 14, 2026, the United States Supreme Court issued a unanimous decision in Montgomery v. Caribe Transport II, LLC , No. 24-1238, holding that the preemption provision of the…
On May 14, 2026, the United States Supreme Court issued a unanimous decision in Montgomery v. Caribe Transport II, LLC, No. 24-1238, holding that the preemption provision of the Federal Aviation Administration Authorization Act (FAAAA) does not bar state-law negligent selection claims against freight brokers. The Court concluded that such claims fall within the statute's safety exception, resolving a question that had divided the lower courts for years and reshaping the litigation landscape for the transportation industry.
The ruling marks a significant shift in broker liability exposure. For more than a decade, freight brokers have relied on FAAAA preemption as a primary defense to state common-law claims arising from accidents involving motor carriers they retained. With that defense now foreclosed, brokers face the prospect of being held directly accountable under state tort law when they engage motor carriers they knew, or in the exercise of reasonable care should have known, were unsafe. Plaintiffs may now pursue theories of negligent hiring, retention, and selection that were previously dismissed at the pleadings stage in many jurisdictions.
The practical implications are substantial. Freight brokers should promptly review and strengthen their carrier vetting protocols, including the screening of safety ratings, authority status, insurance coverage, crash history, and out-of-service rates. Ongoing monitoring of retained carriers, rather than one-time onboarding diligence, is likely to become an industry expectation and a focal point in future litigation. Robust documentation of these processes will be critical to demonstrating reasonable care in the event of a claim.
Brokers should also reassess their risk-management framework in light of the decision. This includes evaluating the adequacy of contingent liability and excess insurance coverage, reviewing indemnification and insurance provisions in carrier and shipper agreements, and considering whether existing contractual risk-allocation mechanisms remain effective given the expanded universe of potential claims. Shippers, motor carriers, and their insurers should likewise anticipate that Montgomery will influence how exposure is allocated across the supply chain.
The full impact of Montgomery will continue to develop as courts apply the decision to specific factual records. Clients with questions about how this ruling affects their operations, contracts, or insurance programs should seek tailored legal advice based on their particular circumstances.