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The Montgomery decision means negligent-hiring claims are now fair game in state court
On May 14, 2026, the U.S. Supreme Court ruled 9-0 in Montgomery v. Caribe Transport II, LLC that freight brokers can now be held liable under state law for negligently hiring an unsafe carrier that causes a motor vehicle accident. The federal preemption shield that brokers have relied on for years is gone — at least for claims arising from physical accidents on the road.
If you are a freight broker, carrier, or shipper, this unanimous ruling changes how you must operate starting now.
How the Supreme Court ruled: Montgomery and the end of FAAAA preemption for brokers
Here’s what the court decided.
For years, brokers invoked the Federal Aviation Administration Authorization Act (FAAAA) to defeat state-law negligence claims, arguing federal law preempted any state regulation touching a broker’s “price, route, or service”with respect to the transportation of property. That defense is no longer available for accident-related claims.
The Montgomery case arose from a serious accident in which a motorist was severely injured by a truck driver working for a carrier that held only a “conditional” federal safety rating. The injured motorist sued freight broker C.H. Robinson, arguing the broker knew — or should have known — that dispatching this carrier created an unreasonable risk of harm.
The court agreed. It held that a negligent-hiring claim against a broker is not preempted by the FAAAA because states retain authority to regulate safety “with respect to motor vehicles.” Requiring a broker to exercise ordinary care when selecting a carrier clearly “concerns motor vehicles,” so such claims fall squarely within the FAAAA’s safety exception.
In plain terms: As a freight broker, if you put an unsafe carrier on the road and someone gets hurt, you can be sued.
Cargo theft, fraud, and claims that remain federally preempted after Montgomery
The court was deliberate in keeping the safety exception narrow. It specifically preserved federal preemption for state-law claims that have “no relationship to safety” — meaning claims tied to a broker’s prices, routes, or services that do not involve motor vehicle safety remain preempted.
This distinction matters a great deal for cargo theft and fraud cases, which are a growing problem in the industry. Because cargo theft — whether by a dishonest carrier or by fraudulent actors intercepting communications — is a financial and property crime rather than a motor vehicle safety issue, those state-law claims may still be preempted. Montgomery did not resolve this question, and it will need to be worked out in the courts.
Steps freight brokers, carriers, and shippers should take now to reduce negligent-hiring liability
Here’s what you need to do going forward:
The most immediate risk is clear: Brokers are now exposed to negligent-hiring lawsuits arising from motor vehicle accidents, with no federal backstop. The legal standard going forward is ordinary care in carrier selection. Meeting that standard consistently is both your best defense and your best risk management strategy.
Document your vetting process. If you do not have a written, repeatable process for vetting carriers, build one immediately. The absence of any process is itself evidence that can be used against you. Many brokers use third-party vetting services. Confirm that yours are thorough and provide the documentation you need at onboarding and throughout the relationship.
Use public safety data actively. Before dispatching any carrier, independently review FMCSA’s SAFER system, SMS BASIC percentile scores, and out-of-service rates. For carriers used infrequently, do this review immediately before each dispatch. For regular carriers, set up ongoing reviews at reasonable intervals. If a carrier has a “conditional” safety rating or is not on the SAFER system further investigation and consideration needs to be done and documented to ensure a reasonable vetting process.
Review your insurance coverage now. A standard $75,000 surety broker bond is not liability insurance. It will not cover a catastrophic tort claim. Confirm with your insurance provider that your coverage specifically responds to negligent-hiring claims. Also ask about separate policies covering dishonest or criminal acts.
Update broker-carrier contracts. Brokers can no longer assume that a federal preemption defense protects them from the whole downstream transportation chain. Review your transportation agreements, refresh your indemnification language, and establish clear carrier-selection standards. Keep in mind that indemnification means nothing if the carrier has no assets or minimal insurance.
How Montgomery reshapes the broker-carrier relationship going forward
Montgomery is a landmark decision that will reshape the broker-carrier relationship across the transportation industry. The ordinary care standard is now the floor, not the ceiling. Brokers who have treated carrier vetting as a mere formality face serious exposure. Those who have invested in documented, rigorous processes are in a far stronger position.
The door to state-court liability is now open. How wide it swings in practice will depend on how well you can show, in writing, that you exercised ordinary care every time you put a carrier on the road.
Frequently asked questions about Montgomery v. Caribe Transport
The Supreme Court ruled 9-0 on May 14, 2026, that freight brokers can be sued under state law for negligently hiring a motor carrier that causes a physical accident. The court held that such claims fall within the FAAAA’s safety exception, which preserves state authority to regulate safety “with respect to motor vehicles.” The federal preemption defense brokers have historically used to defeat these claims is no longer available for accident-related negligent-hiring suits.
Brokers are not automatically liable, but they are now exposed to state-law negligent-hiring claims when a carrier they selected causes a motor vehicle accident. Liability will depend on whether or not the broker exercised ordinary care in vetting and selecting that carrier. A broker with a documented, thorough vetting process is in a much stronger position to defend against such claims than one without any process at all.
The standard is ordinary care. Brokers must exercise reasonable diligence when selecting carriers, such as reviewing safety ratings, FMCSA data, and other available information before dispatch. This is not a strict liability standard, meaning brokers who can demonstrate a careful, documented vetting process have a meaningful defense.
The Federal Aviation Administration Authorization Act generally preempts state laws related to a broker’s price, route, or service. However, the FAAAA includes a safety exception that preserves state authority over safety regulations “with respect to motor vehicles.” Montgomery clarified that negligent-hiring claims arising from physical accidents fall within this exception and are therefore not preempted.
No. The Supreme Court was explicit that Montgomery does not eliminate federal preemption across the board. State-law claims that have no relationship to motor vehicle safety, including many claims tied to a broker’s prices, routes, or services, remain preempted. The ruling opened a specific door for accident-related negligent-hiring claims; it did not remove the wall.
This is an open question the court did not resolve. Because cargo theft and freight fraud are financial and property crimes rather than motor vehicle safety issues, those state-law claims may still be federally preempted. Courts will need to address this directly, and it is an area worth watching closely given the scale of cargo fraud in the industry.
At a minimum, brokers should maintain a documented vetting process, independently review FMCSA’s SAFER system and SMS BASIC percentile scores before dispatch, monitor out-of-service rates, and conduct ongoing reviews for carriers used regularly. Reputable third-party vetting services can supplement this process, but brokers should not rely on them exclusively or treat onboarding checks as a one-time obligation.
Shippers should review their transportation contracts, update their indemnification language, and establishclear carrier-selection standards for their broker partners. They should also keep in mind that indemnification clauses are only as valuable as the financial resources behind them. A broker or carrier with minimal assets or insurance limits the practical value of any contractual protection.
Brokers should immediately document or build a repeatable carrier vetting process, review FMCSA safety data before every dispatch, confirm that their insurance coverage responds to negligent-hiring claims, and review contracts with both carriers and shippers. The ordinary care standard is now the baseline. Brokers who treat vetting as a mere formality face serious exposure.
About Larson & Gaston, LLP
Larson & Gaston, LLP is a Pasadena-based law firm with more than 25 years of experience representing motor carriers, freight brokers, logistics companies, freight forwarders, and warehouse operators on all aspects of transportation and warehousing law. The firm’s transportation attorneys counsel clients on regulatory compliance, contract drafting, cargo loss claims, insurance matters, independent contractor classification, and major truck accident litigation in both state and federal courts throughout California.
Members of the firm are members of the California Trucking Association, the Harbor Trucking Association, and the Trucking Industry Defense Association.
For questions about how Montgomery affects your operations, contracts, or carrier vetting practices, contact Larson & Gaston, LLP to schedule a consultation.