A tractor-trailer driver named Shawn Montgomery was driving through Illinois when a truck hauling a load of plastic pots slammed into him. The crash left him with severe, permanent injuries. The truck belonged to a small motor carrier, Caribe Transport II, LLC. But Caribe wasn't the only company Montgomery went after in court — he also sued the freight broker that had picked Caribe to haul the load in the first place, arguing the broker knew or should have known, from Caribe's own safety rating, that hiring it was likely to end in exactly this kind of crash.
That lawsuit just reached the U.S. Supreme Court. On May 14, 2026, the Court ruled unanimously, 9-0, that freight brokers can be sued under state negligence law for carelessly choosing an unsafe motor carrier — and that a decades-old federal preemption law doesn't shield them from it. If your business ever hires a broker to arrange shipping, or if you run a brokerage yourself, this decision just rewrote the risk you're carrying.
What Happened in Montgomery v. Caribe Transport II
For years, freight brokers had a reliable legal shield. The Federal Aviation Administration Authorization Act of 1994 (FAAAA) broadly preempts state laws "related to a price, route, or service" of a motor carrier or broker. Brokers argued — and many courts agreed — that a negligent-hiring lawsuit was really just a disguised attack on their core "service" of selecting carriers, so it was preempted and had to be thrown out before trial.
But the FAAAA also has a carve-out: states keep their "safety regulatory authority... with respect to motor vehicles." Federal courts had split badly on whether that safety exception covered negligent-hiring claims. The Seventh Circuit's 2023 decision in Ye v. GlobalTranz became the industry's go-to defense, holding that such claims were preempted. Other circuits disagreed.
The Supreme Court, in an opinion by Justice Amy Coney Barrett, sided against the brokers. Requiring a broker to exercise ordinary care in choosing a carrier "concerns" motor vehicles, the Court held — most obviously, the trucks that carrier will put on the road. That means Montgomery's negligent-hiring claim against the broker, C.H. Robinson Worldwide, falls within the safety exception and survives preemption. Ye v. GlobalTranz and the whole line of cases built on it are no longer good law, in any state.
Justice Kavanaugh, joined by Justice Alito, wrote separately to flag that the question was closer than the majority let on — and that the ruling could expose brokers to significant new litigation and cost. That concurrence reads less like a dissent and more like a warning to the industry: don't expect this to be walked back soon.
What "Negligent Hiring" Actually Means for a Broker
The ruling doesn't make brokers automatically liable every time a carrier they hired crashes. Plaintiffs still have to prove two things: that the broker failed to exercise reasonable care in selecting the carrier, and that the failure caused the injury. Simply being unlucky enough to hire a carrier that later has an accident isn't enough on its own.
What courts will now look at is the broker's actual vetting process at the time of hire — things like:
- The carrier's FMCSA safety rating and compliance history
- Prior crashes, violations, and out-of-service orders
- Whether the broker had a documented onboarding and qualification process
- Whether that process was actually followed for this shipment, not just written down somewhere
Brokers with a consistent, well-documented carrier-vetting procedure are in a meaningfully stronger position than brokers who pick carriers off a load board on price and availability alone. The paper trail — or the lack of one — is going to matter enormously in every one of these cases going forward.
Why This Isn't Just a "Big Broker" Problem
It's tempting to read this as a fight between injury lawyers and giants like C.H. Robinson. It isn't. Any business that regularly hires a third-party logistics broker or 3PL to move freight — a manufacturer, a distributor, an e-commerce seller shipping pallets instead of parcels — now has more reason to ask hard questions about who's arranging that freight and how carriers get chosen.
And if you are the broker — even a small, regional one working a handful of lanes — this decision removes your fastest, cheapest way out of a lawsuit. Before Montgomery, a broker facing a negligent-hiring claim could often get it dismissed early on federal preemption grounds, before expensive discovery and depositions ever started. That early off-ramp is gone in every circuit now. Cases that used to die in a motion to dismiss will instead proceed to the merits, where they cost far more to defend regardless of how they end.
Early industry commentary is already pointing at insurance as the next pressure point. Contingent auto liability coverage — the policy that responds when a broker gets pulled into a lawsuit over a carrier's crash — is shifting from an optional add-on to something shippers are starting to require in broker contracts, alongside errors-and-omissions coverage. If you broker freight and haven't looked at your coverage stack since before May 2026, this is the moment to do it.
What to Do About It Now
If you hire brokers to move freight for your business:
- Ask what carrier-vetting process your broker actually uses, not just what their marketing says
- Push for language in your broker agreement that spells out who is responsible for vetting carrier safety records
- Check whether your broker carries contingent auto and E&O coverage, and at what limits
If you run a brokerage, even a small one:
- Put your carrier qualification criteria in writing, and make sure the people booking loads actually follow it every time — a policy nobody uses won't help you in a deposition
- Keep records of the safety data you pulled before assigning a load: FMCSA rating, out-of-service history, insurance status
- Talk to your insurance broker about contingent cargo and contingent auto coverage before a claim forces the conversation
- Review indemnification clauses in your carrier and shipper contracts now that the preemption defense is largely off the table
None of this requires overhauling your business. It requires treating carrier selection as a documented decision, not a quick pick off a load board — because after Montgomery, that documentation is exactly what a court is going to ask to see.
Keep Your Financial Records Ready for Whatever Comes Next
Legal and regulatory risk has a way of showing up as a financial question eventually — a legal bill, an insurance premium increase, a settlement reserve, a new line item for contingent cargo coverage. Bookkeeping that's clear and auditable makes it far easier to see exactly what a risk like this is costing you, and to show it to an insurer, a lender, or an attorney without digging through a shoebox of receipts. Beancount.io offers plain-text accounting that's transparent, version-controlled, and easy to hand off to whoever needs to see your numbers next. Get started for free and keep your books as auditable as the carrier records this ruling now demands.