Montgomery v. Caribe: What the Supreme Court Ruling Means for Shippers in 2026

What did the Supreme Court decide in Montgomery v. Caribe?

The Court held that a state-law negligent hiring claim against a freight broker is not preempted by federal law. Brokers can now be sued in any state for picking a carrier they knew, or should have known, was unsafe.

The facts of the case

Shawn Montgomery was a truck driver parked on the side of an Illinois highway. A tractor-trailer driven by Yosniel Varela-Mojena, hauling a load of plastic pots for Caribe Transport II, struck him. Montgomery lost his leg.

C.H. Robinson had brokered the load. Montgomery argued the broker should have known better. When C.H. Robinson hired Caribe, the carrier held a "conditional" safety rating from the Federal Motor Carrier Safety Administration (FMCSA). That rating reflected deficiencies in driver qualification, hours of service, and inspection, repair and maintenance.

The legal question

A 1994 law, the Federal Aviation Administration Authorization Act (FAAAA), blocks most state laws related to broker and carrier "prices, routes, or services." It has a safety exception that preserves state safety authority "with respect to motor vehicles." For years, many brokers won early dismissals by arguing negligent selection claims were preempted. The district court and the Seventh Circuit agreed with C.H. Robinson.

The Supreme Court reversed. Writing for the Court, Justice Amy Coney Barrett reasoned that requiring a broker to use ordinary care when it picks a carrier "concerns" the trucks that end up on the road. That puts the claim inside the safety exception.

Justice Brett Kavanaugh, joined by Justice Samuel Alito, agreed with the result but wrote that the case was "closer than the Court's opinion perhaps might suggest." Legal commentators read that as an open door for Congress to set a federal carrier-selection standard. No such standard exists yet. You can read the full opinion on the Supreme Court website.

Does Montgomery v. Caribe make shippers liable for carrier selection?

No, not directly. The ruling was about brokers, and the FAAAA preemption it interprets applies to brokers and motor carriers, not shippers.

That point matters because a lot of early commentary blurred it. Transportation attorney Ronald Leibman of McCarter & English put it bluntly: the decision "changes nothing" for shipper liability. Shippers could always be named in negligent selection suits, and they have been. Plaintiffs still have to clear proximate cause and evidence hurdles to win against a shipper.

Still, "no new liability" is not the same as "no exposure." Three things did change around shippers:

• Your broker's defense now runs through your paperwork. With preemption gone, a broker sued for negligent selection will defend on the merits. That defense can pull in what the shipper required, what the shipper knew, and the shipper's own carrier criteria.
• The logic follows whoever picks the carrier. Law firm Adams and Reese noted the decision's reasoning focuses on the party that selects a carrier and has access to its safety data. If your team picks carriers directly, your process is the one under the microscope.
• "Reasonable care" is undefined. No federal rule says what carrier vetting is enough. That standard will now be argued state by state, in front of juries.

How will the Montgomery v. Caribe ruling affect freight costs and broker behavior?

Expect higher broker costs and tighter carrier approval rules. Both will show up in what shippers pay and in how fast loads get covered.

Broker insurance is repricing

Brokers arrange roughly a third of all U.S. freight, and more than 28,000 of them hold federal licenses. Their insurers are now pricing in more lawsuits. Transport Topics reported that one broker liability insurer tripled a client's premium a week after the decision. Another brokerage was warned to expect "a meaningful double-digit percentage increase" even with strong safety controls in place.

Many brokers also carry contingent auto liability coverage that only fills gaps in the carrier's policy. That type of policy may not respond well to a claim about the broker's own negligence. Upgrading coverage costs money, and some of that cost will reach shipper rates.

Approved carrier lists will shrink

To defend their vetting, many brokers will tighten onboarding rules. Likely changes include higher insurance minimums, longer required authority age, and hard stops on conditional ratings or poor CSA scores. Small fleets and new authorities will have a harder time getting approved.

This lands on an already tight market

Capacity was already thin before the ruling. ACT Research reported DAT contract truckload rates at $2.52 per mile in August 2026, up 18% year over year. Enforcement of English language proficiency rules and the new non-domiciled CDL rule keeps removing drivers. Fewer approved carriers on brokered freight will add pressure, especially for shippers who lean on the spot market.

What should shippers update in broker agreements and routing guides after Montgomery v. Caribe?

Start with your contracts and your written carrier standards. The goal is a clear, documented answer to one question: who picked this carrier, and why?

• Assign vetting responsibility in writing. Your broker agreement should state that the broker selects and vets carriers, and what minimum standards it must apply.
• Set a safety floor. Examples: no carriers rated Unsatisfactory, a defined policy on Conditional ratings, and minimum insurance limits.
• Ban re-brokering. Require that the carrier on the rate confirmation is the carrier that hauls the load. Double brokering breaks your vetting chain.
• Require documentation. Ask brokers to keep records of each selection decision and share them on request.
• Align indemnity and insurance. Make sure indemnity clauses and required coverage match negligent selection risk, within what your state allows.
• Check your broker's own coverage. Ask whether their policy covers claims of the broker's own negligence, not just contingent auto liability.
• Review your routing guide. If your team books some carriers directly, write down the criteria you use for them too.

A written standard you actually follow beats a detailed one nobody checks. A policy on paper that your team ignores can hurt you more than having no policy at all.

What carrier safety data should shippers check before tendering freight?

Most of the key data is free on FMCSA's public systems. The Caribe case turned on a safety rating anyone could have looked up.

Check identity too. Freight fraud and identity theft have climbed alongside the capacity squeeze. Our 12 verification steps for shippers covers how to confirm the carrier you vetted is the one that shows up.

Does booking directly with an asset-based carrier reduce carrier-selection risk?

It does not remove risk, but it makes the vetting question simpler. When you book an asset-based carrier directly, you are the party selecting the carrier. You also know exactly who will haul the load.

Shippers who book carriers directly were never covered by broker preemption. What changes with a direct asset relationship is how much you can see. You vet one DOT number, one safety record and one insurance program. The trucks and drivers belong to that carrier.

Brokers still have a place. They add surge capacity and cover lanes an asset fleet does not run. Many shippers use a mix: asset carriers for core, recurring lanes and brokers for overflow. After Montgomery v. Caribe, that core lane base is worth a second look. For more on the tradeoffs, see why shippers choose an asset-based carrier and how to choose a dedicated FTL carrier.

How does MigWay support shipper carrier vetting?

MigWay hauls every load with our own trucks and our own drivers. Zero outsourcing means the carrier you vet is the carrier on your dock.

• Asset-based fleet: 400 trucks and 750 trailers, dry van and flatbed.
• Modern equipment: 2023-2027 Freightliner, Volvo and Mack automatics.
• Speed-governed trucks: every truck is governed at 70 mph.
• Experienced drivers: we require at least two years of recent OTR experience to drive for us.
• Live tracking: ELD and GPS on every load.
• 24/7 in-house dispatch: live people, day and night.
• One accountable plan: one carrier, one safety record, one point of contact from pickup to POD.
• 48-state service: full truckload coverage with drop trailer and EDI capability.

Want to run your own check? Ask us for our carrier packet, including operating authority, certificate of insurance and W-9. You can also pull our record on FMCSA SAFER before you ever send a load.

Request a freight quote or start a chat with our team. Prefer the phone? Call +1-980-255-3200.

What is the bottom line on Montgomery v. Caribe for shippers?

Montgomery v. Caribe did not create new shipper liability. It did end the broker preemption defense, push up broker insurance costs, and put every carrier-selection decision on the record. Shippers who write down their carrier standards, tighten broker contracts and know exactly who hauls their core lanes will be in the strongest position.

Frequently Asked Questions

What is Montgomery v. Caribe Transport II?

It is a 2026 Supreme Court case about freight broker liability. A driver injured by a truck from Caribe Transport II sued C.H. Robinson, the broker that arranged the load. The Court ruled 9-0 on May 14, 2026, that his negligent hiring claim against the broker could go forward under state law.

What did the Supreme Court decide about freight brokers?

The Court held that state-law negligent hiring claims against brokers fall inside the FAAAA's safety exception. That means federal law does not preempt them. Brokers can now be sued for choosing a carrier they knew or should have known was unsafe.

Does Montgomery v. Caribe make shippers liable?

Not directly. The case was about brokers, and shippers could already be named in negligent selection suits before the ruling. However, a broker's defense may now draw on what the shipper required and knew, so shipper documentation matters more.

Can a shipper be sued for negligent selection of a carrier?

Yes, and that was true before this ruling. Plaintiffs must still prove the shipper's choice caused the injury, which is a hard bar to clear. A written, consistently applied carrier selection policy is a shipper's best protection.

Will Montgomery v. Caribe raise freight rates?

It will likely add cost to brokered freight. Broker liability insurers are raising premiums, with one reported case of a premium tripling within a week. Tighter carrier vetting may also shrink broker carrier pools during an already tight market.

What safety rating should a shipper require from a carrier?

Most shippers refuse carriers rated Unsatisfactory, and many set a policy for Conditional ratings. The carrier in this case had a Conditional rating when it was hired. Also check CSA scores, out-of-service rates, insurance and authority status.

Where can I check a trucking company's safety record?

Use FMCSA's free SAFER Company Snapshot for the safety rating, fleet size and out-of-service rates. The Safety Measurement System (SMS) shows CSA BASIC scores. The Licensing and Insurance system shows authority status and insurance on file.

What should shippers change in broker contracts after this ruling?

Spell out who vets carriers and what minimum safety standards apply. Ban re-brokering, require records of selection decisions, and align indemnity and insurance terms with negligent selection risk. Have your own attorney review changes.

Is booking directly with an asset-based carrier safer than using a broker?

It gives you more visibility, not zero risk. You vet one carrier that uses its own trucks and drivers, so you know exactly who hauls your freight. Many shippers pair asset carriers on core lanes with brokers for overflow.

Will Congress set a federal carrier selection standard?

Nothing has passed as of September 2026. Justice Kavanaugh's concurrence called the case close, which many observers read as a nudge toward Congress. Until then, "reasonable care" will be defined state by state in court.