Blogs

The new landscape of freight broker liability

9/1/26

By: Marc Bardack, Wayne Melnick and Xander Melnick

In May 2026, the Supreme Court significantly altered the legal landscape governing freight broker liability, expanding the circumstances under which freight brokers may face tort liability. In Montgomery v. Caribe Transp. II, LLC, 146 S. Ct. 1199 (2026), the Court held that state-law negligent hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act’s (“FAAAA”)[1] preemption provision because such claims fall within the Act’s safety exception. In short, plaintiffs may now pursue state-law negligent hiring claims against freight brokers where they can establish that the broker failed to exercise ordinary care in selecting a motor carrier.

In Montgomery, a Caribe Transport truck driver veered off the roadway and struck the Plaintiff’s vehicle, which was stopped on the side of the road. As a result of the impact, doctors were forced to amputate the Plaintiff’s leg. Caribe Transport (the Carrier) had been hired by broker C.H. Robinson Worldwide, Inc. (the Broker), which coordinated the shipment.

The Plaintiff sued the driver, the Carrier, and the Broker alleging, among other things, that the Broker was liable for his injuries because it negligently hired the Carrier, which had a “conditional” safety rating from the FMCSA when hired. The FMCSA had allegedly found the Carrier to be deficient “with respect to qualifications of drivers,” “hours of service of drivers,” “inspection, repair, and maintenance,” “recordable crash rate,” and more. Based on the safety rating, the Plaintiff contended that the Broker “knew (or should have known) that choosing the Carrier was reasonably likely to result in crashes that would injure others.” In response, the Broker argued that the FAAAA preemption shields it from negligent hiring liability. The Plaintiff countered that even if the FAAAA otherwise preempts his negligent hiring claim against the Broker, the safety exception saves it. The Supreme Court agreed.

Justice Kavanaugh, joined by Justice Alito, authored the concurrence, explaining that while insurance coverage may not be statutorily mandated for brokers as it is for shippers, the lack of meaningful federal safety regulation specific to brokers’ selection of carriers supports the Plaintiff’s argument that brokers fall within the purview of the FAAAA because it is unlikely that Congress intended to allow brokers to operate in “a black hole with no meaningful safety-related regulation.” Highlighting how brokers may sometimes become aware that a particular carrier operates unsafe trucks or hires unfit drivers, Justice Kavanaugh opined that permitting liability incentivizes brokers to do business “only with safe and reliable motor carriers.”

The standard remains ordinary care and as with any negligence case the onus falls to plaintiffs to demonstrate what ordinary care requires. Plaintiffs cannot simply claim that a broker did not do enough, or that there were avenues of inquiry the broker could have followed but did not. Rather, plaintiffs still must offer proof of an actual and accepted standard as opposed to mere speculation or a wish list. Plaintiffs must still prove that the broker violated that standard. And plaintiffs still must prove that the violation proximately caused the injury.

Brokers should also be concerned about their risk structure following Montgomery. Historically, most freight brokers have maintained general liability coverage and, in some instances, contingent cargo coverage. However, comparatively few carry excess liability coverage sufficient to respond to a disproportionate negligent‑hiring verdict. Underwriters may increasingly evaluate not only the broker itself, but also the carriers it selects. Brokers need to understand whether their policies apply to negligent hiring claims and whether current limits are adequate in this environment. Although framed as a broker case, the Court’s reasoning could be applied more broadly. Plaintiffs may also seek to extend the reasoning to other entities involved in carrier selection with access to safety data, including third party logistics and similar intermediaries, into the ambit of this holding.

One day after the Montgomery decision, in In re Home Depot U.S.A., Inc., No. 25‑0317 (Tex. May 15, 2026), the Texas Supreme Court held that a shipper, acting solely as a passive customer, does not owe a duty to the motoring public for the conduct of an independent motor carrier absent control, affirmative conduct creating risk, or another recognized exception. The court rejected a negligent‑selection theory where the shipper merely engaged a federally regulated carrier to transport ordinary goods, emphasizing that liability in tort generally follows control, creation of risk, or a special relationship, not the mere act of contracting for transportation. In doing so, the court drew a clear distinction between brokers and other intermediaries who actively select carriers, and shippers whose role is limited to tendering freight. The decision signals that, while Montgomery expands exposure for those who meaningfully participate in carrier selection, courts may be equally inclined to limit liability where a party’s connection to the underlying risk is attenuated.

[1] In 1995, Congress expanded the FAAAA to protect brokers and other players in the transportation industry to further bolster competition through economic deregulation. The amendment, §14501(c)(1), “preempts state laws related to the prices, routes, and services of the trucking industry.” However, §14501(c)(2)(A), the safety exception, provides that the preemption provision “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.”

For more information on this topic, please contact Marc Bardack at mbardack@fmglaw.com, Wayne Melnick at wmelnick@fmglaw.com or Xander Melnick at xander.melnick@fmglaw.com or your local FMG Law attorney.

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