The Supreme Court Just Stripped Brokers of Their Biggest Legal Shield

The freight brokerage industry has operated for decades under a legal assumption that is now gone. On May 14, the U. S. Supreme Court ruled unanimously in Montgomery v. Caribe Transport II, LLC that state-law negligent-hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act (FAAAA).

The 9-0 decision, authored by Justice Amy Coney Barrett, resolved a longstanding split among federal circuit courts and eliminated the preemption defense that brokers had used for years to defeat tort claims arising from carrier selection decisions. The implications of this case are immediate and far-reaching for brokers.

The ruling does not impose automatic liability, but it opens the door for plaintiffs to challenge how brokers vet and select carriers in state courts nationwide. And according to Josh Lovan, Industry Business Advisor at J. J. Keller & Associates, Inc. , the significance of this moment is difficult to overstate. “For brokers, this is everything,” Lovan said.

“One of the biggest changes that’s occurred in transportation in the last two decades. It fundamentally shapes how freight is going to be moved.” The shield is gone For years, brokers relied on the FAAAA’s broad preemption of state laws related to prices, routes, and services as a blanket defense against negligent hiring claims.

That legal posture often stopped cases cold before they reached a jury. The Montgomery decision turns on the FAAAA’s safety exception, which was a carve-out preserving state authority to regulate safety with respect to motor vehicles. The Court held that negligent-hiring claims fall squarely within that exception.

Justice Brett Kavanaugh, in a concurrence joined by Justice Samuel Alito, acknowledged the ruling could increase insurance costs for brokers but stressed that the FAAAA was an economic deregulation statute, not a safety deregulation statute.

He also pushed back on fears that the decision would bury brokers in litigation, writing that brokers who select reputable carriers “should be able to successfully defend against state tort suits.” But the key word there is “defend.” Brokers can no longer sidestep the question entirely.

They now have to demonstrate that their carrier selection was reasonable, and that means documentation, consistency, and verifiable safety criteria. “Brokerage has exploded in recent years, and this ruling is pulling the shield away from many brokers who have gotten away with negligence,” Lovan said.

The ruling doesn’t prescribe a specific federal standard for what constitutes reasonable care in carrier selection. Instead, that question will be answered by state courts, creating what several industry groups have warned could become a patchwork of varying requirements across jurisdictions.

What it does make clear is that basic vetting, such as confirming a carrier has active authority and insurance on file, is no longer sufficient. “J. J.

Keller’s Carrier Risk Review Service is validating that the carrier has an active USDOT number, the right operating authority, the right insurance forms filed with FMCSA, MCS-90, and a satisfactory rating,” Lovan said. Brokers must now approach carrier selection as a question of defensibility, not just availability.

“The question is no longer just ‘Who can I use to move this?’” said Lovan. “The question is, ‘Can I defend this carrier if an incident occurs?’ Conventionally, a lot of brokers cut corners to fill trucks, but now you have the responsibility to defend the carrier.” That shift echoes what legal analysts have said about the ruling’s practical effect.

Ron Leibman, a partner at McCarter & English who represents brokers, told Trucking Dive that the decision is straightforward in its scope: “A state law negligent claim can be brought against you. You can defend it. That is all the court said.” But defending it requires a paper trail, a process, and a standard applied consistently across every load.

A documentation problem becomes a litigation problem Lovan identified three operational shifts brokers need to make immediately in response to the ruling. “First, elevate carrier vetting to a defensible standard,” he said.

“The Court made it clear that brokers have a duty to exercise reasonable care when selecting carriers, and that decision can now be challenged in court. Reviewing authority and insurance is no longer enough.

Brokers need to consistently evaluate safety ratings, inspection history, and patterns in violations such as driver qualification, hours of service, and maintenance.” “Second, document every carrier selection decision,” Lovan continued. “The biggest shift from this ruling is not just liability exposure — it is the need to prove your process.

The legal defense is no longer based on preemption, but on whether the broker acted reasonably in selecting the carrier. That means brokers need a consistent, repeatable vetting process with clear records of what was reviewed, what risks were identified, and