Montgomery v. Caribe: Brokers Can Be Sued Over Carrier Selection

If you broker freight, you've probably heard some version of this for years: the carrier hauls the load, the carrier carries the insurance, and federal law keeps the lawsuit from reaching you. That last part is now off the table. On May 14, 2026, the U.S. Supreme Court decided *Montgomery v. Caribe Transport II, LLC* unanimously, and the answer to whether you can be sued for picking the wrong carrier is yes.

What the Court decided

The case started with a crash on an Illinois roadside. A tractor-trailer hauling for a motor carrier, Caribe Transport II, struck the plaintiff's stopped truck, and he lost a leg. The broker that arranged the shipment, C.H. Robinson, was sued for negligently hiring a carrier that, according to the opinion, held a "conditional" federal safety rating at the time.

The broker argued the claim was preempted by the Federal Aviation Administration Authorization Act (FAAAA), which bars state laws related to a broker's price, route, or service. The federal appeals courts had split: the Seventh and Eleventh Circuits said these claims were preempted; the Sixth and Ninth said they could proceed.

Justice Barrett, writing for all nine Justices, sided with the injured driver. The FAAAA has a safety exception that preserves a state's "safety regulatory authority... with respect to motor vehicles." The Court held that a duty to use reasonable care in choosing the carrier whose trucks will haul the goods concerns motor vehicles, so the claim fits the exception. The Court assumed, without deciding, that the claim would otherwise have been preempted. Justice Kavanaugh, joined by Justice Alito, concurred, calling the case closer than the opinion suggests and noting that brokers who act reasonably should be able to defend these suits and that proximate cause limits liability.

What it didn't decide

This is the part that matters day to day:

• It didn't find the broker negligent. The Court sent the case back to the lower courts for further proceedings, where negligence and causation still have to be proven.
• It didn't set a federal vetting standard. The opinion says the claim exists; it doesn't say what a reasonable broker must check.
• No federal safe harbor exists yet. As of November 2026, Congress has not enacted a broker carrier-selection standard. Bills proposing one have been introduced and the broker industry is lobbying for it, but none has become law. That is still moving, so watch it.

So your exposure now runs squarely through state tort law, and what counts as reasonable care will be argued in front of a jury, state by state, with your own records as the evidence.

Shippers and 3PLs aren't off the hook either

The opinion was about a broker, but the claim it describes is broad: one company negligently hiring another to transport goods. If you're a shipper that books your own carriers, nothing in the ruling suggests federal preemption will protect that choice, and whether you owe the duty is a question of your state's negligence law. If you're a 3PL, the label on your business doesn't decide it; if you arrange truck transportation, you carry the same selection exposure a broker does, on top of your warehouse and logistics risks. Talk to your attorney about how your state treats negligent selection and how your shipper and carrier contracts allocate it.

Where the insurance actually responds

Several coverages touch this exposure, and they are easy to confuse:

• Contingent auto liability. This is the coverage built for a broker sued over a carrier's crash. It's "contingent" because it is designed to respond when the carrier's own commercial auto liability doesn't, such as a cancelled policy, a denied claim, or a loss outside the carrier's coverage, and it usually sits behind that policy rather than in front of it. Read for whether defense costs erode the limit, and for exclusions like trucks you own or control, liability you assumed by contract, and punitive damages where state law allows them to be excluded. See our truck broker liability insurance overview.
• Excess and umbrella. Large trucking verdicts can run well past a carrier's federal minimum, which is $750,000 for general freight. Confirm your umbrella or excess policy actually lists contingent auto as underlying coverage; not every one does.
• Broker E&O / professional liability. Professional liability covers financial harm from your errors, like a missed pickup or the wrong equipment. Most forms exclude bodily injury, so it generally won't be the policy that answers a crash suit.
• Contingent cargo. Contingent cargo steps in when the carrier's cargo coverage fails to pay a shipper's loss you're blamed for. It's property, not injury, protection.
• The BMC-84 bond is not insurance. Federal rules (49 CFR 387.307) require a $75,000 surety bond (BMC-84) or trust fund (BMC-85) so shippers and carriers get paid if you don't honor your transportation arrangements. It doesn't defend you and it isn't there for an injured motorist.

The gotcha: your policy may hinge on your vetting

Here is what most brokers miss. Many contingent auto forms come with conditions tied to carrier selection, such as verifying active operating authority and confirming the carrier's own auto liability before the load moves. The lawsuit will allege you didn't vet properly. If your file can't show you met the policy's conditions on that load, you can end up arguing with your own insurer at the same time you're defending the suit. The vetting process and the insurance policy have to match, and you have to be able to prove you followed both.

Vetting that holds up in litigation

There's no federal checklist, so courts will look at what a reasonable broker would have done and what you actually did. Keep it consistent and documented:

1. Verify operating authority is active and matches the entity you're dispatching, including identity checks to catch fraud and double brokering. 2. Verify insurance at the source, not just from a certificate, and monitor for cancellation while you use the carrier. 3. Review safety data: safety rating, out-of-service rates, crash history, and the FMCSA data available to you. Decide in advance what disqualifies a carrier. 4. Write the process down and apply it to every load. Exceptions made under rate pressure are what plaintiffs' attorneys look for. 5. Keep the records for each tender, so you can show what you checked and when.

Our approach

At Cory Washington & Co., we build broker and 3PL programs around this exposure, not around a certificate. We read your contingent auto conditions against your actual vetting process, close the gaps between your freight broker insurance, excess, E&O, and cargo coverage, and coordinate with programs for 3PLs and the carriers you work with. For the carrier side, see insurance for trucking companies and our trucking company insurance overview.

Not sure your program answers a negligent-selection suit? Request a coverage review and we'll walk through it with you.

Frequently Asked

This article is general information for business owners, not insurance or legal advice, and does not bind or alter coverage. Policy terms, eligibility, and pricing vary by carrier and state — confirm specifics with our licensed team before making decisions.