The United States Supreme court today issued a unanimous 9-0 decision, which is likely to have a myriad of implications for motor carriers and freight brokers.
The case, Montgomery v. Caribe Transport II, LLC, addressed whether federal preemption under the Federal Aviation Administration Act (FAAA) applies to negligent hiring claims involving motor carrier vehicle safety regulations for freight transportation brokers.
The impetus for this case stems from a 2017 trucking crash, according to an October 2025 Supreme Court publication addressing that the case was granted certiorari by the Supreme Court. The Court said that petitioner Shawn Montgomery sustained severe and permanent injuries after his tractor trailer was struck by a truck driven by respondent Yosniel Varela-Mojena, whom was driving a load of plastic pots through Illinois for respondent Caribe Transport II, LLC. It added that respondent C.H. Robinson coordinated the shipment.
Montgomery subsequently sued several parties, including transportation broker C.H. Robinson, after being injured in a truck crash. He argued that C.H. Robinson was negligent in hiring the trucking companies involved because it either knew or should have known—based on Caribe Transport’s poor safety rating—that hiring them created a significant risk of accidents.
The federal district court dismissed the negligent-hiring claim, ruling that the claim was preempted by the Federal Aviation Administration Authorization Act (FAAAA). The FAAAA limits states from enforcing laws related to the trucking industry’s prices, routes, or services. The court also decided that the law’s “safety exception,” which preserves some state authority over motor vehicle safety, did not apply here. The Seventh Circuit Court of Appeals agreed.
The U.S. Supreme Court then agreed to hear the case to decide whether the FAAAA’s safety exception allows negligent-hiring lawsuits against freight brokers like C.H. Robinson.
In its decision, the Supreme Court stated that the FAAA does not preempt state-law negligent hiring claims against brokers like C.H. Robinson, stating that these claims are under the FAAA’s “safety exception,” which preserves state authority to regulate safety “with respect to motor vehicles.” It also noted that since negligent hiring claims require brokers to exercise reasonable care in selecting carriers—which directly concerns the safety of trucks on the road—those claims are covered by the exception.
“It is true, as the brokers emphasize, that trucking companies are in the best position to monitor their own trucks and drivers,” stated a concurring opinion by Justices Alito and Kavanaugh. “By contrast, brokers may not always (or even often) be in a good position to objectively assess the relative safety of different trucking companies. That said, brokers may sometimes become aware that a particular carrier operates unsafe trucks or hires unfit drivers. And if brokers can be held liable for disregarding poor safety records, they have a strong incentive to do business only with safe and reliable motor carriers.”
They added that brokers acting reasonably should not face undue liability.
In a statement, C.H. Robinson said that although the company is disappointed by the decision, it respects the Court’s ruling and remains committed to safety, service, and compliance across the nation’s transportation network.
“Our hearts continue to go out to the victims of truck accidents,” said Dorothy Capers, Chief Legal Officer at C.H. Robinson. “Safety is foundational to who we are—our employees and their families travel these same roads, and our business depends on safe freight delivery. While we are disappointed in the Court’s decision, we will continue to operate responsibly, support stronger federal enforcement, and work constructively with regulators, carriers, and customers to strengthen the national safety system and support safe, reliable transportation across the country. As Justices Kavanaugh and Alito stated in the concurrence, ‘Importantly, the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents.’”
Chris Burroughs, president and CEO of the Transportation Intermediaries Association (TIA) said that TIA is deeply disappointed with the decision as the law and legal precedent for decades has given the federal government, not states, the responsibility for setting safety standards for motor carriers, adding that, to date, carriers, not brokers, have been responsible for complying with these standards.
“While brokers are fully committed to safety and to working with federally licensed motor carriers in good standing, the decision imposes an impossible task on brokers—effectively asking them to evaluate the safety of a given motor carrier despite having been deemed safe to operate on public roads by the federal government,” he said. “This is like asking travel agents to evaluate the safety of a given airline despite the fact that the airline has been licensed to fly by the federal government. Moreover, since brokers do not employ motor carrier drivers directly, they do not have access to the records and data required to perform the safety functions that plaintiff lawyers contend they must.
Burroughs said TIA is working with its members to assess potential next steps to mitigate the consequences of the Supreme Court’s decision, adding that in the meantime, its members will continue to vigorously defend against negligent selection claims as plaintiffs still must meet applicable legal standards, such as proving causation and proving that individual brokers did not meet a supposed standard of care in each case.
Morgan Stanley analyst Ravi Shanker wrote in a research note that this decision will be transformative for the trucking industry over time.
“While some may categorize this ruling as ‘inconvenient’ or only a minor hurdle for large brokers, while being existential for small brokers (and indeed potentially drive offsetting share shift from small to large brokers), we have a different view and we believe this ruling could be a significant headwind to larger brokers as well,” wrote Shanker. “We believe the biggest change that this case could drive is to raise the cost to serve and ability to scale for all brokers. This means the cost gap between brokers and asset-heavy trucks could close, which we believe could drive significant share toward asset-heavy truckers and away from asset-light brokers (since asset-heavy can offer certainty on price and availability of capacity with a smaller price gap to brokers than before). This will impact brokers of all sizes, in our view. While smaller brokers may indeed be the most impacted, it is possible that they could overcome the capital costs by becoming part of larger brokerage platforms (like AMZN SCS or digital players, potentially) though that path seems uncertain as well. We see the asset-based carriers as the biggest beneficiaries of today’s decision, with all brokers as the most impacted. We further note that brokers continue to face overhang from any regulation around chameleon carriers and small carriers’ insurance requirements.”
Ben Gordon, founder and managing partner of Palm Beach, Florida-based Cambridge Capital, and managing partner of Ben Gordon Strategic Advisors (BGSA), told LM that while the decision creates liability for brokers, it also creates opportunity. T
“The smartest brokers will use this as an opportunity to differentiate,” he said. “First, they will use outstanding software and services for carrier vetting, safety and compliance. Second, they will market these capabilities to their customers. And third, they will be able to outcompete the smallest brokers who lack these capabilities. In addition, this will be inflationary. Expect higher transportation costs. Lastly, this is good news for carrier safety and compliance software companies. Firms like Idelic, which Descartes just acquired, will benefit from this demand.”
