Supreme Court rules freight brokers can be held liable under state negligence law

On May 14, 2026, a unanimous Supreme Court decision held that state-law negligent-hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA or F4A).

The Court’s opinion in Montgomery v. Caribe Transport II, LLC, authored by Justice Amy Coney Barrett, resolves a longstanding split among the federal courts of appeals and eliminates a federal preemption defense under the FAAAA that freight brokers have used to defeat state tort claims arising from motor carrier selection decisions. Justice Brett Kavanaugh filed a concurrence, joined by Justice Samuel Alito.

This alert summarizes the ruling and its practical implications for shippers, freight brokers, and companies considering investments in the brokerage sector.

Background

The case arose from a highway crash involving a motor carrier that had been cited by federal regulators for non-compliance with requirements regarding driver qualification, hours of service, and maintenance. The injured party sought to hold the freight broker liable under state negligence law for selecting a carrier in light of the carrier’s record and its “conditional” safety rating. The defendant asserted that the FAAAA – which preempts state laws “related to a price, route, or service of any motor carrier [] or broker [] with respect to the transportation of property” – barred that state law claim. The Seventh Circuit held that the claim was preempted, and the injured party appealed to the Supreme Court.

The FAAAA generally preempts state laws and regulations regarding prices, routes, and services provided by freight brokers and motor carriers. But the statute contains a significant savings clause: states retain authority to regulate safety “with respect to motor vehicles.” The central question in Montgomery was whether a negligent-hiring claim against a broker falls within that safety carve-out. The Seventh and Eleventh Circuits have held that such claims are preempted, while the Sixth and Ninth Circuits held that they are not. The Supreme Court granted certiorari to resolve the split.

The Court’s holding

The Court unanimously held that negligent-hiring claims are not preempted because the state safety law savings clause of the FAAAA allows such negligent-hiring claims against brokers. The parties agreed that state tort law, including the duty to use reasonable care when hiring a contractor, is part of a state’s power to regulate safety. The question remained whether a claim challenging a broker’s carrier selection constitutes regulation of “motor vehicles,” thereby bringing the claim within the ambit of the state law savings clause. The Court concluded that requiring a broker to use ordinary care when choosing which trucking company will haul a freight load “concerns” motor vehicles, “most obviously, the trucks that will transport the goods.” In other words, when a broker picks a carrier that causes a crash in the course of that transportation, a claim that the broker failed to exercise due care in that selection regulates motor vehicle safety – not the economics, routes, or services that are governed exclusively by federal law.

The Court emphasized that the FAAAA continues to preempt state laws that regulate broker pricing, routing, or other service terms without any connection to safety. The safety savings clause preserves only those state law claims that involve motor vehicle safety. The ruling clarifies that injured parties may bring safety-related state law claims against brokers alleging negligent selection of carriers.

The content of carrier selection requirements, including what constitutes “reasonable care” for a broker selecting a carrier, will be determined by state law going forward. Because state laws vary, this may result in a patchwork of different rules and obligations in different jurisdictions and related complications for interstate motor carrier transportation.

Justice Kavanaugh’s concurrence

Justice Kavanaugh, joined by Justice Alito, wrote separately to state that the case was closer than the majority opinion suggested. The concurrence opined that brokers who act reasonably and select reputable carriers should face minimal exposure, and that proximate-cause requirements in state tort law should help protect brokers from excessive liability. The opinion went on to caution that “state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits.” Ultimately, the concurring Justices concluded that Congress intended to deregulate the economics of the industry while leaving safety regulation intact, and a negligent-hiring tort cause of action “exists to keep unsafe trucks and unsafe drivers off America's highways.”

Practical implications

The decision could have practical consequences for shippers that rely on freight brokers to arrange transportation of their goods, as well as for carriers – particularly smaller operators – whose access to loads often depends on broker relationships.

• Shippers may face increased broker rates. Brokers may face increased costs from higher insurance premiums, more robust carrier-vetting procedures, and greater litigation exposure. These costs could be passed through to shippers in the form of higher brokerage rates.


• Robust carrier-selection processes as the new baseline. Robust and consistent carrier selection practices will assume greater importance, both as a potential litigation defense and as a condition of obtaining affordable insurance. Shippers may have greater leverage to obtain visibility into their brokers’ carrier vetting process and procedures, as a differentiator when evaluating broker relationships and as a means of managing shippers’ own legal risk exposure.


• Potential shipper exposure. Shippers that contract directly with carriers have never been shielded from negligent-selection claims by the FAAAA. But even shippers that use brokers may not be entirely insulated from this decision’s ripple effects. Two theories bear monitoring. First, plaintiffs may argue that a shipper that voluntarily assumed carrier-safety responsibilities performed them negligently – for example, by maintaining an approved-carrier list but failing to update it in light of safety records, or by imposing pricing or scheduling constraints so aggressive that they foreseeably incentivized unsafe carrier operations. This negligent-undertaking theory is well established in tort law and does not require reclassifying the shipper as a broker; it requires only a showing that the shipper assumed a safety-related role and then performed it unreasonably. Second, a shipper that exercises direct control over carrier selection could face claims that it was operating as a de facto broker subject to the same duty of care. This theory is narrow: a shipper with a rigorous approved-carrier program is unlikely to be reclassified as a broker solely because it imposes robust safety requirements. To the contrary, documented and systematic vetting is more likely to serve as a defense against negligence claims than as a basis for liability.


• Broker market disruption. The decision might also trigger other material changes in the motor carrier freight transportation industry – which includes approximately 28,000 brokers. Brokers may experience both a higher volume of negligent-hiring claims and, in the most serious cases, exposure to potentially bankrupting damages awards similar to those rendered against motor carriers in recent years.
  
  One effect of such dynamics could be acceleration of consolidation in the broker sector – including mergers, acquisitions, and bankruptcy filings by under-capitalized brokers. As brokers exit the market, shippers may face disruption in their transportation networks, including increased risk of brokers’ failures to pay carriers – potentially exposing shippers to carrier liens or double-payment liability. Additionally, a more volatile broker landscape may also increase the potential for fraudulent brokerage activity, including double brokering and identity fraud.


• Contractual risk reallocation. Brokers may seek to strengthen indemnification, insurance, and limitation-of-liability provisions in their shipper-broker agreements. As a result, shippers could face renegotiation of these terms and will need to assess whether their agreements adequately address the new liability environment.


• Carrier pool consolidation. As brokers face greater liability exposure, they may favor medium-to-large carriers with robust, auditable compliance infrastructures. For owner-operators and smaller carriers that have historically relied on broker relationships to access loads, such a shift could significantly reduce their volume and market access. For shippers, a smaller carrier pool may reduce supply chain flexibility, limit competitive pricing, and increase dependence on a smaller number of larger carriers.

Looking ahead

Montgomery clarifies that negligent selection/hiring claims may proceed, but it does not establish the applicable standard of care or what constitutes reasonable diligence in carrier selection. Those and other state law requirements will be developed through state common law and statutes. Justice Kavanaugh opined in his concurrence that brokers who “hire carriers that actually have a reasonable policy” and “ask the hard questions of the carrier” should not face liability, and that the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability.

The DLA Piper Transportation team will continue to monitor post-decision developments and is available to assist clients with reviewing and strengthening shipper-broker agreements, assessing carrier-selection practices and vetting procedures and related risk mitigation, advising on supply chain diversification strategies, and conducting due diligence on broker investments. Please contact the authors for additional information.