The Supreme Court’s decision in Montgomery v. Caribe Transport II, LLC resolved a years-long split among federal appeals courts, removing a key inconsistency in how courts have applied broker liability. As a result, a claim that once depended in part on jurisdiction now operates in a more consistent national risk environment.
The Court provided clarity on where liability can exist, but what it left undefined continues to shape how organizations manage that risk. This ruling did not create a new liability standard. Instead, it made an existing exposure harder to avoid and more important to prepare for, regardless of where parties file a case.
This episode of the TN Truck Thought podcast features Prasad Sharma and Nathaniel Saylor, partners at Scopelitis, Garvin, Light, Hanson & Feary, P.C., and True North’s Dan Cook. As always, it’s hosted by Steve Keppler and P. Sean Garney of Scopelitis Transportation Consulting, bringing more than 140 years of combined experience in transportation, law and insurance to unpack the ruling from legal and underwriting perspectives.
Montgomery v. Caribe Transport II, LLC revolved around a freight broker who hired a motor carrier to move a load. During the shipment, the motor carrier crashed, causing severe and permanent injuries. The injured party brought a negligent selection claim against the broker, arguing it failed to exercise reasonable care when choosing that carrier. At its core, the issue was not whether a crash happened, but whether plaintiffs can challenge the broker’s carrier selection process in court.
The broker’s defense centered on a federal statute known as the Federal Aviation Administration Authorization Act of 1994, or F4A. The F4A limits how states can regulate freight transportation but includes a safety exception that preserves state authority over motor vehicle safety. The broker argued the F4A preempted state law, meaning federal law blocked plaintiffs from bringing the negligent selection claim entirely. The question before the Court was whether federal law shut the door on these claims before they could move forward.
The Court unanimously disagreed. Negligent selection claims fall within the safety exception, so federal law does not preempt them. That does not mean every claim succeeds. It means these claims can now proceed nationwide instead of courts dismissing them in some jurisdictions at the outset.
Before this ruling, the same decision carried different legal exposure depending on where parties filed a claim. Some jurisdictions allowed negligent selection claims to proceed. Others dismissed them on preemption grounds. That divide is now resolved.
The conversation has shifted from where a claim is filed to how a broker’s selection process holds up. What the ruling does not do is equally important. The Court confirmed these claims can proceed, but it did not define a standard of reasonable care for carrier selection and therefore no bright line rule for carriers to follow. Additionally, there is no national vetting benchmark, nor a fixed threshold a broker can point to as proof it met an acceptable standard during the selection process.
These determinations remain fact-specific, and a judge or jury will decide them at the trial level by weighing the circumstances of each case. That gap is where legal and execution risk now lives.
A lack of a definitive legal standard is not new. What is new is that this uncertainty now applies in every jurisdiction. For companies that have already built disciplined vetting programs, this ruling raises the importance of consistency and documentation. For companies that have not, it raises the stakes.
For anyone operating in this space, defining reasonable care is what matters most. The standard lacks definition and leads to the question of whether an organization can explain and defend how it makes carrier decisions.
Because reasonable care lacks definition, the questions that follow an incident are consistent regardless of jurisdiction: what information teams reviewed, how they interpreted it and whether the decision reflects how the organization operates. This makes the issue as much about process discipline as legal theory.
Saylor walked through a telling illustration in the episode: two brokers vetting to the exact same criteria with completely different outcomes under deposition. Same decision. One could explain it. One could not.
That example highlights the issue is not only what standard exists on paper, but whether a company can clearly show how it applied that standard in practice.
The ruling did not create that distinction. It sharpened it and shifted the focus from what a company does to what it can demonstrate. That shift may prove more consequential than the legal holding itself for many brokers and leaders.
The insurance market set the standard before this ruling, making the decision feel less like a sudden reset and more like a legal confirmation of existing pressures.
When carrier insurance limits do not reach verdict levels, plaintiff attorneys look for deeper pockets, making brokers a natural target. The median nuclear verdict in trucking climbed to approximately $44 million in 2023, reinforcing how far verdict exposure has outpaced standard coverage and continues to rise.
Industry pressure on broker selection practices had already increased before the Supreme Court weighed in.
Dan Cook explained that brokers seeking true broker liability coverage, not just contingent coverage, have long needed to meet specific carrier qualification requirements as a condition of that coverage. This has included avoiding conditionally rated carriers, verifying auto liability with an A- or better-rated insurer and restricting co-brokering.
Those expectations do not carry the force of federal regulation, but they shape how stronger programs are built and evaluated.
No federal regulation requires any of it, but underwriters have treated it as the price of admission for years. In practice, those expectations have influenced an informal benchmark the Supreme Court declined to establish. Parts of the market have already been operating with a rulebook for years.
Cook noted that plaintiff’s attorneys have begun requesting broker insurance applications in some cases to compare what brokers agreed to in underwriting against what they practiced in the field. That raises exposure for organizations whose documented commitments and execution do not align.
The things a broker commits to in its insurance application, and whether day-to-day decisions reflect that commitment, is increasingly part of the broader litigation story.
Informal underwriting benchmarking points to a broader issue: the gap between having a process and being able to demonstrate one. Documented intent alone is not enough if employees cannot show how they made decisions in real situations.
Documented criteria, clear ownership of decisions and consistent application across teams separate a defensible negligent selection program from one that falls apart under closer review. This is where legal risk, execution and governance begin to converge.
For carriers building their safety profile, the same logic applies from the other direction as brokers facing increased pressure gravitate toward carriers with verifiable data and clean records. If that story exists, make it visible. That visibility can influence relationships with brokers as expectations evolve.
Organizations that regularly evaluate whether documented processes align with actual decision-making will better position themselves as pressure increases and have a stronger chance of defending a negligent selection claim.
A uniform legal framework now exists, but a consistent benchmark does not. Congress introduced legislation that would create a federal safe harbor for broker carrier selection, including a section of the 2025 U.S. House reconciliation bill directing FMCSA to establish a standardized compliance database. However, this section was cut from the final bill and did not advance into law.
Until Congress successfully enacts a bill into law, companies will continue operating in a landscape comprised of litigation, underwriting expectations and fact-specific review.
Dan Cook’s perspective was notably measured compared with much of what has circulated in the industry. The organizations that come out of this stronger are the ones already running disciplined programs. For them, this is not a crisis. It’s a moment of separation. Expectations continue to evolve across underwriting and litigation.
That perspective reframes the ruling from headline risk to business opportunity.
Until regulators create a federal benchmark, that separation will continue to widen. The companies best positioned for what comes next will likely be the ones that can connect policy, practice and proof.
The Supreme Court resolved a long-standing legal divide through its decision in Montgomery v. Caribe. Negligent selection claims against brokers can now move forward in any jurisdiction, and courts will continue to judge those claims based on the facts of each case and the decisions behind them.
This is no longer just a legal update. It is a process, risk and accountability issue that touches multiple parts of the business.
The advantage does not shift to most conservative organizations. It shifts to the organizations that can prove the rationale of their selection processes. In this environment, defensibility may matter as much as decision quality itself.
If you’re making decisions about carrier selection, insurance coverage or risk management in transportation, our episode is worth your time. Listening helps identify where exposure is increasing, how stronger organizations are responding and what a more defensible carrier vetting approach looks like in practice.