Nine to Zero: What Your Carrier-Selection File Must Prove After Montgomery

The letter arrives about six weeks after the crash. Plaintiff's counsel wants the load tender, the carrier packet, every safety lookup your team ran on the carrier, the date and time each was run, who approved the carrier, whether anyone overrode a warning, and every load you gave that carrier before and after. Until this spring, many defense teams would first argue that federal law preempted the whole claim. That move is gone.

On May 14, 2026, the U.S. Supreme Court decided Montgomery v. Caribe Transport II, LLC unanimously. Writing for the Court, Justice Barrett held that a claim that one company negligently hired another to transport goods is not preempted by the Federal Aviation Administration Authorization Act (FAAAA), because the statute's safety exception preserves state authority to regulate safety "with respect to motor vehicles." The question is no longer whether you can be sued for picking the carrier. It is whether your file proves you picked it reasonably.

What the Court actually decided

The facts were plain. A truck hauling a brokered load through Illinois struck the plaintiff's stopped tractor-trailer, and his leg was amputated. He alleged the broker knew or should have known the carrier was dangerous, because it held a Conditional federal safety rating with cited deficiencies in driver qualification, hours of service, inspection and maintenance, and recordable crash rate. The district court (January 2024) and the Seventh Circuit (2025) said the claim was preempted. The Court granted certiorari on October 3, 2025, heard argument on March 4, 2026, and reversed.

The reasoning is short. Common-law duties of care are part of a state's safety authority, and "with respect to" means "concerns." Requiring a broker to use ordinary care in selecting a carrier concerns motor vehicles, "most obviously, the trucks that will transport the goods." The Court assumed, without deciding, that the claim was otherwise preempted, and remanded.

That resolved a split that had built for six years. The Ninth Circuit (Miller v. C.H. Robinson Worldwide, 2020) and the Sixth Circuit (Cox v. Total Quality Logistics, 2025) had let these claims proceed. The Eleventh Circuit (Aspen American Insurance Co. v. Landstar Ranger, 2023) and the Seventh Circuit (Ye v. GlobalTranz Enterprises, 2023) had held them preempted.

Read Justice Kavanaugh's concurrence, joined by Justice Alito. He called it a close case and acknowledged that brokers' concerns about litigation and insurance costs are "legitimate and weighty." But he also wrote that brokers "should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies," and he quoted plaintiff's counsel conceding at argument that a broker "is not going to have a problem if it's asking the hard questions of the carrier." That is the standard the next ten years of litigation will test: not perfection, but documented, reasonable inquiry.

What has happened since

The first post-Montgomery verdict. On July 23, 2026, a Dallas County jury in Lipe v. Lupus Superior returned a verdict of $604,025,000 over a March 2021 pileup on Interstate 20 in Mississippi that killed three motorists. Jurors apportioned fault 45% to the driver (who also died), 32% to the carrier, and 23% to the broker. They also found the driver was operating "subject to control by" the broker as to the details of the mission, a borrowed-employee finding that can expose the broker to the driver's share as well. On October 16, 2026, the trial judge entered final judgment on the full amount plus roughly $107 million in pre-judgment interest at 6.75%, according to trade press reports. The broker has said it will appeal. Two facts from the coverage should stop every compliance team: the carrier reportedly held a Satisfactory FMCSA rating and had delivered nearly 270 prior loads for the broker, while plaintiffs pointed to federal safety alerts in the year before the crash.

A Texas line for shippers. One day after Montgomery, on May 15, 2026, the Texas Supreme Court held in In re Home Depot U.S.A., Inc. that a passive shipper owes no duty to the driving public merely by engaging a federally regulated carrier. It does not protect intermediaries, and its focus on control is the lens the Lipe jury applied to the broker.

A push for a federal safe harbor that does not exist yet. In June 2026, the main broker trade association petitioned FMCSA for a federal carrier-selection standard (registered, insured, not ordered out of service or found unfit) and a published list of high-risk carriers. In Congress, H.R. 5337, introduced September 11, 2025, would deem a broker reasonable if it verified registration, minimum insurance, and FMCSA compliance within 45 days before shipment. As of this writing, neither the petition nor the bill has produced a rule or a law, and FMCSA's safety fitness determination rewrite remains at the advance-notice stage it reached in 2023.

Why "they had a rating" is not a policy

The rating system was never built to carry this weight. FMCSA's own 2023 advance notice says that in fiscal 2019, it and its state partners conducted 11,671 compliance reviews out of more than 567,000 active interstate carriers, and that a Satisfactory rating "may be misconstrued as an FMCSA approval" when it only reflects operations at the time of the investigation. Industry petitions filed this June put the share of authorized carriers without any rating at more than 90%. By statute, SMS percentiles and alerts cannot currently be used for fitness determinations, yet plaintiffs cite them as notice.

So a defensible policy must answer a harder question than "rated or not": what did you know, or should you have known, at tender, and what did you do about it?

The selection record at tender time

Decide, in writing, what your file must show for every load. A practical floor:

• Authority and insurance as of tender, not onboarding. Active operating authority, verified auto liability at your required limit, with the date and time of the check and its source.

• Safety status at tender. Rating (or unrated status), out-of-service orders, and whichever SMS signals your policy says you weigh, stored as a snapshot, not a live link that will show different data by the time of deposition.

• Your own history with the carrier. Prior loads, claims, and internal flags.

• Who approved, and under what rule. If a rep or manager overrode a block, the override reason, the approver, and the time.

• What you did not do. After Lipe, document that the carrier controlled the driver, route, and equipment. Tracking is fine. Directing another company's driver turn by turn is a control fact a jury can use.

A policy that says "we vet carriers" without thresholds invites the question of why your people did not follow it. A policy with specific triggers (for example, which BASIC alerts force a manager review, which ratings are auto-blocked, how old a lookup may be) is something a witness can defend.

Contracts, indemnity, and insurance minimums

Carrier indemnity is only as good as the carrier's policy, and the federal minimum for general freight carriers remains $750,000. Against a nine-figure verdict, that is a rounding error. Decisions to make now:

• Carrier minimums. Many brokers have moved toward $1 million as the floor. Higher minimums improve recovery but shrink the pool, hitting small carriers hardest. Decide by lane and commodity rather than one blanket number.

• Your own contingent auto liability. Confirm whether your policy covers negligent-selection allegations, how defense costs erode limits, and whether there are carrier-selection warranties that void coverage if your team skips a step. A coverage warranty you cannot prove you followed is a coverage gap.

• Shipper contracts. Expect shippers to push indemnity and higher limits onto you. Price it or decline it.

What 2027 renewals will look like

The market has already repriced. An August 26, 2026 equity-research report, as reported by trade press, said one top-10 brokerage's liability renewal tripled, a large broker's excess layer rose from $3 million to $10 million in premium, and roughly 10 underwriters wrote broker auto liability before two exited. An August 19, 2026 freight-market briefing described primary increases in the middle double digits and excess layers up 50% to triple digits, with brokers in the $30 million to $40 million revenue range facing renewals moving from about $10,000 to $30,000 or $40,000 a year.

The backdrop was already bad. A December 2025 trucking-litigation study covering 2019 through 2024 estimated 12,817 state-court tractor-trailer tort cases in 2022, found filings rising 3.7% a year since 2014 and the largest half of awards rising 5.7% a year, and identified improper hiring or onboarding as a negligence theory associated with higher awards. Median verdicts at or above $1 million were $3.6 million in state court versus about $2.52 million in federal court.

At 2027 renewals, underwriters will ask for the policy itself, evidence it is followed, override rates, and how fast you block a carrier after a status change. Shops that can export that evidence on demand will have options.

Asset carriers and hybrids

Asset carriers are not spectators. Brokers will screen harder, ask for higher limits, and read your SMS data the way a plaintiff would. Clean crash attribution, driver files, and data corrections are now sales assets.

Hybrids carry the most complex exposure. When you dispatch your own trucks you are the motor carrier, with direct and vicarious liability. When you broker overflow, you are an intermediary whose selection is judged by the Montgomery standard and whose control over the driver is judged by the Lipe lens. First, keep the authority, documentation, and communications for brokered loads clearly separate from asset dispatch, so a brokered driver never looks like your employee. Second, apply a selection bar to partners that you can defend next to your own safety record. Juries compare.

Making the policy provable

Every operation's freight, lanes, and risk tolerance differ, so no generic checklist fits. What serious shops share is that the policy lives in the system, not a binder. Carrier approval statuses that block tendering automatically when insurance lapses or a status changes. Selection rules configured to your commodities and lanes. Override permissions limited to named roles, with a required reason. A tender-time snapshot of every check, retained for the life of the claim window. That is how a written policy becomes evidence.

FAQ

Did the Supreme Court make brokers automatically liable for carrier crashes?

No, Montgomery v. Caribe Transport II only held that the FAAAA does not preempt state negligent-selection claims against brokers. Plaintiffs still must prove the broker failed to use reasonable care and that the failure caused the harm.

When was Montgomery v. Caribe Transport II decided, and what was the vote?

The Court decided it on May 14, 2026, by a 9-0 vote, in an opinion by Justice Barrett.

Is a Satisfactory FMCSA rating enough to defend a negligent-selection claim?

Not by itself, as the July 2026 Lipe verdict showed, where the carrier reportedly held a Satisfactory rating. Juries look at what the broker knew or should have known at tender, including alerts and its own history with the carrier.

Is there a federal safe harbor for broker carrier selection?

Not yet, as of October 2026. H.R. 5337 would create a 45-day verification safe harbor and a broker trade association petitioned FMCSA in June 2026 for a selection standard, but neither has become law or a rule.

Does Montgomery affect shippers too?

Possibly, though state law still decides whether a shipper owes a duty. In Texas, In re Home Depot U.S.A. (May 15, 2026) held that a passive shipper owes no such duty simply by hiring a federally regulated carrier.

What should brokers prepare for 2027 insurance renewals?

Brokers should prepare a written selection policy with specific thresholds and proof it is enforced on every load. That means tender-time snapshots, override logs, and evidence of how fast carriers are blocked after a status change.