The transportation industry has been talking about Montgomery v. Caribe Transport II, LLC for months—and for good reason.
In May, the U.S. Supreme Court unanimously changed the legal landscape surrounding freight brokers and the way they select motor carriers. Since then, insurers, brokers, transportation attorneys and industry organizations have been working through what the decision means in practice.
For trucking companies and haulers, the headline may initially sound like it applies to everyone.
It doesn’t.
The Supreme Court’s decision was specifically about freight brokers and whether state-law claims alleging negligent selection of a motor carrier can move forward despite federal preemption rules. The decision does not automatically make motor carriers liable for something they weren’t liable for before.
But it does have implications for the broader transportation ecosystem—and it is another reminder that safety practices, documentation, contractual relationships and insurance all matter when a serious accident happens.
So, What Actually Happened?
The case arose from a 2017 crash in Illinois. A tractor-trailer operated by Caribe Transport II was involved in a collision that left another truck driver with severe injuries, including the loss of his leg.
The shipment had been arranged by freight broker C.H. Robinson. The injured driver alleged that the broker should have known about problems with the carrier’s safety record and should not have selected the carrier for the shipment.
The legal question wasn’t simply whether the broker had been negligent.
It was whether federal law prevented that type of state-law claim from being brought against a broker in the first place.
The Supreme Court said no.
The Court concluded that the federal law’s safety exception allows states to regulate safety with respect to motor vehicles, meaning a negligent-hiring claim against a freight broker isn’t automatically wiped out by federal preemption.
That doesn’t mean the broker automatically loses a lawsuit.
It means the claim can move forward.
And that distinction is important.
Why Is the Industry Paying So Much Attention?
Before Montgomery, brokers had a powerful federal preemption defense against certain negligent-selection claims.
That defense is now significantly less available.
As a result, plaintiffs may have more incentive to look beyond the trucking company involved in an accident and examine who selected that carrier and how the selection decision was made.
That’s particularly significant in catastrophic claims, where the damages can exceed the insurance carried by the motor carrier involved.
Lockton notes that plaintiffs may increasingly examine carrier-selection practices, contractual relationships and the degree of influence different parties exercised over transportation operations.
The insurance market is paying attention, too. Recent transportation-market reporting indicates that insurers are scrutinizing freight-broker risks more closely, with some carriers becoming more selective about the risks they insure and where they deploy capacity.
What Does This Mean for Freight Brokers?
This is where the practical lesson becomes clearer.
Carrier selection needs to be more than a checkbox.
There isn’t yet a Supreme Court-created checklist that defines exactly what constitutes “reasonable care” when selecting a carrier. That standard will continue to develop through future cases and regulatory guidance.
But the transportation industry isn’t starting from scratch.
Many brokers already have sophisticated carrier-vetting systems. The current environment simply puts greater emphasis on being able to demonstrate that those processes are meaningful, consistently applied and documented.
That can include reviewing things such as:
- Safety and compliance history
- Crash history
- Hours-of-service compliance
- Vehicle maintenance
- Driver qualifications
- Insurance status
- Other available regulatory and safety information
And importantly, documenting the decision-making process.
If a carrier is approved, what information was considered? If a carrier has a red flag, what happened next? If an exception was made, why?
The goal isn’t to create paperwork for paperwork’s sake.
It’s to be able to demonstrate that carrier selection was handled thoughtfully and consistently.
What About Motor Carriers and Haulers?
If you’re a trucking company or hauler that doesn’t operate a freight brokerage, Montgomery doesn’t suddenly create a new negligent-selection obligation for your business.
But there is still a reason to pay attention.
Brokers are likely to become increasingly focused on the safety and insurance profiles of the carriers they hire. That means a carrier’s safety record, loss history, compliance practices and insurance documentation can become increasingly important to its ability to participate in broker networks.
In other words, this isn’t just a legal development.
It may influence how transportation companies do business with one another.
A well-maintained safety program and organized documentation aren’t just useful when something goes wrong. They can also help demonstrate the quality of your operation when you’re competing for business.
And Then There’s Insurance
The Montgomery decision also highlights something transportation businesses already know:
One serious accident can involve a lot of insurance policies and a lot of questions about where responsibility ultimately falls.
For freight brokers, that may mean taking a closer look at contingent liability coverage, policy limits and the relationship between broker coverage and the motor carrier’s insurance.
For motor carriers, it’s another reason to periodically review liability limits and the overall structure of the transportation insurance program.
And for everyone involved, contractual relationships deserve attention.
Who is responsible for what?
What insurance does each party agree to maintain?
What indemnification provisions apply?
Do the contracts accurately reflect how the parties actually operate?
Those questions become particularly important when a catastrophic claim crosses the boundaries between broker, carrier and shipper.
The Bigger Lesson: Document What You Do Right
There’s still a lot that isn’t settled.
The Supreme Court did not establish a universal carrier-vetting standard, and the industry is still working through what “reasonable care” will mean in different circumstances.
That uncertainty can make a major legal development feel intimidating.
But there is also a practical response that makes sense regardless of how future cases develop:
Know your responsibilities. Follow your safety procedures. Review your contracts. Maintain good records. And make sure your insurance program reflects the risks you actually take.
Those aren’t new ideas.
They’re good transportation risk management.
What Should You Do Now?
Whether you’re a freight broker, motor carrier or another participant in the transportation chain, this is a good time to ask a few questions:
- Are our safety and carrier-selection procedures documented?
- Are we consistently following them?
- Are our contracts current and consistent with how we actually operate?
- Do we understand who is responsible for safety, supervision and regulatory compliance?
- Are our insurance limits appropriate for today’s severity of transportation claims?
- Have we reviewed how our various policies respond when a claim involves multiple parties?
And perhaps the most important question:
- If someone asked us tomorrow to explain how we manage transportation risk, could we show them?
That’s the part of Montgomery that may ultimately prove most useful.
The law will continue to develop. Insurance markets will continue to respond. And the industry will learn more as courts work through cases arising under the new landscape.
In the meantime, transportation companies don’t have to wait for all of those answers.
Good risk management is still good risk management.
At Deeley Insurance Group, we believe that’s what being a transportation insurance advisor is about—not simply putting a policy in place, but helping you understand the risks behind the business you’re actually running.
Because in an industry where one accident can change everything, being prepared isn’t a legal strategy. It’s good business.
Got questions? Reach out the Delmarva’s Transportation Insurance Experts today. Call or text us at 410.213.5600.
