What freight brokers should know following U.S. Supreme Court carrier liability ruling

Photo: SC&RA

The May 14, 2026 decision in Montgomery v. Caribe Transport II, LLC held that the Federal Aviation Administration Authorization Act does not preempt state-law negligent selection claims against brokers. As a result, brokers can now be held liable under state common law if a carrier they select causes harm and the broker failed to conduct adequate due diligence.

“The good news: This is not strict liability,” insurance brokerage and risk management firm Brown & Brown said in a client memo on the ruling. “The standard remains what a reasonably prudent broker would do under similar circumstances. A well-documented, consistently applied carrier selection program is your strongest defense.”

The decision removes what had been a widely used federal preemption defense, meaning brokers who cannot demonstrate a documented, consistently applied carrier selection process face substantially greater litigation risk.

Brown & Brown, which serves the transportation and logistics sector, recommends brokers respond by formalizing written carrier qualification policies, conducting and documenting due diligence on every carrier – including U.S. Department of Transportation authority, insurance verification, safety ratings and FMCSA SMS BASIC scores – and applying enhanced scrutiny to unrated or new-entrant carriers. Brown & Brown also recommends reviewing contingent auto and errors and omissions coverage in light of the ruling.

A large majority of motor carriers operate without an FMCSA safety rating, often because they have not yet accumulated enough inspections for a full compliance review. Under the post-Montgomery standard, unrated status requires heightened scrutiny rather than routine acceptance.

What does this mean for USA specialized transport?

The implications are particularly acute for specialized transport operations.

Oversize and overweight shipments, project cargo moves and heavy haul work involve carriers that may be smaller, newer or operating under permits rather than standard authority; exactly the profile that draws heightened scrutiny under the Montgomery standard.

Brokers arranging these moves should pay close attention to carrier safety records, insurance limits appropriate to the load values involved, and documentation of any exceptions made for unrated or new-entrant carriers.

In a segment where loads routinely exceed standard commercial values, the gap between adequate and inadequate due diligence carries proportionally greater consequences.