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PaperclipPerfector  8hr ago (text post)   244 thread views

Small-Scale Question Sunday for May 17, 2026

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So is anyone planning on doing an effortpost on "Montgomery v. Caribe Transport II, LLC" that dropped last week?

Transport brokers lost immunity for hiring trucking companies with bad safety track records. It's causing some chaos and loops in the CDL and foreign driver discussion.

The important thing is that the trucking industry didn't prepare and because it came into full force immediately there's some chaos.

I'm asking because if someone with more legal and shipping knowledge than me does a write up, anything I write will look pretty half assed.

This should link to the twitter trend: https://x.com/i/trending/2055714473541771375

Possibly, if I have time (which has been in short supply lately), but I would have to do research and anything I produce is going to be half-assed. I dispatch for a mid-sized trucking that's a subsidiary of a larger company (meaning that they're very risk averse, as anything trucking screws up exposes the company as a whole to liability). I don't handle brokering.

The company I work for exclusively does tanking and (limited) hazmat tanking, so we're not really exposed to competition from the cardboard nameplate crowd. That said, compliance and litigation costs have been brutal in the last 5 years, as have been the effects of our efforts to enhance safety on driver retention. Fatalities aside, trucking companies have also been subject to the same issues as the rest of the auto industry in terms of property damage liability (Everything is expensive and costs more to repair.).

Fatal truck accidents were up something like 30% in the last 10 years as of 2024, but it's worth noting that overall accident fatalities spiked from 2020-2024, and only now do we have early estimate data for 2025 suggesting that we're back to the pre-pandemic trend (I wasn't able to find truck fatality data for 2025.). That said, while truck fatalities did spike during the pandemic and have fallen some since peaking in 2022, they were also increasing before the pandemic at the same time that car fatalities were falling, so it seems that truck fatalities are something of their own issue not strictly correlated with traffic fatalities as a whole (Note, much of the increase in traffic fatalities concerning cars has been from pedestrian deaths.).

Non-domiciled CDL holders (aka. foreign drivers) have been involved in a rash of high profile accidents, prompting a crackdown on non-domiciled CDLs, but the federal government doesn't track accident rates based on CDL type, so there is no data that presents a smoking gun suggestion that non-domiciled CDL holders have a higher crash rate than US citizen drivers.

This Supreme Court ruling stabs at a related but different and potentially more meaningful problem, so-called "chameleon carriers" and companies like Super Ego that hire them.

This should link to the twitter trend

Note: This link works only for people with Twitter accounts, and is not supported by Nitter.

Text of opinion

Kavanaugh concurrence:

As I see it, the conflicting contextual considerations make this a close case as we determine how to construe and where to draw the line on the statutory phrase “with respect to motor vehicles”. In the end, I do not believe that Congress, through such oblique language in an economic-deregulation statute, simultaneously (i) allowed state tort suits against negligent trucking companies and (ii) categorically preempted state tort suits against upstream brokers who negligently select an unsafe trucking company. The brokers and their amici raise serious concerns about the repercussions of state tort liability against brokers, and they may of course (among other possibilities) ask Congress and the President to change federal law. But, as of now, federal law does not preempt state tort liability against brokers for negligent selection of trucking companies.

Industry news source:

The Supreme Court just told every freight broker that it can be sued

The legal standard is ordinary care. The question a jury will now be permitted to ask in every state in America is whether the broker exercised reasonable care in selecting the carrier. That means: Did you check the carrier’s safety record? Was the carrier’s FMCSA data available to you? Did the data show elevated crash rates, conditional safety ratings, high out-of-service percentages, or prior enforcement history? Did you have a documented process for evaluating carrier safety? Or did you book the cheapest truck and move on?

If you are a freight broker operating in the United States today, the preemption defense you have been relying on since 2023, when the Seventh Circuit decided Ye v. GlobalTranz, is gone. You are now subject to state tort law in every jurisdiction where you arrange transportation. The carrier you select, the safety record you ignore, the data you decline to check, all of it is discoverable. All of it is admissible. All of it can be presented to a jury.

This decision removes the federal shield that was blocking an old theory. Negligent hiring is a tort theory that has existed for generations. The Restatement (Second) of Torts, Section 411, imposes a duty of reasonable care in employing a contractor for work carrying a risk of physical harm. Barrett cited it in the opinion.

Plaintiffs' attorneys who handle commercial motor vehicle crash cases have been building these case files for years, waiting for the preemption question to resolve. The dockets are ready. The carrier safety data is public. FMCSA’s SAFER system is free. A broker’s carrier selection history is discoverable in litigation. The inspection records showing which carriers a broker habitually dispatched, and what those carriers’ safety profiles looked like at the time of dispatch, are all federal records.

The first wave of post-Montgomery negligent-hiring suits against brokers will be filed within the next few weeks. They will name brokers who selected carriers with known safety deficiencies, conditional ratings, elevated BASIC percentile scores, prior out-of-service orders, and authority less than 18 months old. The discovery requests will seek the broker’s carrier vetting policies, internal screening criteria, communications with the carrier prior to dispatch, and any safety data the broker reviewed or failed to review.

If a broker has no documented carrier vetting process, that absence is itself evidence.

Kavanaugh flagged this in his concurrence, and it deserves its own discussion. The FAAAA mandates minimum insurance coverage for motor carriers. It does not mandate comparable coverage for brokers. The existing broker surety bond requirement under 49 U.S.C. Section 13906 is $75,000. That is not liability insurance. That is a financial responsibility bond intended to ensure payment to carriers and shippers. It does not cover tort claims.

Most freight brokers carry some form of general liability and contingent cargo coverage. Very few carry the kind of excess liability coverage that would respond to a catastrophic negligent-hiring verdict. The nuclear verdict environment in trucking litigation has produced eight-figure and nine-figure outcomes against motor carriers. Those same jury dynamics now apply to brokers.

The insurance industry has not yet priced this exposure. When it does, freight broker premiums will adjust. The adjustment will be significant for brokers who cannot demonstrate a documented, data-driven carrier selection process. The adjustment will be less severe for brokers who can show that their vetting methodology is systematic, repeatable, and grounded in publicly available safety data.

The carriers a broker habitually selects, their safety profiles, their authority ages, their crash histories, their inspection outcomes, all of that is now part of the risk profile that an underwriter will evaluate.

This is not complicated. The court did not rewrite the rules of physics. It removed a procedural shield. The underlying obligation to exercise reasonable care in selecting a carrier is the same standard every other industry participant already operates under. Shippers exercise care in selecting carriers. Carriers exercise care in hiring drivers. Brokers are now held to the same standard.

Montgomery v. Caribe Transport is not just a broker case. Kavanaugh acknowledged this implicitly when he discussed 3PLs, freight forwarders, and digital freight platforms that make carrier selection decisions. The opinion is written about brokers because C.H. Robinson is a broker. But the logic applies to anyone in the supply chain who selects a carrier and has access to publicly available safety data showing that the carrier presents an elevated risk.

The court said that requiring a party to exercise ordinary care in selecting a carrier concerns motor vehicles. That is a principle. It does not stop at licensed broker authority holders.

Shippers who select carriers directly are not preempted and never were. But shippers who relied on the assumption that their broker’s preemption defense would insulate the entire transaction from negligent-selection liability need to rethink that assumption. The broker can now be sued. The broker’s defense will include evidence of what the shipper knew, what the shipper required, and the shipper’s own carrier-selection criteria.

Associated Press:

Supreme Court revives suit against major logistics company with potentially big effects on industry

The Trump administration and companies such as Amazon had argued that letting the suit go forward would expose logistics companies to liability under a “patchwork” of state laws.

Montgomery’s appeal was backed by more than two dozen states. They said a win for him would help bolster safety in an industry that moves billions of tons of goods across billions of miles every year.

The ruling could have far reaching effects if brokers can be held liable for the actions of the trucking companies they hire, said Brian Watt, who runs a freight logistics company in Florida.

Brokers will now have to focus more on the safety records of the truckers they contract with to haul all kinds of goods, including hazardous materials, instead of just looking for the cheapest and fastest option.

The Transportation Department has been cracking down on the trucking industry over the past year by trying to force unqualified drivers, trucking companies and schools out of the industry.

This is going to play merry hell on owner-operators. Nobody's going to want to underwrite one guy with one truck.

I think owner operators will be fine. They already have to carry their own insurance, and it's much easier for a broker to vet a single driver than a company with a revolving door of people who couldn't get hired anywhere else. The law that putatively granted immunity to brokers was enacted in 1994; it's not like owner-operators didn't exist before then.

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