What Montgomery v. Caribe Transport Means for Your Operations For years, freight brokers operated with a clear legal advantage. When negligent carrier selection claims arrived, federal preemption under the FAAAA was usually enough to get them dismissed. Brokers still vetted carriers. They still checked certificates of insurance and FMCSA safety ratings. But they did it knowing a federal defense stood between them and state-law tort liability. On May 14, 2026, the Supreme Court removed that defense. How Freight Brokers Managed Liability Before May 2026 The Federal Aviation Administration Authorization Act, passed in 1994, broadly preempted state laws related to the prices, routes, or services of motor carriers and brokers. For decades, brokers invoked FAAAA preemption to defeat negligent hiring claims at the pleading stage, often before any meaningful discovery. The argument was that carrier selection is a core brokerage service, so state negligence law should not apply. That defense shaped how brokers approached risk. Many invested in carrier vetting, verifying FMCSA safety ratings, checking certificates of insurance, and screening for conditional ratings or recent violations. Others did the minimum and relied on preemption to carry the rest. Either way, the legal floor held. What Changed on May 14 In Montgomery v. Caribe Transport II, LLC, a unanimous Supreme Court held that the FAAAA’s safety exception preserves state-law negligent carrier selection claims against freight brokers. The case turned on whether C.H. Robinson exercised reasonable care when it hired Caribe Transport, a carrier with a conditional FMCSA safety rating, documented maintenance deficiencies, and a recent crash history. The Court’s answer ended the broad preemption defense. Freight brokers can now be direct defendants in bodily injury and catastrophic loss claims under state tort law. This freight broker liability ruling applies to every U.S. lane brokers run today. Courts will ask what information brokers had about a carrier at the time of engagement, how they documented their selection decision, and whether their process reflected a reasonable standard of care. Why Insurance Costs Are Already Moving The ruling did not mandate specific insurance requirements for freight brokers. But even without that, the market has already started adjusting. Brokers currently in their insurance renewal cycle are seeing freight broker liability insurance premiums three to four times higher than last year. Underwriters are pricing increased litigation exposure and severity into every renewal. 3PL insurance costs are moving in the same direction. For smaller brokers without mature compliance programs or documented vetting histories, the impact is sharper. The financial pressure is immediate. Brokers who can demonstrate systematic carrier vetting, ongoing monitoring, and documented selection decisions are in a stronger position with their underwriters and are absorbing less of that cost in their premiums. The Documentation Problem That Predates the Ruling Most freight brokers already had some version of a carrier vetting process. With Montgomery, brokers now face a claims management infrastructure gap they have never had to solve at this scale. Managing claims in a spreadsheet was workable when liability exposure was limited. The spreadsheet holds the claim summary. Photographs, vehicle maintenance records, driver claim histories, witness statements, and carrier certificates of insurance end up scattered across shared drives and email threads. When a claim goes to litigation, that scattered data tells a fragmented story. Courts want records created at the time of the carrier selection decision, not reconstructed months or years later. The standard now requires brokers to document what information they reviewed about a carrier, what criteria they applied, who made the approval decision, and what the carrier’s FMCSA safety rating looked like at the exact moment of engagement. Certificate of insurance tracking at onboarding is not a full defense. Brokers also need ongoing monitoring. A carrier that passed initial vetting two years ago may look very different in FMCSA data today. This is the gap that most broker operations have not closed, and will matter most when the next claim becomes a suit. What Brokers with Defensible Operations Have in Common The brokers best positioned after Montgomery are the ones who treat claims management as a core operational function. Their carrier vetting criteria are written down and consistently applied. Their claims data lives in a single system alongside supporting documentation. And they can produce a complete, timestamped record of any carrier selection decision. This is where freight broker software and carrier compliance software move from useful to necessary. Origami Risk gives freight brokers and 3PLs a centralized platform for claims management, COI tracking software, and driver risk scoring, with integrations into existing transportation management systems so carrier details, claim histories, and compliance records stay connected. When a claim becomes a suit, you need to show what you knew and when you knew it. A centralized system produces that record. Scattered spreadsheets and shared drives leave it to chance. The Montgomery ruling reshaped freight broker liability in a single decision. The brokers who respond by building the right infrastructure will be better positioned with their insurers, more prepared in litigation, and more equipped to make carrier selection decisions that hold up to scrutiny. Ready to assess your current claims infrastructure? Connect with the Origami Risk team to see what defensible operations look like in practice.