On May 14, 2026, the Supreme Court of the United States resolved a circuit split¹ when it unanimously (9-0) ruled in Montgomery v. Caribe Transport II, LLC (Caribe). It held that a claim against a broker that negligently hired another to transport goods is not preempted because States retain authority to regulate the safety of motor vehicles on their roads. The Supreme Court reasoned that claims falling within the Federal Aviation Administration Authorization Act of 1994’s (FAAAA) safety exception are a part of a State’s safety regulatory authority “with respect to motor vehicles,” and are therefore not preempted as district and appellate courts have previously held. Now, a state-law negligent-hiring and/or negligent-selection claim against a transportation broker survives in certain contexts when it had otherwise been extinguished.

For background, the FAAAA contains an express preemption clause historically barring States from enforcing laws “related to a price, route, or service” of a motor carrier or broker “with respect to the transportation of property.” As an exception to this provision, known as the safety exception, such preemption “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” §14501(c)(2)(A). Before Caribe, several appellate courts treated negligent hiring/negligent selection claims as attacks on a broker’s service (i.e., choosing a carrier) and expressly preempted those claims, especially when reading the safety exception narrowly.  In relying on these decisions, brokers who failed to do basic diligence on their hired carriers would routinely escape liability across numerous districts.

In Caribe, the victim, Shawn Montgomery, was severely injured and had to have his lower leg amputated when a truck driven by motor carrier Caribe Transport II struck his stopped tractor-trailer in Illinois. C.H. Robinson Worldwide, Inc., a transportation broker, coordinated the shipment and hired Caribe Transport II. Mr. Montgomery sued all parties, adding a negligent-hiring claim against C.H. Robinson, alleging C.H. knew or should have known from Caribe Transport’s conditional Federal Motor Carrier Safety Administration (FMCSA) safety rating (with deficiencies in driver qualification, hours of service, maintenance, and crash rate) that hiring Caribe was reasonably likely to cause accidents. After significant industry and government opposition via amicus briefing that alleged broker liability would cause shipping and insurance costs to skyrocket, the Supreme Court ruled in favor of safety, reasoning in concurrence that “if brokers can be ‘held liable for disregarding poor safety records, they have a strong incentive to do business only with safe and reliable motor carriers.’”

For inland marine insurers, property insurers, and cargo owners, the bottom line is that brokers can now be sued under traditional state negligent theories when the claim is tied to motor-vehicle safety. This includes claims arising from crashes that cause property damage because the safety exception now saves this subset of state-law claims from the FAAAA’s broad preemption. In other words, while traditional motor carriers remain liable under the Carmack Amendment, brokers that hired those carriers can now be liable under traditional state-law negligent hiring/negligent selection claims, with district courts exercising supplemental jurisdiction.

For additional information, including how this new precedent can help your recovery efforts, please feel free to contact the authors of this Subro Alert or any members of Cozen O’Connor’s National and International Subrogation and Recovery Department.