Those are words or phrases I have seen used to describe the Supreme Court’s May 14 opinion in Montgomery v. Caribe Transport II, LLC, which held that state tort lawsuits against freight brokers for negligent selection of carriers are not preempted by federal law.
Hogwash.
Yes, it’s an important ruling with major consequences, but it’s not some huge shift in the law or an unthinkable about-face in policy. The court’s unanimous decision basically confirmed what was explicitly the situation in two federal appeals court jurisdictions – the 9th and 6th circuits – and at least potentially the situation in eight others where the question of preemption previously wasn’t settled law.
Only in the 7th and 11th circuits did the court clearly overturn the legal status quo. That’s three states in the Midwest and three states in the South. And since interstate freight transportation inherently involves highway crash exposure all over the map, the fact that negligent selection lawsuits against brokers were barred in six states was irrelevant – or at least should have been – in terms of brokers’ carrier selection practices.
Brokers concerned about negligent selection risk should have been acting the same before May 14 as they presumably will after May 14. The Supreme Court isn’t saying that the mere act of selecting a carrier involved in a crash makes the broker accountable for damages. Plaintiffs still must establish that brokers were negligent in their choices, and there’s no more clarity on what constitutes negligence now than there was before the Montgomery decision.
And perhaps that is the real reason for the uproar. The Supreme Court confirmed brokers’ potential liability for negligent selection without giving them a clear path to defeating such claims or setting any kind of national standard that brokers needed to meet. However, those issues were never before the court and were never likely to be part of the ruling, although Justice Brett Kavanaugh’s concurring opinion tries to address them somewhat.
Rather, the court’s ruling revolves around the meaning of the phrase “with respect to motor vehicles” in a 1994 law that preempts state regulation of rates, routes, and services in trucking. The key language is part of what is known as the “safety exception,” and the high court ruled that the exception encompasses state tort claims based on brokers’ choice of motor carriers.
If you think brokers are just now exposed to negligent selection lawsuits, get real. It’s been an issue for years and is why the broker community has long supported federal legislation to provide a “red light/green light” safe harbor for carrier selection.
Now-retired Rep. John Duncan (R-Tennessee) first introduced a “national hiring standard for motor carriers” a dozen years ago and some version of that legislation – more recently called a “national motor carrier safety selection standard” – has been offered in every Congress since then. The currently active iteration (H.R. 5337) is sponsored by Rep. Pete Stauber (R-Minnesota).
Brokers were even successful in getting safe harbor language into the House-passed version of last summer’s budget reconciliation bill, but the provision didn’t survive in the final version enacted by Congress. That legislation would have required the Federal Motor Carrier Safety Administration (FMCSA) to establish a website on which it declared whether a motor carrier does or does not meet its operating requirements and is authorized to operate on the nation’s roadways. Any broker or forwarder selecting a motor carrier listed positively on that website “shall be considered to have taken reasonable and prudent determinations in engaging such motor carrier,” the provision stated.
I am not naïve. I get that it benefits many stakeholders to act as if this decision came out of left field or represents some brand-new threat that you must act immediately to guard yourself against. You play the hand that is dealt to you. You leverage your advantage – whether you are trying to win a political battle, selling a carrier vetting solution, or driving readers to your website. That’s your job.
So, I don’t fault people for hyping the impact of the Supreme Court’s ruling, but I don’t have to just shrug my shoulders and ignore the inaccuracies, either. I’m reminded of Bob Woodward’s line in All the President’s Men: “If you're gonna hype it, hype it with the facts.”
Even as I feel compelled to call BS on the frenzied reaction, I recognize its potential for improving highway safety if it makes brokers worry more about the safety of the carriers they use. Justice Kavanaugh acknowledged this in his concurring opinion in which Justice Samuel Alito joined.
Kavanaugh cited the Transportation Intermediaries Association’s brief arguing that trucking companies are in a better position than brokers to monitor their own trucks and drivers and that brokers may not be able to objectively assess the relative safety of different carriers. He went further, however.
“That said, brokers may sometimes become aware that a particular carrier operates unsafe trucks or hires unfit drivers. And 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’,” Kavanaugh said, quoting a brief from 29 states and the District of Columbia.
Kavanaugh’s comments reflect only the opinion of himself and Justice Alito, but even if they were part of the unanimous opinion, they wouldn’t be very much help.
What does it mean for a broker to “become aware that a particular carrier operates unsafe trucks or hires unfit drivers”? Kavanaugh offers what to him seems like an answer:
“Importantly, the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff’s counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies.”
Sure, but what is a “reputable” trucking company and how does a broker determine that?
There’s lots of data available. The Safety and Fitness Electronic Records (SAFER) website provides an easy, single-page snapshot that tells you a carrier’s safety rating (if there is one), its vehicle and driver out-of-service (OOS) percentages versus the national averages, and how many crashes they have had in the past two years.
One of the limitations of this information as a decision-making tool, though, is the law of small numbers. A very small carrier with few inspections might have a high OOS rate – one that might fall sharply after the next inspection or two. Should a broker avoid using that carrier even though it otherwise might have no crashes or other notable blemishes?
You can find even more information about carriers through the Safety Measurement System (SMS) website, which provides all the information available on the SAFER website and much more, including detailed history of inspections and crashes over the past two years. The old Compliance, Safety, Accountability (CSA) program alerts haven’t been public for more than a decade, but the raw data and SMS algorithms are still available, and multiple vendors offer basically everything that was ever publicly available and then some.
Still, what’s the standard for using or not using a carrier based on this information? Isn’t it really luck of the draw? A broker might win one case but lose another based on the exact same set of facts due to a clever lawyer who seizes on something obscure that the broker didn’t check and convinces the jury that the “oversight” proves that the broker was negligent.
Of course, that’s not just a broker problem. Asset-based carriers, too, lack a clear standard of care in the management of their own drivers and equipment that would shield them from punitive damages and nuclear verdicts.
Another data source, FMCSA’s Licensing & Insurance public website, tells you whether a carrier has active authority and whether it has insurance. Some in the transportation industry argue that this is the only necessary check: Is a carrier authorized and insured? That argument is based on the premise that it’s FMCSA’s responsibility to determine whether a carrier is fit to operate and that if a carrier is good enough for FMCSA, that’s all you need to know.
That line of reasoning is essentially the premise of the budget reconciliation act provision I mentioned earlier. It’s also the argument advanced by the U.S. government itself. In an amicus brief in the Montgomery case, the U.S. solicitor general stated:
“It makes sense that Congress would preempt state negligent-selection claims against brokers arising out of auto accidents. Unlike a claim that a motor carrier was negligent on a particular occasion, a claim that a broker did not exercise due care in selecting a federally registered motor carrier would undermine FMCSA’s determination that the motor carrier satisfied federal registration requirements, including extensive safety requirements.”
No doubt, there’s oversight. U.S.-based trucking operations were inspected at the roadside more than 2.8 million times in 2025, resulting in just under 5 million violations, including nearly 968,000 OOS violations. Those numbers sound large, but in the context of the number of commercial vehicles operating, it’s hardly constant oversight. What would constant oversight look like? Imagine that every week was International Roadcheck week.
All that data goes into FMCSA’s Motor Carrier Management Information System, which populates the publicly available databases discussed earlier and is used by third-party vendors as part of the various carrier vetting solutions on the market. The agency uses inspection and crash data to prioritize carriers for intervention over safety and compliance issues, but here’s where things break down.
FMCSA and its state law enforcement partners don't have anything close to the resources needed to effectively oversee nearly 275,000 interstate for-hire trucking operations currently holding authority, and that doesn’t include private fleets holding authority or purely private fleets, hardly any of which have safety ratings. We’re talking hundreds of thousands of entities.
Few, if any, federal enforcement agencies can match that scope of regulated entities. Maybe the Occupational Safety and Health Administration? Perhaps the Environmental Protection Agency? Even if those agencies have as many or more entities to oversee, at least the business locations they regulate are mostly stationary and are not traveling all over the country.
One approach would be to rate carriers based on data alone, and the Obama administration proposed just that in 2016. For numerous reasons, that effort failed and was withdrawn by the Trump administration a year later. One issue was that law of small numbers I mentioned earlier. For very small carriers, SMS metrics are too unstable to use data as the sole basis for declaring a carrier unfit unless you are comfortable with putting thousands of operations out of business because of a single crash or a couple of bad inspections.
When FMCSA was developing the CSA program in the late 2000s, it stated that brokers and shippers could help improve highway safety by using the data to pick safer carriers, thereby forcing riskier carriers to either improve their safety or exit the market. However, that thorny issue of clear standards remained a problem. For example, could you use a carrier that had a CSA alert? Two alerts? What if a carrier didn’t have an alert but was borderline in one or more safety categories?
The ideal solution would be for FMCSA to certify that all trucking companies not only meet the minimum standard of holding authority and maintaining liability insurance but also adhere to satisfactory safety management practices. FMCSA and its state partners conduct 11,000 to 12,000 safety investigations a year. At that rate, it would take nearly 23 years to assign safety ratings to all the for-hire carriers that are active today. The bottom line is that FMCSA cannot assure that carriers – especially small carriers – are safe.
Plenty of carriers that do not have safety ratings surely are safe and responsible operations, but brokers still face questions in court over why they used a carrier with no rating instead of one with a satisfactory rating. As you might already know, that’s not a practical alternative.
As of the end of March, just 7.3% of U.S. interstate for-hire trucking firms holding active operating authority (excluding private fleets also holding authority) had a safety rating, and more than 14% of those ratings were conditional. For ease of analysis, I’m excluding the roughly 150 carriers that held unsatisfactory ratings and probably have exited the market by now.
Not surprisingly, safety ratings skew to larger carriers. More than half – 58% – of carriers with more than 100 trucks have safety ratings. Nearly 82% of carriers with 501 to 1,000 trucks are rated, all but three satisfactorily. Virtually all for-hire carriers with more than 1,000 trucks have satisfactory safety ratings.
At the other end of the spectrum, only 4.2% of active for-hire carriers with 1 to 5 trucks hold safety ratings, and about 19% of those ratings are conditional. Only 2.6% of carriers with a single truck have safety ratings, and about 19% of those also are conditional. Put another way, just 3.4% of carriers with 1 to 5 trucks hold satisfactory safety ratings while just 2.1% of one-truck carriers are so rated.
While the number of carriers that are rated is very small, the amount of capacity associated with carriers that are rated is far more substantial. About 44% of for-hire trucks and 43% of for-hire drivers are linked to carriers that have satisfactory safety ratings.
Of course, that means that a majority of trucks and drivers are not associated with satisfactorily rated carriers, and that is especially true for the capacity that brokers rely on. FTR estimates that for-hire carriers with 1 to 5 trucks operate more than 382,000 trucks, but just 18,000 of those trucks are operated by carriers with satisfactory safety ratings.
The Supreme Court’s opinion is quite important even if it is hardly shocking. It confirms that brokers need to take reasonable steps to choose carriers that they don’t consider risky – something they should have been doing all along. The lack of a “red light/green light” standard is not an excuse to do nothing.
If there’s anything that remotely could be considered a silver lining to the dark cloud of cargo fraud and theft it’s the explosion in vetting solutions that employ not only the data from FMCSA’s databases but also a host of other inputs, including such cutting-edge technologies as nationwide highway surveillance by video that can be analyzed by artificial intelligence and voice ID applications that can determine whether truck drivers are who they claim to be.
Surely, brokers can leverage such technologies to identify operations that are shaky from a safety standpoint just as they are increasingly using them to minimize the threat of stolen loads. That said, I do recognize the potential slippery slope.
Might plaintiffs’ attorneys argue that unless you employ every available solution you aren’t doing all you can? You bet. But you can’t let the perfect become the enemy of the good. You do what you can to minimize safety risk while maintaining a reasonable margin. Besides, your customers don’t want their loads destroyed, damaged, or even delayed by highway crashes, right?
The fundamental question was whether brokers have any responsibility for considering safety performance in selecting carriers, and the Supreme Court in effect said yes even though it remains unsettled what that consideration should entail.
But would the reverse outcome have been acceptable? Are we prepared to say that brokers bear no responsibility for considering safety – that all that matters is whether FMCSA allows a carrier to operate? Some brokers still say yes, but it’s not an easy stance to defend.
Sure, it would be great if we could count on FMCSA operating authority as a badge of adequate safety, but that’s not the reality and won’t be anytime soon. Meanwhile, lives quite literally are at stake. At a minimum, shouldn’t safety be a shared responsibility of everyone involved in the transportation chain?
At least for now, brokers must decide for themselves what represents a reasonable standard of care when selecting a carrier. Perhaps that’s frustrating, but the situation is not fundamentally different than it was before May 14.
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