Montgomery v. Caribe: Brokers Can Be Sued Now. Your Paperwork Is Their Defense.

Four days after the Supreme Court handed down Montgomery v. Caribe Transport II LLC, the Fourth Circuit had already vacated a broker's summary judgment and sent the case back to district court. The litigation wave didn't build slowly. It started the same week.

If you run a small fleet, that timeline should focus your attention.

What the Court Actually Did (and Didn't Do)

The May 14, 2026 ruling was unanimous — 9-0. The Court held that the Federal Aviation Administration Authorization Act does not preempt state-law negligent hiring claims against freight brokers. Brokers can now be sued under state tort law for choosing a carrier that causes harm.

That's a significant shift. It isn't a free-for-all.

Justice Kavanaugh's concurrence, joined by Justice Alito, drew a limiting line: brokers that vet carriers reasonably "should be able to successfully defend against state tort suits." The door is open for plaintiffs. It isn't propped open forever for every claim.

What matters for carriers is the underlying allegation in Montgomery itself. The plaintiff alleged that C.H. Robinson knew or should have known that Caribe Transport carried a conditional safety rating and had documented deficiencies in driver qualifications, hours-of-service compliance, and vehicle maintenance — and that dispatching that carrier was unreasonably dangerous. That's the blueprint plaintiff attorneys will use from here on out. The carrier's paperwork failures were the story, not just the crash.

Triple-Digit Premiums and a Market Trying to Find Its Floor

The insurance market didn't wait for the first post-Montgomery verdict. Greg Feary, president and managing partner of Scopelitis Law, recalled an insurer that tripled a broker client's premiums within one week of the ruling.

One week.

"Everyone is predicting that broker liability insurers will increase rates simply because they will expect a higher frequency of allegations. Because they cannot predict where this will go, they will likely be far more conservative."

— Greg Feary, president and managing partner, Scopelitis Law

July 1, 2026 was the first major renewal cycle post-Montgomery. Some brokers watched excess liability limits get cut in half while deductibles doubled. One broker's $10 million aggregate limit became a $5 million single-claim cap covering only one incident.

Andy Dyer, CEO of AFS Logistics, watched insurers react in real time.

"They are not hitting the panic button. They are hitting the get-rich-quick button."

— Andy Dyer, CEO, AFS Logistics

Dyer noted that AFS — a broker that routinely uses hundreds of carriers and has maintained detailed safety protocols throughout — was still warned to expect a steep increase on its broker liability policy. Carriers with strong safety track records are getting hit because insurers can't calibrate the risk yet. The market is repricing everything while it figures out what anything is worth.

The Discovery Playbook Plaintiff Attorneys Already Have

The discovery exposure is as dangerous as the verdict exposure. Most broker-industry analysis skips that part.

Cases that once died at summary judgment on FAAAA preemption grounds will now survive into full discovery. That means depositions, document production, months of legal fees — even when the broker eventually wins. The cost of defending is now real regardless of outcome.

What will plaintiff attorneys demand? FMCSA safety data, SAFER reports, inspection histories, BASIC percentile scores, prior out-of-service violations, conditional safety ratings, authority age, crash histories, and all broker-carrier communications. The carrier's onboarding and approval documentation becomes central evidence in negligent selection cases.

Here's the turn that matters for small fleets: brokers will gather that paper trail before a lawsuit gets filed. They'll gather it during carrier onboarding and load tendering — to build their own litigation defense. Your DQ file, your CSA record, and your inspection history aren't regulatory overhead anymore. They're the evidence a broker's legal team will use to prove they chose you wisely.

No Federal Standard. Fifty State Standards.

The Supreme Court left "reasonable care" undefined. What qualifies as adequate broker vetting will be determined state-by-state. A small fleet running interstate freight could face different legal scrutiny depending on where an accident happens, and the standards won't line up across jurisdictions.

Feary put the consequence plainly:

"Until we see what a reasonable standard of care is, shippers probably will gravitate more toward larger freight brokers who have more sophisticated systems and processes for carrier vetting."

— Greg Feary, president and managing partner, Scopelitis Law

The same logic applies to carriers. Without a defined federal benchmark, size and documentation depth become proxies for safety credibility. That's not fair. It's how risk gets priced when nobody knows what the rules are.

Before the ruling, amici warned the Court that a decision favoring the plaintiff could lead brokers to overlook smaller carriers "regardless of their individual safety records." The Court ruled anyway. That concern is now the industry's problem to manage.

Schneider's brokerage operation cut its active carrier network from roughly 60,000 in 2022 to fewer than 14,000 by the time of the ruling — a culling that predates Montgomery but points exactly where the whole market is now headed. Bigger brokers with legal departments will define what "reasonable vetting" looks like. Small carriers will be measured against that standard whether or not they had any input in setting it.

Your Compliance File Is Now a Sales Document

Here's the part that actually benefits the small fleet that has been running clean.

Brokers are going to document their vetting process to build a litigation defense. They need carriers who give them something worth documenting. A small fleet with a complete, current, organized compliance record is a lower-liability selection. A fleet with gaps in its driver qualification file — a missing MVR, an expired medical card, a drug test record nobody can locate — is a reason to call the next carrier on the list.

Chris Vogel, senior vice president of transportation practice at Cottingham and Butler, framed it as a market shift:

"There will be increased demand and a premium placed on high-quality motor carriers."

— Chris Vogel, SVP of transportation practice, Cottingham and Butler

That's not a compliment. It's a warning about who gets loads and who doesn't.

The practical move right now: treat your MVRs, drug test records, medical cards, Clearinghouse enrollment, CSA scores, and inspection history as materials a broker's legal team might review before they tender a load. Because post-Montgomery, they might. If all 18 driver qualification documents required under 49 CFR Part 391 are current and in one place — not scattered across a filing cabinet and three email threads — you hand a broker exactly what they need to document a defensible selection decision. That's what FleetCollect's DQF Compliance Portal is built for: one organized, current file that survives scrutiny.

The ruling doesn't change whether you're a safe carrier. It changes whether you can prove it fast enough for a broker who's watching their insurance premium climb and looking for any reason to thin their network. Small fleets that have always run clean but kept sloppy records are about to find out the hard way that the paper trail is the only trail that counts in court. Get your file in order before a broker culls you out of their network to protect themselves from a lawsuit that had nothing to do with you.

Photo by Daniel Prado on Unsplash