The Impact of Montgomery v. Caribe Transport II on Liability

By: Kapil Mohan

At Gallagher Bassett, we believe timely and effective communication is the cornerstone of excellence in our business, enabling us to maintain trust, alignment, and confidence with our clients and partners. To continue delivering service excellence, our team remains up to date with new or amended laws and helps our clients navigate these changes through our team's expertise and solutions tailored to their programs.

The US Supreme Court's unanimous decision in Montgomery v. Caribe Transport II, LLC is a significant development for the transportation and logistics industry. In simple terms, the ruling makes clear that freight brokers can be sued under state negligence law for hiring unsafe trucking companies.

This decision changes the level of accountability for businesses involved in freight brokerage, transportation, and logistics. Organizations that select motor carriers must be able to show that they did so responsibly and that they can document the basis for those decisions.

What the Court decided

The Supreme Court held that freight brokers aren't broadly shielded from state negligence claims when those claims involve safety-related issues, such as the selection of a motor carrier.

Historically, brokers often relied on federal preemption defenses to get these cases dismissed early. After Montgomery, that defense is no longer as broadly available in claims tied to safety. The Court recognized that motor carrier selection has a direct connection to motor vehicle safety, and that states retain authority over safety matters even within a federally regulated industry.

Why this matters

For the transportation industry, this decision is likely to mean:

• More freight brokers named in lawsuits
• Greater scrutiny of carrier selection, vetting, and onboarding practices
• More aggressive discovery into emails, safety checks, and selection rationale
• Longer claim timelines and increased defense costs
• More coverage and indemnity disputes among brokers, carriers, and insurers

What types of claims will we now see more of?

• Negligent motor carrier selection
• Failure to review safety ratings or compliance history
• Failure to follow internal vetting standards

These claims focus on whether the freight broker knew or should have known the motor carrier posed a risk.

Why claims management strategy matters more than ever

The Montgomery decision reinforces the importance of a proactive claims strategy. In an environment where plaintiff attorneys are likely to dig deeper into broker practices, the quality of early claims handling becomes critical.

That means focusing on:

• Early identification of broker involvement
• Prompt collection of carrier vetting and contract documents
• Coordination between broker-side and carrier-side defense teams
• Clear coverage analysis at the outset
• Claim handling protocols that support defensibility throughout the life of the claim

When exposure isn't identified early, claims can become more complex, more expensive, and more difficult to resolve efficiently.

At Gallagher Bassett, we help clients respond to these evolving challenges with proactive claims strategies, stronger documentation practices, and coordinated defense support designed to improve outcomes and protect defensibility.

For more information, please reach out to your client services manager.