The Montgomery Ruling Just Changed Broker Liability Risk for Shippers
- Corey Coogan
- 3 days ago
- 3 min read
August 4th, 2026
A ruling most shippers haven't heard of is already changing how freight risk works. It has nothing to do with your own operations. It has to do with who you trust to make decisions for you.
In May, the Supreme Court stripped freight brokers of a legal defense they'd relied on for years. On paper, it's a case about broker liability. If your company depends on a broker to move freight, this ruling raises broker liability risk for shippers in ways that don't stay with the broker.
What the Montgomery Ruling Actually Says
The case is Montgomery v. Caribe Transport II, LLC, decided May 14, 2026, in a unanimous 9-0 decision. Shawn Montgomery was badly injured when a truck driven by a Caribe Transport driver hit his vehicle. C.H. Robinson, one of the largest freight brokers in the country, had arranged that load. Montgomery argued that C.H. Robinson knew, or should have known, that Caribe Transport had a conditional safety rating and documented problems with its drivers, and that dispatching that carrier anyway was negligent.
Brokers used to have a solid defense against claims like this: the Federal Aviation Administration Authorization Act, a federal law that blocks state regulation of a broker's prices, routes, and services. Lower courts disagreed on whether that protection covered negligent-hiring claims too. The Supreme Court settled it. It doesn't. The FAAAA has a safety exception, and the Court ruled that a broker's duty to use reasonable care in picking a carrier falls inside it.
Brokers can now be sued under state law for negligently selecting an unsafe carrier. The legal defense they used to knock these claims out early is gone.
Why Broker Liability Risk for Shippers Matters Even If You're Not Being Sued
This reads like a broker problem. It's not confined to brokers. When a broker's liability exposure and insurance costs climb, that cost lands somewhere. Usually it lands in the rates and contracts offered to the shippers who use them. Costs get built into pricing over time. Vetting gets slower and more cautious as brokers try to protect themselves. And it happens unevenly. Some brokers will tighten their process fast, others won't, and you won't necessarily know which is which.
The lawsuit itself isn't the issue. The issue is that you may be inheriting risk in a relationship where you have little to no visibility into how carrier selection actually happens. If something goes wrong with a carrier your broker dispatched, your supply chain and your customer relationships sit downstream of a decision you didn't make and can't see.
This is part of why more shippers are moving toward tools that put that visibility back in their own hands. A cloud-based TMS built for shippers, not brokers, puts carrier data and selection criteria in front of you instead of a third party.
The Questions Shippers Should Be Asking Their Brokers Now
Whether or not you're ready to change how you manage freight, this is a good moment to ask your current broker a few direct questions:
How do carriers get vetted before dispatch, and how often does that data get refreshed?
What documentation exists for carrier qualification and safety history?
Has insurance coverage or the claims process changed since May?
What happens if a carrier's safety rating changes mid-contract?
Good answers are reassuring. Vague ones tell you something too.
What "Owning Your Freight" Looks Like in Practice
Asking better questions is a fine first step. It still leaves you depending on someone else's answers, someone else's documentation, someone else's definition of reasonable care.
Managing carrier selection directly is the alternative. With TMS software for shippers, you get direct access to carrier safety data, selection criteria you control, and a record of why a carrier was chosen for a given load, instead of a black box sitting one layer upstream of your business. For LTL freight, LTL shipping software built for the shipper side means you're the one making the call, not hoping someone else made it well.
This doesn't mean every shipper needs to cut brokers out entirely. It means the shippers in the best position heading into this shift aren't fully dependent on a relationship they can't see into.
Closing
The Montgomery ruling changes what brokers are exposed to. It's also a reason to look hard at how much control you actually have over your own supply chain risk. If you're not sure how your current carrier vetting works, that's usually the first sign it's worth checking.
