What Did the Supreme Court Decide in Montgomery v. Caribe?
The Supreme Court’s decision in Montgomery v. Caribe Transport II, LLC clarified that freight brokers may still face state-level negligent hiring claims when they fail to properly vet motor carriers.
The Court declined to broadly apply federal preemption under the Federal Aviation Administration Authorization Act (FAAAA), meaning state tort claims related to unsafe carrier selection can proceed. This ruling increases legal exposure for brokers and raises the standard for due diligence in carrier vetting.
Key takeaway: Carrier vetting is now a legal risk issue, not just an operational task.
Why Carrier Vetting Matters More After the Ruling
Following the Montgomery decision, courts are more likely to examine how carriers were selected in the event of an accident or claim.
Shippers and brokers may face increased scrutiny in areas such as:
- Whether a carrier had a poor safety rating
- Whether insurance coverage met reasonable standards
- Whether vetting procedures were documented and consistently applied
Failure to demonstrate a structured vetting process can increase the likelihood of liability in negligent hiring cases.
What Is a Defensible Carrier Vetting Process?
A defensible carrier vetting process is one that is clearly defined, consistently applied, and fully documented.
At a minimum, companies should evaluate:
- Safety ratings from FMCSA or equivalent authorities
- Active operating authority and compliance status
- Insurance coverage, including defined minimum thresholds
In addition, companies should maintain audit trails that show when and how each carrier was approved. Documentation is often the deciding factor in legal proceedings.
Example: If a carrier with a “conditional” safety rating is involved in an accident, a company with documented policies excluding such carriers is in a stronger position than one without clear standards.
How to Reduce Liability Risk in Carrier Selection
To align with the Montgomery ruling, companies should strengthen their carrier selection strategies by focusing on consistency and compliance.
Recommended actions include:
- Establish formal, documented vetting policies
- Exclude high-risk carriers (e.g., “unsatisfactory” or “conditional” safety ratings)
- Set and enforce minimum insurance requirements
- Apply the same vetting criteria across all shipments
- Conduct regular audits of carrier selection practices
Consistency is critical. Inconsistent decisions can weaken legal defenses and increase exposure to claims.
Operational Benefits of Strong Vetting Practices
Improving carrier vetting does more than reduce legal risk—it also strengthens overall supply chain performance.
Benefits include:
- Fewer service disruptions and delays
- Reduced cargo damage and claims
- Lower insurance-related costs over time
- Improved reliability and customer satisfaction
By proactively managing carrier quality, companies can avoid many downstream issues that impact both cost and reputation.
How Companies Should Respond Now
The Montgomery v. Caribe ruling signals a long-term shift in how courts view broker and shipper responsibility. Companies should act now to evaluate and improve their vetting processes.
Start by asking:
- Are vetting criteria clearly defined and documented?
- Are standards applied consistently across all loads?
- Can the process withstand legal scrutiny if challenged?
If the answer to any of these is unclear, it may be time to update policies and strengthen internal controls.
The Bottom Line: You Need the Right Partner
Carrier vetting is no longer optional from a risk perspective. The Supreme Court’s decision reinforces that companies must take a proactive, structured approach to selecting carriers.
Ensuring your brokerage partner invests in clear policies, thorough documentation, and consistent execution will be better positioned to reduce liability, improve operations, and adapt to increasing legal scrutiny in the logistics industry. Are you ready for a new partner?
Partnering with Kenco means you’re backed by a nationwide network of thousands of trusted carriers, giving you the capacity you need exactly when and where your business demands it. If you’re ready for dependable service, competitive rates, and a logistics partner who actually shows up for you, explore how Kenco’s brokerage services can elevate your supply chain.