You vet your carriers. You check their safety ratings. You think you’re covered. You might want to think again.
On May 14, 2026, the Supreme Court of the United States issued a unanimous 9-0 decision that upended a legal defence that freight brokers, forwarders, and 3PLs had relied on for years. As a result, transport service intermediaries (including those based in Canada) can now be sued anywhere in the United States for negligent carrier selection under state tort law. This decision materially increases litigation exposure and will most likely result in a number of significant operational, contractual, and insurance changes in the transportation and logistics industry.
If you arrange the movement of goods into, out of, or through the U.S., whether you are based in Dallas or Toronto, this decision affects you directly. The question is not whether your exposure has increased. It has. The question is what you’re going to do about it.
This article breaks down what the Supreme Court decided, what it means for your day-to-day operations, and the specific steps brokers, forwarders, and 3PLs should take right now to reduce their risk.
What did the U.S. Supreme Court decide?
The case began with a 2017 highway accident in Illinois. In Montgomery v. Caribe Transport II, LLC [Caribe], Caribe Transport, a motor carrier with a Conditional safety rating, was engaged by broker C.H. Robinson to haul a load. The carrier collided with the plaintiff, causing catastrophic injuries.
The plaintiff’s argument was straightforward: C.H. Robinson knew, or should have known, that engaging a carrier with a Conditional safety rating created an unreasonable risk of injury to other people on the road. That’s negligent carrier selection, and it’s a tort claim under state law.
The broker’s defence was equally straightforward: federal law pre-empts those claims. The Federal Aviation Administration Authorization Act (“FAAAA”) gives federal authority over interstate transportation, prohibiting states from enforcing laws “related to a price, route, or service” of motor carriers. Carrier selection, the broker argued, is a core service, therefore, state negligence law shouldn’t apply. For years, courts across the country split on this question. Some circuits sided with brokers. Others didn’t. The U.S. Supreme Court’s May 2026 ruling resolved that divide, decisively, and against the industry.
This decision is significant because it resolves a long standing divide between the appellate courts in different parts of the United States.
Implications for brokers, forwarders and 3PLs
This decision has implications not only for U.S.-based intermediaries, but also for Canadian entities engaged in arranging the cross-border movement of cargo, requiring heightened diligence, stronger documentation, and proactive risk management. Liability would be governed by the state where the accident occurs.
Transport service intermediaries should be mindful of the following key implications of this U.S. decision:
- Expansion of direct liability: The defence of FAAAA pre-emption no longer aplies when faced with negligent carrier selection claims. Intermediaries can now be direct defendants in bodily injury and catastrophic loss claims arising from trucking accidents, resulting in increased litigation exposure and severity (Note that this may also apply to upstream shippers and cargo owners).
- Elevated standard of care: Courts will expect that intermediaries are exercising a reasonable degree of care when selecting and retaining motor carriers. Brokers, forwarders and 3PLs should ensure that they have robust vetting procedures, including ongoing monitoring, and contemporaneous documentation related to the entire process, including for each motor carrier. It is expected that this documentation will be produced and heavily scrutinized during the litigation process.
Motor carriers should realize that as a result of this decision, they will be subject to increased scrutiny by brokers, forwarders, and 3PLs, and should ensure that they are also taking steps to address safety compliance.
The operational changes you should be making right now
This ruling is not a future challenge. It applies to every U.S. lane you’re running today. Here is the practical framework for reducing your exposure:
Step 1: Audit your current carrier vetting standards
Start with a clear-eyed review of what your current process actually is- not what your policy document says, but what your team is actually doing. Are minimum safety thresholds defined and documented? Are they being applied consistently? Are there exceptions being made without documentation? Define explicit minimum criteria: what safety ratings will you accept? What inspection history is disqualifying? What will trigger a hold on engagement pending further review? Old vetting policies may need to be replaced, particularly if they are inconsistent with what you are actually doing / plan to do.
Step 2: Build ongoing monitoring into your process
One-time vetting at onboarding is no longer sufficient. Courts will ask what you knew about a carrier’s safety status at the time of arranging the specific load, not just when you first added them to your approved carrier list. Implement regular reviews of FMCSA (U.S. Federal Motor Carrier Safety Administration) safety data and Canadian safety fitness certificate abstracts for all carriers in your active network. Set triggers for automatic review when a carrier’s rating changes or when inspection violations are flagged. Unlike the U.S., Canada does not have a centralized database that can be checked automatically by freight brokers or service providers to verify safety ratings, abstracts, and insurance across all provinces, so manual procedures will likely need to be put in place.
Step 3: Document everything, contemporaneously
“Contemporaneous” matters. Notes and records created after an accident are far less persuasive than documentation created at the time of the decision. Your carrier vetting records, approval decisions, and ongoing monitoring logs should be timestamped and retained. This documentation will be produced in discovery if you’re ever sued. Build it as if you know someone will read it.
Step 4: Train your people
Excellent policies mean nothing if your team is not following them. Staff involved in carrier selection, dispatchers, operations teams, and procurement need to understand the standards, know how to document their decisions, and have clear escalation paths when a carrier raises concerns. Management is responsible for ensuring these procedures are being followed in practice. That responsibility does not transfer to the policy document.
Step 5: Review your contracts and insurance
Your logistics services agreements, broker-carrier agreements, and shipper contracts should be reviewed in light of this ruling. Indemnification provisions, insurance requirements, and liability allocation clauses that made sense before Caribe may need to be updated.
Your insurance broker should also be aware of this development. Errors and omissions coverage and contingent cargo liability coverage for transport intermediaries operate in a changed risk environment after this ruling.
The bottom line
Caribe is a watershed moment for the freight industry. The 9-0 ruling removes a long-relied-upon legal defence and signals that courts -and juries- will be scrutinizing how brokers, forwarders, and 3PLs make carrier selection decisions.
The good news: this is a risk that disciplined operations can manage. Strong vetting standards, ongoing monitoring, thorough documentation, and well-trained staff are the building blocks of a defensible carrier selection process. The intermediaries that invested in these practices before this ruling are better positioned than those scrambling to catch up. Don’t be the case that sets the next precedent.
Should you require assistance with reviewing and refreshing your procedures and ensuring that you are taking appropriate steps to address potential risk exposure resulting from this decision, feel free to reach out to any lawyers from Miller Thomson’s Transportation & Logistics team.
