Originally published at: BREAKING: SCOTUS rules against brokers in Montgomery case - FreightWaves
More to follow….
SAFE Freight™
The Supreme Court’s unanimous decision in Montgomery v. Caribe Transport II represents one of the most important trucking safety rulings in modern transportation history because it finally acknowledges an uncomfortable truth the freight industry has spent decades avoiding: carrier selection is itself a safety function.
For years, freight brokers defended themselves by arguing they merely “arranged transportation” and therefore should not be held responsible for the operational conduct of motor carriers. The Court rejected that argument unanimously.
Justice Barrett’s opinion makes clear that selecting a motor carrier “concerns” motor vehicles and therefore falls within traditional state safety authority. Justice Kavanaugh’s concurrence goes even further, openly acknowledging the glaring absence of meaningful federal broker safety regulation. His warning that brokers otherwise operate inside a “black hole with no meaningful safety-related regulation” may become the most consequential line in the entire case.
That observation is correct.
Under the present FMCSA framework, motor carriers are theoretically subject to audits, inspections, compliance reviews, and safety intervention. Freight brokers are not. More than 28,000 federally licensed brokers currently operate in the United States with virtually no meaningful federal safety oversight regarding how they select carriers. There is no federal broker audit system for safety procurement practices. There is no uniform federal carrier-selection standard. There is no operational review structure equivalent to what carriers theoretically face.
Yet brokers routinely coordinate shipments involving hazardous materials, toxic chemicals, explosives, corrosives, fuels, industrial gases, and other regulated cargoes moving through densely populated American highways and cities every single day. Many brokers openly market haz mat transportation services while operating without any meaningful federal safety audit regime governing how they vet carriers, drivers, equipment, maintenance practices, or operational controls.
That is extraordinary.
In practice, many brokerage operations simply verify operating authority and insurance and call that “safety.” It is not.
The modern brokerage environment increasingly rewards speed, transactional pricing, and lowest-cost procurement over operational familiarity and long-term carrier relationships. Chameleon carriers, double-brokering, shell entities, ghost process agents, recycled DOT numbers, and fraudulent insurance practices have flourished inside that environment.
The Supreme Court has now recognized that reality without directly saying so.
Importantly, this ruling does not magically solve the problem. It merely shifts the battlefield. The Court did not create a federal broker safety standard. It created liability exposure in the absence of one. That means insurers, plaintiff attorneys, juries, and eventually Congress may now become the de facto regulators of broker carrier-selection practices.
Economic consequences will be substantial.
Larger brokers and vertically integrated mega-carriers will likely adapt through enhanced vetting systems, legal departments, insurance restructuring, and procurement controls. Smaller brokers and smaller legitimate carriers may struggle under the new liability environment. Ironically, deregulation may now accelerate consolidation.
The Court reached the correct conclusion.
For too long, the freight industry attempted to separate “procurement” from “safety” even though brokers directly influence which trucks, drivers, carriers, and hazardous materials shipments appear on American highways every single day.
The truck may physically cause the crash.
But someone chose the truck.
Like its gonna fix the issue.
Problem is people are not loosing their cdls for doing stupid stuff. How can carrier prevent a driver taking drugs in the truck after he passed a clearinghouse. How can carrier prevent a drivers road rage or anything? Start taking away cdls, problem solved
I will step out on a limb and make a prediction. Since no one has bothered to defined what constitutes a safe carrier, a large number of CMV accidents involved in litigation will, in the near future, also drag in the other parts of a freight shipment – broker, consigner, consignee because each entity made a choice to entrust someone with the freight. I’ll go even further and predict that this decision will turbocharge the jackpot litigation industry by doubling / tripling the number of pockets facing exposure in a CMV accident.
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Smart people making ■■■■ conclusions = SCOTUS. How much, precisely, does a FB need to compile to have sufficient evidence to keep him clean of litigation?
Henry Seaton said it best - the more evidence a FB provides, the more fodder to be used against him. Carriers should be licensed, authorized and insured and that’s all a broker needs to do in his opinion to be legal. Guess this is thrown out the window and it’s not right …