SCOTUS killed the broker defense; is truck leasing next?

First, the disclosure. I currently serve as a retained expert witness in multiple active matters in which equipment lessors have been named as codefendants alongside motor carriers, and nothing in this article draws on any of those case files. Every factual claim here traces to the Supreme Court’s published opinion, the United States Code, federal regulatory data and court records.

Two shields

To see what Montgomery actually changed, you have to understand that brokers and lessors have been standing behind two completely different legal walls.

The brokers’ wall was the Federal Aviation Administration Authorization Act of 1994, a deregulation statute that preempts state laws related to a price, route or service of a motor carrier or broker. For years, brokers argued that a lawsuit accusing them of negligently selecting a carrier was really a state trying to regulate their services, and therefore federally barred. Several federal appeals courts agreed. The result was a defense that worked at the motion to dismiss stage, before discovery, before a jury, before anyone examined what the broker actually knew. That is the wall that came down on May 14. The Court held that the statute’s safety exception, which preserves state authority over motor vehicle safety, saves these claims, because a duty of care in selecting the company whose trucks will be on the highway plainly concerns those trucks.

The lessors’ wall is the Graves Amendment, a provision slipped into a 2005 highway bill after jury verdicts in vehicle rental cases grew large enough that at least one major rental company threatened to pull out of entire states. The amendment, codified at 49 U.S.C. 30106, preempts state laws that made vehicle owners vicariously liable for their renters’ driving. Before Graves, states like New York and Florida held the owner of a vehicle responsible for the negligence of whoever was driving it, simply by virtue of ownership. Graves ended that for companies engaged in the trade or business of renting or leasing motor vehicles.

The difference between the two walls is the entire story. Graves protection applies only where there is no negligence or criminal wrongdoing by the owner. The shield covers liability based solely on ownership. It has never covered the leasing company’s own conduct. Negligent maintenance claims survived Graves. Negligent entrustment claims survived Graves. A claim that the rental company itself failed to exercise reasonable care in the transaction was never preempted, not in 2005 and not today.

Brokers had categorical immunity and just lost it. Lessors never had categorical immunity at all. The door in the Graves Amendment has been standing open for twenty years. What protected the commercial leasing industry through those twenty years was not the statute. It was the absence of any developed standard for what reasonable care means when the customer is not a college kid renting a box truck but a federally regulated motor carrier with a public safety record. Nobody had authoritatively said what a leasing company is supposed to check.

On May 14, the Supreme Court said what a broker is supposed to check. The migration of that standard across the parking lot is now just a matter of pleading.

The causation hierarchy is backward

Consider what each upstream party actually contributes to a catastrophic crash.

The shipper has freight and wants it moved. The broker matches the freight to a carrier for a single load, often in minutes, often through automated systems, often without any relationship beyond the transaction. Justice Kavanaugh’s concurrence in Montgomery, joined by Justice Alito, made a point of this: brokers may not always, or even often, be in a good position to objectively assess the relative safety of different trucking companies. He predicted that brokers who ask hard questions and arrange transportation with reputable carriers should be able to defend these suits successfully, and that ordinary proximate cause rules would protect them from excessive liability. Fair enough.

Now apply the same knowledge and proximity analysis to a full-service commercial lessor, and watch the hierarchy invert.

The lessor does not touch the carrier for one load. It signs a lease term measured in years. It runs a credit underwriting process on the carrier before a unit changes hands, which means it already examines the customer more closely than any broker does when evaluating a carrier for a tender. Under a full-service lease, the lessor performs the maintenance on the vehicle, which means its own technicians see the condition of the equipment, the abuse, the deferred repairs, the miles. In many arrangements, the lessor’s systems see telematics data from its own units. The lessor has a continuous, contractual, revenue-bearing relationship with the carrier for the life of the lease, and a repossession right that gives it leverage no broker ever had.

The lessor supplies the instrument itself. The Supreme Court’s holding turned on the phrase with respect to motor vehicles, which the Court read to mean concerns motor vehicles. A broker’s carrier selection indirectly concerns motor vehicles: it determines which trucks haul a load. A lessor’s decision concerns a motor vehicle in the most literal sense the English language offers. The truck involved in the crash is the lessor’s. Its name is on the title. If a duty of reasonable care follows knowledge, proximity and control of the instrumentality, then the entity with the deepest knowledge, the longest relationship and legal title to the vehicle sits above the broker in the responsibility chain, not below it. The industry has spent a decade litigating the matchmaker’s liability while giving the armorer a pass.

A consumer standard doing commercial work

The reason that pass has held is that the law of negligent entrustment in the rental context was built for a different transaction, and it has been doing work it was never designed for.

The existing case law grew up around the consumer rental counter. Its questions are consumer questions: Did the renter present a valid driver’s license? Was the renter visibly intoxicated? Was there some obvious, observable incompetence at the counter? Courts have generally held the bar there low. At least one California decision concluded that a rental company has no duty even to check a customer’s driving history before handing over the keys. For a consumer transaction, there is a defensible logic to that: the rental company knows nothing about the customer, has no practical means of knowing more, and the state licensing system is the designated gatekeeper of driving competence.

Put a motor carrier on the other side of the counter and watch every one of those premises fail. A motor carrier customer is not an information void. It carries a USDOT number that unlocks, in public federal databases, its safety rating, its roadside inspection history, its out-of-service rates, its crash record, its driver and vehicle violation patterns, its insurance filing history, its authority history including every revocation, and its age as a regulated entity. This is the data the Supreme Court just held put C.H. Robinson on notice about Caribe Transport. The conditional safety rating that anchored Montgomery’s claim was one lookup away. A leasing company that hands fifty tractors to a carrier is in possession of the carrier’s federal identifier, which means the carrier’s entire public safety record is one query from the desk where the lease is signed.

The question a jury will eventually be asked, in some courtroom, in some state, is simple: if a broker exercising ordinary care must consult the public safety record before tendering a single load to a carrier, what does ordinary care require of the company that leased that carrier the truck itself, for three years, after running a credit check but not a safety check?

I don’t know a persuasive answer that ends with nothing.

What reasonable care would actually look like

None of this implies that a rental counter must become a compliance department, and the version of this argument scales the duty to the transaction because the informational position of a daily commercial rental and a five-year full-service lease is different.

At the transactional end, a same-day rental of a single unit to an established carrier, reasonable care plausibly looks like what a competent broker’s minimum screen now looks like post-Montgomery: verify active operating authority, verify insurance on file, and confirm the carrier is not operating under an out-of-service order or an unsatisfactory or conditional rating. That is minutes of work against free public data, and the technology to automate it at the counter has existed for years.

At the relationship end, a multi-unit, multi-year, full-service lease, the analysis deepens because the knowledge deepens. The lessor is already underwriting the carrier’s finances. A safety underwrite alongside the credit underwrite would examine authority age, inspection and out-of-service history, crash record and rating status at origination, and, critically, at renewal, because the lessor is one of the few upstream parties with a natural periodic checkpoint and a contractual remedy. A carrier whose safety profile collapses in year two of a lease is a carrier the lessor is actively maintaining trucks for while the public record deteriorates. The broker sees the carrier once. The lessor watches it decay in its own service bays.

More than that, I’d argue that the leasing company, through USS debtor filings, knows a chameleon and a bad actor long before anyone else does, because they, like the factors, already know who really has the deepest ties to the carrier’s true identity and stakeholders.

There is a category of signal that the leasing industry is positioned to see.

The equipment on-ramp

Reincarnated carriers, the operations that crash, dissolve and reappear under a fresh USDOT number, have a structural problem: equipment. A new entity has no credit history under the new name, no capital, and needs power units immediately, because the freight never stopped. The formation documents can be filed overnight. The authority can be granted in weeks. The trucks are the hard part, and the solutions to the hard part are a short list: title the equipment to a related leasing entity that survives the carrier’s death, or rent and lease from the commercial fleet.

My published network investigations have documented the first pattern extensively: equipment held by affiliated leasing companies while operating authorities churn underneath it, the trucks constant, the carrier names disposable. Federal court records and reporting have documented individual vehicles cycling through a half dozen successive authorities. This is where the Graves Amendment contains a provision the plaintiffs’ bar has barely used. Graves extends its protection to an owner or its affiliate, and defines affiliate around common control, a structure a New York federal court examined in Stratton v. Wallace, where the leasing entity and the motor carrier shared a common parent. When the leasing company and the carrier are the same people wearing two entities, the statute itself contemplates that the analysis changes. In the chameleon networks, the same people wearing two entities is not the exception. It’s the design.

The second pattern, the commercial fleet as the on-ramp. The federal inspection and crash files record which carriers operated which vehicle identification numbers on which dates. Title records establish who owned them. The analysis runs those against each other: what share of crash-involved power units were operating under authorities young enough to have no meaningful safety record, what a unit’s odds of appearing in the crash file look like once it has churned through three or more authorities in three years, and, from a reproducible sample of fatal-crash vehicles run through the national title database, what share were titled to equipment leasing and rental companies at the moment of the crash.

What the fed data shows

Most trucks live their federal lives under one carrier. Of the 6,646,349 VINs appearing in inspection and crash records, 88.2 percent were operated by a single DOT number. The other 781,285 units, about one truck in eight, ran under two or more carriers. Nearly 120,000 ran under three or more. That smaller population is where rental pools, full-service leases, and chameleon fleets all live, because those are the business models in which the truck is the constant, and the company is the costume.

Put the crash file next to the churn file. Trucks that stayed with one carrier have appeared in crash records since 2021 at a rate of 8.9 percent. Trucks that ran under two carriers: 19.3 percent, more than double. Three carriers: 24.9 percent. Four or five: 26.2 percent, just under three times the single-carrier rate. The fatal-crash rate climbs the same hill, from 0.28 percent for one-carrier trucks to 1.12 percent for units that cycled through six or more carriers, roughly four times the baseline, though that last group is small, 1,253 trucks, and I would not hang a verdict on it alone.

First, crash records themselves feed the carrier count, so a truck that crashes under its second operator is mechanically counted as a two-carrier truck. That inflates the association at the margin. It does not manufacture a threefold gradient. Second, this is association measured over the same window, not causation. Nothing here proves that changing hands makes a truck crash. What it proves is narrower and, for a duty analysis, sufficient: the equipment that moves between companies is the equipment that shows up in crash records at double and triple the rate of equipment that stays put, and the entities in the best position to see that movement are the ones whose business is supplying the equipment.

The new-entrant slice is smaller than the churn numbers. Of 424,756 crash-involved units since January 2023 that match a carrier in the federal census, 2.45 percent were operating under an authority younger than 12 months at the time of the crash, and 4.14 percent were operating under an authority younger than 18 months. Small percentages. 17,586 trucks is not a small number, and every one of them was crashed by a company too young to have completed the federal new-entrant monitoring period, which means it had no safety record for anyone to check. The broker could not have vetted its history. Neither could the shipper. The only entity that ran any screening on that carrier before it put a truck on the road was the credit department of whoever supplied the equipment.

One more thing fell out of the fatal-crash data that I did not go looking for. I drew a reproducible random sample of 500 post-2023 fatal-crash power units for title verification. In 79 of those 500 records, nearly one in six, the crash record carries no DOT number at all. A person died, and the federal record cannot say what company was operating the truck. Whoever holds the title to those units knows.

Finally, the related-party pattern, which is where the Graves Amendment’s affiliate problem is real, I took every crash-involved truck that ran under three or more carriers and asked which pairs of those carriers share a company officer or a physical address in the federal census. Among the top 100 pairs ranked by shared crash-involved equipment, 82 share an officer. In 62 of them, the officer’s name on both carriers is identical, the same person listed on both companies that traded the same crash-involved trucks. Thirty-two pairs share a physical address. Those 100 pairs alone account for 273 crash-involved high-churn units. Not one of the carriers in those pairs carries a prior-revocation flag in the census. On paper, each of them is a new company. In the equipment record, they are the same fleet wearing two names, and when one of those names is styled as a leasing company, the statute Congress wrote to protect Ryder, Penske, Idealease, Enterprise, etc., from a customer’s negligence is being claimed by an entity leasing trucks to itself.

The structural point stands on the record. The lifecycle that federal regulators have acknowledged and the media have documented requires equipment; the equipment has to come from somewhere, and every path it can come from runs through an entity that had the carrier’s USDOT number in hand and a decision to make.

The case for the leasing industry, stated fairly

There is a real argument on the other side. The Graves Amendment exists because the pre-2005 regime was genuinely broken. Vicarious liability based on bare ownership meant a rental company could be held responsible for a renter’s conduct it had no ability to observe or control, and verdicts under that regime grew large enough to threaten the availability of rental vehicles in whole jurisdictions. Congress concluded that the entity best positioned to prevent a crash is the one operating the vehicle, and that ownership alone is not fault. That judgment was reasonable then and is reasonable now.

The cost argument is also real, and Justice Kavanaugh made its broker version in his concurrence: litigation and insurance costs cascade through the economy and land on consumers. For leasing, the cascade has a sharper edge. Rented and leased equipment is how small and new carriers exist at all. A vetting duty calibrated wrong, one that prices new entrants out of equipment access entirely, does not clean up the industry. It consolidates it, handing the market to the largest fleets while the marginal operators migrate to exactly the related-party leasing structures that are hardest to reach. And the carrier, not the lessor, remains the federally regulated party. The lessor holds title; the carrier holds the safety obligations. There is a coherent view in which asking lessors to screen carriers duplicates a function that belongs to FMCSA, and FMCSA’s failures should be fixed at FMCSA.

All true. And all of it was true of brokers on May 13, and none of it carried the day on May 14. Kavanaugh wrote in his concurrence that truck safety is a matter of life and death, and the Court’s answer to the cost cascade was not that the concern was illegitimate but that it does not override a state’s authority to demand ordinary care from the parties whose decisions put trucks on the road. The leasing industry should study that outcome closely, because its own version of the argument is weaker in the one place that matters. The broker could plausibly say it never sees the truck. The lessor’s name is on the title.

What happens now

Nothing in Montgomery changed the text of the Graves Amendment, and no court has yet extended the decision’s reasoning to an equipment lessor. That is precisely why this is the moment to look at it: the mechanism by which it will happen is already in motion.

Within days of the decision, a federal appeals court sent a broker case back down for another look in light of Montgomery. Plaintiff intake screening across the country now includes a standard question: Was a broker involved? The next question, in any case involving rented or leased equipment, costs nothing to add: who owned the truck, what did they check, and when? The claims will be pleaded as negligent entrustment and negligent rental, the theories Graves always preserved. The standard-of-care evidence will be the same public data stack that Montgomery blessed. Discovery will ask the lessor for its underwriting file, and the underwriting file will show a detailed credit analysis and no safety analysis, and a jury will be invited to draw the obvious conclusion about what the company valued.

The leasing industry has a window that will determine whether it spends the 2030s as the trucking bar’s next deep pocket. The playbook is not mysterious because the brokers are writing it as we speak. Adopt a written carrier screening standard, run it against the free federal data at origination and renewal, build the escalation path for carriers whose profiles collapse mid-lease, and document it all. The companies that do this will be the ones Kavanaugh described, the ones that asked hard questions and can defend themselves. The companies that keep underwriting the credit and ignoring the safety record are betting their balance sheets on the proposition that no court will ever read Montgomery’s logic across the parking lot.

It is a bad bet. The Supreme Court just held unanimously that in this industry, the duty to check is the price of participation. Brokers are paying it. Shippers are assessing their exposure. The companies that own the trucks had better be doing the same.

The truck that ends up in the median has a title, and the title lists a name. Sooner or later, a jury is going to ask that name what it knew.