The Blind Spot Closes – Forwarding Intermediary Liability After Montgomery v. Caribe Transport II

What Thirty Years of Misdirected Litigation Missed — and Why It Matters Now

Forwarding Intermediary Liability After Montgomery v. Caribe Transport II

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GUEST EDITORIAL

For thirty years, the company at the center of nearly every vehicle repossession in America has been legally invisible.

Not protected by any statute. Not defended by a court ruling. Just invisible — to the two plaintiff bar disciplines that handle repossession litigation, and to the plaintiff attorneys who could have reached it at any point using legal theories that predated the forwarding model itself.

That company is the repossession forwarding intermediary. And its blind spot is closing.

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What a Forwarding Intermediary Does

Most people outside the repossession industry — including most attorneys — have never heard of a forwarding intermediary. That invisibility is not incidental. It is structural.

A forwarding intermediary sits between the lender and the field recovery agency. When a borrower defaults on a vehicle loan, the lender typically does not call a tow operator directly. It calls a forwarder. The forwarder receives the assignment from the lender, selects which field agency attempts the recovery, routes the account through its dispatch system, manages performance metrics, and controls which agencies stay in its vendor network based on results.

Federal transportation law has a name for this function. Under 49 U.S.C. §13102(2), a person who arranges transportation by motor carrier for compensation is a freight broker. A forwarder selects field recovery agencies — which are motor carriers — and routes those assignments for compensation. The definitional fit is precise.

On the largest forwarding platforms, this function operates at scale most people do not appreciate. One major platform documented a vehicle recovery every two minutes through a network of more than 800 contracted agencies. CFPB market research documented forwarder usage growing from 31 percent of repossession assignments in 2018, peaking at approximately 69 percent in October 2022 before settling into the mid-60 percent range by year-end.

Thirty Years of Invisibility

Two plaintiff bar disciplines have handled repossession litigation for decades without either one looking upstream at the selection layer.

The consumer protection bar — FDCPA attorneys, UCC practitioners, state consumer protection lawyers — handles repossession cases. Their frame is built around the borrower’s experience: what happened at the property, what the agent said, whether the peace was breached. The forwarding intermediary is not in that story. It never appears at the property.

The motor carrier personal injury bar handles broker selection cases. They know how to run FMCSA database checks, read CSA safety scores, and present a thin vendor file to a jury as evidence of negligent selection. But repossession cases have not historically landed on their desks — they arrive, always, at the consumer protection bar’s door.

The forwarding intermediary sat in the gap between those two disciplines. Visible to neither. Named in no reported case on a negligent selection theory. Not because the law blocked it — the legal theory was available the entire time — but because no one who could use it had reason to look.

What Montgomery Changed

On May 14, 2026, the Supreme Court decided Montgomery v. Caribe Transport II, LLC unanimously. The question was whether state negligent selection claims against freight brokers are preempted by federal transportation law. The answer, 9-0, was no.

The Court held that the safety exception at 49 U.S.C. §14501(c)(2)(A) — which preserves state laws concerning highway and motor vehicle safety — saves those claims from federal preemption. A negligent selection claim targeting a broker’s decision to route an inadequately vetted motor carrier onto public roads fits squarely within that exception.

Montgomery did not change the law that applies to repossession. The nonconsensual towing carve-out had already preserved state authority over repossession towing. The negligent selection theory was always available. What a 9-0 Supreme Court opinion does is get read — by every plaintiff attorney in every practice area where broker selection decisions are relevant.

The motor carrier PI bar reads it and sees: broker, selection decision, motor carrier, ordinary care. That is their case type. The consumer protection repossession bar reads it and sees: an upstream selection decision in every case it has ever filed, never reached for. Neither bar changed its legal theory. Both aimed what they already had at a target they had not previously identified.

The Record the Industry Already Built

The forwarding model created, as a routine byproduct of its normal operation, a comprehensive contemporaneous record of every selection decision it ever made.

Fee schedules unchanged for twenty years — documented in the forwarder’s own contract management system across every vendor agreement in its network. Assignment churn logs where throughput was the operative metric, not fitness. Performance systems measuring close rates and response times, measuring nothing about conduct or consumer safety. Complaint routing records showing disputes resolved by scorecard adjustment, without investigation, without assignment suspension.

These records predate any litigation. They were produced without awareness that they would ever be reviewed. In the hands of a well-prepared plaintiff team, they are not an incident on trial. They are a system on trial.

The Paper Shield

The forwarding industry did not overlook liability risk. It managed it — with indemnification clauses in every vendor agreement, requiring the field agency to indemnify the forwarder for claims arising out of the recovery.

Those clauses were designed for a specific theory: liability originates in field conduct and travels upstream to the forwarder. The negligent selection theory does not work that way. It originates at the forwarder’s desk — at the moment of the selection decision, before the agency ever touched the account. A clause covering field-conduct claims does not address a tort the forwarder committed independently. Courts in most jurisdictions require explicit, unambiguous language to enforce indemnification of a party’s own independent negligence. That language is not in the standard forwarding vendor agreement. It was never commercially viable to include it — no agency operating under compressed fees would have signed it.

Even if the clause language were adequate, a second independent barrier operates in most states. By 2016, 42 states had enacted motor carrier anti-indemnification statutes. These statutes render void — as a matter of public policy — any provision requiring a motor carrier to indemnify a non-motor carrier for the non-motor carrier’s own negligence. The forwarding intermediary is not a motor carrier. The field recovery agency is. The statute describes the forwarding vendor agreement precisely, and it voids the indemnification clause before the contract language is even examined.

There is a structural irony the industry should sit with. The nonconsensual towing carve-out that indicates FAAAA preemption does not protect the forwarder is the same legal feature that kept those anti-indemnity statutes enforceable the entire time. The carve-out that removes the preemption argument cuts against the forwarder twice.

The downstream consequence for field agencies is direct. SCRA violations, automatic stay violations, lien loss claims, wrongful repossessions — claims where liability traces not to agency field conduct but to upstream information failures the agency had no means to verify — have routinely been settled with the indemnification clause as the cost-allocation instrument. That mechanism may have been void or unenforceable under applicable anti-indemnity statutes from the day the vendor agreement was signed.

For forwarding operations and lenders, the consequence runs in the other direction. When the contractual shield is stripped, the forwarder must defend the negligent selection claim on its own merits. The lender, still carrying its non-delegable exposure under UCC §9-609, sits at a defense table with a co-defendant whose vendor network was contractually represented as adequate — and is now, on the record, something less. The lender’s rational response is a cross-claim against the forwarder. What was structured as a unified defense fractures into competing interests at the same table.

The Operational Answer

There is an answer to the ordinary care question. It requires building the right record before anyone is looking — not after discovery has been served.

The Peace Point System™ is the only published, measurable, field-tested breach-of-peace threshold framework in the repossession industry. It provides the scoring framework, the mandatory stop threshold, the Statement of Recovery protocol, and the supervisory review cadence that together produce the record an ordinary care defense requires. It originated in the field, in the circumstances that make abstract policy real, and has been refined across more than a decade of practice.

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By Carl W. Carico

About the Author:

Wes Carico is a repossession industry analyst, author of the Georgia Personal Property White Paper, Professional Standards in Repossession Volumes I & II, Peace Under Pressure and a principal of Artis Recovery.

Contact: https://ccarico.com

This article is provided for informational purposes and does not constitute legal advice