By common law and statute, Florida imposes vicarious liability on lessors of motor vehicles for the negligent acts of the lessee/operator. Vanguard filed a lawsuit in U.S. District Court (M.D. Fla.) for a declaratory judgment that the Graves Amendment preempted any claims against the Vanguard companies for wrongful death or bodily injury in connection with the Davis accident. The decedents’ estates and surviving spouses sued the rental car companies in Florida state court for wrongful death.
The wrongful death actions were removed to federal court and consolidated with the declaratory judgment action. The parties moved for summary judgment and the District Court granted judgment in favor of the Vanguard companies, holding that the Graves Amendment, 49 U.S.C. 30106(a), preempted all of the state tort claims. The plaintiffs appealed.
In Florida, a rental car company can be held liable under the “dangerous instrumentality” doctrine, which imposes strict vicarious liability on the owner of a motor vehicle who voluntarily entrusts that vehicle to an individual whose negligent operation causes damage to another. The law also imposes a damage cap. The Graves Amendment states that rental car companies cannot be held liable for renting a car to an individual who, through his own negligence, causes damage. The savings clause of the Graves Amendment states that state law will not be preempted if it is a financial responsibility law.
The plaintiffs maintained that the Florida vicarious liability law is a financial responsibility law, in that it induces car rental companies to ensure that lessees are adequately insured. The Graves Amendment does not define “financial responsibility,” but using the plain meaning of the term, the Eleventh Circuit concluded that the Florida law did not fall into that category. The Court stated that financial responsibility laws for purposes of the Graves Amendment consist of legal requirements, not inducements.
The plaintiffs next argued that the Graves Amendment is unconstitutional because it is outside Congress’ commerce power. The commerce power permits regulating intrastate activities which substantially affect interstate commerce. The Court concluded that the rental car market has a substantial effect on interstate commerce. Furthermore, it was rational for Congress to perceive that strict vicarious liability laws, such as the Florida law, could have a negative effect on the car rental market, making interstate commerce more expensive and inhibited.
The appellate court affirmed the summary judgment in favor of the rental companies.
Jurisdiction: U.S. Court of Appeals, Eleventh Circuit
Related Categories: Civil Procedure , Conflict of Laws , Insurance , Transportation
|Intervenors Lawyer(s)||Intervenors Law Firm(s)|
|Charles Scarborough||U.S. Department of Justice Civil Division|
|Mark Stern||U.S. Department of Justice Civil Division|
|Amicus Lawyer(s)||Amicus Law Firm(s)|
|Richard Schweitzer||Richard P. Schweitzer PLLC|
|Appellant Lawyer(s)||Appellant Law Firm(s)|
|John Vail||Center for Constitutional Litigation PC|
|Appellee Lawyer(s)||Appellee Law Firm(s)|
|Mark Perry||Gibson Dunn & Crutcher LLP|
|David Borucke||Holland & Knight LLP|
|Steven L. Brannock||Holland & Knight LLP|
|Paul Jones||Luks Santaniello Perez Petrillo & Gold LLC|
|James P. Waczewski||Luks Santaniello Perez Petrillo & Gold LLC|