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Rental car companies not immune from liability, Florida court holds.

A Florida trial court recently ruled that a federal law known as the Graves Amendment does not preempt claims against motor vehicle leasing companies that allege vicarious liability for injuries caused by the negligence of drivers who lease their vehicles. (Poole v. Enterprise Leasing Co. of Orlando, No. 05-2005-CA-008150 (Fla., Brevard County Cir. Ct. Jan. 19, 2006).) The court's decision is one of the first reported rulings supporting a challenge to the application of the Graves Amendment to a personal injury lawsuit against a vehicle lessor.

The rental vehicle industry--which earns billions of dollars each year--mounted an aggressive campaign in Congress for immunity from state laws that impose vicarious liability on lessors. In 2005, with the passage of the Safe, Accountable, Flexible, Efficient Transportation Equity Act, the industry's persistence paid off. Tucked away in its folds is a substantive provision commonly referred to as the Graves Amendment, which preempts state tort laws that permit motor vehicle lessors to be held vicariously liable for their lessees' tortious acts. This amendment all but ensures that people injured by the negligent driving of uninsured or underinsured lessees will receive little or no compensation for their injuries.

The Florida case arose out of a 2002 car crash in Brevard County. Jo Ellen Poole and her husband were in a car that collided with a rental car driven by James Dowling and owned by Enterprise.

The Pooles sued Enterprise, alleging that, as the owner of the rental car, the company was financially liable for the negligent driving of renter Dowling. Florida is one of 15 states (plus the District of Columbia) that impose some measure of liability on motor vehicle leasing companies for costs associated with rental drivers' negligence.

Enterprise moved to dismiss the suit, arguing that the Graves Amendment immunized it from state tort liability for the negligent acts of its lessees. Andre Mura, a lawyer with the Center for Constitutional Litigation (CCL) in Washington, D.C., which represents the Pooles, argued against dismissal, contending that the Graves Amendment does not apply in Florida. Mura argued that the amendment contains an exception that preserves liability for failure to meet state financial responsibility laws and that Florida has such a qualifying law. CCL also mounted a Tenth Amendment challenge to the Graves Amendment.

The Florida trial judge ruled in favor of the Pooles, holding that the Graves Amendment did not apply in Florida because Florida Statute 324.021 (9) (b) (2) is a qualifying financial liability law under which Enterprise could still be held liable. The court did not reach the constitutional issue.

Three other Florida trial courts have adopted the Poole court's reasoning. CCL is currently bringing similar challenges to the application of the Graves Amendment in other states, including New York and Connecticut.
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Date:Sep 1, 2006
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