Car Rental Agencies Win One Round


On August, 19th a federal appeals court upheld the statute shielding car rental companies from vicarious liability in auto accidents.  See Garcia v. Vanguard Care Rental USA, Inc., 11th Circuit Ct. of App., No. 07-12235. 

Our prior post on immunity for car rental companies can be found here.

In this case a Vanguard rental car was leased to a Gregory Davis who was at fault in a fatal three way collision in Florida.  The estates would have sued the car rental company on the theory of vicarious liability, i.e., Vanguard would be responsible for the negligence of the driver.  Florida, like New York, has a vicarious liability law which imposes liability on the car owner for the negligence of the operator.  The so-called federal Graves Amendment shielded car rental and leasing agencies from such liability.  Therefore, the Graves Amendment voided the vicarious liability law of Florida (and New York).

Vanguard filed a declaratory judgment in the federal court seeking a declaration that the Graves Amendment preempted a suit against the car rental company.  Vanguard did this in anticipation of the estates suing Vanguard for vicarious liability in the state court.  The federal court upheld the car rental company’s position, and the Court of Appeals upheld the decision.  The federal Graves Amendment preempts Florida’s statute imposing vicarious liability.  The Court of Appeals ruled that the U.S. Congress exercised its constitutional power to regulate interstate commerce and to preempt states’ law imposing vicarious liability.  In essence the Congress is regulating the car rental/leasing industry in exempting it from state imposed laws (such as vicarious liability) which burden it and impair interstate commerce.

Although the car rental industry won this round, the fight is not over.  Constitutional challenges will be brought in other courts, and we predict that the U.S. Supreme Court will have to rule.  The trial lawyers groups, both national and statewide, are going to continue to fight for the rights of regular people against the U.S. Congress’ incredible gift to the car rental industry.

We congratulate and thank great Florida attorney, Ira Leesfield, for fighting Garcia  on behalf of regular, working people.

Mark E. Seitelman, 9/3/08, www.seitelman.com.

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13 Responses to Car Rental Agencies Win One Round

  1. […] Enterprise Rent-A-Car wrote an interesting post today onHere’s a quick excerptOn August, 19th a federal appeals court upheld the statute shielding bcar rental companies/b from vicarious liability in auto accidents. See Garcia v. Vanguard Care bRental/b USA, Inc., 11th Circuit Ct. of App., No. 07-12235. b…/b […]

  2. Anthony Swick says:

    What I dont understand is that when you rent a car in the state of Florida, or other, do you not have to provide a valid driver license and insurance. Is it not the responsibility of the rental car company to verify the insurance at time of rental? If a car is rented without that verification and the driver is involved in an auto accident at their fault… where does the liability fall? The driver that had been hit should be able to recover deductable, etc. from the auto owner? This just seems that they require a contract, however they should verify insurance, etc. of the renting party, otherwise they should be resposible for not completing the contract? Who has rights here…?

  3. Dear Anthony:

    Thank you for your comment.

    I cannot speak of Florida practice.

    Generally, in New York, anyone with a valid driver’s license can rent a car. The rentor need not own a car or have auto insurance.

    The New York rentor will be covered by the car rental company’s insurance for both Personal Injury Protection (medical, lost income, etc.) and Liability. However, the car rental insurance company will only provide the minimum required in NY, i.e., $50,000 for PIP and $25,000/50.000 for Liability.

    The problem with the Graves Amendment is that a person injured by a rental car can only recover the minimal insurance required. E.g., a pedestrian struck by a Thrifty car can only recover a maximum of $25,000 for his injuries in New York. This is so regardless of the severity of injuries. In the past an injured person would sue Hertz or Avis, and insurance limits would not be a problem.

    M.E.S.

  4. […] In prior posts we discussed the federal Graves Amendment which precludes a finding of vicarious liability against a car rental or leasing company.  See our prior posts here and here. […]

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  9. For rentals of a week or longer, you may get better rates from local companies, particularly auto dealers.

  10. murat mercan says:

    Car rental services today offers a lot of convenience to people. Hopefully, more people will use rental services.

    Nice blog post, and thanks for sharing…

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