Industry Wire

TRALA Continues Successful Defense of Graves Amendment in Courts Across U.S.

TRALA’s successful defense of the Graves Amendment in all levels of U.S. Courts of law has continued. Two more court cases in which TRALA has filed an amicus brief have returned decisions that affirm the authority of the federal Graves Amendment (49 U.S.C. § 30106) to preempt state vicarious liability laws. On January 14, 2010, the State of Minnesota Supreme Court issued a ruling which rejected an argument that state laws capping vicarious liability are preserved by the Graves Amendment’s “savings clause.” The decision in Meyer v. Enterprise Rent A Car upholds an earlier ruling of the Minnesota Court of Appeals. This ruling from the State of Minnesota Supreme Court is in agreement with the amicus brief that TRALA filed with the court that supported the authority of the Graves Amendment. Meyer argued that Minnesota Statutes § 169.09, subd. 5a, and Minnesota Statutes § 65B.49 subd. 5a(i)(2) were MFR statues and should be preserved under the Graves Amendment’s savings clause. However, the Supreme Court agreed with TRALA and Enterprise, ruling that the statute was not an MFR requirement, but was actually a cap on vicarious liability, and thus preempted by the Graves Amendment.

The second most recent case in which a court has returned a ruling agreeing with an amicus brief filed by TRALA occurred on December 16, 2009. The U.S. Court of Appeals for the Second Circuit reversed an earlier decision of the United States District Court for the Eastern District of New York in the Merchants Insurance Group v. Mitsubishi Motor Credit Association (MMCA) vicarious liability court case. TRALA filed an amicus brief on March 3, 2008 with the federal appellate court arguing that the Graves Amendment preempted New York law that holds vehicle owners vicariously liable for the damages arising from a lessee’s operation of the vehicle. The District Court for the Eastern District of New York initially granted Mitsubishi’s request for summary judgment, agreeing with TRALA’s assessment that the Graves Amendment preempted New York’s vicarious liability law. However, the federal Court of Appeals has reversed that decision on grounds that the original action “commenced” before the effective date of the Graves Amendment.

However, in the ruling the court states, “In the instant case, there is no dispute that, if Merchant’s suit against MMCA was commenced after the Graves Amendment’s effective date, the Graves Amendment preempts New York law and precludes Merchants’ claim.” Importantly, this ruling by the U.S. Court of Appeals does not challenge the authority of the Graves Amendment. The Court of Appeals vacating of the District Court ruling is based solely on the timing of when the Amended Complaint was filed by Merchants Insurance Group.

TRALA has filed eight amicus briefs supporting the preemptive authority of the Graves Amendment. Seven have returned decisions that agree with TRALA’s arguments and affirm the Graves Amendment. The eighth is the case still pending in the Florida Supreme Court.