Legislative Bulletin - June 5, 2009

Court Reverses Itself to Support Graves Amendment

The authority of the Graves Amendment to pre-empt Florida vicarious liability laws was recently affirmed by the United States Court of the Southern District of Florida. In a March 12, 2009 decision in the Vanguard Car Rental USA v. Huchon case, the federal court reversed an earlier September 2007 ruling in which it found that Congress exceeded its authority under the Commerce Clause of the U.S. Constitution in enacting the Graves Amendment (49 USC 30106). In its March 12 reversal, the court ruled that the vicarious liability claim [against Vanguard] is prohibited by the Graves AmendmentThis case remains closed [and] all pending motions are denied as moot.

The U.S. District Court was compelled to reverse its earlier decision as a result of the August 19, 2008 ruling of the U.S. Court of Appeals for the 11th Circuit in the Garcia v. Vanguard case. In that strongly-worded decision, the Graves Amendment was determined to be constitutional under all three categories of Congress powers under the Commerce Clause. The federal appellate court in Garcia also ruled that Floridas statutes setting caps on vicarious liability and creating higher levels of insurance requirements for rented and leased vehicles are not financial responsibility statutes preserved by the Graves Amendment and are pre-empted by the federal law. TRALA filed an amicus brief on behalf of the industry in the Garcia case and the federal court agreed with all of the points discussed in TRALAs brief.

In addition to the U.S. District Court for the Southern District of Florida, all federal district courts in Alabama, Florida, and Georgia must follow the U.S. Court of Appeals decision in Garcia v. Vanguard. To see a more detailed description of the Garcia v. Vanguard decision, as well as find a link to both the Garcia and the Huchon decision, click here.