Legislative Bulletin - January 20, 2010

MN SUPREME COURT AGREES WITH TRALA ARGUMENTS UPHOLDING GRAVES AMENDMENT

On January 14, 2010, the State of Minnesota Supreme Court issued a ruling affirming the preemptive authority of the Graves Amendment and rejecting arguments that state laws capping vicarious liability are preserved by the federal law. The decision in Meyer v. Enterprise Rent A Car upholds an earlier ruling of the Minnesota Court of Appeals which held that the federal Graves Amendment (codified at 49 U.S.C. § 30106) preempted Minnesota law that imposed caps on vicarious liability for rental vehicle owners. 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 law which required rental vehicle owners to maintain higher levels of minimum financial responsibility (MFR) standards was a requirement that should fall under the Graves Amendment’s “savings clause” which allows states to set their own MFR requirements. 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.

This affirmation from the Supreme Court comes almost one year to the day that the Court of Appeals filed their ruling. On January 20, 2009, the Minnesota Court of Appeals affirmed an earlier decision of the Otter Tail County District Court of Minnesota which granted Enterprise's motion for summary judgment in Meyer v. Enterprise Rent A Car. In the Minnesota Court of Appeals, the judge rejected Meyer's contention that Minnesota Statutes § 169.09, subd. 5a, and Minnesota Statutes § 65B.49 subd. 5a(i)(2), which established caps on vicarious liability, were preserved by the Graves Amendment's savings clause which exempts "financial responsibility laws" from federal preemption. The Court of Appeals affirmed the decision of the District Court ruling that the existing statutes that established caps on vicarious liability are not financial responsibility laws and are not preserved by the Graves Amendment.

These consistent rulings from the District Court, Court of Appeals, and the Supreme Court in Minnesota are important victories for TRALA and the vehicle renting and leasing industry. TRALA has now filed eight amicus briefs to support the authority of the Graves Amendment, and seven of them have agreed with TRALA and upheld the preemptive authority Graves Amendment. The eighth case is still pending in the Florida Supreme Court.

To see a copy of the amicus brief filed by TRALA in the State of Minnesota Supreme Court, please click here. To see a copy of the ruling from the Supreme Court that supports TRALA’s position, please click here. For more information about TRALA’s successful effort to defend the Graves amendment, please contact TRALA’s Tom James at tjames@trala.org or by calling (703) 299-9120.