Weekly Wire - May 2, 2008

NEW YORK HIGH COURT UPHOLDS GRAVES AMENDMENT ELIMINATING VICARIOUS LIABILITY

TRALA won a landmark victory in court this week when New York’s highest court affirmed the authority and constitutionality of the Graves Amendment…federal law that eliminates vicarious liability nationwide. The New York Court of Appeals on April 29 dismissed the appeal of the plaintiffs in the Graham v. Dunkley and NILT, Inc. on the grounds that there was absolutely no question about the constitutionality of the federal law. This dismissal confirms the February 1, 2008 decision of the lower NY appeals court that “..actions against rental and leasing companies based solely on vicarious liability may no longer be maintained.”

TRALA led a coalition of industry allies in successfully seeking the enactment of the Graves Amendment, which was signed into law on August 10, 2005. In September 2006 the New York Supreme Court, Queens County, was one of the few courts to question the statute’s constitutionality. This negative decision has been a core argument in almost every vicarious liability case filed since then. The court’s action this week puts vehicle renting and leasing companies in the strongest position yet to defend against vicarious liability claims in these and any future cases.

Following the 2006 decision in Graham v. Dunkley, TRALA and its Industry Council for Vehicle Renting and Leasing helped defend the federal law and organized the filing of amicus briefs providing additional information for the court to consider in the first appeal of the Graham v. Dunkley decision. TRALA has also filed supporting legal briefs in five additional cases involving the Graves Amendment, three of which have resulted in the court upholding the federal law. Two of the cases are still pending.

For more information on this week’s decision by the New York Court of Appeals please contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.

MILLIONS SAVED AS $6 PER DAY COLORADO RENTAL TAX IS DEFEATED

TRALA and its industry allies have succeeded in defeating a statewide $6 per day vehicle rental tax in Colorado. The rental tax was part of a larger transportation funding proposal in Senate Bill 244. The bill sponsor, Senator Abel Tapia (D-Pueblo), pulled the bill from consideration in the Senate Committee on Appropriations on May 2 after it was clear there were not enough votes to pass it. The broad daily tax would have applied to both commercial rentals and rentals to consumers for periods of up to 45 days, including renewals.

Immediately following the bill’s introduction on April 24, TRALA contacted Senator Tapia to express opposition to the rental tax provision. TRALA then organized its Colorado member companies to lobby key Senators in opposition to the rental tax. TRALA also worked closely with its Industry Council member Enterprise Rent-A-Car, who testified against the bill and fought to defeat it. As a result of the strong show of opposition to the tax, Senator Tapia was reported to have considered lowering or even eliminating the rental tax from the funding package before the overall bill was defeated.

For more information about the TRALA opposition to the Colorado rental tax proposal, please contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.