By the Ballard Spahr Consumer Financial Services Group
The Florida Supreme Court has ruled in Vargas v. Enterprise Leasing Company that the State law imposing vicarious liability on short-term car lessors is preempted by the federal Graves Amendment.
The Graves Amendment is a provision of the Safe, Accountable, Flexible, Efficient Transportation Equity Act of 2005: A Legacy for Users. It preempted state laws imposing vicarious liability on car leasing companies but contained a savings clause for state "financial responsibility laws."
Florida law imposed vicarious liability on lessors of vehicles leased for a term of less than one year. Finding that law to be preempted by the Graves Amendment, the Florida circuit court entered summary judgment for the leasing company in an action filed against it by an individual who had been injured in an accident involving a leased car. That ruling was affirmed by the Florida district court, which certified the preemption issue to the State's Supreme Court.
The Florida Supreme Court, in its opinion issued on April 21, 2011, rejected the plaintiff's argument that the State vicarious liability law was not preempted because it was a "financial responsibility law" and affirmed the district court's grant of summary judgment for the leasing company.
The State's high court also agreed with the district court's conclusion that the Graves Amendment did not violate the Commerce Clause of the U. S. Constitution. In reaching that conclusion, the district court had followed the reasoning of other courts that rejected such a Commerce Clause challenge on the grounds that vehicle leasing is a commercial activity with substantial effects on interstate commerce.
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