Connecticut Supreme Court Determines that Graves Amendment Preempts State Law

In a decision scheduled to be released on May 4, 2010, the Connecticut Supreme Court has concluded that the Graves Amendment, 49 U.S.C. § 30106, preempted Connecticut General Statutes (C.G.S.) § 14-154a, which imposes vicarious liability on the lessor of an uninsured motor vehicle for damages caused by the negligent acts of the lessee or an agent thereof. Rodriguez v. Testa, (SC 18389).

In Rodriguez, the plaintiff was involved in a motor vehicle accident on July 9, 2006. She subsequently sued a number of defendants, including the operator of the other motor vehicle, and Daimler Chrysler, the lessor of that vehicle. The plaintiff claimed that Daimler Chrysler was liable for the driver’s negligent operation of the vehicle under the theory of vicarious liability set forth in C.G.S. § 14-154a. Daimler Chrysler filed a motion for summary judgment, arguing that the state law was preempted by the Graves Amendment, and the trial court granted the motion.

On appeal, one of the plaintiff’s claims was that the trial court improperly granted Daimler Chrysler’s summary judgment motion because the Graves Amendment did not preempt her state law claim. The Connecticut Supreme Court disagreed and affirmed the trial court’s decision.

In concluding that the Graves Amendment preempted state law, the Connecticut Supreme Court rejected the plaintiff’s arguments that:

1) The Connecticut legislature’s amendment to §14-154a (abrogating lessor liability if the lease term is for one year or more and if the leased vehicle is insured for bodily injury liability of not less than $100,000 per person and $300,000 per occurrence) constitutes the type of financial responsibility or liability insurance requirement that the savings clause in the Graves Amendment was intended to exclude from preemption; and

2) The Graves Amendment is unconstitutional.

The Court concluded that the Connecticut statute does not constitute the type of “financial responsibility or liability insurance [requirement]” that the savings clause was intended to exclude from preemption, reasoning that it does not mandate that lessors procure coverage, but merely gives them an option to do so. The Court also concluded that the Graves Amendment is a valid exercise of congressional authority under the commerce clause of the U.S. Constitution.

If you would like a copy of the decision, or care to discuss it, please contact Michael T. Ryan, Catherine S. Nietzel or Tamar T.J. Blazer.

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 The Graves Amendment provides in relevant part, (a) “[a]n owner of a motor vehicle that rents or leases the vehicle to a person…shall not be liable under the law of any State…by reason of being the owner of the vehicle…for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if (1) the owner…is engaged in the trade or business of renting or leasing motor vehicles; and (2) there is no negligence or criminal wrongdoing on the part of the owner…” 49 U.S.C. § 30106(a) (2006). The savings provision of the Amendment provides, (b) “Nothing in this section supersedes the law of any state…(1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or (2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.” 49 U.S.C. § 30106(b) (2006).

C.G.S. § 14-154a imposes vicarious liability on the owner of a rented or leased vehicle and provides, “[a]ny person renting or leasing to another any motor vehicle owned by him shall be liable for any damage to any person or property caused by the operation of such motor vehicle while so rented or leased, to the same extent as the operator would have been liable if he had also been the owner.” C.G.S. § 14-154a(b)(1) provides that vicarious liability does not apply to any person if the lease term is for one year or more and if, at the time the damages are incurred, the leased vehicle is insured for bodily injury liability of not less than $100,000 per person and $300,000 per occurrence.