In a recent lower federal court ruling, the Center for Constitutional Litigation (CCL) won a major victory in the fight to assure that folks who are hurt or damaged by corporate wrongdoing can hold wrongdoers accountable and get justice in the civil justice system. In a ruling last month with wide implications for federal preemption and vicarious liability, the U.S. District Court for the Southern District of Florida declared legislation referred to as the Graves Amendment unconstitutional. That amendment had given immunity to automobile rental agencies for harm caused by their vehicles.

In 2005, the Graves Amendment was hidden in a 900-page transportation appropriations bill without any review from relevant congressional committees. The amendment intentionally pre-empted state laws that imposed vicarious liability on rental car companies. It was the prized lobbying success of the politically active rental car industry, which invested a substantial sum in campaign contributions in the effort, and then called in their chips.

The Florida ruling holding the Graves Amendment unconstitutional came in a declaratory judgment action brought by a group of rental car companies against a person who had been injured in a collision with a rental car. Interestingly, the United States government intervened to defend the statute’s constitutionality. But, U.S. District Judge K. Michael Moore found the amendment to be “an unconstitutional overreaching of Congress’ power under the Commerce Clause.” In the ruling it was stated: “Under the rationale set forth (by the rental car companies and the United States) this Court is hard pressed to think of any type of state legislation which could not be pre-empted by Congress, including state taxes.”

Simply put, the court’s ruling gives rental car companies a powerful incentive to assure that their customers are adequately insured. Striking down the Graves Amendment also helps ensure that victims of car accidents with rented or leased vehicles will be adequately compensated for their injuries. However, the ruling could ultimately have wide repercussions regarding the federal government’s preemption powers. In recent years, Congress has shown little reluctance to legislate in areas of traditional state concern. Courts, led by the U.S. Supreme Court, have found such overreaching legislation to violate the Constitution. The CCL entered the case at the request of the lawyers for the victims, Patricia M. Kennedy and Thomas Scolaro of Leesfield Leighton and Partners in Miami, Florida, to address the constitutional issues and they were successful. John Vail, CCL Vice-President and Senior Litigation Counsel, and Andre Mura, CCL Litigation Counsel, handled the briefing on the constitutional issues, with Mura arguing the case.

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