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What's New in the Law

BY Robert W. Ihne
June 27, 2008

Graham v. Dunkley, 2008 WL 269527 (N.Y.A.D. Feb. 1, 2008). An Appellate Division reversal of a notorious lower court decision which held the Graves Amendment (the federal statute preempting state laws holding motor vehicle lessors to be vicariously liable for injuries caused by their lessees) to be contrary to the U.S. Constitution as a violation of the commerce clause. Consistent with a number of other listed decisions and contrary to the holding below, this court finds that the New York vicarious liability statute has a substantial effect on interstate commerce and that the federal statute preempting it is a legitimate exercise of federal power to govern interstate commerce.

'There can be no real dispute that the rental and lease of vehicles, and the conditions under which such transactions occur, are economic activities which impact the national market ' As detailed in amicus briefs, vicarious liability laws caused lessors to either cease leasing cars in states having them, opting for more expensive balloon note structures, or spread the cost of higher insurance premiums to lease customers nationwide.'

Kumarsingh v. PV Holding Corp., 2008 WL 238955 (Fla.App. Jan. 30, 2008). A brief decision affirming the holding of a lower court that the Graves Amendment supersedes and abolishes the Florida statute governing vicarious liability of auto lessors as of the federal statute's effective date (Aug. 10, 2005). In this case, the appellate court agreed with the trial court's determination that the defendant lessors were liable only up to the limits of the statutory self-insurance financial responsibility minimums set forth in the Florida statute ($10,000), the auto's lessee who caused the injuries having been uninsured.

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