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Connecticut Supreme Court upholds Graves Amendment in cases where a lessor leases an uninsured motor vehicle

July 2010

In Rodriguez v. Testa (SC 18389), the Connecticut Supreme Court decided whether 49 U.S.C. § 30106, also known as the Graves Amendment, preempted state law imposing vicarious liability on the lessor of an uninsured motor vehicle for damages caused by the negligent acts of the lessee or the agent thereof. 

 

The plaintiff, Nilsa Rodriguez, was involved in a motor vehicle accident in which a vehicle operated by the named defendant struck her vehicle.  The defendant's company leased the vehicle from Daimler Chrysler Financial Service America Trust (Daimler Chrysler), but the vehicle was not insured by Daimler Chrysler at the time of the accident.  The plaintiff claimed that the trial court improperly granted a summary judgment motion of the defendant Daimler Chrysler because the Graves Amendment does not preempt the theory of vicarious liability set forth in Connecticut General Statutes § 14-154a under the circumstances of this case.  The plaintiff also claimed that the Amendment is an unconstitutional exercise of congressional power under the Commerce Clause of the U.S. Constitution.

 

The law is well settled in Connecticut with regard to C.G.S. § 14-154a, whereby the statute that imposes vicarious liability on the owner of a rented or leased vehicle is no longer valid since the enactment of the Graves Amendment.  However, the plaintiff argued that the savings clause of the Graves Amendment, which excludes from preemption those state laws that impose liability on motor vehicle lessors for failure to comply with state financial responsibility or liability insurance requirements, was not complied with by Daimler Chrysler, because it leased a vehicle without adequate insurance. 

 

The Connecticut Supreme Court concluded that, because the Graves Amendment preempts state law and is a valid exercise of congressional authority under the Commerce Clause of the U.S. Constitution, the trial court properly granted Daimler Chrysler's summary judgment motion.  Accordingly, the high court affirmed the judgment of the trial court.

 

Justice Peter T. Zarella, writing on behalf of a unanimous court, went through a lengthy analysis of the doctrine of preemption and savings clauses and determined that the financial responsibility laws that are under the savings clause of the Graves Amendment do not mandate the lessor procure such coverage as a prerequisite to conducting business.  It merely gives the lessor the option to do so.  Thus, a lessor is not in violation of the law if it chooses not to obtain the specified coverage. 

 

The court also upheld the constitutionality of the Graves Amendment as a valid exercise of congressional authority under the Commerce Clause of the U.S. Constitution.

 

If you have questions regarding this decision, you can contact Stephen P. Brown of the Connecticut office.  He can also be reached by telephone at 203.388.9100.

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