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Eleventh Circuit Upholds Graves Amendment

By Connie Ariagno and David G. Mayer

Congress enacted the Graves Amendment in August 2005 to bar vicarious liability claims against long-term lease and rental car companies. Often challenged in the courts, the dependability of the Graves Amendment has been undermined by inconsistent court rulings that subject lessors to the liability the Graves Amendment intends to prevent.

The U.S. Court of Appeals for the Eleven Circuit in Garcia v. Vanguard Car Rental USA, Inc., found Congress had the authority to enact the Graves Amendment under the Commerce Clause of the U.S. Constitution. See 540 F.3d 1242, 1252-53 (11th Cir. 2008). It also found that the Graves Amendment blocks vicarious liability of lessors arising out of motor vehicle accidents involving their lessees. Although Garcia does not answer all the questions pertaining to lessor liability in these instances, it represents the first time a federal appellate court has handed down a decision concerning the Graves Amendment that offers some relief for passive lessors against liability created by their lessees.

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