TRALA defends Graves Law in U.S. Senate hearing on vicarious liability

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TRALA President and Chief Executive Officer Tom James this week testified before Congress in support of preservation of the existing federal law, known as the Graves/Boucher Law, which preempts states from imposing vicarious liability on owners of rented and leased vehicles.

James’ testimony was heard by the Senate Committee on Commerce, Science and Transportation’s Subcommittee on Consumer Protection, Product Safety and Insurance. James was the sole witness representing the vehicle renting and leasing industry at the hearing, but he made it clear in his testimony that he was speaking on behalf of a broad coalition of companies, trade associations and other stakeholders who were impacted significantly by state vicarious liability laws before Congress took action in 2005.

The Graves/Boucher Law (49 USC 30106), passed in August 2005 as part of the SAFETEA-LU highway bill, created a uniform standard against liability without fault by preempting state vicarious liability laws imposing liability on non-negligent leasing and renting companies. Since its enactment into law, the highest courts in several states, including New York, Florida and Minnesota, have upheld its authority. Federal circuit courts and the U.S. Court of Appeals also have ruled in support of the Graves Law.

In his testimony, James said that supporting the Graves/Boucher Law equals support for American jobs, consumer choice and simple fairness. James also highlighted the fact that the vicarious liability issue is not limited to the consumer car rental industry. “Please keep in mind that the rented and lease fleet includes automobiles leased to consumers generally from three to five years, automobiles rented to consumers for periods of one day to 30 days, automobiles leased to businesses generally for three years, trucks rented to consumers for periods of one to 30 days; and trucks leased to businesses usually for one to five years,” he told the committee.

“Combined with our inability to control where and how our cars and trucks were driven, the pre-Graves/Boucher patchwork of state vicarious liability laws put non-negligent rental and leasing companies in an untenable situation,” James said. “We were exposed to liabilities for which there was no best practice, nor any actions that could be taken to avoid exposure.”