In most states, the federal Graves Amendment is almost meaningless. But in the Bluegrass State, 49 U.S. Code § 30106 could make or break an injury case. Kentucky has an imputed contributory negligence law. This law mostly applies when a teen borrows a parent’s car and causes a wreck. However, this law could also apply in commercial negligent entrustment cases, like U-Haul truck wrecks.
Basically, the Graves Amendment makes it difficult to establish third party liability in these cases. That’s a fancy way of saying that if a guy driving an Enterprise rental causes a wreck, the victim may not be able to sue the company. That’s very bad for victims, since most vehicle renters have little or no insurance. Pretty much everyone declines the extra-insurance option.
Fortunately, as outlined below, the Graves Amendment has some rather large holes. If a Lexington personal injury lawyer exploits such a loophole, the door is open to sue the company following a wreck, even though the company wasn’t driving the car. Suing a different defendant could make a very big difference in terms of the amount of compensation a victim actually receives.
Graves Amendment Background
A few states, such as nearby Michigan, have very broad imputed contributory negligence laws. In the Wolverine State, if an owner lets someone borrow a motor vehicle and that someone causes a wreck, the owner is on the hook, financially speaking. 49 U.S. Code § 30106 was directed at states like Michigan and, to a lesser extent, states like Kentucky with more limited imputed contributory negligence laws.
In the early 2000s, Rep. Sam Graves (D-MO) attached the Graves Amendment to a large transportation bill, to protect companies like U-Haul and Enterprise from large judgments in places like Michigan and Kentucky. Like most policy riders, no Congressional hearings support the poorly-drafted Graves Amendment. These facts make it easier to exploit the loopholes in the law itself.
Not Otherwise Negligent
According to the Graves Amendment, “An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease.” This immunity only applies if the owner, agent, or affiliate was not otherwise negligent during the transaction.
The duty of care requires owners to verify that the driver is qualified to rent the vehicle. That means, at a minimum, verifying the renter’s drivers’ license. Usually, people without drivers’ licenses are incompetent to operate motor vehicles as a matter of law, no matter how much driving experience they have.
As mentioned, Congress passed the Graves Amendment in the early 2000s. Back then, digital license confirmation was impossible. A clerk could only eyeball a license to see if it looked valid. There was no way to tell if the license was safety suspended or otherwise invalid. On a related note, if a renter presented a fake Texas drivers’ license, the clerk couldn’t compare it with a real Texas license.
Technology has advanced considerably since then. The first iPhones now look like those clunky and featureless 80s cell phones compared to today’s iPhones. Now, clerks can easily access the DMV’s database to verify a drivers’ license. Similarly, if you want to see a picture of a real Texas license, Google Images will show you about a zillion such licenses in a flash.
Arguably, therefore, clerks who don’t utilize such technology are negligent. If that’s the case, Grave Amendment immunity doesn’t apply.
Trade or Business of Renting Vehicles
The second loophole, which must be present as well, is a little harder to apply, so strap yourselves in.
Graves Amendment immunity only applies if the company was in the “trade or business of renting or leasing motor vehicles.” Since 49 U.S. Code § 30106 doesn’t define “trade or business,” lawyers must look elsewhere.
According to the Uniform Commercial Code, that “trade or business” line basically means “primary trade or business.” Most Old Navy stores also sell candy and gum. But Old Navy isn’t a candy store just because it sells candy. Old Navy’s “trade or business” is apparel.
Similarly, many U-Haul truck outlets are moving supply companies which happen to offer a couple of trucks as well. These companies aren’t in the “trade or business” of renting vehicles. Therefore, once again, Graves Amendment immunity doesn’t apply.
Injury victims are usually entitled to substantial compensation. For a free consultation with an experienced personal injury lawyer in Lexington, contact the Goode Law Office, PLLC. You have a limited amount of time to act. The post What Does the Graves Amendment Do? first appeared on Goode Law Office, PLLC.