U.S. District Court in Florida strikes down federal statute immunizing rental car companies

A federal statute which immunizes rental car companies from liability for harm caused by their vehicles violates the Commerce Clause, a U.S. District Court in Florida has ruled.

The plaintiffs leased a car to a customer who was involved in an accident with the defendant. The defendant filed a state court action for personal injury, suing the plaintiffs pursuant to Florida's "dangerous instrumentality" doctrine.

The plaintiffs sought a declaratory judgment that they were immune from suit under a federal statute providing immunity to car rental businesses. They argued the statute preempted Florida's laws creating vicarious liability for car rental companies.

The defendant contended the statute was an unconstitutional exercise of Congressional authority under the Commerce Clause.

The court agreed, concluding the federal statute regulated tort liability rather than regulating or protecting either the car itself or its use.

"The Supreme Court explained that the Commerce Clause gives Congress the authority to regulate, first, the use of channels of interstate commerce, second, the instrumentalities of interstate commerce, meaning persons or things in interstate commerce, and third, activities substantially related to interstate commerce," the court noted.

"This court holds that the direct language of [the federal statute] regulates tort liability, and does not directly regulate either channels of interstate commerce, or the use of those channels.

"[T]here is no rational basis to support a conclusion that vicarious tort liability for car rental or leasing companies substantially affects interstate commerce. Under the rationale set forth by the [car rental companies] for finding [the federal statute] constitutional, this court is hard pressed to think of any type of state legislation which could not be preempted by Congress," the court concluded.

Vanguard Car Rental USA, Inc. v. Huchon (Lawyers USA No. 9938311) U.S. District Court for the Southern District of Florida No. 06- 10082. Sept. 14, 2007.

Credit: Lawyers USA Staff