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Bassford Remele is a full service litigation firm located in Minneapolis, Minnesota. Founded in 1882, the firm represents local, national and international clients in all areas of civil litigation and dispute resolution.
Case Law Update
Date: January 15, 2010 — Minneapolis, MN
During the week of January 15, 2010, the Minnesota appellate courts released an opinion on the following topic that may be of interest to our clients:
VICARIOUS LIABILITY – RENTAL-VEHICLE OWNERS
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Vicarious liability claims against rental-vehicle owners premised on Minn. Stats. § 65B.49, subd. 5a(i)(2) (2006), and § 169.09, subd. 5a (2008) are preempted by the federal Graves Amendment, 49 U.S.C. § 30106 (2006).
A rented SUV was involved in a single-vehicle accident which resulted in two deaths and injuries to two minors. Suit was brought against the driver of the SUV and Enterprise Rent A Car, alleging that the driver was negligent, that Enterprise negligently entrusted the SUV to the driver, and that Enterprise was vicariously liable for the driver’s negligence under Minn. Stats. § 65B.49, subd. 5a(i)(2) (2006), and § 169.09, subd. 5a (2008). The district court dismissed Enterprise on summary judgment, determining that the federal Graves Amendment, 49 U.S.C. § 30106, preempted the vicarious liability claims, and that the negligent entrustment claims against Enterprise lacked evidence. The court of appeals affirmed.
The Minnesota Supreme Court recently affirmed the lower courts, holding that the vicarious liability claims against Enterprise were preempted by the Graves Amendment, and did not fall within the Act’s savings clause. The Graves Amendment preempts state laws imposing liability against rental-vehicle owners in the absence of their own negligence or criminal wrongdoing. 49 U.S.C. § 30106(a). The Graves Amendment’s savings clause permits state law imposing liability on rental-vehicle owners if it is premised on the failure of rental-vehicle owners to “meet the financial responsibility or liability insurance requirements under State law.” 49 U.S.C. § 30106(b). The Supreme Court first determined that “financial responsibility” means “insurance-like requirements under state law.” It then held that Minn. Stat. § 169.09, subd. 5a, permits vicarious liability against rental-vehicle owners regardless of whether the owner complies with the financial responsibility laws of Minnesota, and that Minn. Stat. § 65B.49, subd. 5a(i)(2), offers rental-vehicle owners the ability to limit exposure to vicarious liability claims by maintaining optional insurance coverage but does not does not impose higher liability insurance requirements on rental-vehicle owners. Therefore, because these state statutes do not set forth “financial responsibility or liability insurance requirements,” they are preempted by federal law and cannot be used to support a vicarious liability claim against rental-vehicle owners. The parties to the case had agreed that Minn. Stat. § 65B.49, subd. 3, which generally requires vehicle owners to maintain minimum liability insurance in the amount of $30,000 per person and $60,000 per accident, is not affected by the Graves Amendment. As a result, the Supreme Court expressly did not address whether this statutory provision was preempted.
Meyer v. Nwokedi, A08-250 (Minn. 1/14/10).
Editorial Staff |
C. Lundberg, C. Morris, K. Putney, R.A. Williams, J.S. Andresen, M. Covin, S. Gustad, B. Sande, C. Hund, S. Sitek, T. Quick, D. Camarotto, K. Burke, J. Marquet, D. Turner, L. Pugh, M. Bradford, P. Semrow, and S. Pearson |
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