Florida Court to Hear Rental Car ‘Vicarious Liability’ Case

An accident victim’s lawyer has urged the Florida Supreme Court to rule that rental car companies can be held liable for damages in an accident they did not cause in the state, even though a new federal law is designed to shield the companies.

The legal concept of holding non-negligent owners responsible regardless of who is behind the wheel is known as “vicarious liability.” The 2005 federal Graves Amendment prohibits vicarious liability except in states that have financial responsibility or insurance requirements for rental companies.

At issue in the Florida Supreme Court is whether a Florida law meets the federal exception criteria in what could be a precedent-setting case. The state law says if the person who leases or drives a rented vehicle is uninsured or has combined insurance limits of less than $500,000, the rental company “shall be liable for up to an additional $500,000 in economic damages.”

Two lower courts rejected a vicarious liability claim by Rafael Vargas, who was injured when an Enterprise-owned vehicle rear-ended his car in February 2006. Vargas did not allege Enterprise was negligent nor at fault nor that the lease was improper.

Several similar cases in Florida are on hold pending a ruling. It has also been an issue in other states including Minnesota, where the state Supreme Court ruled the Graves Amendment pre-empted a similar state law there. The 11th U.S. Circuit Court of Appeals in Atlanta also ruled Florida’s law was pre-empted in 2008. As a result, the Florida justices’ decision would apply only to state courts, Graham said. They did not indicate when they would rule.