ATLA lobbies third branch to ignore car-leasing laws

by Ted Frank on September 20, 2007

We previously noted the important legislation passed by Congress in 2006 to protect deep-pocket car-leasing companies against vicarious liability for the accidents of its customers. As a result, the price paid by New Yorkers for leased vehicles dropped $600. Of course, that was money out of the pocket of trial lawyers, and ATLA’s litigation-lobby litigation arm, the Center for Constitutional Litigation, intervened with repeated efforts with judges to either ignore or strike down the statute. Several Florida state judges provided a tendentious reading of the statute to ignore it precisely when it was said to apply; a federal district judge refused, but instead struck down the regulation of the interstate transaction under the Commerce Clause.

One can applaud a narrower view of the federal government’s scope under the Commerce Clause, but this judge’s interpretation is contradictory to that of the Supreme Court’s and narrower even than Justice Scalia’s view, and perhaps even the view of the Supreme Court pre-Wickard: no court ever held that the federal government cannot regulate commercial automobile transactions. We’re looking forward to hearing the paranoid Constitution-in-Exile complainers on the left speaking up about the attempt by ATLA to strip the federal government of its powers.

CCL’s argument has been that the statute doesn’t regulate automobile transactions, but intrastate litigation. This is tendentious enough in state court (does civil liability under the ADA not regulate employment, but rather the litigation over intrastate employment?), but utterly absurd in a federal court where the parties are of diverse citizenship.

The ATLA press release is excited that the decision “gives rental car companies a powerful incentive to assure that their customers are adequately insured”—by forcing customers to purchase insurance that they may not want to purchase. Of course, nothing in the Graves Amendment forbade states from setting regulations requiring such minimum insurance; it just forbade trial lawyers from doing so in state court without state legislation. The litigation is a vivid reminder that getting legislators to act to enact desperately needed reforms is only the beginning of the process of fixing a broken civil justice system: one also needs judges who will follow the rule of law. (Vanguard v. Huchon (via Turkewitz); see also Graham v. Dunkley (NY Sup. Ct.)).

{ 3 comments }

1 E-Bell 09.20.07 at 9:26 am

I deal with this issue from time to time in my practice because our firm happens to do a lot of business with rental car companies in the District of Columbia.

It’s absurd to hold a rental car company responsible for the negligence of its renters.

The result in D.C., prior to the federal law, was that rental car companies got sued directly, and were potentially exposed to damages far in excess of the mandatory minimum insurance coverages required by law. In many of these cases, it proved impossible to serve the renter (tortfeasor), so on top of the potential damages, the rental car companies are deprived of the one party who could provide a liability defense.

2 cowpill 09.20.07 at 9:54 am

I am wondering why I need to buy extra insurance when my personnal policy fully protects me while using a rental under contract.

3 Greedy Trial Lawyer 09.20.07 at 10:49 am

I find it interesting that you call the traditional litigation efforts to overturn a law “lobbying” (to imply improper tactics) but then urge the stacking of courthouses with judges who will rule to your liking as just “fixing a broken civil justice system.”

The only thing “broken” in this argument is your logic.

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