Getting Around the Graves Amendment

Georgia law regarding owner liability for U-Haul, Enterprise, and other rented vehicle wrecks is very complex. 49 U.S.C. 30106 makes these laws even more complex. In the wake of several large verdicts in the 1990s, including one that involved a fireball Enterprise Rent-a-Car wreck in Connecticut, lawmakers added the Graves Amendment to a large transportation bill in 2002. Rep. Sam Graves and his colleagues wanted this amendment to immunize owners of rented vehicles from liability lawsuits. However, as outlined below, the Graves Amendment contains some large holes.

In most cases, a Marietta personal injury attorney can use the complex Georgia laws to hold U-Haul, Enterprise, and other vehicle rental companies responsible for damages if they rent vehicles to individuals who cause crashes. This third-party liability is important because, in most cases, rented vehicle drivers have little or no insurance. Vicarious liability gives injured victims another way to obtain compensation for their economic losses, such as medical bills, and noneconomic losses, such as pain and suffering.

Negligent Entrustment

The negligent entrustment doctrine applies if an owner allows an incompetent driver to operate their motor vehicle. Evidence of incompetence includes:

  • No valid driver’s license,
  • Driving in violation of a license restriction, like no night driving,
  • Recent at-fault collisions on a driving record, and
  • Recent safety suspensions, and
  • A generally poor driving record.

This evidence is basically in descending order. Frequently, people with no valid licenses are incompetent as a matter of law, no matter how much experience they have. A poor driving record, in and of itself, usually is not conclusive proof of incompetence.

Proving incompetence is easier in these cases because the burden of proof (a preponderance of the evidence, or more likely than not) is quite low. In simple terms, a little evidence goes a long way.

The negligent entrustment doctrine often comes up in borrowed vehicle cases, usually a teen driver borrowing the family car. Georgia courts recognize the family purpose doctrine. There is a presumption that the tortfeasor (negligent driver) was using the vehicle with the owner’s express or implied permission.

Graves Amendment Loopholes

Since it was a last-minute add-on, there is almost no legislative history interpreting the Graves Amendment. Therefore, Marietta personal injury attorneys must look beyond the law to interpret its two key provisions.

  • Trade or Business: Graves Amendment immunity only applies if the vehicle’s owner was in the trade or business of renting motor vehicles. This designation applies to most Enterprise and other such outlets. But it does not apply to most U-Haul outlets. Many of these companies are moving supply and storage companies that rent a few trucks on the side.
  • Not Otherwise Negligent: 20 years ago, the internet was in its infancy, so most DMV databases were not publicly available. Today, anyone can access this information with just a few clicks. So, although it is arguably the industry standard to electronically verify driver’s licenses, many vehicle rental clerks do not verify them. Falling short of an industry standard is arguably negligent.

Once again, a Marietta personal injury attorney must only prove that a loophole applies by a preponderance of the evidence.

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