A federal law that, for the last decade, has shielded vehicle leasing companies from liability is expected to affect trucking companies whose business relies on the protection in case of an accident.
The Graves Amendment, a statute protecting car rental and trucking companies from vicarious liability in operator accidents, was rejected from being used in a civil action lawsuit against the vehicles owner in the Western District of New York.
Michael Stratton is suing over the death of his wife after a truck plowed into the back of her stalled vehicle along the New York Turnpike in 2009.
The truck driver, Thomas Wallace, is currently carrying out a 3 – 9 year state prison sentence for second-degree manslaughter.
The defendants of the suit include Wallace’s employer, Millis Transfer, the truck’s owner, Great River Leasing, and the parent of both Millis Transfer and Great River, Midwest Holding Group.
Although the owners originally sought summary judgement under the Graves Amendment, Judge Richard Acara decided that the parent company, Midwest Holding Group, can be held liable for the actions of its affiliates, even if the owner was not operating the vehicle at the time of the crash.
Previously, the Graves Amendment granted immunity to vehicle rental and leasing companies by overriding the laws of states that held vehicle owners vicariously liable for the actions of their drivers.
Acara said in a written statement that since both companies were owned by the same parent corporation, the Graves shield will not protect the defendants from New York’s law.
“Run-of-the-mill Graves Amendment cases—where the vehicle owner and operator are related only by an arm’s length contract—are generally simple,” Arcara wrote.
“However, what differentiates this case from the ordinary Graves Amendment case is the fact that, here, the lessor and lessee are related by more than just a lease agreement; in this case, the lessor and lessee are owned by the same parent company.”
According to the attorney for the plaintiff, the ruling is expected to be significant for trucking companies who have reconfigured business expecting to be shielded from liability under the Graves Amendment.