Court Deals Blow to Pre-Emption Tactics


As I mentioned in an earlier post, industry lobbyists have recently changed tactics and are seeking governmental regulations where once they fought tooth and nail to avoid them. One of their primary rationales for this change of heart was to attempt to get Federal regulations that would pre-empt state regulations.

However, in a major ruling last week, the US District Court of Southern Florida declared the Graves Amendment unconstitutional. The Graves Amendment was a particularly cynical attempt at pre-empting state law to the detriment of public interest. The Amendment, which was snuck into a 900-page transportation appropriations bill in 2005, absolved car rental companies from the vicarious liability imposed on them in some degree by many states.

The legislation was purely directed at the profit margin for rental car companies, who sought to avoid both liability for any accidents and responsibility for checking the insurance status of the drivers to whom they rented vehicles. Under the Graves Amendment, a car rental company had no incentive to check whether their renters were insured, and if an uninsured renter caused an accident, they could not be held responsible. This combination might prove particularly dangerous to public health and safety in Florida, whose No-Fault statue was recently allowed to lapse, meaning that more and more drivers might find it difficult to collect from their insurance companies in the event of an injury accident.

Thankfully, though, the Graves Amendment has been declared unconstitutional for violating the Tenth Amendment, which reserves power for the states against the power of the Federal government. Although US lawyers argued that the Amendment was within the rights of the Congress under the Commerce Clause, US District Judge K. Michael Moore found the amendment overreached the power granted by the Clause, saying, “Under the rationale set forth, this Court is hard pressed to think of any type of state legislation which could not be pre-empted by Congress, including state taxes.”

This ruling has broad implications for efforts to seek pre-emption of tough state laws regulating product liability and workplace safety, and shows that, while legislators are sometimes in the pocket of big business, a lawyer can be your best friend. If you have suffered an accident due to a defective product or corrupt practice by a major corporation, get in touch with a lawyer through, and act now. Others may be waiting for your case to set a precedent.