What one media outlet calls a “landmark decision” by a federal court pushes aside a nearly decade-long federal protection for vehicle leasing companies. It's expected to affect trucking companies whose owner-operators are involved in accidents when certain leasing arrangements are used.
The case involves the Graves Amendment, a federal provision that was ruled not to apply in a civil case filed against a truck’s owner in the Western District of New York, according to the Buffalo Business Journal/Buffalo Law Journal.
Michael Stratton is suing over the death of his wife in a 2009 crash that was caused by a truck driver who was watching pornography at the time of the crash along the New York Turnpike.
The driver has since been convicted of second-degree manslaughter and is currently in jail.
Named in the suit are a number of defendants, including the trucker’s employer, Millis Transfer; the tractor-trailer’s owner, Great River Leasing; and the parent of both Millis Transfer and Great River, Midwest Holding Group.
The judge ruled 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, essentially rejecting an argument that the Graves Amendment pre-empts states’ vicarious liability laws.
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 acts of their drivers.
But the judge said that with both companies being owned by the same parent corporation, the lessor and lessee were related by more than just a lease agreement.
The ruling is expected to be significant for thei ndustry, according to the attorney for the plaintiff, with the ruling setting “a precedent for trucking company operators.”
Read more about it from Buffalo Business Journal/Buffalo Law Journal.