Stratton v. Wallace

Stratton’s wife Julie was killed when her disabled car was struck by a tractor-trailer-owned by Great River Leasing Inc. (GRLI)-driven by Wallace. Stratton’s lawsuit named GRLI, Wallace’s employer Millis Transfer Inc., and their corporate parent Midwest Holding Group Inc. Both Michael and GRLI-which has no paid employees and operates exclusively as a vehicle and trailer purchase and leasing company- sought judgment as to GRLI’s protection from vicarious liability by 49 USC §30106, the Graves Amendment, which provides that firms that lease or rent vehicles may not be held vicariously liable for the negligence of those to whom their vehicles are leased or rented. GRLI was not required to lease its vehicles to all qualified customers. The court declined to adopt a magistrate judge’s recommendation that GRLI be granted judgment. It granted Stratton partial summary judgment. GRLI and Millis were “affiliates” as defined by the Graves Amendment. To immunize the vehicle’s owner from vicarious liability, the court interpreted §30106 (a)(2) to require that both the owner and the affiliate of the owner be free from negligence. The court determined that in such a scenario, New York’s vicarious liability statute might still apply.

Graves Amendment