Garcia v. Vanguard Car Rental Usa, Inc., No. 07-12235.

• Decision Date: 19 August 2008
• Docket Number: No. 07-12235.
• Citation: 540 F.3d 1242
• Parties: Maria D. GARCIA, as surviving Spouse, as Administrator and Personal Representative of the Estate of Jose Garcia, and on behalf of her minor children Gabriela Garcia and Luis Garcia, Plaintiff-Cross-Defendant-Appellant, Santos Ruiz, individually, and as administrator and personal representative of the Estate of Nelson Ruiz, and on behalf of and as legal guardian of the minor Nelson Xavier Ruiz, et al., Plaintiffs, v. VANGUARD CAR RENTAL USA, INC., a Delaware corporation, National Rental (US), Inc., a Delaware corporation, f.k.a. National Car Rental, Alamo Financing, L.P., a foreign limited partnership, Alamo Rent-A-Car (Canada) Inc., a Florida corporation, et. al., Defendants-Cross-Plaintiffs-Appellees, Vanguard Rental (Belgium), Inc., a Florida corporation, et. al., Defendants-Appellees, United States of America, Intervenor, Gregory Davis, et al., Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

540 F.3d 1242

Maria D. GARCIA, as surviving Spouse, as Administrator and Personal Representative of the Estate of Jose Garcia, and on behalf of her minor children Gabriela Garcia and Luis Garcia, Plaintiff-Cross-Defendant-Appellant Santos Ruiz, individually, and as administrator and personal representative of the Estate of Nelson Ruiz, and on behalf of and as legal guardian of the minor Nelson Xavier Ruiz, et al., Plaintiffs, v. VANGUARD CAR RENTAL USA, INC., a Delaware corporation, National Rental (US), Inc., a Delaware corporation, f.k.a. National Car Rental, Alamo Financing, L.P., a foreign limited partnership, Alamo Rent-A-Car (Canada) Inc., a Florida corporation, et. al., Defendants-Cross-Plaintiffs-Appellees Vanguard Rental (Belgium), Inc., a Florida corporation, et. al., Defendants-Appellees United States of America, Intervenor Gregory Davis, et al., Defendants.

No. 07-12235.

United States Court of Appeals, Eleventh Circuit.

August 19, 2008.

John Vail, Andre Mura, Center for Constitutional Litigation, P.C., Washington, DC, for Garcia.

Mark Andrew Perry, Gibson, Dunn & Crutcher, LLP, Washington, DC, James P. Waczewski, Luks, Santaniello, Perez, Petrillo & Gold, Tallahassee, FL, Paul S. Jones, Luks, Santaniello, Perez, Petrillo & Gold, Orlando, FL, David Clark Borucke, Steven L. Brannock, Holland & Knight, LLP, Tampa, FL, for Appellees.

Richard P. Schweitzer, Richard P. Schweitzer, PLLC, Washington, DC, for Amicus Curiae Truck Renting and Leasing Ass'n.

Charles W. Scarborough, Mark B. Stern, U.S. Dept, of Justice, Civ. App. Staff, Washington, DC, for U.S., Intervenor.

Appeal from the United States District Court for the Middle District of Florida.

Before EDMONDSON, Chief Judge, and KRAVITCH and ALARCÓN,^* Circuit Judges.

KRAVITCH, Circuit Judge:

These consolidated declaratory judgment and wrongful death actions require us to interpret the Graves Amendment, 49 U.S.C. § 30106, a federal tort reform statute which purports to shield rental car companies from certain vicarious liability suits. We conclude that the tort claims at issue are within the Amendment's preemption clause and not within its savings clause. We further conclude the statute is within Congress's Article I powers. Accordingly, we affirm the grant of summary judgment in favor of the rental car companies.

I.

The pertinent facts are undisputed. The appellee rental car companies¹ leased a car to Gregory Davis on February 2, 2005. They were not negligent or otherwise at fault in so doing. Davis rented the car in Orlando, Florida and drove it north towards Georgia. The record does not establish whether Davis embarked on his trip intending for it to be an interstate journey. On the trip, Davis was involved in a three-car accident in Marion County, Florida, for which he was allegedly at fault. The collision caused the deaths of Jose Garcia, appellant's decedent, and Nelson Ruiz, whose estate was a party in the district court but has not appealed. Israel Lopez was also severely injured, but fortunately was not killed.

Anticipating a suit alleging vicarious liability for Davis' negligence, Vanguard filed a declaratory judgment action in the district court against Lopez and the estates and surviving spouses of Garcia and Ruiz. Jurisdiction was based on diversity. The Vanguard companies sought a declaration that the Graves Amendment preempted any claims against them for wrongful death or bodily injury caused by their lessee Davis. The estates and surviving spouses of Garcia and Ruiz then filed separate wrongful death actions in Florida state court. The state court actions were removed and consolidated with the declaratory judgment action, and the district court dismissed several corporate parties it found were fraudulently joined to defeat diversity jurisdiction. On cross-motions for summary judgment, the district court issued a thorough and well-written opinion holding that the Graves Amendment validly preempted all the tort claims, and thus, it granted summary judgment for the rental car companies in all three cases. This appeal ensued.

II.

We must first determine whether the Graves Amendment, by its terms, preempts these wrongful death actions. Of course, a valid federal statute preempts any state law with which it actually conflicts. See, e.g., Foley v. Luster, 249 F.3d 1281, 1286 (11th Cir.2001).

These suits were brought against Vanguard, which concededly was not culpable in renting a car to Davis, because of the so-called dangerous instrumentality doctrine. Through that doctrine, Florida common law "imposes strict vicarious liability upon the owner of a motor vehicle who voluntarily entrusts that motor vehicle to an individual whose negligent operation causes damage to another." Aurbach v. Gallina, 753 So.2d 60, 62 (Fla.2000) (citing Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 86 So. 629, 637 (1920)). The doctrine applies to commercial motor vehicle lessors such as Vanguard.

In 1999, the Florida legislature imposed statutory caps on the amount of vicarious liability rental car companies could face under the dangerous instrumentality doctrine. As pertinent here, the statute provides that

The lessor, under an agreement to rent or lease a motor vehicle for a period of less than 1 year, shall be deemed the owner of the vehicle for the purpose of determining liability for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and up to $300,000 per incident for bodily injury and up to $50,000 for property damage. If the lessee or operator of the vehicle is uninsured or has any insurance with limits less than $500,000 combined property damage and bodily injury liability, the lessor shall be liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle.

Fla. Stat. § 324.021(9)(b)(2). Thus, the statute explicitly countenances the type of lawsuits at issue here—those imposing strict liability against a rental car company for the negligent acts of its lessee—while imposing a damages cap on them. It also reduces the rental company's liability exposure if a lessee is insured for $500,000 or more.

The Graves Amendment takes aim at precisely these types of lawsuits. The Amendment has two operative provisions, a preemption clause and a savings clause. The preemption clause provides as follows:

An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof by reason of being the owner of the vehicle (or an affiliate of the owner) for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if (1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles, and (2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).

49 U.S.C. § 30106(a). The instant wrongful death claims are clearly within the scope of this provision. Vanguard and its affiliates are in the rental car business. Vanguard owned the rental car driven by Davis and leased it to him, and the accident occurred during the lease period. Plaintiffs seek to recover solely under a vicarious liability theory: Vanguard is allegedly liable "by reason of being the owner of the vehicle" negligently driven by Davis, not because of any negligent entrustment or other wrongdoing of its own. Thus, assuming for now that the statute is constitutional, these wrongful death suits are preempted by § 30106(a) unless they are within the statute's savings clause. It provides that

Nothing in this section supersedes the law of any state or political subdivision thereof—

(1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or (2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under state law.

49 U.S.C. § 30106(b). Appellants contend their suits are within the savings clause because Florida's imposition of vicarious liability on rental car companies for the negligence of their lessees is a financial responsibility law. To evaluate this argument, we must review the pertinent law of statutory interpretation.

The Graves Amendment does not define the term "financial responsibility." When statutory terms are undefined, we typically infer that Congress intended them to have their common and ordinary meaning, unless it is apparent from context that the disputed term is a term of art. Konikov v. Orange Cty., Fla., 410 F.3d 1317, 1329 (11th Cir.2005) (citation omitted). When Congress employs a term of art, it presumptively adopts the meaning and "cluster of ideas" that the term has accumulated over time. Medical Transport. Mgmt. Corp. v. Comm'r, Internal Revenue Service, 506 F.3d 1364, 1368-69 (11th Cir.2007) (citations omitted). In construing an ambiguous statute, we also employ canons of construction which embody sound generalizations about Congressional intent. One such canon is noscitur a sociis, which is the commonsense principle that statutory terms, ambiguous when considered alone, should be given related meaning when grouped together. See, e.g., S.D. Warren Co. v. Maine Bd. Of Env. Protection, 547 U.S. 370, 378, 126 S.Ct. 1843, 164 L.Ed.2d 625 (2006) (citations omitted). By construing proximate statutory terms in light of one another, courts avoid giving "unintended breadth to the acts of Congress." Gustafson v. Alloyd Co. Inc., 513 U.S. 561, 575, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995) (quoting Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307, 81 S.Ct. 1579, 6 L.Ed.2d 859 (1961)). Another pertinent canon is the presumption against...