Meyer v. Nwokedi

• Decision Date: 14 January 2010
• Docket Number: No. A08-250.,A08-250.
• Parties: Nancy M. MEYER, as trustee for the heirs of Margaret Mphosi, deceased, et al., and Nancy M. Meyer, as guardian ad litem for Lucas Mphosi, injured, et al., Appellant, and Bunmi Obembe, et al., Intervenors, v. Bibian NWOKEDI, Defendant, Enterprise Rent A Car Co. of Montana/Wyoming, d/b/a Enterprise Rent A Car of the Dakotas/Nebraska, Respondent.
• Court: Minnesota Supreme Court

777 N.W.2d 218

Nancy M. MEYER, as trustee for the heirs of Margaret Mphosi, deceased, et al., and Nancy M. Meyer, as guardian ad litem for Lucas Mphosi, injured, et al., Appellant, and Bunmi Obembe, et al., Intervenors, v. Bibian NWOKEDI, Defendant Enterprise Rent A Car Co. of Montana/Wyoming, d/b/a Enterprise Rent A Car of the Dakotas/Nebraska, Respondent.

No. A08-250.

Supreme Court of Minnesota.

January 14, 2010.

Duane A. Lillehaug, Maring Williams Law Office, P.C., Craig Richie, Richie & Associates, Fargo, ND, Andre Mura, Center for Constitutional Litigation, P.C., Washington, D.C.; for appellant.

Theodore J. Smetak, Paul E.D. Darsow, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, MN, for respondent.

Lori Swanson, Attorney General, John S. Garry, Assistant Attorney General, St. Paul, MN, for amicus curiae State of Minnesota.

Michael L. Weiner, Yaeger, Jungbauer & Barczak, PLC, Minneapolis, MN, for amicus curiae Minnesota Association for Justice.

Richard P. Schweitzer, Craig M. Cibak, Richard P. Schweitzer, PLLC, Washington, D.C., for amicus curiae Truck Renting and Leasing Association, Inc.

OPINION

DIETZEN, Justice.

Appellant Nancy Meyer, who is trustee of the heirs of decedents Margaret Mphosi and Joshua Mphosi and guardian ad litem for Lucas Mphosi and Jehoshophat Mphosi, commenced this action to recover damages arising out of a single-vehicle accident. The lawsuit alleged that respondent Enterprise Rent A Car Co. of Montana/Wyoming, d/b/a Enterprise Rent A Car of Dakotas/Nebraska (Enterprise), as owner of the rental vehicle involved in the accident, was vicariously liable for the driver's negligence. Enterprise moved for summary judgment arguing, among other things, that Meyer's claim for vicarious liability was barred by the Graves Amendment, 49 U.S.C. § 30106 (2006). The district court granted summary judgment in favor of Enterprise, and the court of appeals affirmed. Meyer v. Nwokedi, 759 N.W.2d 426, 432 (Minn.App.2009). We granted review and affirm.

The material facts are undisputed. Maboko Mphosi (Mr. Mphosi) rented a sport utility vehicle (SUV) from Enterprise in Fargo, North Dakota, on June 4, 2004. The next day the SUV was involved in a single-vehicle accident on I-94 near Fergus Falls, Minnesota, which resulted in the deaths of Mr. Mphosi's wife, Margaret Mphosi, and their son, Joshua Mphosi, as well as injuries to their sons, Lucas Mphosi and Jehoshophat Mphosi.¹ At the time of the accident, Bibian Nwokedi was driving the SUV with the permission of Mr. Mphosi.

Meyer was named trustee for the heirs and next of kin of the decedents Margaret Mphosi and Joshua Mphosi and guardian ad litem for the injured minors Lucas Mphosi and Jehoshophat Mphosi. Subsequently Meyer commenced this action against Nwokedi and Enterprise to recover damages arising out of the accident. Meyer's complaint alleged that Nwokedi was negligent and that Enterprise was vicariously liable for the deaths and injuries caused by the negligent operation of the rental vehicle involved in the accident. The vicarious liability claim was premised on Minn.Stat. § 65B.49, subd. 5a(i)(2) (2006), which caps vicarious liability for rental-vehicle owners, and Minn.Stat. § 169.09, subd. 5a (2008), which, in relevant part, imposes vicarious liability on rental-vehicle owners. Additionally, Meyer's complaint alleged that Enterprise negligently entrusted the rental vehicle to Mr. Mphosi and that Enterprise was negligent.

Enterprise moved for summary judgment, arguing that (1) Meyer's vicarious liability claim should be dismissed as a matter of law because the Graves Amendment, a federal statute that preempts state laws imposing vicarious liability on rental-vehicle owners, preempts Minn.Stat. §§ 65B.49, subd. 5a(i)(2), and 169.09, subd. 5a, and (2) Meyer's negligent entrustment and negligence claims should be dismissed as a matter of law because Meyer failed to produce any evidence to support those claims. Meyer and Nwokedi both opposed Enterprise's motion for summary judgment. The district court agreed with Enterprise, however, and granted summary judgment in favor of Enterprise.

Although Enterprise's motion for summary judgment was granted, the claim against Nwokedi was still pending and Enterprise acknowledged its obligation to defend and indemnify Nwokedi; therefore, the parties entered into a settlement agreement to facilitate an appeal. In the agreement, Enterprise, as self-insurer² of the rental vehicle involved in the accident, deposited $60,000 with the district court based on the minimum insurance liability requirements of Minn.Stat. § 65B.49, subd. 3 (2008). In exchange, Meyer agreed to dismiss with prejudice and without costs "all claims in this lawsuit" with the exception of her vicarious liability claim against Enterprise.

Meyer then appealed the district court's grant of summary judgment for Enterprise. The court of appeals affirmed, holding that the Graves Amendment preempts Minn.Stat. § 65B.49, subd. 5a(i)(2), and Minn.Stat. § 169.09, subd. 5a, insofar as both of those state laws impose vicarious liability on rental-vehicle owners. Meyer, 759 N.W.2d at 432.

I.

Meyer argues that the district court erred in granting Enterprise's motion for summary judgment, particularly by dismissing her vicarious liability claim on the ground that it was preempted by the Graves Amendment. Meyer concedes that her vicarious liability claim fits within the express preemption clause of the Graves Amendment, but argues that, under the savings clause of the Graves Amendment, her vicarious liability claim is excluded from preemption.

Summary judgment is properly granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to judgment as a matter of law." Minn. R. Civ. P. 56.03. Whether federal law preempts state law is an issue of statutory interpretation, which we review de novo. In re Estate of Barg, 752 N.W.2d 52, 63 (Minn.2008).

The Supremacy Clause of the United States Constitution provides that the "Constitution, and the Laws of the United States ... made in Pursuance thereof ..., shall be the supreme Law of the Land." U.S. Const. art. VI, cl. 2. In determining if a federal law preempts a state law, "[c]ongressional purpose is `the ultimate touchstone.'" Barg, 752 N.W.2d at 63 (citation omitted). Congressional intent to preempt state laws may be express or implied. In re Qwest's Wholesale Serv. Quality Standards, 702 N.W.2d 246, 250 (Minn.2005). Preemption is generally disfavored, particularly if state laws regulating "the historic police powers of the States" are implicated. Barg, 752 N.W.2d at 63. Indeed, if "the text of a pre-emption clause is susceptible of more than one plausible reading, courts ordinarily `accept the reading that disfavors pre-emption.'" Altria Group, Inc. v. Good, ___ U.S. ___, 129 S.Ct. 538, 543, 172 L.Ed.2d 398 (2008) (quoting Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005)). Therefore, state laws are not preempted "unless that [is] the clear and manifest purpose of Congress." Barg, 752 N.W.2d at 63 (citation omitted) (internal quotation marks omitted). But when "Congress expressly preempts state action, the matter is settled." Risdall v. Brown-Wilbert, Inc., 753 N.W.2d 723, 728 (Minn.2008).

The Graves Amendment was enacted on August 10, 2005, as part of a comprehensive transportation bill known as the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (the Act), Pub.L. No. 109-59, 119 Stat. 1144 (2005). The Act deals generally with motor vehicle safety, primarily providing billions of dollars in funding allocations for transportation projects. Id.; see generally Susan Lorde Martin, Commerce Clause Jurisprudence and the Graves Amendment: Implications for the Vicarious Liability of Car Leasing Companies, 18 U. Fla. J.L. & Pub. Pol'y 153, 163 (2007). The Act also contains a provision, known as the Graves Amendment, which preempts state laws imposing vicarious liability on lease- or rental-vehicle owners. 49 U.S.C. § 30106.

The Graves Amendment has both an express preemption clause and a savings clause. The preemption clause states:

An owner of a motor vehicle that rents or leases the vehicle to a person ... shall not be liable under the law of any State ... by reason of being the owner of the vehicle ... 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 ... 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....

49 U.S.C. § 30106(a). It is undisputed that Meyer's vicarious liability claim fits within the scope of the express preemption clause of the Graves Amendment. Specifically, Enterprise is engaged in the business of renting motor vehicles, and did not engage in negligence or criminal wrongdoing. See id. Consequently, the express preemption clause of the Graves Amendment is applicable and, without more, would preempt Meyer's lawsuit.³

Meyer argues that her vicarious liability claim is predicated on a "financial responsibility or liability insurance requirement" of Minnesota law, and therefore is excluded from preemption under the savings clause of the Graves Amendment. The savings clause provides:

Nothing in this section supersedes the law of any State ...

(1) imposing financial responsibility or insurance standards on the owner of a 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.

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