On March 1, 2010, the Florida Supreme Court heard oral argument in Rafael Vargas v. Enterprise Leasing Company, et al., SC08-2269. The case challenges the application of a federal law that shields rental car companies from vicarious liability for accidents involving rental cars. The 2005 federal “Graves Amendment” protects rental car companies from such liability except in states which impose financial responsibility or insurance requirements on rental car companies.

In the Vargas case, the issue is whether a Florida law, entitled “Financial Responsibility,” meets the federal exemption criteria, thereby rendering the protections of the Graves Amendment inapplicable. Under Florida law, if the person who leases or drives a rented vehicle is uninsured or has combined insurance limits of less than $500,000, the rental company “shall be liable for up to an additional $500,000 in economic damages.”

Vargas was injured when a vehicle rented from Enterprise rear-ended his car in February 2006. Vargas subsequently made a vicarious liability claim against Enterprise, which the trial court rejected. Florida’s Fourth District Court of Appeal agreed with Enterprise Leasing Company, holding stated that the Florida statute did not fit within the exemptions to the Graves Amendment. The Florida Supreme Court will now resolve the issue.

For more information see here.