New York

In Graham v. Dunkley, Queens County, Supreme Court (Polizzi, J.), held that the Transportation Equity Act of 2005 was unconstitutional.  The Act intends to preempt all state statutes to the extent that they hold those owners in the business of renting or leasing motor vehicles vicariously liable for the negligence of drivers, except when there is negligence or criminal wrongdoing on the part of the owner.  In New York, the Act implicates Vehicle and Traffic Law sec. 388.

Last week, the Appellate Division, Second Department reversed Justice Polizzi's holding, concluding that the Act is constitutional.  The Court noted that the Act aids in the regulation of the national market for leased and rented automobiles and motor vehicles are "the quintessential instrumentalities of modern interstate commerce."   The Court also observed that the Act constitutional as a regulation of an economic "class of activities" which, taken in the aggregate, substantially affect interstate commerce.

See the following posts for some background on this case: here, here, and here.