Opinion
No. CV07-5012748S
April 22, 2008
MEMORANDUM OF DECISION ON CAMRAC, INC.'S MOTION FOR SUMMARY JUDGMENT
Before the court is a motion for summary judgment brought by the defendant Camrac which is in the business of renting motor vehicles to the public. It operates its business through Enterprise Rent-A-Car. That company leased a car to a police officer who was to use it on police department business. A copy of the rental agreement is attached to an affidavit submitted by a Camrac Loss Control Supervisor. The car was being operated by an undercover officer when it was involved in an accident with the plaintiff's vehicle. The plaintiff then brought a negligence action against the driver police officer, the town, and Camrac.
The complaint makes no reference to the lease arrangement between the police and Camrac; it merely states Camrac owns the vehicle. The Camrac motion and attached documents explicitly claim a lease arrangement and the objection concedes as much by relying on a claim that the basis of the suit is § 14-154a of our General Statutes. Camrac in its motion argues that our statute has been preempted by federal legislation 49 U.S.C. § 30106(a). The plaintiff argues that . . . "in the context of this case, there is no legitimate federal interest sufficient to permit the Federal Government to preempt Connecticut's law (as embodied in § 14-154(a))." The plaintiff concedes that this is a problem under the Commerce Clause as embodied in Article I § 8 of the federal constitution but opines that in recent years courts "have severely limited" Congress's power under that clause citing U.S. v. Morrison, 529 U.S. 598 (2000) and U.S. v. Lopez. Citing Graham v. Dunkley, 827 N.Y.S.2d 513 (2006) the plaintiff accepts its premise that if federal preemption of New York or any other state suits brought under local law against car rental companies were permitted "all substantive tort law would be swept up into the regulatory arm of the Federal Government" — there is no "legitimate federal interest sufficient to permit the Federal Government to preempt Connecticut (or New York statutes) permitting actions against car rental companies."
First the court will refer to the statutes involved and then it will try to discuss the issues raised.
Conn. Gen. Stat. § 14-154a(a)
Any person renting or leasing to another any motor vehicle owned by him shall be liable for any damage to any person or property caused by the operation of such motor vehicle while so rented or leased, to the same extent as the operator would have been liable if he had also been the owner.49 U.S.C. § 30106(a)
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 or political subdivision thereof, 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.
There is no claim in this case that any negligence or wrongdoing on the part of Camrac caused the accident and resulting injury to the plaintiff.
(1)
The court has relied heavily on Modern Constitutional Law, 2d ed, Antineau and Rich, Vol. 3, § 44.05- § 44.18 "Congressional Power Over Commerce" pp. 167-200.
In approaching this problem and the claim that the federal statute is unconstitutional in that exceeds federal power under the Commerce Clause thereby in effect arguing it intrudes on powers reserved to the states, the court will rely on certain basic principles.
In New York v. O'Neill, 359 U.S. 1, 6 (1959) the court said: "Rather according (federal) statutes the full benefit of the presumption of constitutionality is the postulate of constitutional adjudication, we must find clear incompatibility with the United States Constitution." In Schwenk v. Hartford, 204 F.3d 1187, 1204 (CA9, 2000) the court said: "It is well-established that acts of Congress enjoy a strong presumption of constitutionality and that newly passed statutes do not require judicial ratification in order to take effect," cited in Collins v. Bayer, 408 F.3d 1279, 1294 (CA9, 2005).
At § 44.05, page 171, Antineau and Rich frame the problem more concisely than this court could hope to do. They point out that in the 1971 case of Perez v. U.S., 402 U.S. 146, 150 the court "identified three broad categories of problems reached by the Commerce Clause" first, problems which Congress deemed to have involved misuse of the channels of commerce (such as shipment of stolen goods, kidnapped persons, or mislabeled products), second, protection of "instrumentalities of interstate commerce (for example, regulation of aircraft or protecting persons or things in commerce from theft); and third activities `affecting commerce.'" U.S. v. Lopez, at 514 U.S. page 558 itself recognized "these three broad categories of activity that Congress may regulate under its Commerce Power."
The case now before the court involves the third category — activities affecting commerce. Antineau and Rich point out that: "in measuring the scope of the Commerce Clause in relationship to `activities affecting commerce' three basic principles provide a guide: first Congress may regulate all activities — including those that take place intrastate — which have `a substantial effect' on interstate commerce (citing U.S. v. Darby, 312, 100, 119 (1941); second, even effects that seem individually `trivial' may be deemed substantial when `taken together with that of many others similarly situated' (citing Wickard v. Filburn, 317 U.S. 111, 128 (1942); and third, courts will defer to a congressional finding that a regulated activity affects interstate commerce `if there is any rational basis for such a finding' (citing Hodel v. Virginia Surface Mining and Reclamation Ass'n, Inc., 452 U.S. 264, 276 (1982))."
This last point was referred to earlier when this court quoted from decisions holding that Congressional acts should be given a presumption of constitutionality and Justice Frankfurter underlines this point in matters involving the Commerce Clause.
When the conduct of an enterprise affects commerce among the States is a matter of practical judgment, not to be determined by abstract notions. The exercise of this practical judgment the Constitution entrusts primarily and very largely to the Congress, subject to the latter's control by the electorate. Great power was thus given to the Congress: the power of legislation and thereby the power of passing judgment upon the needs of a complex society . . . To hold that Congress could not deem the activities here in question to affect what men of practical affairs would call commerce, and to deem them related to such commerce merely by gossamer threads and not by solid ties, would be to disrespect the judgment that is open to men who have the constitutional power and responsibility to legislate for the Nation.
Polish National Alliance of U.S. v. NLRB, 322 U.S. 643, 650-51 (1944).
Certainly there was a rational basis for Congress to conclude that state statutes imposing liability on car rental agencies for the actions of lessees in the absence of negligence or wrong doing would in the congregate affect interstate commerce and have an effect on such commerce. For that reason they passed § 49 U.S.C. § 30106(a). Camrac which does business as Enterprise Rent-A-Car leases vehicles which can be used in interstate commerce and thus its business is inextricably bound up with that commerce. The rental agreement attached to the defendant's motion for summary judgment has a box entitled "Permission Granted to Operate Vehicle only in the State of Rental and the Following States," "Operation in any other state or county will affect your liability and rights under the agreement." Certainly it is contemplated that these cars might be leased to operate in interstate commerce. Statutes like § 14-154(a) impose a liability on car rental companies thus increasing their operating costs since they will be exposed to a liability unknown at common law. These costs will be passed on to the consumer-lessees of the cars in the form of higher rental fees or if the companies operate in highly competitive markets the costs will have to be absorbed limiting their ability to expand their services. All of this would affect the flow of vehicles in interstate commerce. Perhaps just as importantly airlines, bus companies and trains and car rental companies are all competing commercial entities in intrastate and interstate commerce. Congress certainly has a right to be concerned about the functioning of this competitive commercial market — if for no other reason than it has an interest in seeing to it that citizens desiring to engage in interstate travel, itself an economic activity, have many types of transportation options open to them at fair competitive prices. A statute like § 14-154(a), by imposing added operational costs on car rental companies not imposed on other providers of interstate travel, has a discernible effect on interstate commerce which Congress has a right to preempt.
Furthermore, nothing in U.S. v. Lopez, supra, or U.S. v. Morrison, provides an indication that the present Federal Supreme Court is set on the path of radically altering the law under the Commerce Clause. U.S. v. Lopez, supra, found that a federal law against possessing firearms in school zones does not regulate activity having a substantial effect on interstate commerce. What was lacking in the statute before the court in Lopez was "an evident commercial nexus," see Justice Kennedy's concurring opinion at 514 U.S. page 580. Justice Kennedy points out that Chief Justice Rehnquist explained that "unlike the earlier cases to come before the court here neither the actors nor their conduct have a commercial character," id. The federal statute in U.S. v. Morrison, supra, had the same failing, it sought to provide a federal remedy for victims of gender motivated violence.
Certainly the federal statute in this case has a self-evident commercial nexus to the operation of car rental companies and their consumers in interstate commerce.
The court grants Camrac Inc.'s motion for summary judgment.
The plaintiffs cite to a decision by a New York trial judge is not persuasive, Graham Dunkley, 827 N.Y.S.2d 513 (2000). He held the federal statute preempting state vicarious liability law for motor vehicle leasing companies is unconstitutional. At one point the good judge said "an individuals' pursuit of justice in (a state court) is not an `economic class of activity' or `economic enterprise' no matter how broadly those terms may be defined," id. p. 524. This turns the analysis exactly on its head. The question is not whether the presence or absence of activity in state courts will have some kind of economic effect. The issue is whether the federal legislative activity in fact appropriately lies under the Commerce Clause. If it does what may be the effect on state litigation is irrelevant and should not enter into the predicate analysis as to whether Congress has the right to act under that clause.