Zipcar Granted Graves Protection

Although car-sharing company Zipcar advertises itself as an alternative to "traditional rental cars," Zipcar can claim protection from a law that shields car rental agencies against liability for most accidents involving their vehicles.

The Graves Amendment is a 2005 federal law protecting car rental agencies from that liability.

A Queens, N.Y., state Supreme Court Justice Roger N. Rosengarten has ruled that the use of a car in exchange for a fee appears little different from traditional companies, even though Zipcar's marketing statements contrast it with those companies, Rosengarten wrote in Minto v. Zipcar. Zipcar, the court found, is in the trade or business of renting or leasing motor vehicles, as those words are traditionally understood.

Leslie Minto brought the personal injury case against Zipcar and Zipcar member Dale Douglas for injuries she allegedly received when her car was rear-ended in May 2009 in a Zipcar.

Zipcar bills itself as an alternative to traditional companies, because it requires membership, leases cars by the hour or the day, and provides gas and insurance.

In her complaint, Minto claimed Zipcar should be responsible for the accident with Douglas under the Vehicle and Traffic Law, which provides that every "owner of a vehicle used or operated in this state shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle."

Zipcar argued that any such vicarious liability was precluded by the Graves Amendment, which states that car rental agencies are not liable "for harm to persons or property that results or arises out of the use, operation, or possession of [their vehicles] during the period of the rental or lease," subject to certain conditions.

Justice Rosengarten found that Zipcar is essentially another form of car rental agency, and therefore falls within the protected class for the Graves Amendment.

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