Until recently, victims of automobile accidents in New York had protection through a legal concept called vicarious liability, which allowed victims of car accidents to hold the car owner liable in cases that involved negligence, even if the owner was not the driver of the vehicle. Because leasing and rental companies have some control over who drives their cars, law makers in New York and a few other states put vicarious liability in place to protect innocent victims of negligence.

On August 10^th, 2005, however, this all changed when congress passed a bill known as the “highway bill”. Slipped into this 900 page document was the Graves amendment. The Graves amendment abolishes vicarious liability, leaving auto leasing and rental companies free and clear of responsibility when their drivers were negligent.

Laws regarding insurance issues are typically decided by each individual state. The Graves amendment is historic because it is a federal law that overrides individual state laws on the issue.

It was later discovered that the Graves amendment was never actually put on the floor for debate, angering some who would have objected to it. Because of this controversy, there have been several appeals of the Graves amendment, which was in fact, banished in 2007 when a US district court judge ruled it unconstitutional. However, it was upheld again in August of 2008 and ruled constitutional on the basis of the commerce clause, since leased and rented cars typically cross state lines.

More appeals may follow, but as it stands, the Graves law is still in place, leaving leasing and rental companies void of any liability for their drivers.