A New York trial court has ruled in a case of first impression that Zipcar is an automobile rental/leasing company and is therefore protected from vicarious liability by the Graves Amendment.

Zipcar is a membership-based business that provides cars to its members for an hourly or daily charge pursuant to a membership contract. In Minto v. Zipcar New York, Inc., (Supreme Court, Queens County, decided June 14, 2010), one Dale Douglas was driving a vehicle pursuant to his membership in Zipcar New York. He allegedly rear-ended the plaintiff, who brought suit for personal injuries he suffered in the accident. He sued Zipcar based upon New York Vehicle and Traffic Law section 388(1), which provides that a vehicle owner is liable for injuries resulting from the negligent use or operation of the vehicle.

Zipcar moved for summary judgment, citing the Graves Amendment, which provides that an owner who rents or leases a vehicle to another “shall not be liable under the law of any State…by reason of being the owner of the vehicle……” The plaintiff, for his part, argued that Zipcar was not a rental/leasing company and was therefore not protected by the Graves Amendment.

The court ruled that Zipcar was in the business of renting/leasing vehicles, notwithstanding its membership contracts and notwithstanding its advertisements that included lines like, “You could rent a car (but that would be silly)…” Given that Zipcar is in the rental/leasing business, the court concluded that it was cloaked with the protection of the Graves Amendment and dismissed the plaintiff’s claims.