Second Child v. Edge Auto, Inc.

Summary

The New York Court of Appeals considers whether the federal Graves Amendment preempts Vehicle and Traffic Law § 370's requirement that rental car companies provide primary liability insurance coverage to renters. The Court holds that the primary-coverage requirement is preempted, while the statute's requirement that rental companies maintain specified minimum insurance remains valid. The Court affirms the Appellate Division's order and answers the certified question in the affirmative.

Holdings

1. The Graves Amendment preempts Vehicle and Traffic Law § 370 to the extent § 370, as interpreted in ELRAC, Inc. v. Ward, requires rental car companies to provide primary liability insurance coverage to renters up to the statutory minimum limits.
2. The Graves Amendment does not preempt Vehicle and Traffic Law § 370's requirement that rental car companies carry specified minimum amounts of insurance, including insurance required for registering and operating vehicles.
3. The McCarran-Ferguson Act does not reverse-preempt the Graves Amendment in this case.

Questions Presented

1. Whether the Graves Amendment preempts Vehicle and Traffic Law § 370 insofar as § 370, as interpreted in ELRAC, Inc. v. Ward, requires rental car companies to provide primary liability insurance coverage to renters up to statutory minimum limits.
2. Whether the Graves Amendment preempts the separate requirement in Vehicle and Traffic Law § 370 that rental car companies carry specified minimum amounts of insurance.
3. Whether the McCarran-Ferguson Act reverse-preempts the Graves Amendment because § 370 regulates the business of insurance.

Disposition

affirmed