New York Court of Appeals confirmed the preemptive reach of the Graves Amendment in the Second Child v. Edge Auto case

The New York Court of Appeals issued its decision in Second Child v. Edge Auto, Inc. on April 23, 2026, affirming the Appellate Division’s ruling that the federal Graves Amendment preempts portions of New York Vehicle and Traffic Law § 370. The 4-3 decision confirmed the preemptive reach of the Graves Amendment, which shields rental car companies from vicarious liability for damages caused by their renters.

The Court’s Ruling

The Court of Appeals held that the Graves Amendment (49 USC § 30106) preempts Vehicle and Traffic Law § 370 to the extent that state law has been interpreted to require rental car companies to provide primary liability insurance coverage to renters up to the statute’s minimum liability amounts. However, the court clarified that the Graves Amendment does not preempt § 370’s requirement that rental car companies maintain a specified minimum amount of insurance for their vehicles.

The majority opinion, authored by Judge Singas, reasoned that “requiring defendants to primarily insure and indemnify plaintiffs’ damages is the precise result barred by the Graves Amendment”. The court rejected the argument that the Graves Amendment only supersedes vicarious liability statutes while allowing statutes mandating primary coverage, calling this “a distinction without a difference”.

Attorney General’s Position

New York Attorney General Letitia James filed an amicus brief in the case supporting the plaintiffs’ position that Vehicle and Traffic Law § 370 should not be preempted. The Attorney General’s office argued in favor of overturning the First Department’s precedent, seeking to preserve the state’s ability to require rental companies to extend primary insurance coverage to renters.

Impact

The ruling means that rental car companies in New York are no longer statutorily required to extend minimum limits liability insurance to their renters, though they must still maintain the specified insurance minimums for their fleet. The decision represents a significant shift from the prior interpretation established in the 2001 Ward case, which had been the precedent before Congress enacted the Graves Amendment in 2005.