-: SJC-13378, Maria Blanca, Elena Garcia
and another v. Shaniqua Steele and another.
-: Okay, Attorney Antonelli, whenever you're ready.
-: May it please the court, good morning, Your Honors.
Peter Antonelli on behalf of the plaintiffs
Maria Elena Garcia and Jose Favian Sejo.
Before the court is really a legal issue
under the Graves Amendment, 49 USC 30106.
We believe and it's our position
that the superior court erred in finding
that the Graves Amendment applied to the transaction
at issue, which was a courtesy loaner car.
The plain reading of the statute covers the lease
and the rental of cars.
The record before the court demonstrates
that the courtesy loaner vehicle--
-: Can you address the 11th circuit's take on consideration
'cause we have two cases of the circuit.
Well, you obviously know the case law.
But we have the 11th circuit goes against you on this issue
of consideration on a lease or rental.
Can you address that, please?
-: Your Honor, I can try.
With all due respect to the 11th circuit,
I didn't find the rationale entirely understandable.
-: Yeah, as I understand this is part and parcel
of you buying this fancy car and having this service,
we're gonna give you a rental and that's the consideration?
-: I think what the--
-: Rental, I'm sorry, I misspoke, a loaner.
-: Right, I think what the 11th circuit said
in taking a square peg and putting it into the round hole
of what was actually an ordinary and common usage
for consideration, for rent, what was consideration.
The court said that when I as the customer
of the service department have an opportunity
to service my vehicle,
that constitutes sufficient consideration.
-: So I go to the dealership, I go to the Mercedes-Benz
of Caldwell to get my car serviced,
I don't go to Joe's Garage
because Joe's Garage is not gonna give me a loaner.
Isn't that part of the consideration
of me going to the Mercedes-Benz dealer
'cause I'm gonna pay for this front end alignment
and I'm gonna get a loaner.
-: Well, the problem with that is that it's twofold.
First of all, it's strained in the sense
that if you take another hypo on the home owner that chooses
to paint my house and actually the consideration
that I'm paying to a particular painter
before I actually pay it, before I actually undertake
the agreement, before I even render the agreement
is just the opportunity that I had to give that job out
to seven different painters.
It just strains credulity.
It really contravenes statutory construction,
which is let's use the plain and ordinary
and common sense meaning, which is why you look
to dictionaries, number one.
I'm sorry.
Gaziano: No, please continue.
-: Number two, when I asked at deposition the CFO,
the 36B representative very simply
is there a cost associated with it,
i.e. is there consideration paid
by the customer for that?
Not only did the 36B representative not say,
well, I don't know what you mean,
there's a lot of ways to construe that,
she understood the plain and ordinary meaning
of the question that I was asking and said, "No."
-: I'll expose my naivete.
I was struck by the fact that there are 125 vehicles
that are loaners.
This is a big business.
Doesn't that more go to there's costs associated
with maintaining those 125 vehicles that are passed on
to the person who's getting their car fixed.
-: Well, certainly the dealership can maintain its business
of servicing the car
and it can do what any number of dealerships do,
which is maintain an independent rental agency
within the dealership.
It can give the customer an Uber ride.
It could say, we don't wanna give you any rental at all.
It could say any number of things.
And my point there is it's separate, it's independent
from the transaction.
And the court need look no further
than the actual rental document
because the rental document has...
Sorry-- -: Lack of a rental document.
-: Right, it's not a rental document.
The dealership calls it a loaner authorization form
and front and center is a placeholder for cost
and it's zero.
It doesn't say what the 11th circuit says, which is,
well, for this particular transaction,
we're gonna call it an opportunity.
-: But we're gonna charge you $1,000
for the front end alignment rather than $800
that Joe's Garage does, basically.
(Gaziano laughs)
-: Again, I think anybody construing this
has a hard time finding consideration.
-: I see what you're saying.
It's a search and inquiry for consideration.
Antonelli: Right.
-: Let me ask you a different question then
'cause I think it's as straightforward as that
whether there's consideration,
but one of the decisions talked about the statutory purpose
of the Graves Amendment and that this failure
to hold the business liable would be inconsistent
with the statutory purpose.
What do you understand the purpose
of the Graves Amendment to be
and whether or not your interpretation fits in
with that purpose?
-: Sure, I think first of all when construing a statute,
a federal statute--
-: Yeah, this is probably third in the tool box.
-: Right, so if we get past the plain terms
and we need to go past dictionaries and then we need
to look at what is the statutory purpose, which I understand
in other rules of construction is part and parcel
of the first two steps.
The statute was enacted in 2005 to afford protections
to rental car companies and leasing companies,
not just necessarily private individual rental cars,
that operate in interstate markets.
-: So they don't get sued in California
when they rent it in Virginia.
-: Right, and so the congress made a decision
to bolster that business by affording liability protection
on a countrywide basis
so as to preempt individual state laws
that might impose liability
on a particular national rental chain
in a particular state.
That was the purpose.
-: Where does the 100 miles radius fit into that
in that inquiry?
-: Well, it fits in I believe in the sense that generally
for Congress to act in a case like this, it's operating
under its powers under the Commerce Clause.
And I think it was the GMC case
also by the 11th circuit cited by my brother,
the court analyzed under Raich I think
that where you have activities that substantially effect,
that's the test under Raich,
substantially effect interstate commerce,
then Congress has the power to act.
So it goes to both the purpose and it goes to both the power
of Congress to act.
In other words, here we have a situation
where the local dealer much like many dealers,
most dealers perhaps, are operating
in a localized environment at least vis a vis
national rental companies, national truck rental companies,
auto rental companies.
And so it doesn't fit within the purpose.
And then as to the power, it undercuts the proposition
that Congress was acting
under its interstate commerce powers
because obviously the dealership is telling its customer
don't go more than 100 miles.
And in most circumstances,
unless you live in a border state,
that's gonna restrict the loan of the vehicle
to that particular state.
So I think it cuts on both those points.
-: Can I ask a silly question?
Am I cutting you off?
-: No, I'm all set, thank you.
-: As much as we love deciding
complicated federal statutory questions,
there's no possibility of negligence here
on the part of this company, right?
I mean, the lease is with...
The rental agreement is with her husband or her boyfriend,
I can't remember who he is.
He's not driving the car.
She's driving the car.
Don't they preclude him
from letting anyone else drive the car?
So should we be even deciding
this difficult federal question in a case
in which there's no possibility
of proving negligence against the company?
-: I think that's one argument
that the court need not reach that,
but here, we're arguing obviously that there is liability
based upon essentially responding at the superior--
Gaziano: Applying other statutes.
-: Yeah, applying 85A, 231:85A and number two--
-: Meaning that if they're the owner...
Okay, so your point is that if we rule the other way,
there's a presumption that they're the owner,
but there's not a presumption
that there's negligence, right?
-: Well, I've read the case law.
Judge Gantz in the,
I believe it's the St. Pierre v. Penske Truck case,
while he was a superior court justice traced the arc
of the development of 85A.
-: It's prima facie evidence of responsibility.
-: It's not only prima facie evidence, but where he came out
in 2001 was that the SJC creates...
The SJC has ruled, applied that statute in such a way
that the question of the presumption goes to a jury.
So that's number one.
Number two is on the question of liability.
Admittedly, this is a question before the court.
It's a question of what is the legal question
of whether or not there's a duty
and then because I found no case that was four square
on the circumstances of this case.
There are a couple cases, I think it's Jupen or Jupin,
which dealt with the court, the SJC imposing a new burden
on a home owner whose boyfriend had firearms
and created a burden.
And so it's an issue of law.
And those are duties that evolve.
-: And the judge below didn't reach this issue.
Antonelli: What's that?
-: The judge below didn't reach this issue.
-: The judge did reach the issue and he said unequivocally
there is no duty under the circumstances of the case.
And I submit that there is a duty
and there should be a duty because--
-: He said that notwithstanding the Graves Amendment?
-: Yeah, he reasoned that there was no duty
under the circumstances.
-: 'Cause I was more looking at whether
or not Mr. Oakey was liable for negligent entrustment.
-: Well, I just heard Your Honor's question as whether
or not there was a duty as to the dealership.
And he reasoned that there was no duty
under the circumstances of this case
because the conduct was not foreseeable.
Ultimately that, Oakey entrusting the car to his wife
and his wife, who is an unlicensed driver
was not a foreseeable injury such that that was a duty.
And I think it's the Jupin case, obviously the court,
whether or not there's a duty is a matter of law
and then we get to the question of what is the scope
of the duty and that becomes a factual interest.
And I submit to the court that under the circumstances
of this case where you have a Mercedes dealership
renting out high end cars that generates 10
to $15 million just in its parts and service business
because that's what Mr. Pittman testified to
in his deposition and that's before the court
that there should be a duty.
In other words, they're in the best position
to assess the risk of giving out these loaner vehicles.
They've decided that it helps their business to do that,
but they have options.
They can give a customer a rental voucher,
they can give the customer an Uber ride.
And this court is not blind to those options.
Those are everyday options.
The dealership could put a LoJack on the vehicle
that enforces the distance limitation.
The record testimony is they don't do anything.
They don't check to see that their policies
and procedures are being enforced.
So as Justice Scalia said, quoting someone, one
of the founding fathers, "It's a parchment guarantee."
"It's just a piece of paper," in their words.
So I submit--
-: That's mostly what we deal with, parchment guarantees,
so you don't wanna put us out of business.
-: I don't, I don't.
On the negligence, and I have 49 seconds,
so on the negligent entrustment,
I read Judge Deakins' decision and my brother's briefing
to say that because Mr. Oakey testified
and because Steele testified
that I didn't have express permission to drive that car
that that's enough.
It doesn't get to a jury.
And our position is regardless
of what they said about authority--
-: But he left it running with her in the front seat.
-: So the test under the negligent entrustment doctrine
is whether there's specific or general permission.
And our position is--
-: The parking enforcement person
thought she had permission to move it.
-: Everybody seemed to think it and there's no dispute.
Your Honors can look to the incident report, the detective
that investigated it that happened to be on the scene,
Detective McManus, observe the incident.
He saw her behind the wheel of the car, Oakey admitted
that he left her in the car running.
So the circumstances of the case I would submit
show implied permission.
But in any event, it's something that a jury should decide
under the circumstances of the case.
Looks like I'm over.
I believe so.
I'll rest, sir, thank you.
-: Thank you.
Okay, Attorney Melville.
-: May it please the court, Michael Melville on behalf
of MBF Auto doing business in Mercedes-Benz of Caldwell
and MBB Auto doing business Mercedes-Benz Brooklyn.
We ask the court affirm the judgment of the trial court.
As there's really no evidence of negligence in this case,
the plaintiffs have to rely on the prima facie assumptions
created by 231:85A, but that statute one,
with regard to MBB--
-: Does that get you over the rail to a jury trial?
-: Well, we were granted
some rejudgement on this, Your Honor.
And my opinion on 85A just in general,
first of all, it's preempted by the Graves Amendments,
but secondly, as far as if we just wanted to focus
on whether or not you need to apply 85A,
while there's some rather old SJC case law,
I think the most recent case was the '40s,
more recent appellate authority in Massachusetts
has indicated that some rejudgement can be appropriate.
I think it was the appeals court, not this court,
so it's per sway of authority,
but I believe the Thompson case said you can overcome
that presumption of 85A at the summary judgment stage.
-: Let's go to the Graves Amendment.
What's your view of the consideration?
Does it have to be dollars for consideration
or could it be this kind of goodwill?
-: Well, it's not goodwill, Your Honor,
in these circumstances.
It doesn't have to be dollars.
Consideration has never been anywhere
and it's not limited to dollars.
Consideration is something which motivates a person
to do another act.
In this case, the consideration is if you bring your car
into a dealership and it meets certain criteria, including
that it has to be there for more than three hours,
so presumably larger repairs, not just an oil change
or whatever, we will provide you with a courtesy vehicle
as part of it.
And you only get that courtesy vehicle,
not for an unlimited period of time.
You have to return it within 24 hours
of our service being done.
So it's very clearly tied into the requirements
and business of this vehicle--
-: But Mr. Oakey doesn't believe he paid anything
for the loaner vehicle, right?
He got it as a gratuity for the service.
-: Well, no, Your Honor, while he may have said
he didn't pay anything for it, he brought it in,
he chose to come into a Mercedes-Benz dealership,
pay presumably higher prices as part of that,
as part of his calculation of where do I bring my vehicle?
Do I bring it to Joe's Auto as Your Honor referred to as
or do I go into a Mercedes-Benz dealer
where I might pay a higher rate per hour for work,
a premium on prices, the same part, the same service,
motivated him to go to the dealership
'cause he indicated I think in his testimony,
"I always go to dealerships."
Well, why does he do that?
He goes there because it gives him additional services
in addition to having his vehicle repaired.
-: What's your understanding of the statutory purpose
of the amendment?
-: Well, the statutory purpose of the amendment, Your Honor,
it's under, the congress enacted it
under the Commerce Clause.
The Commerce Clause allows Congress to do several things,
but the large one I think RC in the 11th circuit noted
allows them to regulate purely intrastate activities
which have a substantial factor on interstate commerce.
The repair of vehicles, an instrumentality of commerce,
has a substantial impact on the interstate commerce.
This is allowing him...
First of all, I would dispute that this activity
of this company is purely intrastate.
100 miles from Caldwell, New Jersey...
-: He wasn't supposed to be there.
-: Well, he wasn't supposed to be in Massachusetts,
but 100 miles would bring you to Philadelphia
or New Haven, Connecticut from Caldwell,
New York City is still within that 100 miles.
-: What do we make of the fact that it doesn't say bailments?
It just says leases or rentals.
-: Well, Your Honor, I assume you're talking
about the statute saying lease, yes.
Well, it doesn't say bailment.
And first of all, I think a rental, even if I paid money
to rent to Enterprise, that is a bailment.
The terms in the statute are lease or rent.
And those terms, this fits that, which is a rent is...
Well, I think we look at the 2004 version of Black's
which doesn't define rent--
-: Everybody cites the definitions, both sides.
-: Yeah, it does.
-: The question is how do we define consideration
in this transaction?
-: And it was an activity that motivated him
or it motivated a consumer rather to bring their vehicle--
-: Maybe I should've looked at it
and maybe it's not before me, but what did he say
in his deposition as far as that goes?
-: I'm not sure what his motivation was explicitly asked,
this particular individual's motivation was explicitly asked
and I'm not sure it's necessary to interpret the statute.
As you know I don't know--
-: I'm getting more to the brass tacks.
Was he asked about why he went to the Mercedes dealer
and whether or not the rental car
or the loaner cars were part of his reasoning?
-: I don't recall that that was actually part of the record
if that was ever asked of him, Your Honor.
I was not the trial attorney on this case,
but I don't recall that that was
in the part of the record of this case.
I believe he said, "I brought it in to get it repaired."
-: His individual intent wouldn't really matter.
-: Exactly, Your Honor.
That was more my point is I'm not sure
that his intent matters,
it's is this consideration for the transaction.
-: The company's giving a detriment, which it seems
it meets contractual definition of consideration.
I don't know if it meets the definition of rent or lease,
but it satisfies the meaning of consideration, doesn't it,
under contract law?
They're suffering a detriment.
In return for getting the ability to repair his car
and make some money, they're providing this car to him.
So that gives him a benefit and it's a detriment to them.
So it seems like it's gonna meet
some definition of consideration.
-: I agree, Your Honor.
-: 11th circuit's embellishment of rent or lease.
-: Well, Your Honor, and I think you have to go back
to break down what a rent or a lease is,
which is I'm giving someone a piece of the use,
the temporary use of property in exchange for consideration.
That's when you go back to the consideration,
this meets the definition of it.
It doesn't need to necessarily be a dollar figure.
If Congress wanted to include a dollar requirement
that a dollar figure be part of the transaction,
it could've done so, it did not do so.
It said a rent or a lease.
And the definition of common parlance
of rent or lease is a temporary granting of property
in exchange for consideration.
And this meets the definition.
-: I'm sorry, I'm slow today, but so...
And probably always.
So your client gave the plaintiff a loaner car
and the consideration for that loaner was the opportunity
to repair the car as opposed to him going to Joe's?
-: Correct, it's an opportunity for him
to come in and repair the car.
It doesn't need to specifically be--
-: And so there's two parts to the Graves Amendment.
So you are saying that you're the owner
that rented or leased the vehicle
and the consideration was the opportunity to get...
How do you meet the engaged in the business
of renting and leasing?
Is that because your fleet is so large?
-: Well, it's part of I think, one, they are a car dealership
that leases vehicles in general.
But besides that with regards to this specific issue here,
Your Honor, yes, in addition to being a car dealership
that leases vehicles to other consumers,
long-term leases as Mercedes-Benz is wont to do,
they also have a very large repair business.
That repair business has a fleet of 125 vehicles.
95% of them on any given day are out on loaner.
Part of that repair business also is enticing people
to come in as part and parcel of the whole business,
the whole repair package together.
-: And can you cite for me again that Commerce Clause case
that is really about the breadth of the Commerce Clause.
It's really, really hardly a limit at all.
You had discussed it earlier or I can just listen back
to the tape if you don't have that.
-: It was Garcia, Your Honor, I believe was the case.
It was the 11th circuit case cited in my brief.
Well, there was two, Thayer didn't have to deal
with the Commerce Clause because the 11th circuit itself
had already found it was constitutional statute
and it wasn't a constitutional challenge on Thayer
or in this case really either.
They didn't really challenge the constitutionality of it,
but the Commerce Clause, by and large, the Graves Amendment
almost I believe every time it's been challenged
has been found to be constitutional by the federal courts,
at least the circuit courts of appeal,
at least as far as I'm aware.
With no other questions, we'll rest on our brief, thank you.
-: Thanks.
And Attorney Lantini gets a chance.
-: Good afternoon, Your Honors, may it please the court.
David Lantini on behalf of the defendant Goliweli Oakey.
The sole claim against Mr. Oakey is for one
in negligent entrustment of the vehicle
to Ms. Steele causing the accident.
-: Is that the only claim against Mr. Oakey in the complaint?
-: There's a claim for consortium, Your Honor.
Only summary judgment was entered as
to the negligent entrustment claim count two.
-: And how is it that if you double park your car,
leave somebody who can't drive in the vehicle
with the car running not negligent entrustment?
-: The foreseeability issue, Your Honor,
I'll get right to it.
Was it foreseeable, I guess that's the question
to Mr. Oakey whether Ms. Steele was going to--
-: It's right down there during business hours.
It's not out in a field in Iowa.
-: Understandable, but there's also I think everyone
in this room has been in a car, an occupant of a vehicle
and the owner or the operator gets out,
runs into the convenience store with the car running.
Budd: So that the person in the passenger seat
can move the car if need be.
-: If there was such evidence in a discussion, Your Honor,
that would be great.
-: But you don't even have to.
Wendlandt: Aren't you at summary judgment?
-: We were, Your Honor, and there was affirmative evidence
from Ms. Steele and Mr. Oakey
that she didn't have a license, he knew this,
she never tried to drive one of his cars.
For all we know, he could've left her there as,
for lack of a better description,
a human scarecrow if a meter maid came along
seeing that this car is running, the lights are there,
they're obviously not gonna be here for a long time,
I'm just gonna go down the street.
If there was some evidence that they had a discussion,
move the car, I wouldn't get summary judgment
and I would have never moved for it.
But there was no discussion amongst them and I would--
Wendlandt: Why would he leave the car running?
-: That's a great question, Your Honor.
Gaziano: One for the jury probably.
-: Not when there's affirmative evidence, Your Honors.
-: Must have been hot, keep the air conditioner on.
-: We're guessing.
It's speculation as to why he left her there,
but he knew she couldn't drive it and she literally said--
-: Is it really guesswork, though?
Isn't it a fair inference and on summary judgment,
we indulge the fair inferences in favor of the nonmovement.
-: But she said, "I didn't have permission to drive the car,"
in her interrogatories and that's her testimony.
That's affirmative evidence
that she knew she did not have consent
to operate the vehicle.
And there's been nothing to refute that.
And the plaintiff's only real argument is
that it is a matter of implied consent
and that seems to be.
And the only case they cite in their portion
of the brief addressing this is the O'leary v. Fox case.
And it's convoluted similar to this,
but that was two motorcycles crashing and they found
that the owner, the operator, they found the owner liable
under a negligent entrustment theory because the owner saw
that the operator bought the bike on her credit card.
-: Is that a summary judgment case?
-: I thought usually these cases are kids
that take a parent's car for a joyride and there's evidence
of parents never allowed the kid in this.
You can have summary judgment there.
Those are a little different, right?
-: I don't really see a lot of difference.
If there was, again, there's just no affirmative evidence
and we're on summary judgment
as to why she was sitting in the car.
If there was,
again, this wouldn't be a summary judgment case.
But for those reasons, I would just respectfully request
the court uphold the lower court's decision
and I would rest on my brief,
unless there's any further questions from the court.
-: Okay, thank you.