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DANS CITY USED CARS, INC., dba Dans City Auto Body, Petitioner v. Robert PELKEY.

Supreme Court of the United States2013-05-13No. No. 12–52.
569 U.S. 251185 L. Ed. 2d 909133 S. Ct. 1769

Summary

Holding. The Court affirmed the New Hampshire Supreme Court's decision, holding that 49 U.S.C. § 14501(c)(1) does not preempt state-law claims for damages arising from a towing company's storage and disposal of a towed vehicle, because such claims are not related to a motor carrier's service with respect to the transportation of property.

Robert Pelkey sued towing company Dans City Used Cars after it towed his vehicle from his apartment complex parking lot during his medical emergency, stored it, and then sold it at auction without properly notifying him or following state procedures for disposing of abandoned vehicles. Dans City relied on a federal preemption clause in the Federal Aviation Administration Authorization Act (FAAAA) to argue that Pelkey's claims under New Hampshire consumer protection and tort law were barred from state court.

The Supreme Court held that the FAAAA's preemption provision does not eliminate state-law claims arising from a towing company's storage and disposal of a vehicle after the actual transportation has ended. The Court emphasized that the FAAAA's preemptive scope is limited to state laws affecting motor carriers' services "with respect to the transportation of property." Because Pelkey's claims concern what happened to his car after it was stored—not the towing service itself—and because New Hampshire's abandoned vehicle disposal law regulates custodians of stored vehicles rather than transportation services, the claims fall outside the federal preemption clause. The Court also noted that allowing preemption would create an absurd result: towing companies could rely on state law to justify selling vehicles but then use the same federal law to escape liability for violating that state law.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether federal motor carrier preemption extends to state-law claims regarding post-towing storage and disposal of vehicles
  • The meaning of 'with respect to the transportation of property' in the FAAAA preemption clause
  • Whether state abandoned vehicle disposal laws are preempted by federal deregulation of the trucking industry
  • Whether the enumerated exceptions to preemption limit the scope of the general preemption rule

Procedural posture

The New Hampshire Superior Court granted summary judgment to Dans City on preemption grounds; the New Hampshire Supreme Court reversed; and the U.S. Supreme Court granted certiorari to resolve conflicting state court decisions on whether federal motor carrier preemption applies to vehicle disposal claims.

Authorities cited

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Cited by (3)

Opinion

majority opinion

Justice GINSBURG delivered the opinion of the Court.

This case concerns the preemptive scope of a provision of the Federal Aviation Administration Authorization Act of 1994 (FAAAA or Act) applicable to motor carriers. Codified at 49 U.S.C. § 14501(c)(1), the provision reads:

[A] State ... may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... with respect to the transportation of property.

Plaintiff-respondent Robert Pelkey brought suit under New Hampshire law against defendant-petitioner Dans City Used Cars (Dans City), a towing company. Pelkey alleged that Dans City took custody of his car after towing it without Pelkeys knowledge, failed to notify him of its plan to auction the car, held an auction despite Pelkeys communication that he wanted to arrange for the cars return, and eventually traded the car away without compensating Pelkey for the loss of his vehicle.

Disposal of abandoned vehicles by a storage company is regulated by chapter 262 of the New Hampshire Revised Statutes Annotated. See N.H.Rev.Stat. Ann. §§ 262:31 to 262:40-c (West 2004 and 2012 West Cum.Supp.). Dans City relied on those laws to dispose of Pelkeys vehicle for nonpayment of towing and storage fees. According to Pelkey, however, Dans City failed to comply with New Hampshires provisions governing the sale of stored vehicles and the application of sale proceeds. Pelkey charged that Dans Citys disposal of his car without following the requirements contained in chapter 262 violated the New Hampshire Consumer Protection Act, § 358-A:2 (West 2009), as well as Dans Citys statutory and common-law duties as bailee to exercise reasonable care while in possession of a bailors property.

We hold, in accord with the New Hampshire Supreme Court, that state-law claims stemming from the storage and disposal of a car, once towing has ended, are not sufficiently connected to a motor carriers service with respect to the transportation of property to warrant preemption under § 14501(c)(1). The New Hampshire law in point regulates no towing services, no carriage of property. Instead, it trains on custodians of stored vehicles seeking to sell them. Congress did not displace the States regulation of that activity by any federal prescription.

I

A

The Airline Deregulation Act of 1978(ADA), 92 Stat. 1705, largely deregulated the domestic airline industry. In keeping with the statutes aim to achieve maximum reliance on competitive market forces, id., at 1706, Congress sought to ensure that the States would not undo federal deregulation with regulation of their own. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992). Congress therefore included a preemption provision, now codified at 49 U.S.C. § 41713(b)(1), prohibiting States from enacting or enforcing any law related to a price, route, or service of an air carrier.

Two years later, the Motor Carrier Act of 1980, 94 Stat. 793, extended deregulation to the trucking industry. Congress completed the deregulation 14 years thereafter, in 1994, by expressly preempting state trucking regulation. Congress did so upon finding that state governance of intrastate transportation of property had become unreasonably burden[some] to free trade, interstate commerce, and American consumers. Columbus v. Ours Garage & Wrecker Service, Inc., 536 U.S. 424, 440, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002) (citing FAAAA § 601(a)(1), 108 Stat. 1605). Borrowing from the ADAs preemption clause, but adding a new qualification, § 601(c) of the FAAAA supersedes state laws related to a price, route, or service of any motor carrier ... with respect to the transportation of property .

108 Stat. 1606, now codified at 49 U.S.C. § 14501(c)(1) (emphasis added). The Act exempts certain measures from its preemptive scope, including state laws regulating motor vehicle safety, size, and weight; motor carrier insurance; and the intrastate transportation of household goods. § 14501(c)(2)(A)-(B). Also exempted from preemption are state laws relating to the price of vehicle transportation by a tow truck, if towing occurs without prior consent of the vehicle owner. § 14501(c)(2)(C).

This case involves the interaction between the FAAAAs preemption clause and the State of New Hampshires regulation of the removal, storage, and disposal of abandoned motor vehicles. Chapter 262 of the New Hampshire Revised Statutes Annotated establishes procedures by which an authorized official or the owner ... of any private property ... on which a vehicle is parked without permission may arrange to have the vehicle towed and stored. N.H.Rev.Stat. Ann. §§ 262:31 to 262:34, 262:40-a(I). It generally makes the owner of a towed vehicle responsible for reasonable removal and storage fees. See § 262:33(I) (reasonable removal and storage charges shall be a lien against the vehicle which shall be paid by the owner); § 262:33(II) (owner entitled to recover vehicle after payment of all reasonable towing and storage charges); § 262:40-a(II) (owner of a vehicle towed from a parking lot or parking garage is responsible for removal and storage charges when the lot or garage conspicuously posts notice of parking restrictions).

Under chapter 262, the custodian of a car that remains unclaimed for 30 days following a tow may dispose of the vehicle upon compliance with notice requirements. § 262:36-a(I), (II). A garage owner or keeper must post notices of an impending sale in public places and provide mail notice to the vehicle owner whenever the owners address may be ascertained ... by the exercise of reasonable diligence. § 262:38. If a towed vehicle is not fit for legal use, its custodian need not provide individual or public notice prior to disposal, and sale of the vehicle may occur upon written notice to and approval from New Hampshires Department of Public Safety. § 262:36-a(III).

On compliance with the statutory requirements, the custodian of a stored vehicle may sell the vehicle by public auction at its place of business. § 262:37. The storage company may use the sale proceeds to pay the amount of the liens and the reasonable expenses incident to the sale. § 262:39 (West 2004). Remaining proceeds are payable to the [vehicles] owner ... if claimed at any time within one year from the date of sale. Ibid.

B

The landlord of the apartment complex in which Pelkey lived required tenants to remove their cars from the parking lot in the event of a snowstorm, so that the snow could be cleared. Pelkeys 2004 Honda Civic remained in the lot during and after a February 2007 snowstorm. At the landlords request, Dans City towed and stored the vehicle. Confined to his bed with a serious medical condition, Pelkey did not know his car had been towed. Soon after removal of his car, Pelkey was admitted to the hospital for a procedure to amputate his left foot, during which he suffered a heart attack. He remained under hospital care until his discharge on April 9, 2007.

Unaware of Pelkeys identity or illness, Dans City sought permission from New Hampshires Department of Public Safety to sell the Honda at auction without notice. In response, the department identified Pelkey as the last known owner of the vehicle. Dans City wrote to Pelkey, notifying him that it had towed and was storing his car. When the post office returned the letter, checking the box moved, left no address, Dans City scheduled an auction for April 19. Meanwhile, in the days following Pelkeys discharge from the hospital, his attorney learned from counsel for the apartment complex that the car had been towed by Dans City and was scheduled to be sold at public auction. On April 17, Pelkeys attorney informed Dans City that Pelkey wanted to pay any charges owed and reclaim his vehicle. Dans City nevertheless proceeded with the auction. Attracting no bidders, Dans City later disposed of the car by trading it to a third party. Pelkey was not notified in advance of the trade, and has received no proceeds from the sale.

Pelkey brought suit against Dans City in New Hampshire Superior Court. He alleged that Dans City violated the New Hampshire Consumer Protection Act, N.H.Rev.Stat. Ann. § 358-A:2, by failing to comply with chapter 262s requirements for disposal of stored vehicles, making false statements about the condition and value of his Honda, and proceeding with the auction despite notice that Pelkey wanted to reclaim the car. He also alleged that Dans City negligently breached both statutory and common-law duties as a bailee to use reasonable care in disposing of the car. Granting summary judgment to Dans City, the New Hampshire Superior Court concluded that Pelkeys claims were preempted by the FAAAA.

The New Hampshire Supreme Court reversed. It held the FAAAAs preemption clause, 49 U.S.C. § 14501(c)(1), inapplicable because Pelkeys claims related to Dans Citys conduct in disposing of his Honda post-storage, not to conduct concerning the transportation of property. 163 N.H. 483, 490-493, 44 A.3d 480, 487-489 (2012) (emphasis deleted). Alternatively, the court ruled that, even if Pelkeys claims could be said to concern the transportation of property, they did not sufficiently relat[e] to a towing companys service to be preempted. Id., at 493, 44 A.3d, at 490.

We granted certiorari to resolve a division of opinion in state supreme courts on whether 49 U.S.C. § 14501(c)(1) preempts a vehicle owners state-law claims against a towing company regarding the companys post-towing disposal of the vehicle. 568 U.S. ----, 133 S.Ct. 786, 184 L.Ed.2d 526 (2012). Compare 163 N.H. 483, 44 A.3d 480 (this case), with Weatherspoon v. Tillery Body Shop, Inc., 44 So.3d 447, 458 (Ala.2010) ( § 14501(c)(1) preempts state statutory and common-law claims arising out of storage and sale of a towed vehicle).

II

A

Where, as in this case, Congress has superseded state legislation by statute, our task is to identify the domain expressly pre-empted. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001). To do so, we focus first on the statutory language, which necessarily contains the best evidence of Congress pre-emptive intent. CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993).

The FAAAAs preemption clause prohibits enforcement of state laws related to a price, route, or service of any motor carrier ... with respect to the transportation of property. 49 U.S.C. § 14501(c)(1). In Rowe v. New Hampshire Motor Transp. Assn., 552 U.S. 364, 370, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008), our reading of this language was informed by decisions interpreting the parallel language in the ADAs preemption clause. The phrase related to, we said, embraces state laws having a connection with or reference to carrier rates, routes, or services, whether directly or indirectly. Ibid. (quoting Morales, 504 U.S., at 384, 112 S.Ct. 2031; emphasis deleted). See also id. , at 383, 128 S.Ct. 989 (ordinary meaning of ... words [related to] is a broad one, thus ADAs use of those words expresses a broad pre-emptive purpose).

At the same time, the breadth of the words related to does not mean the sky is the limit. We have refused to read the preemption clause of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1144(a), which supersedes state laws relate[d] to any employee benefit plan, with an uncritical literalism, else for all practical purposes pre-emption would never run its course. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655-656, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) (internal quotation marks omitted). And we have cautioned that § 14501(c)(1) does not preempt state laws affecting carrier prices, routes, and services in only a tenuous, remote, or peripheral ... manner. Rowe, 552 U.S., at 371, 128 S.Ct. 989 (quoting Morales, 504 U.S., at 390, 112 S.Ct. 2031).

B

The New Hampshire Supreme Court concluded that Pelkeys state-law claims are related to neither the transportation of property nor the service of a motor carrier. We agree.

Pelkeys claims escape preemption, we hold, because they are not related to the service of a motor carrier with respect to the transportation of property. § 14501(c)(1). Although § 14501(c)(1) otherwise tracks the ADAs air-carrier preemption provision, see Rowe, 552 U.S., at 370, 128 S.Ct. 989, the FAAAA formulation contains one conspicuous alteration-the addition of the words with respect to the transportation of property. That phrase massively limits the scope of preemption ordered by the FAAAA. Ours Garage, 536 U.S., at 449, 122 S.Ct. 2226 (SCALIA, J., dissenting). As the New Hampshire Supreme Court correctly understood, for purposes of FAAAA preemption, it is not sufficient that a state law relates to the price, route, or service of a motor carrier in any capacity; the law must also concern a motor carriers transportation of property. See 163 N.H., at 490, 44 A.3d, at 487.

Title 49 defines transportation, in relevant part, as services related to th[e] movement of property, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property. § 13102(23)(B). Pelkeys Consumer Protection Act and negligence claims are not related to th[e] movement of his car. Ibid. (emphasis added). He charges Dans City with failure to comply with chapter 262 and neglect of its statutory and common-law duties of care as a bailee of his stored vehicle. Chapter 262 does not limit when, where, or how tow trucks may be operated. The Chapter regulates, instead, the disposal of vehicles once their transportation-here, by towing-has ended. Pelkey does not object to the manner in which his car was moved or the price of the tow; he seeks redress only for conduct subsequent to transportation, conduct occurring after the car ceased moving and was stored.

Dans City maintains that because § 13102(23)(B)s definition of transportation includes storage and handling, Pelkeys claims, which do concern the storage and handling of his car, fall within § 14501(c)(1)s preemptive ambit. Dans City overlooks, however, that under § 13102(23)(B), services such as storage and handling fit within the definition of transportation only when those services relat[e] to th[e] movement of property. Temporary storage of an item in transit en route to its final destination relates to the movement of property and therefore fits within § 13102(23)(B)s definition. But property stored after delivery is no longer in transit. Cf. 49 C.F.R. § 375.609 (2012) (distinguishing between storage-in-transit and permanent storage (regulation of Federal Motor Carrier Safety Administration)). Here, no storage occurred in the course of transporting Pelkeys vehicle. Dans Citys storage of Pelkeys car after the towing job was done, in short, does not involve transportation within the meaning of the federal Act.

Pelkeys claims also survive preemption under § 14501(c)(1) because they are unrelated to a service a motor carrier renders its customers. The transportation service Dans City provided was the removal of Pelkeys car from his landlords parking lot. That service, which did involve the movement of property, ended months before the conduct on which Pelkeys claims are based. His claims rely on New Hampshires abandoned vehicle disposal regime, prescribed in chapter 262, for the rules governing Dans Citys conduct. Chapter 262 addresses storage compan[ies] and garage owner[s] or keeper[s], not transportation activities. See N.H.Rev.Stat. Ann. §§ 262:36-a, 262:38. Unlike Maines tobacco delivery regulations at issue in Rowe, chapter 262 has neither a direct nor an indirect connection to any transportation services a motor carrier offers its customers. See 552 U.S., at 371, 128 S.Ct. 989. We need not venture an all-purposes definition of transportation service[s] in order to conclude that state-law claims homing in on the disposal of stored vehicles fall outside § 14501(c)(1)s preemptive compass. Our conclusion that state-law claims regarding disposal of towed vehicles are not preempted is in full accord with Congress purpose in enacting § 14501(c)(1). Concerned that state regulation impeded the free flow of trade, traffic, and transportation of interstate commerce, Congress resolved to displace certain aspects of the State regulatory process. FAAAA § 601(a), 108 Stat. 1605 (emphasis added). The target at which it aimed was a States direct substitution of its own governmental commands for competitive market forces in determining (to a significant degree) the services that motor carriers will provide. Rowe, 552 U.S., at 372, 128 S.Ct. 989 (internal quotation marks omitted).

Pelkeys claims are far removed from Congress driving concern. He sued under state consumer protection and tort laws to gain compensation for the alleged unlawful disposal of his vehicle. The state laws in question hardly constrain participation in interstate commerce by requiring a motor carrier to offer services not available in the market. Nor do the state laws invoked by Pelkey freez[e] into place services that carriers might prefer to discontinue in the future. Ibid. New Hampshires laws on disposal of stored vehicles, moreover, will not open the way for a patchwork of state service-determining laws, rules, and regulations. Id., at 373, 128 S.Ct. 989. As Dans City concedes, abandoned vehicle laws like chapter 262 do not hamper the operations of tow truckers and are not the kind of burdensome state economic regulation Congress sought to preempt. Reply Brief 21.

C

Dans City advances two further arguments in favor of preemption. First, Dans City contends that Congress enumeration of exceptions to preemption, detailed in 49 U.S.C. § 14501(c)(2), (3), and (5), permits state regulation of motor carriers only when the States law comes within a specified exception. Because Pelkeys claims do not fit within any exception to preemption, Dans City urges, those claims must be preempted. This argument exceeds sensible bounds. Exceptions to a general rule, while sometimes a helpful interpretive guide, do not in themselves delineate the scope of the rule. The exceptions to § 14501(c)(1)s general rule of preemption identify matters a State may regulate when it would otherwise be precluded from doing so, but they do not control more than that.

An example may clarify the point. Section 14501(c) does not exempt zoning regulations. Such laws, however, are peculiarly within the province of state and local legislative authorities. Warth v. Seldin, 422 U.S. 490, 508, n. 18, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). It is hardly doubtful that state or local regulation of the physical location of motor-carrier operations falls outside the preemptive sweep of § 14501(c)(1). That is so because zoning ordinances ordinarily are not related to a price, route, or service of any motor carrier ... with respect to the transportation of property. § 14501(c)(1). The same is true of New Hampshires regulation of the disposal of stored vehicles.

Dans City, in a second argument, urges otherwise. Pelkeys claims, Dans City maintains, are related to the towing service it rendered because selling Pelkeys car was the means by which Dans City obtained payment for the tow. But if such state-law claims are preempted, no law would govern resolution of a non-contract-based dispute arising from a towing companys disposal of a vehicle previously towed or afford a remedy for wrongful disposal. Federal law does not speak to these issues. Thus, not only would the preemption urged by Dans City leave vehicle owners without any recourse for damages, it would eliminate the sole legal authorization for a towing companys disposal of stored vehicles that go unclaimed. No such design can be attributed to a rational Congress. See Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 251, 104 S.Ct. 615, 78 L.Ed.2d 443 (1984) (It is difficult to believe that Congress would, without comment, remove all means of judicial recourse for those injured by illegal conduct.).

In sum, Dans City cannot have it both ways. It cannot rely on New Hampshires regulatory framework as authorization for the sale of Pelkeys car, yet argue that Pelkeys claims, invoking the same state-law regime, are preempted. New Hampshires legislation on abandoned vehicles gave rise to Pelkeys debt and established the conditions under which Dans City could collect on that debt by selling Pelkeys Honda. See N.H.Rev.Stat. Ann. §§ 262:33, 262:36-a, 262:40-a ; supra, at 1775 - 1777. Pelkeys claims, attacking Dans Citys conduct in disposing of the vehicle, rest on the very same provisions. See Brief for Petitioner 41 (All of the alleged wrongful conduct of Dans City was part of the state sanctioned and regulated process for disposing of abandoned vehicles under Ch. 262.).

* * *

For the reasons stated, we hold that 49 U.S.C. § 14501(c)(1) does not preempt state-law claims for damages stemming from the storage and disposal of a towed vehicle. The judgment of the New Hampshire Supreme Court is therefore affirmed.

It is so ordered.

The term motor carrier is defined as a person providing motor vehicle transportation for compensation. 49 U.S.C. § 13102(14) (2006 ed., Supp. V). We have previously recognized that tow trucks qualify as motor carriers under § 14501(c)(1). Columbus v. Ours Garage & Wrecker Service, Inc., 536 U.S. 424, 430, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002). Dans Citys qualification as a motor carrier under the FAAAA is uncontested by the parties. See Brief for Petitioner i; Brief for Respondent 18.

Section 262:36-a has been amended since April 2007, when Dans Citys alleged misconduct occurred. The amendments do not bear on the outcome of this case.

The Consumer Protection Act makes it unlawful for any person to use any unfair method of competition or any unfair or deceptive act or practice in the conduct of any trade or commerce within New Hampshire. N.H.Rev.Stat. Ann. § 358-A:2 (West 2009). It authorizes a private claim for damages and equitable relief; for a willful or knowing violation, the Act allows the plaintiff to recover as much as 3 times, but not less than 2 times, actual damages. § 358-A:10(I) (2012 West Cum.Supp.).

Although this statement appears in the Ours Garage dissent, nothing in the Courts opinion in that case is in any way inconsistent with the dissents characterization of § 14501(c)(1).

The parties dispute whether, as Pelkey alleges, conduct that violates chapter 262 may qualify as an unfair or deceptive act or practice proscribed by New Hampshires Consumer Protection Act. This dispute turns on interpretation of state law, a matter on which we express no opinion.

There is an exception to Congress silence, but it is of no aid to Dans City: The Act spares from preemption laws relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed [as it was here] without the prior consent or authorization of the owner or operator of the motor vehicle. 49 U.S.C. § 14501(c)(2)(C).