Dan's City Used Cars, Inc. v. Pelkey
Dan's City Used Cars, Inc. v. Pelkey
Opinion
*254
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
"[A] State ... may not enact or enforce a law, regulation, or other provision having *1775 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 Dan's City Used Cars (Dan's City), a towing company. Pelkey alleged that Dan's City took custody of his car after towing it without *255 Pelkey's knowledge, failed to notify him of its plan to auction the car, held an auction despite Pelkey's communication that he wanted to arrange for the car's 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.). Dan's City relied on those laws to dispose of Pelkey's vehicle for nonpayment of towing and storage fees. According to Pelkey, however, Dan's City failed to comply with New Hampshire's provisions governing the sale of stored vehicles and the application of sale proceeds. Pelkey charged that Dan's City's 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 Dan's City's statutory and common-law duties as bailee to exercise reasonable care while in possession of a bailor's 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 carrier's 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 State's regulation of that activity by any federal prescription.
I
A
The Airline Deregulation Act of 1978(ADA),
Two years later, the Motor Carrier Act of 1980,
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*257 This case involves the interaction between the FAAAA's preemption clause and the State of New Hampshire's 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 owner's 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 Hampshire's Department of Public Safety. § 262:36-a(III). 2
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
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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 [vehicle's] owner ... if claimed at any time within one year from the date of sale."
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. Pelkey's 2004 Honda Civic remained in the lot during and after a February 2007 snowstorm. At the landlord's *1777 request, Dan's 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 Pelkey's identity or illness, Dan's City sought permission from New Hampshire's 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. Dan's 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," Dan's City scheduled an auction for April 19. Meanwhile, in the days following Pelkey's discharge from the hospital, his attorney learned from counsel for the apartment complex that the car had been towed by Dan's City and was scheduled to be sold at public auction. On April 17, Pelkey's attorney informed Dan's City that Pelkey wanted to pay any charges owed and reclaim his vehicle. Dan's City nevertheless proceeded with the auction. Attracting no bidders, Dan's 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.
*259 Pelkey brought suit against Dan's City in New Hampshire Superior Court. He alleged that Dan's City violated the New Hampshire Consumer Protection Act, N.H.Rev.Stat. Ann. § 358-A:2, by failing to comply with chapter 262's 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. 3 He also alleged that Dan's 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 Dan's City, the New Hampshire Superior Court concluded that Pelkey's claims were preempted by the FAAAA.
The New Hampshire Supreme Court reversed. It held the FAAAA's preemption clause,
We granted certiorari to resolve a division of opinion in state supreme courts on whether
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,
The FAAAA's 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."
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,
B
The New Hampshire Supreme Court concluded that Pelkey's state-law claims are "related to" neither the "transportation of property" nor the "service" of a motor carrier. We agree.
Pelkey's 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 ADA's air-carrier preemption provision, see
Rowe,
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). Pelkey's Consumer Protection Act and negligence
*262
claims are not "related to th[e]
movement
" of his car.
Dan's City maintains that because § 13102(23)(B)'s definition of "transportation" includes "storage" and "handling," Pelkey's claims, which do concern the storage and handling of his car, fall within § 14501(c)(1)'s preemptive ambit. Dan's 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.
Pelkey's claims also survive preemption under § 14501(c)(1) because they are unrelated to a "service" a motor carrier renders its customers. The transportation service Dan's City provided was the removal of Pelkey's car from his landlord's parking lot. That service, which did involve the movement of property, ended months before the conduct on
*263
which Pelkey's claims are based. His claims rely on New Hampshire's abandoned vehicle disposal regime, prescribed in chapter 262, for the rules governing Dan's City's conduct.
5
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 Maine's 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
Pelkey's 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
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the state laws invoked by Pelkey "freez[e] into place services that carriers might prefer to discontinue in the future."
C
Dan's City advances two further arguments in favor of preemption. First, Dan's City contends that Congress' enumeration of exceptions to preemption, detailed in
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,
*265
Dan's City, in a second argument, urges otherwise. Pelkey's claims, Dan's City maintains, are "related to" the towing service it rendered because selling Pelkey's car was the means by which Dan's 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 company's disposal of a vehicle previously towed or afford a remedy for wrongful disposal. Federal law does not speak to
*1781
these issues.
6
Thus, not only would the preemption urged by Dan's City leave vehicle owners without any recourse for damages, it would eliminate the sole legal authorization for a towing company's disposal of stored vehicles that go unclaimed. No such design can be attributed to a rational Congress. See
Silkwood v. Kerr-McGee Corp.,
In sum, Dan's City cannot have it both ways. It cannot rely on New Hampshire's regulatory framework as authorization for the sale of Pelkey's car, yet argue that Pelkey's claims, invoking the same state-law regime, are preempted. New Hampshire's legislation on abandoned vehicles gave rise to Pelkey's debt and established the conditions under which Dan's City could collect on that debt by selling Pelkey's Honda. See N.H.Rev.Stat. Ann. §§ 262:33, 262:36-a, 262:40-a ; supra, at 1775 - 1777. Pelkey's claims, attacking Dan's City's conduct in disposing of the vehicle, rest on the very same provisions. See Brief for Petitioner 41 ("All of the alleged wrongful conduct of Dan's City was part of the state sanctioned and regulated process for disposing of abandoned vehicles under Ch. 262.").
* * *
*266
For the reasons stated, we hold that
It is so ordered.
The term "motor carrier" is defined as "a person providing motor vehicle transportation for compensation."
Section 262:36-a has been amended since April 2007, when Dan's City's 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 Court's opinion in that case is in any way inconsistent with the dissent's 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 Hampshire's 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 Dan's 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."
Reference
- Full Case Name
- DAN'S CITY USED CARS, INC., Dba Dan's City Auto Body, Petitioner v. Robert PELKEY.
- Cited By
- 197 cases
- Status
- Published