Dan's City Used Cars, Inc. v. Pelkey
Does the Federal Aviation Administration Authorization Act (FAAAA), which preempts state laws 'related to a price, route, or service of any motor carrier… with respect to the transportation of property,' preempt state-law claims arising from a towing company's storage and disposal of a vehicle?
The Decision
9-0 decision · Opinion by Ruth Bader Ginsburg · 2013
Majority Opinion— Ruth Bader Ginsburgconcurring ↓
The Supreme Court unanimously ruled in favor of Pelkey, holding 9–0 that the FAAAA did not preempt his New Hampshire state-law claims. Justice Ruth Bader Ginsburg authored the opinion for a united Court.
The core of the Court's reasoning turned on the precise language of the FAAAA's preemption clause in 49 U.S.C. § 14501(c)(1). That provision bars states from enacting or enforcing laws 'related to a price, route, or service of any motor carrier… with respect to the transportation of property.' The Court emphasized that this language contains two key limiting phrases: the state law must relate to the 'price, route, or service' of a motor carrier, and it must concern 'the transportation of property.' Both conditions must be met for preemption to apply.
Justice Ginsburg explained that Pelkey's claims arose from what Dan's City did with his car after it had been towed — specifically, the company's storage of the vehicle and its eventual disposal without proper notice. These activities, the Court held, were not 'transportation of property.' A car sitting in a storage lot is not being transported; it is being held. And selling or junking a car without telling its owner is not a transportation service — it is a separate act that state consumer protection laws have every right to regulate.
The Court also looked to the broader purposes of the FAAAA. Congress passed the law in 1994 primarily to prevent states from undermining federal deregulation of the trucking industry by reimposing economic regulations on prices, routes, and services related to transporting goods. Pelkey's claims had nothing to do with these concerns. He was not trying to regulate how motor carriers price their services or choose their routes; he was trying to hold a company accountable for destroying his property without following basic legal procedures.
By drawing a clear line between the act of transporting property and what happens afterward, the Court ensured that the FAAAA's preemption provision would not become an all-purpose shield against state-law accountability for towing companies. The decision affirmed the New Hampshire Supreme Court's judgment in full.
Concurring Opinions
There were no separate concurring opinions; the Court was unanimous in both its judgment and its reasoning.
Background & Facts
Robert Pelkey lived in an apartment in Hillsborough, New Hampshire, and owned a Honda Civic that he parked in his building's parking lot. In the winter of 2007, Pelkey suffered a serious medical emergency and was hospitalized for an extended period. While he was in the hospital and unable to respond, his landlord arranged for Dan's City Used Cars, Inc., a local towing company, to tow Pelkey's car from the parking lot. Dan's City towed the vehicle and kept it in storage at its facility.
The trouble came with what happened next. Under New Hampshire law, a towing company that stores an abandoned or unclaimed vehicle must follow specific procedures before disposing of it, including providing notice to the vehicle's owner. Dan's City ultimately disposed of Pelkey's Honda Civic — selling it for salvage — without giving Pelkey the legally required notification. By the time Pelkey got out of the hospital and tried to reclaim his car, it was gone.
Pelkey sued Dan's City in New Hampshire state court, bringing claims under New Hampshire's Consumer Protection Act and asserting that the company had violated state towing and storage regulations by disposing of his car without proper notice. Dan's City defended itself by arguing that the FAAAA — a 1994 federal law designed to deregulate the trucking industry — preempted Pelkey's state-law claims because the company was a motor carrier and the claims related to its services.
The New Hampshire Superior Court ruled in favor of Pelkey, and Dan's City appealed. The New Hampshire Supreme Court affirmed the trial court's decision, concluding that the FAAAA's preemption clause did not bar Pelkey's claims because they concerned the storage and disposal of a vehicle, not the transportation of property. Dan's City then petitioned the U.S. Supreme Court for review.
The Supreme Court agreed to hear the case to clarify the scope of FAAAA preemption — specifically, whether the federal law's reach extended beyond actual transportation activities to cover what a towing company does with a vehicle after it has been towed and placed in storage. There was uncertainty across courts about how broadly to read the FAAAA's preemption language, making the question ripe for resolution.
The Arguments
Dan's City argued that because it operated as a motor carrier, Pelkey's state-law claims about the handling of his vehicle were 'related to' the company's services and were therefore preempted by the FAAAA. The company contended that towing, storage, and disposal were all part of a continuous chain of motor carrier services that fell under the federal statute's broad preemption language.
- The FAAAA broadly preempts state laws 'related to a price, route, or service of any motor carrier,' and Dan's City was a motor carrier performing services that included towing and its aftermath.
- Courts have interpreted the phrase 'related to' in similar preemption contexts very broadly, meaning it should encompass all aspects of the towing company's handling of the vehicle.
- Allowing state-law claims like these would effectively reimpose the kind of state regulation of motor carriers that Congress intended the FAAAA to eliminate.
Pelkey argued that his claims had nothing to do with the transportation of property — they concerned the improper storage and unauthorized disposal of his car after it had already been towed. The FAAAA's preemption clause only applies to state laws related to motor carrier activity 'with respect to the transportation of property,' and disposing of someone's car without notice is not transportation.
- The FAAAA's preemption provision is expressly limited to laws related to motor carrier services 'with respect to the transportation of property,' and a car sitting in a storage lot is not being transported.
- New Hampshire's consumer protection and towing statutes regulate what happens after transportation has ended — they govern the safekeeping and proper disposal of stored property, not the act of moving it.
- Congress enacted the FAAAA to prevent states from interfering with competitive pricing and routes in the trucking industry, not to immunize towing companies from liability for destroying people's property without notice.