Federal Aviation Administration Authorization Act

American Trucking Ass

Starting in 2008, one of the busiest ports in the United States, the Port of Los Angeles (POLA), entered into “concession agreements” with motor carriers doing business at the port. POLA enforced the agreements through a system of tariffs levied against noncompliant carriers and remedial provisions that empowered it to revoke noncompliant carriers’ access to the port. The American Trucking Association (ATA) sued POLA, arguing that the agreements were barred under the Federal Aviation Administration Authorization Act of 1994 (FAAAA) and the Supreme Court’s decision in Castle v. Hayes Freight Lines, Inc. The Central District of California and Ninth Circuit found that multiple provisions of the concession agreements were exempted from the FAAAA’s preemption clause under the market-participant doctrine and held that Castle did not bar suspension of carriers’ port access because of the FAAAA’s express safety exemption. In resolving the questions presented, the Supreme Court will determine the scope of the market-participant exemption to FAAAA preemption and whether Castle bars POLA from enforcing its concession agreements through revocation or suspension of port access. The case directly affects local and state governments’ power to regulate and contract under the FAAAA and similar Congressional legislation and has broad regulatory implications for motor carriers and other regulated actors in interstate commerce.

Questions as Framed for the Court by the Parties: 

Title 49 U.S.C. § 14501(c)(1), originally enacted as a provision of the Federal Aviation Administration Authorization Act of 1994, provides that “a State [or] political subdivision . . . 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.” It contains an exception providing that the express preemption clause “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” Id. § 14501(c)(2)(A). The questions presented are:

  1. Whether an unexpressed “market participant” exception exists in Section 14501(c)(1) and permits a municipal governmental entity to take action that conflicts with the express preemption clause, occurs in a market in which the municipal entity does not participate, and is unconnected with any interest in the efficient procurement of services.
  2. Whether permitting a municipal governmental entity to bar federally licensed motor carriers from access to a port operates as a partial suspension of the motor carriers’ federal registration, in violation of Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954).

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Issue

Does federal law prevent enforcement of certain aspects of motor carrier-related contracts used by the Port of Los Angeles?

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Dan

Robert Pelkey's car was towed from his apartment complex for failure to move it during a snowstorm. At the time, Mr. Pelkey was quite ill and eventually was sent to the hospital to have his left foot amputated. When he returned home and was made aware that his car was towed, he had his attorney track down the car at Dan’s City towing and ask for it back. When they disposed of the car, Mr. Pelkey sued for violations of New Hampshire’s consumer protection laws and common law negligence. Dan’s City claimed that the Federal Aviation Administration Authorization Act ("FAAAA") controlled motor carriers and preempted any state law claims. The New Hampshire Supreme Court reversed the lower court and agreed with Mr. Pelkey that his state law remedies were not preempted because they dealt with the disposal of property and debt collection on a lien, rather than the "services" of the towing company. Dan's City contends these actions are incidental to their towing and storage of the vehicle and therefore are properly construed as services of their company. The Supreme Court granted certiorari to resolve a circuit split on the scope of preemption under the FAAAA. How the Court rules in this case will have great significance for both vehicle owners and the towing industry.

Questions as Framed for the Court by the Parties: 

Whether state statutory, common law negligence, and consumer protection act enforcement actions against a tow-motor carrier based on state law regulating the sale and disposal of a towed vehicle are related to a transportation service provided by the carrier and are thus preempted by 49 U.S.C. § 14501(c)(1).

Issue(s)

Are state law claims of negligence and consumer fraud against a towing company for having a car towed and eventually disposed of to pay towing and storage fees preempted by the Federal Aviation Administration Authorization Act (“FAAAA”)?

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