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Argument recap: Justices look for ways to rein in open-ended preemption

Not long into Wednesday’s argument in Dan’s City Used Cars v. Pelkey, it became apparent that Justices from across the ideological spectrum were deeply skeptical about the consequences of the petitioner’s broad preemption theory. As the argument developed, the Court seemed to be struggling not with deciding which side would win, but with how to write an opinion that would define clear limits on an open-ended statutory preemption regime—limits that, several Justices acknowledged, the Court’s previous opinions had utterly failed to provide.

At least in part, the Justices’ questions seemed driven by their reactions to the unsavory facts. As I explained in a previous post, the preemption question arises in the case of Robert Pelkey, a New Hampshire man whose car was towed away from his home by a used car dealer who refused to give it back and instead traded it away to a customer. When Pelkey sued under state consumer-protection and negligence law, alleging violations of a state law regulating the storage of abandoned vehicles, the dealer invoked the Federal Aviation Administration Authorization Act (FAAAA), a transportation deregulation law from the 1990s that preempts state laws “related to a price, route, or service of any motor carrier … with respect to the transportation of property.”

All three advocates, including the representative of the Solicitor General’s office, were appearing before the Court for the first time. Andre Bouffard, arguing for Dan’s City Used Cars, went first. Over the course of his argument, he received a barrage of pointedly skeptical questions, loaded with very difficult hypotheticals, from seven of the eight Justices who regularly ask questions. (Justices Kennedy asked no questions of either side.)

Justice Ginsburg started things off, wanting to know whether the state law at issue (governing storage of abandoned vehicles) would apply to any garage that stores a car. Bouffard answered that the case is really about the consumer protection law and tort law, but this led Justice Breyer to ask “What’s your point?” Why, he wondered, would that help Dan’s City? That would make the claim even less related to transportation deregulation. And it would mean that “all the abandoned motor vehicle laws and all the snow emergency towing and everything else that I see every day would be preempted a fortiori.” However, Bouffard doubled down on his line of argument, again stressing that what’s preempted here is the state’s general consumer protection law, which is “predicated on the State of New Hampshire’s policy protecting consumers.” Justice Scalia, echoing Justice Breyer, observed: “It seems to me you are running in the wrong direction. To the extent you say the case doesn’t involve New Hampshire’s towing law but involves just its general consumer protection law, it’s – it’s even further distant from being preempted.”

As is often the case, Justice Alito had prepared a deadly hypothetical: “Suppose there was a towing company that lawfully towed cars, but its practice was to hold the car for 24 hours and if it wasn’t picked up they would immediately sell it for parts. Your argument would be that’s preempted by the Federal statute?” Bouffard said that this case, unlike Justice Alito’s hypo, involves a “payment dispute” and that Pelkey had an opportunity to pay and get his car back. This led to Justice Ginsburg to pounce on the facts: “When?” When did he have an opportunity to get his car back?

In an extended colloquy with Bouffard, Justice Sotomayor pressed the point that any dispute over payment was a dispute over storage of the car, not transportation, and the federal law only preempts laws “with respect to” transportation. Justice Scalia picked up the thread, explaining that, in his view, storage in transit might be covered, but not storage after transportation is complete. He wondered whether, under Bouffard’s theory, the federal law would preempt state law in a scenario in which a company picks something up “and leaves it in its warehouse for 3 years.”

Chief Justice Roberts was also interested in testing how far storage extends. “Let’s say you park your tow trucks on somebody else’s parking lot, and you don’t pay the rent,” he hypothesized. “So they sell your tow truck. Is your claim against your landlord preempted?” The Chief followed this up with a hypo about a negligence suit arising from a tow truck accident, suggesting that Bouffard’s reading would preempt such garden-variety claims.

At a certain point in Bouffard’s argument, the Justices seemed to go into Conference. They appeared to give up on testing Bouffard’s position and instead wondered among themselves how to impose limits on this unwieldy preemption regime. Justice Scalia suggested adopting a reading from a dissent of his, under which “with respect to the transportation of property” would be read to preclude preemption of generally applicable laws that make no special reference to transportation. Justice Breyer chimed in to say that there is some support for that theory in the majority opinion, that the statute’s savings clause indicates an intent to preserve traditional state prerogatives, that the presumption against preemption should be the starting point of the analysis, and that this case involves a traditional area of state regulation. These words had to be particularly encouraging to the respondent coming from Justice Breyer, who (as discussed in my previous post) has a special interest in this area of the law.

By the time Brian Shaughnessy and Assistant to the Solicitor General Lewis Yelin got up to argue against preemption, it appeared as if they had already won and that the Justices were principally concerned with a question Justice Sotomayor asked directly: “How do we draw the line, that line that you just asked us to draw between direct and indirect? How do we articulate that line?” Later, Justice Scalia observed that, given the statute’s indeterminacy, “I think maybe — maybe we have to make it up, what the limitation” is, and asked Shaughnessy what limitation he proposed. He said that the “with respect to the transportation of property” qualifier provided the most obvious limitation, as did the Court’s distinction between indirect and direct effects.

Arguing for the government, Assistant to the Solicitor General Lewis Yelin emphasized that, when it enacted the FAAAA, Congress was seeking to deregulate the trucking industry to eliminate interference with “market forces and consumer choice,” neither of which “operate[s] on the sale of nonconsensually towed cars.”

Again in search of a limiting principle, Justice Breyer asked Yelin whether he would want the Court to expand upon its previous statements that state laws are not preempted when the effects are “too tenuous, remote or peripheral,” a formulation Breyer describes as “singularly unhelpful,” or whether the Court should adopt Yelin’s suggestion that there is no preemption where, as here, the state “is regulating something that never was, could not be, and is not part of a regulated or deregulated market.” Yelin’s answer was that the two are not mutually exclusive, and that “when a State law does not have a significant effect on Congress’s deregulatory and preemptive objectives, it is by definition going to be too tenuously connected to the motor carrier services.”

In rebuttal, Bouffard noted that a concern expressed by Justice Breyer earlier in the argument—that his theory would preempt all sorts of local ordinances governing towing of parked cars—was answered by the statute’s savings clause for actions taken under the state’s safety regulatory authority. Both Justice Ginsburg and Justice Kagan interrupted during the rebuttal to point out that Dan’s City was trying to have it both ways—wanting to invoke state-law process to sell the car and take the money, but not wanting to live up to the consequences of violating state law. But, Kagan says, “you have to take the bitter with the sweet.”

Ultimately, this does not seem to be a case in which the Justices are divided over what to do. Rather, the Justices seemed remarkably united in their quest for some sound limiting principles in a very indeterminate area of preemption jurisprudence. I therefore feel safe in repeating my prediction that Pelkey will prevail and further predicting that the decision will be unanimous, possibly with Justice Breyer authoring the opinion. Much harder to predict is whether the Court will be able to articulate a useful limiting principle, and whether the Court will decide the case (1) based merely on an interpretation of the word “transportation,” (2) by attempting to ensure that any preemption is moored in federal deregulatory purposes, as Justice Breyer suggested, or (3) by precluding preemption of generally applicable laws with no special reference or application to transportation, as Justice Scalia suggested. The first approach might be useful in some cases, but the second and third approaches could provide much-needed guidance to the lower courts across the full spectrum of consumer, labor, and other disputes that involve the airline and trucking industries.

Recommended Citation: Deepak Gupta, Argument recap: Justices look for ways to rein in open-ended preemption, SCOTUSblog (Mar. 23, 2013, 12:17 PM),