13 May 2013

Law in Plain English: Dan's City Used Cars v. Pelkey

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Dan’s City Used Cars, Inc. v. Pelkey

Dan's City Used Cars towed Pelkey's car, failed to notify him of its plan to auction the car, held an auction despite Pelkey’s notice that he wanted to reclaim the car, and eventually traded the car away without compensating Pelkey for the loss. Pelkey sued, but the New Hampshire court ruled in favor of Dan's City, concluding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempted New Hampshire's consumer protection laws (when state and federal laws conflict, the federal law applies and the state law is invalidated). The FAAAA preempts state laws “related to a price, route, or service of any motor carrier...with respect to the transportation of property.” In a unanimous decision, the Supreme Court ruled that the FAAAA does not preempt state-law claims stemming from the storage and disposal of a towed vehicle. In other words, the Pelkey's Consumer Protection Act claim is not related to the “transportation of property” nor the “service” of a motor carrier. As a result, Pelkey's claims can go forward under state law. The practical impact of this decision is that courts will seek to find limitations to preemption in areas where the law is unclear. When the text of a pre-emption clause is susceptible of more than one plausible reading, courts ordinarily “accept the reading that disfavors pre-emption.” Bates v. Dow Agrosciences LLC, 544 U. S. 431, 449 (2005).
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