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Dan’S City Used Cars, Inc., Dba Dan’S City Auto Body v. Robert Pelkey

Oral argument transcript · No. 12-52 · October Term 2012 · argued March 20, 2013 · the respondent won

Decision: votes, opinion and citations · Official transcript (PDF) · Argument audio at the Supreme Court

Advocates

Transcript

From the Court's official transcript; speaker labels as in the transcript, with advocates' full names from its list of appearances.

Chief Justice Roberts: We will have argument next in Case 12-52, Dan's City Used Cars v. Pelkey. Mr. Bouffard? ORAL ARGUMENT OF ANDRE D. BOUFFARD ON BEHALF OF THE PETITIONER

Andre D. Bouffard: Mr. Chief Justice, and may it please the Court: The issue in this case is whether Section 14501 of the United States Transportation Code expressly preempts the Respondent's State law consumer protection in tort claims for damages against a tow trucker who towed his vehicle lawfully and then, several months later, disposed of the vehicle after the fees for towing and storage had not been paid. Both of these claims are preempted because they are directed at the conduct -- the type of conduct that tow truck companies all over this country every day engage in, in dealing with a particular type of tow that's referred to in the business as nonconsensual tows.

Justice Ginsburg: Mr. Bouffard, this law, this New Hampshire law, it regulates storage. Is this a Alderson Reporting Company Official Page 4 law that applies only to the towing companies who tow the automobile and then store it, or does the law apply, say, to a garage, say, someone brings a car to a garage for repairs, and does this storage law regulate garage operations as well as towing operations?

Andre D. Bouffard: Justice Ginsburg, this law regulates abandoned motor vehicles. It's an abandoned motor vehicle law.

Justice Ginsburg: So -- so it would apply to a garage operator.

Andre D. Bouffard: Well, if a garage operator came into possession of an abandoned motor vehicle, then I suppose it would. If -- if you look at the -- at the title to this subchapter of this New Hampshire statute, the title is abandoned vehicles, Your Honor.

Justice Ginsburg: Yes, but what made it abandoned was that they tried to locate the owner, couldn't and so -- this same thing could happen with a garage owner as happened to the towing truck. So there's nothing peculiar about being in the towing business that makes this storage application -- storage statute apply.

Andre D. Bouffard: Well, let me be clear about this statute, Your Honor. It's an abandoned vehicle statute, and what's really important to understand with Alderson Reporting Company Official Page 5 this case is that none of the Plaintiff's claims rely on this abandoned vehicle statute. The Plaintiff has pled in his complaint a couple of allegations of violations of this abandoned vehicle law, but the substantive rights that were sued upon by the Plaintiff in this case do not live in the abandoned motor vehicle law. The substantive rights that were sued upon by the Plaintiff live in the State's consumer protection law, which is a separate New Hampshire statute, unrelated to the abandoned vehicle law. And secondly, the claim that the -- the common law negligence claim in this case arises out of the common law of New Hampshire. It doesn't arise out of the abandoned motor vehicle law. One of the sources of confusion, I would submit, in the New Hampshire Supreme Court's decision is that it did not adequately deal with the -- the role of the abandoned vehicle law in this case. The abandoned vehicle law actually plays a relatively minor role as it relates to the causes of action that were pled in this case and the causes of action that the preemption defense is directed to in this case.

Justice Breyer: What's -- what's your point? If it's not part of the towing law, then it's further removed. Alderson Reporting Company Official Page

Andre D. Bouffard: The reason -- the reason why these claims are preempted, Your Honor, is because they all stem from the towing of the vehicle, which was followed by the storage of the vehicle.

Justice Breyer: I guess, I mean, I guess you could have thousands of claims across the country, millions of claims where there are all kinds of towing laws. And -- you know, it says in Cambridge, Massachusetts park your car here during a snow emergency, it will be towed. Probably every northeastern country has laws like that. I guess there could be millions of negligence claims when the thing is towed, the guy broke a headlight.

Andre D. Bouffard: Well, I think that's a different --

Justice Breyer: And are all those things preempted? I would be amazed.

Andre D. Bouffard: I don't think so, Your Honor. We're not --

Justice Breyer: Then what's the difference between this and -- and what could arise any day of the week? I mean, as I read your brief, I -- are you saying that all the northeast statutes that say your car will be towed if you park here during a snow emergency, what happens? I mean, do they have to go to the Department Alderson Reporting Company Official Page 7 of Transportation? Boston couldn't function. I know that they do tow cars. I don't know that firsthand, but I've seen it. (Laughter.)

Justice Breyer: So how's it supposed to work?

Andre D. Bouffard: There's no -- there's no claim in this case, Your Honor, that the abandoned motor vehicle law is preempted, that New Hampshire's abandoned motor vehicle law --

Justice Breyer: Well, all right, there isn't in this case, but I'm curious to know how it works because it seemed to me from what you're arguing, 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. So you tell me how it all works.

Andre D. Bouffard: We are arguing that the causes of action that were pled in this case, which are a Consumer Protection Act claim for damages and attorneys' fees -- treble damages actually in the Consumer Protection Act claim. That claim is predicated on the consumer protection law. It's predicated on the State of New Hampshire's policy protecting consumers. Now, there's -- there's an allegation in the Alderson Reporting Company Official Page 8 complaint that there was also -- there happened to be a violation of this abandoned vehicle law. But that is a completely meaningless allegation as it relates to the Consumer Protection Act because even if it were a violation of the abandoned vehicle law, that would not make it a violation of the consumer protection law. Consumer protection laws are intended to regulate fairness in business practices. That's what that statute is about.

Justice Scalia: My question is -- is the same as Justice Breyer's. 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. I --

Andre D. Bouffard: Well, there's a difference, Your Honor, Justice Scalia, between whether the case is predicated on the New Hampshire towing law and whether or not these causes of action are related to the towing of the vehicle. Our point, and our primary argument, is that all of these claims are related to, within the meaning of this statute, to the towing of the vehicle.

Justice Scalia: Suppose -- I understand. My goodness. Suppose a vehicle -- I pay for somebody to Alderson Reporting Company Official Page 9 tow -- I agree that somebody will tow my vehicle and I will pay him $100. And he tows the vehicle, puts it in my garage and says, give me the $100. And I say, ha, ha, I'm not going to give you $100. (Laughter.)

Justice Scalia: Now, you think that that general obligation under State law to pay a debt that you've contracted to pay is eliminated?

Andre D. Bouffard: That's a very different set of circumstances, Justice Scalia.

Justice Scalia: Why is that different from normal consumer protection law? I -- I don't see that it's so much different.

Andre D. Bouffard: Well, this -- this case involves a nonconsensual tow. This case involves a situation where there was an opportunity, a fair opportunity, to pay for the towing and the storage charges that had been incurred, and --

Justice Alito: What difference does that make? 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? Alderson Reporting Company Official Page

Andre D. Bouffard: No, we wouldn't --

Justice Alito: The State can't regulate that?

Andre D. Bouffard: I -- I think the State could regulate that, Your Honor. What the State -- what the -- what a private plaintiff can't do in a case like this is assert claims like common law negligence claims --

Justice Alito: Right. A private plaintiff could not assert a common law negligence claim if that were done?

Andre D. Bouffard: A --

Justice Alito: Lawfully towed, sold for parts within 24 hours because it wasn't picked up.

Andre D. Bouffard: I think -- I think a private plaintiff could -- could probably assert that, that negligence claim.

Justice Alito: Well, if that's -- if that is not related to payment for services, then why is this -- why is there such a relationship here?

Andre D. Bouffard: That situation doesn't involve a payment dispute, Your Honor. This case -- the case we have before us today, involves a payment dispute. This is really a payment dispute. A person --

Justice Alito: It would involve a payment Alderson Reporting Company Official Page 11 dispute to the same extent as this. Towed, notice sent out immediately, wasn't picked up within 24 hours, sell it for parts.

Andre D. Bouffard: Well, that -- that's not a payment dispute. The parties haven't -- haven't disputed whether or not there -- there is a payment obligation. The part -- this -- this case is about a dispute over whether there is even an obligation to pay for the -- the towing and the storage services. That's what this case is about. This -- this plaintiff had an opportunity to pay for and to discharge his obligation under State law. I -- I feel the need to --

Justice Ginsburg: When? When did that opportunity come up? Because I thought that the notice didn't get to the -- to the plaintiff, and then when the lawyer said, I have a client, it's his car, then the towing company went ahead and put it up for auction. And then no bidders, so they sold it, pocketed the money, gave nothing to the car owner. So I don't understand how it's a dispute about payment. This is not a case where the car owner said I won't pay for the towing.

Andre D. Bouffard: Well, Justice Ginsburg, we don't agree with that. It is -- it is exactly that kind of case. Alderson Reporting Company Official Page

Justice Ginsburg: At what point did Pelkey say, I won't pay for the towing?

Andre D. Bouffard: There -- there's a letter in the record of the New Hampshire Supreme Court, Your Honor, it's -- I believe it's at page 86 and 87 of the record in the New Hampshire Supreme Court, which is a letter from Mr. Shaughnessy, counsel for Mr. Pelkey, to my client. And this letter was written something in the range of 3 months after the towing took place, and -- and before the vehicle had been disposed of. And the letter asserts that Mr. Pelkey doesn't believe he should have to pay for any storage fees. He would -- he would pay the towing fees, but he doesn't believe he should have to pay for any of the storage fees. And that's -- that's -- that's really reflective of what this case is really all about. It's about a dispute over payment. And the reason why this case is so significant --

Justice Sotomayor: Not payment over towing, payment over storage.

Andre D. Bouffard: He -- he offered in this letter to pay the towing fees only. There was never any tender of payment. There was an offer to pay, provided that -- provided that my client would tow the vehicle Alderson Reporting Company Official Page 13 back to his place of residence because the vehicle wasn't operative at the time.

Justice Sotomayor: If this was a consensual contract, he asked -- Justice Scalia's question. They contracted for the tow. What State laws would be preempted under the FAAAA with respect to that private contract? Would there be any?

Andre D. Bouffard: The – the -- any breach of contract claim that might arise on behalf of the plaintiff would not be preempted. That's what the Court decided in the Wolens decision.

Justice Sotomayor: How about, do consumer fraud laws apply to that contract between the parties?

Andre D. Bouffard: The consumer fraud law might --

Justice Sotomayor: That's the basis of his claim here.

Andre D. Bouffard: It might apply as a matter of State law, but it would be preempted.

Justice Sotomayor: Ah, so you're arguing that those laws would be preempted.

Andre D. Bouffard: It would be preempted to the extent that it's a -- the case involves a dispute over payment for the services. This is a -- this case is a -- Alderson Reporting Company Official Page

Justice Sotomayor: That gets back to whether the services include storage, which is what the New Hampshire court said it doesn't.

Andre D. Bouffard: The New Hampshire --

Justice Sotomayor: That the movement of property or towing doesn't include services for storage.

Andre D. Bouffard: That's what the New Hampshire Supreme Court said, relying on the minority view that's come out of the Ninth Circuit in the Charas decision.

Justice Sotomayor: So why don't you answer that question? As I read the list of things that are preempted, they have to do with storage during transportation. Why should we read it more broadly than that?

Andre D. Bouffard: I think -- Justice Sotomayor, I think you are referring to the argument that's been made by my friends with regard to the final phrase in the statute with respect to transportation --

Justice Sotomayor: Exactly.

Andre D. Bouffard: And the short answer to that question is that the term "transportation" is a defined term in Title 49, and it's defined very broadly for -- for good reason because that term is used throughout Title 49. In fact, the term is used to define the scope of jurisdiction of the Department of Transportation, and Alderson Reporting Company Official Page 15 the definition of transportation is quite broad, and --

Justice Scalia: It -- it includes storage, is the point you are coming to, right?

Andre D. Bouffard: That's correct.

Justice Scalia: The definition includes storage. You think it means -- it means storage at the end of the transportation? Suppose you're -- you're a company that moves goods, but we also store goods. You can -- you know, rent -- rent space and we will store your furniture for years. If that company picks up some goods, brings it to its warehouse and leaves it in its warehouse for 3 years, that storage is covered by this -- by this statute, you think? See, I thought the storage was -- was storage in the course of the transportation. Sometimes when you're -- you know, changing the mode of transportation, going from trucks to ships or something, you have to store it temporarily during -- during the course of the transportation. That's how I would read it. But you're saying, even if you're a storage company, if you pick up goods and bring it to the place where you store it, that's covered by -- by this statute.

Andre D. Bouffard: No, that's not what I'm saying, Your Honor. I'm saying that if you tow a motor Alderson Reporting Company Official Page 16 vehicle, you bring the motor vehicle into your possession via towing and, as is the case here, you also store the vehicle. And in particular in a case like this, where the claimant was seeking to have the vehicle returned to his place of business -- to his place of residence, those are the facts of this case. This wasn't necessarily the end of the transportation. The plaintiff here, the Respondent, was asking for further transportation services at the end of the day. So on the facts of this case, the transportation hadn't ended. But even if -- we do have a situation where there would have been no further transportation. The -- the reading that my friends have advocated inserts the word "incidental" to -- to transportation in the statute that doesn't appear in the statute. The definition of "transportation" doesn't include the word -- doesn't say "storage incidental to the movement of property."

Chief Justice Roberts: Let's say you park your tow trucks on somebody else's parking lot, and you don't pay the rent. So they sell your tow truck. Is your claim against your landlord preempted?

Andre D. Bouffard: I don't think so, Your Honor, Alderson Reporting Company Official Page 17 because I don't think that that scenario would fall within what Congress intended by the term "services" there. That -- that claim -- that claim that -- that you've described, Mr. Chief Justice, is a claim that would really be a -- a breach of contract claim between the tow truck owners and his landlord. That would be a -- a contract dispute. It wouldn't -- wouldn't relate to the transportation services of the -- of the tow truck company in a way that is picked up by this preemption statute. It relates to it in a very tangential way, in a very remote way, I suppose, but not -- not in a way that's close enough -- not in a way that -- that relates to the business of a tow truck company in the way that payment disputes over -- over the services relate to the business of the tow truck company. There are any number of different types of disputes that motor carriers, like tow truck companies, could get involved in that wouldn't be preempted here. Motor carriers are involved in lots of different types of business activity that doesn't involve the delivery of their services. They could be involved in a real estate transaction, for example. They may be buying a new -- a new depot, and there may be claims that arise out of disputes in Alderson Reporting Company Official Page 18 connection with that real estate transaction. Those claims aren't preempted by this statute, even though in a very remote sense, they -- those -- those disputes might be related to the business of -- of the motor carrier. It's very remote, unlike a situation where the claim arises out of the actual delivery of the transportation services.

Chief Justice Roberts: How does -- so if your tow truck is involved in an accident, is that -- and a suit is filed for negligence. Is that preempted?

Andre D. Bouffard: I don't think that's preempted, Your Honor. I -- I -- and the reason I say that is because there's a whole line of Court of Appeals' decisions in the airline area that deal with negligence claims arising out of the negligent operation of the aircraft. And your scenario is the negligent operation of a tow truck as opposed to an aircraft.

Chief Justice Roberts: I'm just looking at the statutory language. It says -- you know, "related to a service of a motor carrier with respect to the transportation of property," and you know, your motor -- your truck is involved in transporting property. That's the claim against you, that you don't -- you don't render good service because you're negligent in a -- and it just seems to me to fit within the terms of the Alderson Reporting Company Official Page 19 statute, if you adopt as broad a reading as you adopt.

Andre D. Bouffard: Well, literally, I think you're -- you're right, Your Honor, that -- that the scenario you describe could fall within the literal language of the statute, but the Court has said that we can't go -- we can't necessarily go to the literal end of the earth in the reading of the statute, and we have to -- we have to limit this in some fashion. And the limitation that the Court has fashioned --

Justice Scalia: Well, let me tell you how we -- it seems to me we've limited it in -- in the Columbus case, Columbus v. Harrah's Garage and Wrecker Services, Inc. We said that, "The clause -- the clause's limitation to motor carrier services with respect to the transportation of property massively limits the scope of preemption to include only laws, regulations, and other provisions that single out for special treatment motor carriers of property." And here you've told us that this case doesn't involve any law that singles them out for -- for special treatment. To the contrary, it's the general consumer protection law.

Andre D. Bouffard: Well --

Justice Scalia: So you want us to eat those words, they were wrong, or -- or somehow you don't come Alderson Reporting Company Official Page 20 within them?

Andre D. Bouffard: Respectfully, Justice Scalia, I think those words came from your dissent in that case.

Justice Scalia: Ah. (Laughter.)

Justice Scalia: I forgot that. (Laughter.)

Justice Scalia: So you say they were wrong, you say? (Laughter.)

Andre D. Bouffard: No, no. No, I don't say that they were wrong, Justice Scalia. What I -- what I would though -- do though is I would point the Court to the language of the statute, and not only the -- not only the specific statute involved here, the motor carrier statute, but there's a -- there's a twin statute that applies to air carriers. And it also applies to hybrid air and -- and motor carriers. And I apologize, I haven't sent up a text of this statute in our appendix or anything, but it's -- it's Section 41713 of Title 49, and -- and it includes very similar, general -- broad, general, preemptive language. And it does not -- neither of those -- those provisions in 41713 contains limiting language that -- that -- that would limit the scope of preemption in any Alderson Reporting Company Official Page 21 way. The -- the -- and we know from the -- the legislative intent with regard to the statute involved in this case directly that Congress intended that the scope of preemption for all of these different kinds of industries would be coextensive. That's what Congress was trying to achieve with this statute, was to give motor carriers the same breadth of protection through preemption that air carriers enjoy and that hybrid air and motor carriers enjoy. And so if there are no -- if there are no limitations with regard to air carriers and -- and hybrid air motor carriers of -- of the type that are suggested by my friends for motor carriers, then -- then that language at the end of 14501 can't be interpreted in a -- in a strictly limiting fashion.

Justice Breyer: No, there's a lot of language in the majority pretty much along the line that Justice Scalia said. And not sure if that’s your point. I mean, Justice Ginsburg wrote the majority, and she said the reference to regulatory authority of a State, which is a different reference, I agree, should be read to preserve, not preempt traditional prerogative for the State. And Justice White said previously that you Alderson Reporting Company Official Page 22 have to start with the idea that this is -- historic police powers of the State are not going to be superseded by the Act, unless it's a clear manifest purpose of Congress. So I guess the problem is, with a lot of the other things, that you yourself are in an area that is a traditional matter of State regulation. It is, in fact, regulated in a way that applies to everybody. It is indirectly related to the transport itself, and that it takes place on -- about storage that took place after the event. So you have all that working against you. Now, the Columbus case does offer some hope for the other side, I would think. But what do you think?

Andre D. Bouffard: Well, Justice Breyer, let me just say, first of all, that -- that consumer protection is -- is -- I'm not sure I would concede that consumer protection is -- is an area of traditional State regulation. In fact, the New Hampshire consumer protection law dates to 1970, and the Federal government has largely occupied the field of motor carrier transportation since 1935 with the enactment of the Motor Vehicle Act in that year. So --

Justice Sotomayor: That's your problem, which is, what is it directed to? And that's the real Alderson Reporting Company Official Page 23 issue in this case. Yes, it's preempted with respect to any towing activity. The issue is, is it -- is it preempted, as the New Hampshire court, said to storage and sale?

Andre D. Bouffard: That is what the New Hampshire Supreme Court said, Justice Sotomayor. I would submit that -- that that's an artificial distinction that fails to take into account the broad definition of "transportation" in Federal law. If the Court has --

Justice Ginsburg: But why should the tow operation be treated any different from the garage when they're doing the identical thing, that is, storing and then selling the vehicle?

Andre D. Bouffard: Well, if a -- if a person has brought their vehicle into a garage, Justice Ginsburg, there's been no transportation by a motor carrier. The difference is that in this case this whole scenario started out with a transportation by a -- by a motor carrier which also, once it had possession of the vehicle, stored it. And so in a garage scenario, I suppose if a tower towed the vehicle to a garage and then left it, left it at a garage to be worked on, that -- that garage owner wouldn't be in a position to say that I can assert Alderson Reporting Company Official Page 24 a preemption defense because that garage owner has never -- has never engaged in the kind of transportation activity that triggers this preemption law. I hope that answers the question. May I reserve?

Chief Justice Roberts: Yes. Thank you, counsel. Mr. Shaughnessy? ORAL ARGUMENT OF BRIAN C. SHAUGHNESSY ON BEHALF OF THE RESPONDENT

Brian C. Shaughnessy: Thank you, Mr. Chief Justice, and may it please the Court: Transferring title and disposing of Mr. Pelkey's car against his will and not compensating him for the loss of his personal property is not a service of a motor carrier with respect to transportation of property. The regulation of State-created property interests is a field of traditional State regulation, and the broad sweep advocated by Dan's City Used Auto in this case would create a regulatory vacuum because there are no Federal laws that allow the sale of a motor vehicle. Now, let me address some of the things that my brother has argued that this case is about that we disagree about. My brother has argued that this case is Alderson Reporting Company Official Page 25 about payment. This case is not about payment. Mr. Pelkey is not challenging that Dan's City Used Car had the ability to tow the vehicle. We are not challenging how it was towed. We are not challenging the price of the tow. None of that is being challenged, and those are all the services of a motor carrier. Let me also --

Justice Scalia: What about the price of the storage? Are you challenging that?

Brian C. Shaughnessy: We are not challenging the price of the storage. There was a reference to a letter that I had sent to the Dan's City people several months -- but there were two letters. The first letter was actually quite close to, within several weeks of the auction, where we said, no, we are looking to pay for it. The other letter was, I think in June, was saying, you need to account for these proceeds. You sold the vehicle at auction and there is equity in this property, you need to account for these proceeds. So we didn't challenge the storage, but that brings up the issue raised by Justice Sotomayor with respect to the storage. And I would disagree with the characterization of my brother with respect to what RSA 262 is. RSA 262 talks about removed vehicles. It Alderson Reporting Company Official Page 26 actually provides the authority to law enforcement to remove a vehicle that might be in a public way, but it also gives the authority to a private landowner to have a car removed that's on their private property. It does not relate to the motor carrier services of a tow truck operator.

Chief Justice Roberts: But it seems to me that you can't ignore the fact that part of what tow trucks do is store things. I mean, it's a necessary and integral part of the motor service, the transportation of property, that they do. And regulation of the storage will affect the services that they provide.

Brian C. Shaughnessy: Well, we would say --

Chief Justice Roberts: It's not just like -- it's not just like storing anything else.

Brian C. Shaughnessy: Well, respectfully, Mr. Chief Justice, we would say that storage is a separate service altogether. And the act of transportation -- and this is another place where I would disagree with the characterization by my brother with respect to the definition of "transportation." I believe the definition of "transportation" specifically refers to a "motor carrier," meaning a person providing motor vehicle transportation for compensation, but also relates to the movement of the passengers and the Alderson Reporting Company Official Page 27 property, and the services related to that movement. So the very definition that applies to this case and to the transportation services relate to the movement of the property. Here the movement has stopped. And the storage that we are dealing with in this case is precisely the storage that is in RSA 262, which is the storage charges, not for the movement of the property. So I would clarify, Mr. Chief Justice, that it is our position that the transportation, with respect to the transportation of property which Justice Scalia has aptly pointed out, severely limits the scope of this preemption statute. The services of the motor carrier terminated once the hook was off the tow truck. That is when it stopped.

Justice Kagan: Suppose, Mr. Shaughnessy, that the New Hampshire laws were more onerous than they are. Suppose they said to a towing company, once you've towed this car you have to hold on to it forever. Or suppose they said to the towing company, you have to hire private investigators to go figure out who owns this car. Would any of those be preempted?

Brian C. Shaughnessy: Yes. I believe it's pointed out in the Rowe decision, in order for it to be Alderson Reporting Company Official Page 28 related to the motor carrier service you have to either directly regulate that service or it has an indirect connection with the service that significantly affects the service. In your example, it would be a direct regulation. You're actually requiring a motor carrier to actually provide a service that the marketplace itself wouldn't provide or that the motor carrier would not otherwise provide. So that is a direct regulation or an example of directly regulating that would be preempted under this statute. But what we are dealing with here, is the storage afterward, is not that motor carrier service. And I do believe the –- the language at the end with respect to --

Justice Sotomayor: 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?

Brian C. Shaughnessy: The direct --

Justice Sotomayor: Because now you're -- now you're articulating a different line. You are saying this -- the hypothetical that Justice Kagan posited is not storage-related, it is something else-related. It's towing-related. What's the difference?

Brian C. Shaughnessy: Correct. The way I -- the Alderson Reporting Company Official Page 29 way I interpreted the hypothetical is the State is then saying in order as a precondition to or as part of the motor carrier service of transporting or towing that vehicle, you also must provide this other service over here, which is actually one of the problems with the Rowe case and under the Maine State statute. Under Maine State law what they were requiring the motor carrier to do in Rowe was actually to provide the verification service. And so that was a direct regulation I believe that this Court found under Rowe.

Justice Scalia: You've just told us anything that significantly affects the transportation service is covered. And I think what your brother's argument is, is that this significantly affects the service, whether he can collect for the storage after -- you know, after the -- after towing it by -- by selling it, and by selling it on terms that are not so onerous as to impinge upon his -- his ability to run the business.

Brian C. Shaughnessy: Well, it may impinge upon his ability or impinge upon how much he can collect. It may impinge upon those things, Your Honor. But it doesn't affect the service of the motor carrier with respect to the transportation of the property because that's the movement of the property. Alderson Reporting Company Official Page 30 Certainly getting paid is an important part of the service that anybody provides, but that is getting too attenuated, that's getting too far out. That's getting towards --

Chief Justice Roberts: Well, it isn't too -- I mean, this is a provision of course in the Federal Aviation Administration Act. Whatever rule we adopt is going to apply to air transportation as well. And is your position, for example, that things related to a hangar at an airport, that those are not covered by this at all? It seems to me that there the connection between the transportation and the storage, the storage of the airplane, you can see a little bit more clearly how that would affect what the airplane -- you know, can do. A lien -- you can't take the airplane out of the hangar because you didn't pay the rent or whatever.

Brian C. Shaughnessy: There is an effect there, and I do believe that this Court started drawing that line actually in the Travelers case. And when the Travelers case looked at this "related to," that's what's causing the problem, "related to" and what does "related to" mean? And as has been pointed out, if you actually use "related to" to its extreme, everything is related to everything else. That has been said several Alderson Reporting Company Official Page 31 times in the case law. But "related to" in Travelers, I believe in that case the Court looked at -- there was attention to that type of broad sweep of "related to" and the presumption against preemption, which says we're not going to preempt, but "related to" seems we are preempting everything. So there was a tension. So in Travelers we went to, well, we have to take a look at what the manifest intent of Congress was for the regulatory scheme. You have to look at the intent of Congress, and certainly the best place to look for that intent is first in the words that are used. But once we are looking at the intent, we have to say does the actual thing that is being regulated by the State, and they are putting in their own policies by direct regulation by a positive enactment, does it affect or significantly affect the deregulatory purposes. And I believe that's the line that was adopted in Rowe.

Justice Breyer: All right. Now, don't lose that. I will ask you this question to, which favors you in a sense but I want the answer really from the Solicitor General who may know. But I'm going to ask it to you too because you've probably both thought about it. He may have -- they may have some experience on it. Alderson Reporting Company Official Page 32 If you start talking about significant effect, without those last words, "deregulatory purpose" I suddenly worry about the following, that every city in the United States depends upon towing to regulate parking within the city. We couldn't function without it, although none of us like it. We know that it's necessary. And certainly a law that provides for towing does directly regulate the service of the tow truck. It says do it. And then it tells you when not to do it. So what's the -- what happens? Is every traffic law in the United States involving towing suddenly preempted? I can't believe that. How does this work? So there is much more in significance in this case than the words we write, perhaps, than in the particular case. And now, do you want to, in light of what my concern is, add anything to what you say. And you may not, the Solicitor General might, but I'd like to hear anything you have to say about that.

Brian C. Shaughnessy: Well, believe -- I believe with respect to RSA 262, which is the statute that is in this case, it doesn't require a tow truck company to do anything.

Justice Breyer: No, you -- you can just rest on that, but I'm going to have -- or somebody's Alderson Reporting Company Official Page 33 going to have to write an opinion. And we could just say that, but I -- I don't see I can -- my own problem is not being able to have an intelligent answer to that without having some answer to the bigger picture. And the bigger picture seems to me horrendously important. And -- and I don't know what that answer is. You seem to be getting there with the words "deregulatory purpose." And I -- and I was thinking how we might try to work with those, but go ahead.

Brian C. Shaughnessy: Well, I think it's -- it is an easier case in this case under the FAAAA --

Justice Breyer: Oh, I think it's much harder than this case --

Brian C. Shaughnessy: Well, I --

Justice Breyer: -- because the relationship is -- is in the -- in the more general case is more direct to the tow truck. It says "go tow." And that's -- that's why I need some kind of bigger picture.

Brian C. Shaughnessy: I'm getting lost in the "go tow" command, if you will.

Justice Breyer: We have a statute which says, if you park your car here for more than 3 hours, you will be towed, okay? And as part of that statute, though we don't see it, there is an arrangement for the service of the city with the tow truck company, which Alderson Reporting Company Official Page 34 says when the parking person calls you and says -- the meter says red, yellow, purple, green, you are to go there and tow, okay? Doesn't that sound as if it's regulating the service of tow trucks? And I suspect across the country, there is some variation on that theme, but there are thousands of them. And since the words -- I would be repeating it -- the words of this case may affect that situation, I want to know what you know, which may not be very much -- I don't blame you -- about that broader situation.

Brian C. Shaughnessy: Well, thank you for the out, Justice Breyer. But again, I -- I -- the reason I'm getting lost is -- and I understand the -- the example having to do with the City of Cambridge having no -- no parking, and if you're there for 3 hours, that allows -- there is this -- statutes that allow the tow truck operator, the motor carrier, to go and collect that under a nonconsensual tow. And a nonconsensual tow is a special animal, unfortunately, because there are no market forces in play there. But I don't believe that that's affecting the motor carrier service. There is nothing that forces that tow truck carrier to go out and actually undertake that tow. And if they do undertake the tow or do the Alderson Reporting Company Official Page 35 business or whatnot, then certainly, they would be under whatever obligations that the State has. And that's one of the problems I think we have --

Justice Sotomayor: I think that Justice Breyer is -- I may be speaking for him -- he's thinking that that State contract or that State regulation that permits towing companies to do this is preempted in some way. That would be his argument because it affects --

Justice Breyer: Or the opposite.

Justice Sotomayor: No?

Justice Scalia: He's worried that it'll be preempted.

Justice Breyer: Correct.

Brian C. Shaughnessy: Right.

Justice Breyer: Correct.

Justice Scalia: And he didn't -- he didn't mention Cambridge, did he?

Brian C. Shaughnessy: No.

Justice Scalia: I don't think so.

Brian C. Shaughnessy: I think he did yesterday, too, Your Honor.

Justice Scalia: Yeah, you're both from Boston, Massachusetts. Alderson Reporting Company Official Page

Justice Breyer: And they're -- they're very attractive places except in the winter. But a -- a motor carrier vehicle -- a service, transportation includes related to the movement of passengers or property. Related to the movement of passengers or property. So we have these words "related to" again. I -- well, you've given me a couple of ideas, but I -- maybe they'll turn out not to be relevant, but -- but -- which I hope.

Justice Scalia: I think maybe -- maybe we have to make it up, what the limitation -- I mean, you're quite right, everything's related to everything else. And we've had trouble with the same -- the very same words with ERISA, and -- and started off trying to give it its -- its apparent meaning, "related to," and we finally concluded you can't do that. So what do you want us to make up? What kind of a limitation do you -- (Laughter.)

Brian C. Shaughnessy: Well -- Justice Scalia, I don't think you have to make up too much in this particular case. It gets easier to draw the line because of the with respect to transportation of property. So with respect to the FAAAA and motor carriers, we're drawing the line as to only the services Alderson Reporting Company Official Page 37 of the movement of the property, and that is limiting. And I do -- I would agree with your dissent.

Justice Scalia: Related to -- related to -- related to the movement of the property. That's the problem. It's the "related to" words.

Brian C. Shaughnessy: Correct. And then we go back to the instructions in Rowe, which -- which provided the framework that when you're interpreting related to, you go: One, is it direct -- directly regulating or directly affecting service; or, if it's an indirect effect, which obviously it can be, it has to have a significant impact on the services. And then there's the ultimate out of Morales that says if it's -- it could certainly connect, but if it's too far attenuated to the purposes of Congress, it's just not going to be done. I know that doesn't help with the line drawing in -- in connection of the gray area that we're dealing with in this case, but I do believe in this particular case, it is easier because we have that -- those words of limitation, "with respect to the transportation of property" are words of limitation, and they are not present in the ADA, and they were not present with the ERISA cases, which deals with a broad regulatory scheme with long history and other things Alderson Reporting Company Official Page 38 that apply. We don't have that in this case. I believe the New Hampshire Supreme Court got it right when they were focusing on actually what is a service of a motor carrier, and I believe we do have words of limitation in this particular case. So what the Supreme Court of New Hampshire said is, "The manner in which a company in possession of a towed vehicle may" -- not must -- "may dispose of the vehicle to collect on a debt created by the operation of State law is far removed from Congress's aim of promoting free markets and equalizing the competitive playing -- playing field between motor carriers and air carriers, and help assure transportation rate services reflect maximum reliance on -- on forces." I also believe that the Petitioner has basically given up the case and conceded the case in several places in their brief and in here in oral argument today. If you look at page 34 of the Petitioner's brief, it says that most -- that "The most that Dan's City really can say is that the services within the meaning of Section 14501(c)(1) includes activities that are incidental and distinct from the actual transportation services." So the Petitioner's brief is calling the Alderson Reporting Company Official Page 39 storage afterwards, after the transportation has stopped. And -- and they call it incidental and distinct. In the reply brief at page 21, they say, "Moreover, criminal laws prohibiting theft are not the kind of burdensome State economic regulation Congress sought to prevent with the FAAAA, nor are abandoned vehicle laws such as New Hampshire Chapter 262 in its regulations which do not hamper the operations of tow truckers. Instead they establish procedures for the efficient handling and disposition of abandoned vehicles." So they're conceding that RSA 262 in this case, the statute does not have a significant impact, so this is not a clear case. I see I have more time, but I think I've made all my points, if there are no more questions.

Chief Justice Roberts: Thank you, counsel. Mr. Yelin, welcome. ORAL ARGUMENT OF LEWIS S. YELIN, FOR THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE RESPONDENT

Lewis S. Yelin: Thank you, Mr. Chief Justice, and may it please the Court: Congress deregulated the trucking industry Alderson Reporting Company Official Page 40 to eliminate undue interference with market forces and consumer choice. But market forces and consumer choice cannot operate on the sale of nonconsensually towed cars, and there's little reason to think that Congress intended to preempt State laws that regulate that conduct. This Court in this case, as in many preemption cases involving the phrase "related to," must engage in a -- in a process of sensible line drawing. Everything is related to everything else in the literal sense. And the Court in Travelers suggested that the Court should not -- courts should not use uncritical literalism in determining the scope of a preemption provision. I think that this Court does have some work to do in this case, but a lot of the groundwork has already been laid in the Rowe case. In Rowe, this Court held that a State law is related to a motor carrier service if the State law either directly regulates the service or if it has an indirect connection with the service and a significant -- forbidden significant effect on Congress's deregulatory and preemptive objectives. I think --

Chief Justice Roberts: Well, it's -- I asked your friend on the other side the question. Alderson Reporting Company Official Page 41 Storage is part of what tow trucks do. Maybe in a way that -- you know, cross-country trucks don't. And it seems to me if you have a local jurisdiction who figures out, well, this is a great way to make a lot of money or -- you know, to give -- or the other way -- you know, you can charge -- charge a lot because we want to keep subsidized tow trucks. I mean, why isn't that fairly directly related to the service they provide?

Lewis S. Yelin: It's certainly a foreseeable service that could be provided. The question is whether it has a sufficient locus to the transportation itself. I think there are indications in the statute itself and the statutory purposes which suggest that the Court should view service as a separate type of service, independent and distinct from transportation, at least in the towing context where the motor transportation has ceased. The reason for that, Your Honor --

Justice Scalia: I don't understand what you just said. Say it again.

Lewis S. Yelin: Yes, sir. I think that there are reasons in the statutory text itself and in the statutory objectives for viewing service as independent -- excuse me, storage --

Justice Scalia: Service where? Service Alderson Reporting Company Official Page 42 where?

Lewis S. Yelin: I misspoke, Justice Scalia. Storage --

Justice Scalia: Storage, ah. I see.

Lewis S. Yelin: -- as independent of transportation. And the reasons for that are as follows: First, let me start with the statutory text. The statute defines "transportation" as "services related to the transportation of property." And for – and storage has been in the Interstate Commerce Act for over 100 years, the term "storage." And for over 100 years this Court has construed disputes concerning storage and considered whether or not Federal law governed or State law governed. When the storage was before delivery of a package, for example, the storage was considered to be storage in transit and it was part of the transportation itself. But if the storage occurred after delivery, that was a separate service not connected with the transportation.

Justice Kagan: Mr. Yelin, I gave Mr. Shaughnessy a couple of hypotheticals about very onerous regulations involving storage after the towing that might very conceivably have an effect on the tower, drive up the tower's prices, conceivably even drive the Alderson Reporting Company Official Page 43 tower out of the market. So how do we draw the line as between this and those kinds of things?

Lewis S. Yelin: So I have two points that I would like to make with respect to that, Your Honor. The first is that I think the hypotheticals you gave are much more difficult cases and could very well cross the line if a State tried to indirectly influence towers. For example, let's assume, if I may elaborate on your hypothetical, that a State really disliked the practice of nonconsensual towing, and really wanted to try and reign it in and so imposed certain conditions on towers that would discourage them from engaging in this particular type of service. I think that would be an indirect type of regulation, but it would, as a matter of fact, it really would impair the ability or the interest of towers to provide this service to --

Justice Scalia: How do we discover that? Do we look into the city council hearings or what?

Lewis S. Yelin: I think in part, Your Honor --

Justice Scalia: No, I want to be able to look at the law and say the law is preempted or the law isn't preempted. Don't tell me -- you know, the purpose of the law is this or that. That's not something I am able to do. Alderson Reporting Company Official Page

Lewis S. Yelin: Your Honor, I think some of these preemption questions necessarily are factual in part in nature. The Court, to consider whether or not a service of the motor carrier is affected by an indirect statute is --

Justice Scalia: Yes, that's factual. But whether the intent of the city council was this or that is not factual.

Lewis S. Yelin: Oh, no. That's right, Your Honor. And I didn't mean to suggest that that would be part of the inquiry.

Justice Scalia: I thought that is what you meant.

Lewis S. Yelin: No, Your Honor. The question is whether it would have that effect, that factual effect. And if I may, I think it's critical in this case to point out that Petitioner has conceded at page 21 of its reply brief that laws like Chapter 262 do not hamper towing industry practices. And Respondent's amicus Towing and Recovery Association explains that laws like this provide a critical backbone for nonconsensual towing services. In the absence --

Chief Justice Roberts: Well, but I mean, maybe these, but you can easily imagine that these types of laws would be subject to abuse and would have an Alderson Reporting Company Official Page 45 adverse impact on the towing company and, therefore, on the transportation of property.

Lewis S. Yelin: And if there were such abusive laws, Your Honor, and if they do impair the transportation of property and the services that a tower was willing to provide, I think that the Court would likely consider those cases and consider those --

Chief Justice Roberts: Well, now we only -- now we not only have to decide whether this type of law is related to it, but once we say some of those laws might be and some won't be, depending upon the impact in a particular case.

Lewis S. Yelin: Your Honor, I think every law has to be considered in its application, and I think that, for example, in Morales, the Court just didn't consider --

Chief Justice Roberts: Every law doesn't have to be considered in its application. If you say you can't speak out on the sidewalk, it doesn't matter what they apply it, you can consider that law absolutely.

Lewis S. Yelin: Fair enough, Your Honor. My comment was too broad. What I would say is some laws will be obvious. Those that directly regulate towing industries, for example, a State law that flatly Alderson Reporting Company Official Page 46 prohibits nonconsensual towing would be the type of direct regulation which is proscribed by this preemption clause. When you are talking about indirect regulation, however, that perhaps is where I think one needs to consider it on an as-applied basis because indirect regulation by definition is not going to have an obvious direct limit on towing services and the question the Court will have to consider is whether the indirect regulation is sufficiently onerous that it does impair the provision of towing services.

Justice Breyer: It seems to me that there -– we have two choices. In Morales, since I can mock my own opinions, I wrote at the end, "it's not -- when it's too tenuous, remote or peripheral." That's singularly unhelpful. (Laughter.)

Justice Breyer: It seems to -- there --

Justice Scalia: I thought so at the time. (Laughter.)

Justice Breyer: Yes, you were right. There are two directions you could go. But first I would like to know, it seems my guess is it is universally thought by cities that this Act does not preempt their normal parking regulations. Am I right about that? Alderson Reporting Company Official Page

Lewis S. Yelin: You are right about that, Your Honor.

Justice Breyer: Okay. Then we either have to take this tenuous, et cetera, this is too much, this isn't too much, da, da, da, or you've given -- there is another thought being thrown out and that is you relate it to the basic purposes of the deregulation act and you say that where the city is regulating something that never was, could not be, and is not part of a regulated or deregulated market, i.e. has nothing to do with the subject matter, then it is not preempted. Now, do you want us to take that approach? Should we punt and just use the words like "tenuous" or -- and if we take the implicit suggestion, what's the right way to do it?

Lewis S. Yelin: Your Honor, I think the two alternatives you sketched are not mutually exclusive. In fact, I think they support each other. I believe 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. I would propose, Your Honor, that in this context, where the Department of Transportation would have no regulatory authority and where there is no Alderson Reporting Company Official Page 48 private market that could fill the vacuum that would be created by the removal of State laws creating the structure for the private choices that are undertaken here, this would be a prime example.

Justice Scalia: So it would depend upon how severe the consumer protection law is, is that right? If it's a consumer protection law that really whacks the tow truck operator, that would be different from a moderate, benign consumer protection law? We have to examine each consumer protection law on its own, is that it?

Lewis S. Yelin: I think the answer has to be yes, Justice Scalia. In Morales, for example, the Court considered the application of the consumer protection law where the States were trying to use specific guidelines.

Chief Justice Roberts: Well, why doesn't this one really whack them, though? It's treble damages and all that. You can answer my question, yes. (Laughter.)

Lewis S. Yelin: Thank you, Mr. Chief Justice. Your Honor, the Consumer Protection Act claims that are asserted here are premised on Chapter 262, which structures the background organization of the Alderson Reporting Company Official Page 49 nonconsensual towing services altogether. There will be no treble damages if the substantive provisions were satisfied. If they are not, that would be a different question. And, Your Honor, there has been no evidence suggested here that in fact treble damages for a violation of the background laws which structure the standards that tow truck companies are supposed to undertake would have that harm.

Chief Justice Roberts: Thank you, counsel. Mr. Bouffard, you have 3 minutes remaining. REBUTTAL ARGUMENT OF ANDREW D. BOUFFARD ON BEHALF OF THE PETITIONER

Andre D. Bouffard: Thank you. Let me take a couple of moments to try to address some of the questions that seem to be troubling some of the Justices. Justice Breyer, the simple answer to why local traffic safety laws wouldn't be preempted is that there's an exemption for the safety regulatory authority of States in the statute.

Justice Breyer: Thank you.

Andre D. Bouffard: And, Justice Kagan, the reason why this -- this case goes over the line and is preempted is because what the Plaintiff's damages claims Alderson Reporting Company Official Page 50 in this case seek to do is they seek to enforce duties that go well beyond what even the New Hampshire abandoned vehicle law requires. They seek to impose duties of reasonable care to seek out the owner of the vehicle; they -- the -- the -- the negligence claim seeks to impose a duty to act -- a duty of reasonable care in disposing of the vehicle; and -- and a duty of reasonable care to return the vehicle to Mr. Pelkey. And those duties and what has been a breach of those duties will be determined by a jury. And so when tow truckers are faced in the future with having to live up to those sets of duties, they will never know whether or not, in any given situation, their conduct will be second-guessed as having been not reasonable by a jury and they will be subjected to damages claims by plaintiffs. Under the -- the abandoned vehicle law, the rule is very simple in New Hampshire and under -- and in many other jurisdictions -- pay, or your vehicle can be sold. It's a very simple rule. And --

Justice Ginsburg: But it also tells how the vehicle will be sold -- sold, and your client is invoking that statute in order to be able to sell the car, but wants to have enforced only the parts that are favorable to the tow operation. And the -- the regime Alderson Reporting Company Official Page 51 in New Hampshire is, yes, you can sell the vehicle, but this is how you do it. And it seems to me that that's not how it was done here.

Andre D. Bouffard: Well, Justice Ginsburg, actually, the -- the tower here wasn't invoking the law, the tower was simply following what the law says in terms of the process. This is a mandatory process. When -- when a person comes into possession of another's vehicle in New Hampshire and -- and there's no claim made for the vehicle, the law requires that the tow trucker report that fact to the Department of Motor Vehicles. And the Department of Motor Vehicles then looks at the information that's provided and then instructs the tower about the process of whether or not the vehicle can -- can be sold without notice, or if it -- if notice is required, what notice is required.

Justice Kagan: But it's a process that allows you in certain circumstances to sell the car and to take the money. And what Justice Ginsburg is suggesting is -- you know, you have to take the bitter with the sweet.

Chief Justice Roberts: Please.

Andre D. Bouffard: Well, I -- I think that the -- the New Hampshire law is the New Hampshire Alderson Reporting Company Official Page 52 law, and what we have here is -- is a tow trucker that was just making a good faith -- a good faith attempt to comply with the law. And if -- if tow truckers that are making good faith attempts to comply with the law are faced with Consumer Protection Act claims and negligence claims and the kinds of remedies that come with Consumer Protection Act claims, that will have a significant impact on the business of these motor carriers.

Chief Justice Roberts: Thank you, counsel. The case is submitted. (Whereupon, at 12:10 p.m., the case in the above-entitled matter was submitted.)