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Supreme Court Sides With Car Owner in Case Against Towing Company That Towed and Traded His Car Without Permission

May 13, 2013

Supreme Court Sides With Car Owner in Case Against Towing Company That Towed and Traded His Car Without Permission

Statement by Adina H. Rosenbaum, Attorney, Public Citizen

Note: Adina Rosenbaum was Supreme Court co-counsel for Robert Pelkey in this case.

In a unanimous ruling in Dan’s City Used Cars, Inc. v. Pelkey, the U.S. Supreme Court today affirmed that people can bring state-law cases against towing companies that tow their cars and sell them against the owners’ wishes. The court rejected a broad theory of federal pre-emption that would have kept people from being able to sue under state laws in such cases.

In the case, Dan’s City towed Robert Pelkey’s car from the handicapped parking spot in his apartment complex’s parking lot in Manchester, N.H. Pelkey subsequently spent two months in the hospital, learning that his car had been towed only upon returning home. Although Pelkey’s lawyer informed Dan’s City that that he wanted to arrange for the car’s return, Dan’s City traded the car away without reimbursing Pelkey for his loss.

Pelkey brought state-law consumer protection act and negligence claims against Dan’s City. The state trial court sided with Dan’s City, holding that the claims were pre-empted by a federal law that prevents states from enacting or enforcing state laws “related to a price, route, or service of any motor carrier … with respect to the transportation of property.” The New Hampshire Supreme Court reversed, holding that the claims neither relate to services nor to the transportation of property.

As our brief for Pelkey explained, “If claims related to selling or otherwise disposing of a towed car were preempted, then, no matter what state law provided about how long a vehicle must be kept before it could be sold, towing companies could tow cars directly from parking lots to auction lots for immediate sale without compensating the owners.” 

Today, the U.S. Supreme Court rejected such a result. Affirming the New Hampshire Supreme Court’s decision, the U.S. Supreme Court held that “state-law claims stemming from the storage and disposal of a car, once towing has ended, are not sufficiently connected to a motor carrier’s service with respect to the transportation of property to warrant preemption under” the applicable federal law.

In rejecting federal pre-emption of the state-law claims, the Supreme Court recognized that when Congress enacted the federal law, it was not concerned with towing companies’ disposal of towed vehicles. Vehicle owners can rest more easily knowing that if their cars are towed, federal law will not deprive them of state-law protections against the towing companies’ selling their cars against their wishes.

Read more about the case.

Brian C. Shaughnessy, of Kazan, Shaughnessy, Kasten & McDonald, PLLC, in Manchester, New Hampshire, represents Mr. Pelkey in the case and argued before the U.S. Supreme Court.