Wrecker company brought action against city seeking declaration
that city ordinances were preempted by federal law, and to enjoin
city from enforcing ordinances. On cross-motions for summary
judgment, the District Court, Jordan, J., held that: (1) ordinances
relating to route, service, and price of consensual towing services
were preempted by federal law; (2) regulation of vehicle storage
was not preempted; and (3) regulation of price of winching services
was preempted.
Plaintiff's motion granted in part, and denied in part, and city's
motion denied.
West Headnotes
[1] KeyCite this headnote
48A Automobiles
48AIII Public Service Vehicles
48AIII(A) Control and Regulation in General
48Ak62 k. Concurrent and Conflicting
Regulations.
268 Municipal Corporations
268II Governmental Powers and Functions in General
268k52 Political Status and Relations
268k53 k. In General.
Provisions of city ordinances relating to route, service, and
price of consensual towing services were preempted by Federal Aviation
Administration Authorization Act (FAAA Act). 49 U.S.C.A. §
14501(c)(1).
[2] KeyCite this headnote
48A Automobiles
48AIII Public Service Vehicles
48AIII(A) Control and Regulation in General
48Ak62 k. Concurrent and Conflicting
Regulations.
268 Municipal Corporations
268II Governmental Powers and Functions in General
268k52 Political Status and Relations
268k53 k. In General.
City ordinances regulating route, service, and price of consensual
towing services were not exempted from preemptive scope of
section of Federal Aviation Administration Authorization Act
(FAAA Act) that generally precluded state laws or municipal ordinances
that regulate prices, routes, or services provided by motor carriers
under section that exempted state regulation of safety and
insurance issues, but did not mention political subdivisions.
49 U.S.C.A. § 14501(c)(1), (c)(2)(A).
[3] KeyCite this headnote
48A Automobiles
48AIII Public Service Vehicles
48AIII(C) Regulation of Operation and Management
48Ak111 k. Conduct of Business
in General.
Tennessee statute concerning procedures to be followed in rate-making
by state regulatory agencies did not apply to city in setting
price for non-consensual towing services. T.C.A. §§
65-5-201, 65-5-203.
[4] KeyCite this headnote
48A Automobiles
48AIII Public Service Vehicles
48AIII(A) Control and Regulation in General
48Ak62 k. Concurrent and Conflicting
Regulations.
48A Automobiles
48AVIII Garage Keepers, Repairmen, Auto Liverymen, and
Filling Stations
48Ak369 Storage of Vehicles; Parking Facilities
48Ak370 k. In General.
268 Municipal Corporations
268II Governmental Powers and Functions in General
268k52 Political Status and Relations
268k53 k. In General.
City's regulation of vehicle storage was not preempted by federal
statute prohibiting states and political subdivisions from regulating
price, route, and service "with respect to the transportation
of property." 49 U.S.C.A. § 14501(c)(2)(C).
[5] KeyCite this headnote
48A Automobiles
48AIII Public Service Vehicles
48AIII(A) Control and Regulation in General
48Ak62 k. Concurrent and Conflicting
Regulations.
48A Automobiles
48AVIII Garage Keepers, Repairmen, Auto Liverymen, and
Filling Stations
48Ak368 k. Repairs and Other Services and
Supplies.
268 Municipal Corporations
268II Governmental Powers and Functions in General
268k52 Political Status and Relations
268k53 k. In General.
City's regulation of price of winching services was preempted
by federal statute prohibiting states and political subdivisions from
regulating price, route, and service "with respect to the transportation
of property." 49 U.S.C.A. § 14501(c)(2)(C).
*725 Michael P. McGovern, Ayers & Parkey, Knoxville, for
Plaintiff.
George T. Underwood, Jr., City of Knoxville, Department of Law,
Knoxville, TX, Charles W. Swanson and Jason H. Long, Sheppeard
& Swanson, Knoxville, TX, for Defendant.
MEMORANDUM OPINION
JORDAN, District Judge.
This civil action is before the court on the parties' motions
for summary judgment [docs. 6 and 12]. The parties have responded to
the respective motions, and oral argument on the motions has
been heard by the court. For the reasons discussed below, the
plaintiff's motion for summary judgment will be granted in part
and denied in part, and the defendant's motion for summary judgment
will be denied.
In its Amended Complaint, the plaintiff alleges that the city
of Knoxville's wrecker *726 ordinance (Art. IV, ch. 26 of the City Code,
§
26-226, et seq.) has been preempted, in large part, by federal
law (49 U.S.C. § 14501(c)). Specifically, the plaintiff alleges that
the
City's wrecker ordinance attempts to regulate the route, service
and price of consensual towing services provided by wrecker
companies like the plaintiff. The plaintiff seeks a declaration
that the provisions of the City's wrecker ordinance which regulate route,
service or the price of consensual towing services have been
preempted by federal law. The plaintiff also seeks to have the City
enjoined from further administration and enforcement of the provisions
of the City's wrecker ordinance which have been preempted
by federal law.
The plaintiff is a wrecker company engaged in the business of
towing vehicles. Since 1962 the City of Knoxville has had an
ordinance in place for the regulation of tow trucks, which has
been amended from time to time. The ordinance requires any person
who wishes to engage in the towing business to have a Certificate
of Public Convenience and Necessity. To obtain such a
certificate, the wrecker owner must pay a non-refundable fee
of $100.00, demonstrate compliance with certain technical vehicle
equipment specifications, provide proof of financial responsibility,
and conform to some general regulations. The wrecker owner must
also verify his experience in the towing industry and provide
information as the number of tow trucks to be operated and the
location of storage facilities. Any tow truck paint design, monogram,
or insignia must be approved by the wrecker inspector. Once a
wrecker owner demonstrates compliance with all these provisions,
a Certificate of Public Convenience and Necessity will be issued
by the City. Once the Certificate is issued, the wrecker owner
must keep certain logs and copies of invoices and make them
available to the City upon request. Any violation of State or
federal law of the wrecker ordinance that "reflects unfavorably on the
fitness" of the wrecker owner may result in suspension or revocation
of the Certificate.
LEGAL DISCUSSION
Under Rule 56 of the Federal Rules of Civil Procedure, a motion
for summary judgment may be granted, "if the pleadings,
depositions, answers to interrogatories and admissions on file,
together with affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled
to judgment as a matter of law." In this case the parties have agreed
that there are no facts in dispute, and that summary judgment
would be the appropriate disposition of this civil action.
In August 1994, Congress passed the Federal Aviation Administration
Authorization Act (FAAA Act), codified at 49 U.S.C. § 14501
et seq. The Act became effective on January 1, 1995. Section
14501(c)(1) provides as follows:
(c) Motor carriers of property.--
(1) General rule.--Except as provided in paragraphs (2) and (3),
a State, political subdivision of a State, or political authority of 2
or
more States 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 ... or any motor private carrier,
broker or freight forwarder with respect to the transportation of
property.
Section 13102(12) defines "motor carrier" as "a person providing
motor vehicle transportation for compensation." The parties do not
dispute that § 14501(c) applies to tow trucks.
Congress provided for two exceptions to the statute: (1) states
could regulate safety and the financial responsibility of motor carriers
of property and (2) movers of household goods were exempted.
[FN1] In 1995, *727 Congress amended the 1994 Act adding a third
exception which provides as follows:
FN1. Section 14501(c)(2) provides:
(2) Matters not covered.--Paragraph (1)--
(A) shall not restrict the safety regulatory
authority of a State with respect to motor vehicles, the authority of a
State
to impose highway route controls or
limitations based on the size or weight of the motor vehicle or the hazardous
nature of the cargo, or the authority
of the State to regulate motor carriers with regard to minimum amounts
of
financial responsibility relating to
insurance requirements and self-insurance authorization;
(B) does not apply to the transportation
of household goods.
(C) [Paragraph 1] does not apply to the authority of a State or
political subdivision of a State to enact or enforce a law, regulation,
or
other provision relating to the price of for-hire motor vehicle
transportation by a tow truck, if such transportation is performed without
the prior consent or authorization of the owner or operator of
the motor vehicle.
49 U.S.C. § 14501(c)(2)(C).
Thus, federal law expressly preempts any attempt by a state or
a political subdivision of a state from enacting or enforcing any law
or regulation of tow trucks related to "price, route, or service."
However, states have been given the authority to regulate safety and
financial responsibility of tow trucks, and states and political
subdivisions of states have been given the authority to regulate the
price of non-consensual towing services.
In reliance on these statutory provisions, the plaintiff argues
that Congress has plainly and unambiguously preempted a
municipality's regulation of tow trucks except as to the price
of non-consensual towing services (towing services required, for
example, because of an arrest, accident, or illegally parked
vehicle). In spite of the statute's plain language, in its motion for
summary judgment, the City argues that there is a strong presumption
against federal preemption in areas traditionally occupied by
the states. The City contends that if the court narrowly construes
the terms of § 14501(c) and expansively construes the
exceptions, then federal law will not be found to have preempted
the City's wrecker ordinance.
The City argues that preemption should not be found by inference;
that is, municipalities should not be excluded from regulating the
towing industry in the absence of specific preemptive language,
relying on Wisconsin Public Intervenor v. Mortier, 501 U.S. 597,
111 S.Ct. 2476, 115 L.Ed.2d 532 (1991). At issue in Mortier was
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
FIFRA authorizes a state to regulate pesticides, but does not
mention political subdivisions of states. The Supreme Court found that
the term "state" is not self-limiting and includes political
subdivisions of states. Id. at 612, 111 S.Ct. at 2485. Thus, the Court
found
that FIFRA's grant of authorization to the states "leaves the
allocation of regulatory authority to the 'absolute discretion' of the
States themselves, including the option of leaving local regulation
of pesticides in the hands of local authorities." Id. at 612, 111
S.Ct. at 2483.
This same argument was made in by the City of Atlanta in R. Mayer
of Atlanta, Inc. v. City of Atlanta, 158 F.3d 538 (11th Cir.1998).
The issue before the Eleventh Circuit Court of Appeals was whether
the City of Atlanta's wrecker ordinance had been preempted by
§ 14501(c). It appears, based on the Court's description
of the Atlanta wrecker ordinance that the City of Knoxville's wrecker
ordinance is nearly identical to Atlanta's. The Eleventh Circuit
rejected the City of Atlanta's argument that the term "state" also
includes political subdivisions and found that, unlike FIFRA,
§ 14501 expressly differentiates between states and their political
subdivisions. Id. at 547. The Court noted that § 14501 has
"no fewer than seven subsections that expressly preclude or authorize
rulemaking by political subdivisions, while the subsection at
issue in this case [§ 14501(c)(1) ] conspicuously omits any reference
to political subdivisions." R. Mayer, 158 F.3d at 547. The Eleventh
Circuit also observed that other courts, including the Sixth
Circuit, have declined to follow Mortier when interpreting preemption
statutes of other federal *728 statutes. See, e.g., United States
v. City and County of Denver, 100 F.3d 1509, 1513 (10th Cir.1996)
(following Mortier would produce a result contrary to the
objectives of CERCLA); Ohio Mfr. Ass'n v. City of Akron, 801
F.2d 824, 829 (6th Cir.1986), cert. denied, 484 U.S. 801, 108 S.Ct.
44, 98 L.Ed.2d 9 (1987) (Congress' explicit reference to political
subdivisions in the Occupational Safety Act demonstrates that
Congress did "not simply overlook political subdivisions").
[1] The Eleventh Circuit also pointed out that, "when Congress
omits certain language in a particular subsection of a statute and
includes the language in other subsections, the omission is intentional
rather than accidental." R. Mayer, 158 F.3d at 545 (citing
BFP v. Resolution Trust Corp., 511 U.S. 531, 537, 114 S.Ct. 1757,
1761, 128 L.Ed.2d 556 (1994)). This presumption certainly
applies to the statutory sections at issue in this case. Subsection
1 of § 14501(c)(1) only refers to states, while subsection §
14501(c)(2)(C) refers to both states and political subdivisions.
It is unlikely that the omission of a reference to political subdivisions
in subsection 1 was inadvertent given the fact, as mentioned
above, that there are seven other specific references to both states and
political subdivisions in other subsections of the same statute.
[FN2]
FN2. Subsections 14501(a), 14501(b),
14501(c)(1), 14501(c)(2)(C), 14501(c)(3)(A), 14501(c)(3)(B) and 14501(c)(3)(C)
all reference both states and political
subdivisions, while subsection 14501(c)(2)(A) references only states.
This conclusion is further bolstered by the legislative history
of the FAAA Act. The House Report accompanying the 1996 proposed
amendment to the Act states that the purpose behind the amendment
is to:
provide[ ] a new exemption from the preemption of State regulation
of intrastate transportation relating to the price of
non-consensual tow truck services. This is only intended to permit
States or political subdivisions thereof to set maximum prices
for non-consensual tows, and is not intended to permit reregulation
of any other aspect of tow truck operations.
H.R.Rep. No. 104-311, at 119-20 (1995) U.S.Code Cong. & Admin.News
1982, p. 793. (emphasis added). Thus, Congress' clear
intent was to allow states and political subdivisions to address
the price of non-consensual towing services, while leaving
undisturbed the preemptive effect of the statute as it pertains
to all other aspects of the towing industry. See R. Mayer, at 544.
Prior to the amendment's passage, it was noted by Representative
Rahall, "[t]he pending legislation would restore the local
authority to engage in regulating the prices charged by tow trucks
in non-consensual towing situations. Regulation of routes
and services, as well as regulation of consensual towing, would
still be preempted." 141 Cong. Rec. H15602 (1995)
(emphasis added). The legislative history shows that Congress
intended that regulation of the towing industry would be preempted
except in the limited areas set out in the legislation. See R.
Mayer, at 545.
[2] This court finds the reasoning of the Eleventh Circuit in
R. Mayer persuasive authority. Many of the same issues raised by the
defendant in this case were raised and discussed in R. Mayer,
and the Eleventh Circuit's determination of the issues comports with
the plain language of the statute and its legislative history.
The defendant in this case also argues that since the City of
Knoxville operates under a City Charter that has been granted the force
of State law by the Tennessee General Assembly, the State of
Tennessee has "expressly delegated" to the City the regulation of all
motor vehicles operating within the City, including tow trucks.
The City Charter provides that the City of Knoxville shall have the
power to "regulate the operation of all motor and other vehicles."
The Charter of the City of Knoxville, Art. II, Corporate Powers, §
209, *729 Regulation of Vehicles. The Charter was approved by
the Tennessee Legislature in 1923.
In response to the City's argument, the plaintiff relies on CSX
Transportation, Inc. v. City of Plymouth, 86 F.3d 626 (6th Cir.1996). In
CSX, the City of Plymouth, Michigan, argued that its local ordinance
prohibiting trains from obstructing streets for more than five
minutes and requiring more than five minutes between obstructions
was promulgated pursuant to the authority granted to the City of
Plymouth by the Michigan Constitution. Id. at 627. Thus, the
City of Plymouth argued, even though the Federal Railway Safety Act
specifically allowed only states to adopt regulations related
to railway safety, its ordinance was authorized due to the delegation of
authority in the Michigan Constitution. Id. at 628. The Sixth
Circuit held that "municipal legislation, however, neither becomes the
'law, regulation, or order' of a state when promulgated under
state constitutional authority nor meets an FRSA preemption clause
exception because it is authorized by a state constitution".
Id.; see also City of Covington v. Chesapeake & Ohio Ry., 708 F.Supp.
806, 808 (E.D.Ky.1989) ("Congress did not intend to permit states
to exercise their remaining authority under [the FRSA preemption
clause] by delegating it to municipalities") (quoting Consolidated
Rail Corp. v. Smith, 664 F.Supp. 1228, 1237 (N.D.Ind.1987).
This court finds that the City of Plymouth case disposes of the
City's delegation argument. Even though the Tennessee Legislature
has approved the City's Charter, and the City's Charter allows
the City to "regulate the operation of all motor and other vehicles," the
City's ordinance does not become the "law" of the state simply
because the City's Charter has been approved.
Thus, the court finds the City's argument that its wrecker ordinance
is rationally related to the safety and financial accountability is
unavailing. In fact, any part of the ordinance which attempts
to regulate the safety and financial accountability of tow trucks has
been expressly preempted by federal law. The court finds that
sections 26-226, 26-241 to 244, 26- 245(b), 26,-246, 26-261 to 264,
26-276, 26-279 to 281, 26-283 to 285, and 26-288 to 289 of the
City's wrecker ordinance have been preempted by federal law.
In its motion for summary judgment, the plaintiff also challenges
the price for non-consensual towing services provided in the City's
wrecker ordinance. The plaintiff alleges that the City set its
prices arbitrarily without conducting any hearings on the proposed
pricing scheme. The plaintiff does not argue that the prices
are not compensatory and reasonable, only that the City should have
allowed the wrecker companies to have some input before setting
the prices. The plaintiff relies on the law concerning rate-making
by Tennessee regulatory agencies to support its argument that
there are certain formalities which should have been complied with
before prices were established.
[3] First, the statutes relied upon by the plaintiff only to
rate making by public utilities and carriers. See Tenn.Code Ann. §§
65-5-201 and 203. The City is neither a public utility nor a
carrier within the meaning of the statutes. Second, the case the plaintiff
cites in support of its argument stands for the proposition that
the Tennessee Public Service Commission must set rates for public
utilities that are within the "zone of reasonableness." See Tennessee
Cable Television Ass'n v. Tennessee Pub. Serv. Comm'n,
844 S.W.2d 151, 159-60 (Tenn. Ct. App.1992). Even if this case
could be read to apply to the City as a "rate maker," the plaintiff
has not alleged that the prices the City set for non-consensual
towing services are unreasonable. In the absence of any such claim,
the court finds that the plaintiff's motion for summary judgment
on this issue must be denied.
Finally, the plaintiff also argues that one other section of
the City's wrecker ordinance is not precisely related to the price *730
of
non- consensual towing services and it is also preempted by federal
law. Section 26-277 of the City's ordinance sets the price a
wrecker company may charge for winching services and vehicle
storage. The plaintiff says that the exception allowing municipalities
to regulate the price of non-consensual towing services is limited
to prices of "for-hire motor vehicle transportation by a tow truck,"
(49 U.S.C. § 14501(c)(2)(C)) and winching services and vehicle
storage are not "transportation" of vehicles.
In its response, the City agrees with the plaintiff's argument
but points out that winching services and vehicle storage regulations are
not preempted at all by the plain language of § 14501(c)(1).
The City argues that that section only purports to preempt the "price,
route, and service ... with respect to the transportation of
property." In support of its argument, the City cites the court to an
unreported Report and Recommendation, Rhode Island Public Towing
Association, Inc. v. State, 1997 WL 135571 (D.R.I. Feb.28,
1997), approved by, 1997 WL 225695 (D.R.I. Mar.26, 1997). In
the Rhode Island case, the court found that storage of vehicles is
"too attenuated from the regulation of transportation of property
to fall within the scope of the FAAA Act. Put simply: storage has
almost nothing to do with transportation because the two phases
involve mutually exclusive aspects of a towing transaction." Id. at
*5.
[4][5] This court agrees with the reasoning of the Rhode Island
court with respect to vehicle storage, but winching services are a
different matter. The Rhode Island court recognized that the
"transportation phase of a tow involves the actual hooking and towing of
a vehicle ...." Thus, the price of winching services would appear
to this court to be part and parcel of the transportation of the towing
operation and covered by the exception in § 14501(c)(2)(C).
The plaintiff's motion on this issue will be denied.
CONCLUSION
For the reasons discussed above, the plaintiff's motion for summary
judgment will be granted in part and denied in part. The court
declares that sections 26-241 to 244, 26-245(b), 26-246, 26-261
to 264, 26-276, 26-279 to 281, 26-283 to 285, and 26-288 to 289 of
the City's wrecker ordinance have been preempted by federal law.
The court finds that sections 26-277 and 26-290 [FN3] of the
City's wrecker ordinance have not been preempted by federal law.
The City of Knoxville is enjoined from enforcing any of the
above-referenced sections of the City of Knoxville's wrecker
ordinance. The plaintiff has requested attorney's fees and costs. If the
plaintiff intends to pursue this claim, the plaintiff shall file
a brief within fourteen days of the entry of this order setting out the
statute,
rule, or other grounds entitling the plaintiff to an award of
attorney's fees in this case. See Fed.R.Civ.P. 54(d)(2). Costs shall be
allowed as of course to the prevailing party, the plaintiff,
in this case. Fed.R.Civ.P. 54(d)(1). An order reflecting this opinion shall
be
entered.
FN3. This section of the City's wrecker
ordinance merely creates the Wrecker Service Commission and gives the
Commission to enforce the lawful provisions
of the ordinance.
ORDER
For the reasons stated in the Memorandum Opinion filed contemporaneously
with this Order, it is hereby ORDERED that the
plaintiff's motion for summary judgment [doc. 6] is GRANTED IN
PART AND DENIED IN PART, and the defendant's motion for
summary judgment is DENIED. The court DECLARES that sections
26-241 to 244, 26-245(b), 26-246, 26-261 to 264, 26-276,
26-279 to 281, 26-283 to 285, and 26-288 to 289 of the City's
wrecker ordinance have been preempted by federal law. The court
finds that sections 26-277 and 26-290 [FN1] of the City's *731
wrecker ordinance have not been preempted by federal law. It is
further ORDERED that the City of Knoxville is ENJOINED from enforcing
any of the above-referenced sections of the City of
Knoxville's wrecker ordinance.
FN1. This section of the City's wrecker
ordinance merely creates the Wrecker Service Commission and gives the
Commission to enforce the lawful provisions
of the ordinance.
The plaintiff has requested attorney's fees and costs. If the
plaintiff intends to pursue this claim, the plaintiff shall file a brief
within
fourteen days of the entry of this order setting out the statute,
rule, or other grounds entitling the plaintiff to an award of attorney's
fees in this case. See Fed.R.Civ.P. 54(d)(2). Costs shall be
allowed as of course to the prevailing party, the plaintiff, in this case.
Fed.R.Civ.P. 54(d)(1).
E.D.Tenn.,1999.
Cedar Bluff 24-Hour Towing, Inc. v. City of Knoxville