Source: http://blog.transportbusinesslaw.com/tag/federal-preemption/
Timestamp: 2019-04-22 12:13:32+00:00

Document:
FEDERAL PREEMPTION (FEDERAL AVIATION ADMINISTRATION AUTHORIZATION ACT OF 1994) / Breach of contract action on agreement by which plaintiff commercial finance company purchased “all right, title and interest” of defendant logistics provider (implied but not explicitly stated by the court to be a motor carrier) in such logistics provider’s accounts receivable, and defendant logistics provider argued that breach of contract claim was preempted by federal law because the Federal Aviation Administration Authorization Act of 1994 “preempts the enactment or enforcement of state laws in a manner related to the prices, routes, and services of a motor carrier” – held: Such sale of receivables did not constitute a contract that “related to” a “rate, route, or service” of the logistics provider. No federal preemption of breach of contract on sale of receivables.
Porter Capital Corp. v. Johns Manville, Inc., Case No. 2:12-CV-00925-RDP (U.S. District Court for the Northern District of Alabama, June 14, 2013).
Google Scholar version of court’s opinion available here.
Motor Carriers & Preemption (City Regulation of Drayage) / Unanimous U.S. Supreme Court rules on Port and City of Los Angeles requirements that drayage trucking companies serving Port of Los Angeles must (1) affix a placard to each truck posting a telephone number to call relating to environmental or other concerns an observer might have about such truck, and (2) submit to the Port an off-street parking plan for each truck – held: Expressly preempted and therefore invalid under Federal Aviation Administration Authorization Act of 1994 as a state “law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier … with respect to the transportation of property.” THIS IS A VERY BIG DEAL AND HAS BEEN LONG-AWAITED.
American Trucking Association v. Los Angeles. Copy of court-issued opinion available here.
This is a major development both specifically as to the Ports of Los Angele and Long Beach, and with respect to other ports entertaining similar proposed ordinances, regulations or laws.
The trade-off in policy values: Federal preemption to ensure uniformity of standards across the United States through 49 U.S. Code § 14501(c)(1) versus locality’s interest in protecting its environment.
See Washington Post story here, and SCOTUS Blog story here.
RAILROADS (FEDERAL PREEMPTION) – A 1975 order of a state safety agency that requires a railroad to hire two brakemen around the clock to prevent the railroad’s cars running onto adjacent tracks and colliding with other rail cars held to be federally preempted by the Federal Railroad Safety Act of 1970. A textbook tutorial in federal preemption analysis under this statute and related Federal Railroad Administration regulations.
United Transportation Union v. Pennsylvania Public Utility Commission, No. 1270 C.D. 2012 (Commonwealth Court of Pennsylvania, May 20, 2013). Court-issued opinion available here.
REMARKS / U.S. Supreme Court unanimously rules that the Federal Aviation Authorization Act of 1994 (“FAAA”) DOES NOT federally preempt state consumer fraud statute and negligence claims against towing company that moved plaintiff’s car during a snowstorm without his permission. Comment: This sort of “Captain Obvious” answer by a unanimous court is just common sense. But federal preemption doctrine in the transportation field continues to be a major source of confusion and inefficiency. From negligence standards at rail crossings, to airline agreements with passengers, to all manner of motor carrier operations – it’s just too easy to “throw in a preemption argument” and gum up the works in court for months or worse.
During briefing and prior to argument before the U.S. Supreme Court this was anticipated in an “UPCOMING” post three month ago available here.
Official copy of opinion available here.
There are common sense limits to the extent of federal preemption doctrine’s application to transportation. Some matters are indeed so local that they will not be deemed to implicate national concerns.
Common sense is not codified.
Look what it took to get a ruling on this obvious point (i.e., did Congress intend the Federal Aviation Authorization Act to govern car tows in small New England cities?). They had to go all the way to the U.S. Supreme Court.
The vagueness of federal preemption law continues to confuse transport providers and muddy the waters for those lawyers and courts who are supposed to serve them.
MOTOR CARRIER (PREEMPTION) / FMCSA Grants Order Determining that Alabama Metal Coil Securement Act is Federally Preempted.
March 5, 2013., Order; Grant Of Petition For Determination Of Preemption.
“FMCSA grants a petition submitted by the American Trucking Associations (ATA) requesting a determination that the State of Alabama’s Metal Coil Securement Act (the Act) is preempted by Federal law. Federal law provides for preemption of State commercial motor vehicle (CMV) safety laws that are more stringent than Federal regulations and (1) Have no safety benefit; (2) are incompatible with Federal regulations; or (3) would cause an unreasonable burden on interstate commerce. FMCSA has determined that there is insufficient support for the claimed safety benefits and that the Act places an unreasonable burden on interstate commerce.
“On June 26, 2009, FMCSA sent a letter to then-Governor Bob Riley of Alabama stating that the Act appeared to be incompatible with the requirements of FMCSA’s Motor Carrier Safety Assistance Program. FMCSA also drew attention to two Federal laws authorizing preemption of State legislation (49 U.S.C. 14506 and 31141) and indicated that they might be applicable. The Agency urged State officials to work together with FMCSA officials to resolve any conflict between State and Federal law. Governor Riley responded on August 26, 2009, explaining that the Act was adopted in response to a number of accidents in Alabama involving the transport of metal coils. Governor Riley took the position that Alabama’s metal coil load securement certification requirements were not preempted by Federal law.
“On December 22, 2010, ATA petitioned FMCSA for a determination that Alabama’s metal coil load securement certification requirements and penalties create an unreasonable burden on interstate commerce and are preempted under 49 U.S.C. 31141. ATA contended that Alabama’s requirement that drivers obtain certification in metal coil load securement is more stringent than and incompatible with Federal metal coil safety regulations.
In its December 22, 2010 letter, ATA also requested a determination that the requirement that the driver carry the certification and display it upon demand is preempted by 49 U.S.C. 14506. The recent amendment to the Act, however, removed this requirement, rendering this aspect of ATA’s request moot.
TORTS (FRAUD) / Package delivery service (Falcon) purchases rights to deliver on behalf of air express company (DHL) and assumes duties to air express company to make deliveries; air express company then ceases domestic U.S. air express activity; package delivery service lawsuit against air express company – held: Fraud claim and related punitive damages preempted (1) Airline Deregulation Act of 1978 and (2) FAA Authorization Act.
DHL Exp. (USA) Inc. v. Falcon Exp. Intern. Inc., 2013 WL 561457 (Texas Court of Appeals – Houston, February 14, 2013). Free copy available here.
“Falcon alleged and presented evidence to the jury that DHL defrauded it of $1,571,426.31 to enter a contract to become a reseller of DHL’s small package delivery services in the United States with written assurances that DHL had ruled out any possibility of withdrawing from the United States market and was “here to stay.” Specifically, Falcon asserted that DHL failed to disclose material facts with the intent to induce Falcon to pay DHL to assume a reseller agreement that Freight Savers Express (“FSE”) had with DHL. After DHL, only four months later, announced that it would discontinue all domestic shipping operations, effectively destroying Falcon’s business, Falcon sued DHL to rescind the agreement, get its money back, and punish DHL for its wrongdoing. The jury unanimously found that DHL defrauded Falcon and awarded it $1,704,228.79 in actual damages and $3,214,724.62 in exemplary damages.
UPCOMING – Does the Federal Aviation Authorization Act of 1994 (“FAAA”) federally preempt state consumer fraud statute and negligence claims against towing company that moved plaintiff’s car during a snowstorm without his permission?
Petitioner’s Brief on the Merits available here (subscription required).
One lesson is to avoid questions about federal preemption by the Federal Aviation Authorization Act of 1994 if at all possible. Here a simple case of an unwanted towing of a car in a New England town is the subject of a petition for certiorari to the U.S. Supreme Court.
The wise executive and his / her counsel will think twice before bringing a lawsuit under state or local law where such federal preemption might be raised as a defense.
These doctrinal fun-and-games are one of the grave deficiencies of the U.S. legal framework governing transport business law. Neither the uncertainty they create nor the legal fees required to mitigate that uncertainty make a positive contribution to our economy.
The law should be practical and this aspect of federal preemption doctrine is anything but.
Does this FAAA apply to federally preempt a lawsuit against a local towing company? The FAAA is currently the subject of litigation about the scope of federal preemption before the U.S. Supreme Court in the context of the Port of Los Angeles’ regulation of trucking and drayage activities inside the boundaries of that port.
“1. Are the Respondent’s state-law consumer-fraud and negligence claims preempted because they are “related to” the “service[s]” provided by the tow truck company?
“2. Are the Respondent’s state-law consumer-fraud and negligence claims preempted because they are made “with respect to the transportation of property”?
FEDERAL RAIL SAFETY ACT / Lawsuit on multiple state tort theories by motorcyclist against railroad for injuries in collision with train at rail / highway crossing – Held: Under Federal Rail Safety Act two pleaded tort claims not preempted and two other pleaded tort claims federally preempted.
Federal Rail Safety Act preempted state tort claims for (1 negligence per se, and (2) failure to warn based on alleged misclassification of tracks at crossing. Federal Rail Safety Act did not preempt state tort claims for failure to maintain safe crossing area.
Zimmerman v. Norfolk Southern Corp., 2013 WL 238789 (U.S. Court of Appeals for the 3rd Circuit, January 23, 2013). Free copy available here.

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