Opinion ID: 18032
Heading Depth: 3
Heading Rank: 4

Heading: The City as a consumer of towing services

Text: 24 Cardinal argues that the City's actions here constitute regulation because the City is not really contracting as a consumer of towing services at all--the owner of the vehicle towed, not the party ordering the tow, is the real consumer. This argument has some intuitive resonance. When a police tow occurs, the owner of the vehicle rather than the City pays for the service. The City is not utilizing its spending power at all. It thus could be argued that however skillfully the City has tried to cast the issue in contractual terms, the reality here is the classic regulatory situation of the government imposing itself, without any direct interest, on the interactions between two private parties. However, this argument ignores the odd structure of the towing industry. While a portion of the industry functions on quintessential market lines--the type of consensual tow where one calls a truck to have a broken-down car taken to the repair shop--the nonconsensual tows at issue here do not. 25 As we noted earlier, nonconsensual tows do not involve any opportunity for market interaction on the part of the owner of the vehicle. The real decision is made by the party who ordered the tow, who chooses both to remove the vehicle and the party to perform the service. And whether the ordering party is the City or a private property owner, it seeks out this service in the pursuit of its own interests. For property owners, that interest is typically the freeing of a parking space. 6 For the City, it is the need to maintain traffic flow in the wake of an accident and remove abandoned vehicles blighting their environment. In both cases this interest is hardly abstract. Both need the service performed--if the City were unable to contract with private parties, it would presumably have to purchase and deploy its own tow trucks. And both have a very real desire to obtain the best service possible. They will accordingly select the fastest and most reliable towing company that they are aware of, and towing companies will compete for their business. 26 This structure, while somewhat distorted by the fact a third party gets left with the bill, is in its relevant essentials an ordinary market for services. When a private property owner requests the removal of a car from its lot, it is a consumer of towing services and the company it selects is a provider. The owner of the vehicle, who did not request and most likely did not desire this service, can of course also be viewed as a consumer (and often is also liable for the tow costs, see note 6, supra ). But in this oddly bifurcated market, the party requesting the tow is undeniably also acting as a consumer, and when the City requests a tow it should be treated as a consumer. We are convinced that the City's role here is of a proprietary nature, notwithstanding the fact that a third party pays for the service. 27 For the reasons stated, we hold that the City's actions here did not constitute regulation or have the force and effect of law. Accordingly, they are not preempted by section 14501(c). This makes it unnecessary for us to determine whether the statute's preemption exemption for safety regulations, see 49 U.S.C. § 14501(c)(2)(A), can be invoked by municipalities, an issue that has created a split between the circuits in cases involving true regulation. See Ace Auto Body & Towing, Ltd. v. City of New York, 171 F.3d 765, 775 (2d Cir.1999) (safety exemption applies and shields bulk of municipal regulation from preemption); R. Mayer of Atlanta, Inc. v. City of Atlanta, 158 F.3d 538, 545-48 (11th Cir.1998) (terms of statute allow only state, and not municipality, to shelter under exemption). We also need not determine whether the ordinance and contract provisions here were sufficiently motivated by or related to public safety concerns to be eligible for the section 14501(c)(2)(A) exemption.