Monday, September 19, 2005
Court of Appeal Rules:
California Limit on Towing Charges Not Preempted by U.S. Law
By KENNETH OFGANG, Staff Writer/Appellate Courts
A California law limiting the amount that a towing company can charge for storing a vehicle that has been towed without the consent of the owner is not preempted by federal law, the Fourth District Court of Appeal ruled Friday.
Overturning a contrary ruling by a San Diego Superior Court judge, Div. One held that the Federal Aviation Administration Authorization Act of 1994 does not bar a state from limiting storage charges following nonconsensual tows.
The appellate panel reinstated claims by CPF Agency Corp., which—on its own behalf and that of the general public—sued R&S Towing for fraud, negligence, and unfair competition.
CPF claimed in its complaint that a vehicle belonging to the company was towed by R&S from private property in the Spring Valley section of San Diego in July 2002. When a company employee went to retrieve the car less than 24 hours later, he was charged $200—$150 for the tow and $50 per day for two days of storage, the plaintiff alleged.
The employee was allegedly told that the company charges $25 for each calendar day on which the vehicle is stored.
CPF alleged that the fees violated Vehicle Code Sec. 22658(i)(2), which prohibits a towing company from charging more than one day’s storage for a vehicle that is picked up in less than 24 hours. The towing company moved to dismiss on the ground that the statute was preempted by the FAAAA, which bars states from regulating prices, routes, or services of motor carriers unless the regulation falls within one of the statute’s four exceptions.
San Diego Superior Court Judge Lillian Y. Lim agreed with the towing company. Construing the paper as a motion to strike, rather than dismiss, the judge struck the three causes of action and the case was eventually dismissed by stipulation, subject to the plaintiff’s appeal.
In the Court of Appeal, CPF and its amicus, Attorney General Bill Lockyer, argued that the Vehicle Code provision falls within two exceptions to FAAAA preemption, one allowing states to regulate motor vehicle safety and another allowing them to regulate “the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior written consent or authorization of the owner or operator of the motor vehicle.”
Justice Terry O’Rourke, writing for the Court of Appeal, said CPF and the attorney general were wrong about the safety exception but right about the nonconsensual towing exception.
R&S claimed that the exception did not apply, arguing that the towing was consensual and that storage charges are not subject to state regulation because they are imposed after the vehicle has been transported and are thus not part of “the price of...transportation.”
Both arguments fail, O’Rourke said—the first because it is outside the four corners of the complaint, and the second as a matter of statutory interpretation.
“The Legislature’s definition of transportation is broad and open-ended— providing for ëservices related to [the] movement’ of property—and in our view, storage of a towed vehicle at a storage yard after its transport is a service incident or related to the carriage,” the justice wrote.
The case is CPF Agency Corp. v. R&S Towing Service, D045017.
Copyright 2005, Metropolitan News Company