797 F.3d 733
9th Cir.2015Background
- San Francisco enacted Articles 30 and 30.1 requiring tow-truck drivers and firms to obtain and maintain city permits and to provide application data, fingerprints, insurance proof, recordkeeping, brochures, and a business plan/complaint system.
- California Tow Truck Association (CTTA) sued, asserting the scheme is preempted by the Federal Aviation Administration Authorization Act (FAAAA), 49 U.S.C. § 14501(c)(1), which preempts state/local laws "related to a price, route, or service" of motor carriers, subject to savings clauses (notably the safety exception §14501(c)(2)(A)).
- The Ninth Circuit in CTTA I vacated the district court’s initial judgment and remanded for a provision‑by‑provision FAAAA analysis. On remand the district court upheld most provisions, finding many saved by the FAAAA safety, insurance, or price exceptions, but struck the city’s limit-on-charges enforcement provision; CTTA appealed other holdings.
- The City defended the Permit Scheme as "genuinely responsive to safety concerns," relying on legislative findings and a police declaration describing illegal/unsafe conduct in the towing industry (illegal tows, overcharging, theft, assaults, stranding motorists).
- The Ninth Circuit majority: adopted a broad reading of the FAAAA safety exception (it covers safety regulations "with respect to motor vehicles," including safety of people and towed vehicles), conducted provision‑by‑provision review, affirmed most provisions as exempt from preemption, but held the business-plan requirement (except for the complaint-system piece) preempted and severable.
Issues
| Issue | Plaintiff's Argument (CTTA) | Defendant's Argument (City) | Held |
|---|---|---|---|
| 1) Are permit requirements (must hold city permit to operate) preempted by the FAAAA? | Permit requirements relate to service/price and thus are preempted. | Permit requirements are saved by the FAAAA safety exception because they address safety risks in towing and enable policing of misconduct. | Permits: Not preempted — fall within §14501(c)(2)(A) safety exception. |
| 2) Are application information and criminal-history disclosures preempted? | Collection of IDs/arrest records is unrelated to vehicle safety and burdens carriers. | Identification and conviction history are logically connected to public safety and enforcement; they enable monitoring and revocation. | Not preempted — application and criminal-history requirements fall within the safety exception. |
| 3) Are fees, penalties, possession/display, recordkeeping, brochure, and complaint-system requirements preempted? | These impose economic/regulatory burdens on services and thus are preempted. | These provisions support enforcement and reduce confrontations/illegal towing, so they are safety‑related or not "services." | Fees, penalties, recordkeeping, brochure, complaint-system, possession/display: not preempted (safety exception or not "service"). |
| 4) Is the business-plan requirement (§3052(4)) preempted and severable? | Business-plan intrudes on pricing/service — preempted. | Business plan helps assess safe operations and pricing; fits safety exception. | Business-plan requirement (except complaint-system part) is preempted; it is severable from the ordinance and complaint-system. |
Key Cases Cited
- City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424 (2002) (FAAAA safety exception applies to municipal ordinances; state/local safety authority preserved but cannot cloak economic regulation as safety)
- Cal. Tow Truck Ass'n v. City & Cnty. of S.F., 693 F.3d 847 (9th Cir. 2012) (earlier CTTA decision directing provision‑by‑provision analysis under the FAAAA)
- Dan's City Used Cars, Inc. v. Pelkey, 133 S. Ct. 1769 (2013) (FAAAA preemption requires relation to transportation of property; "related to" is broad but scope limited by statutory text)
- Rowe v. New Hampshire Motor Transp. Ass'n, 552 U.S. 364 (2008) (state laws that affect rates/routes/services only in a tenuous or remote way are not preempted)
- Tillison v. City of San Diego, 424 F.3d 1093 (9th Cir. 2005) (towing regulation requiring written authorization for private-property tows falls within FAAAA safety exception)
- Ace Auto Body & Towing, Ltd. v. City of N.Y., 171 F.3d 765 (2d Cir. 1999) (safety exception not limited to mechanical aspects of vehicles; covers accidents and breakdowns)
- Cole v. City of Dallas, 314 F.3d 730 (5th Cir. 2002) (licensing restriction tied to criminal convictions treated as a motor‑vehicle safety regulation under the FAAAA)