Supreme Court Decision Alert - May 13, 2013

On May 13, 2013 the Supreme Court issued two decisions, described below, of interest to the business community.

Motor Carriers—Interstate Commerce Act—Federal Preemption Patents—Exhaustion Doctrine—Self-Replicating Technologies Motor Carriers—Interstate Commerce Act—Federal Preemption

Dan's City Used Cars, Inc. v. Pelkey , No. 12-52 (previously discussed in the December 10, 2012, Docket Report)

The Interstate Commerce Act preempts state laws "related to a price, route, or service of any motor carrier ... with respect to the transportation of property." 49 U.S.C. § 14501(c)(1). In Dan's City Used Cars, Inc. v. Pelkey, No. 12-52, plaintiff Robert Pelkey brought state statutory and common-law claims against a towing company arising out of the towing company's disposal of his car. Pelkey alleged that the towing company towed his car, failed to notify him about its plan to sell the car at auction, held the auction despite his attempt to arrange for the car's return, and then sold the car without compensating him. The trial court granted summary judgment to the towing company, holding that section 14501(c)(1) of the Interstate Commerce Act preempted Pelkey's claims. The New Hampshire Supreme Court reversed.

Today (May 13, 2013), the Supreme Court affirmed, holding in a unanimous decision by Justice Ginsburg that section 14501(c)(1) does not preempt "state-law claims stemming from the storage and disposal of a car, once the towing has ended."

The holding turned on the Court's analysis of whether the towing company's actions were encompassed by section 14501(c)(1)'s "with respect to the transportation of property" language. The Court noted that section 14501(c)(1)'s preemption provision tracks the Airline Deregulation Act's preemption provision, but adds this limiting phrase on the scope of preemption. Based on the limitation, the Supreme Court held that Pelkey's claims were not preempted because they did not relate to the "movement" of his car and sought redress only for conduct that followed the "transportation" of the car.

The Supreme Court's decision clarifies the scope of section 14501(c)(1) for all motor carriers who rely on that provision to preempt state-law claims.

Patents—Exhaustion Doctrine—Self-Replicating Technologies

Bowman v. Monsanto Co. , No. 11-796 (previously discussed in the October 8, 2012, Docket Report)

Under the doctrine of patent exhaustion, the initial authorized sale of a patented item terminates all patent rights to...