Supreme Court Docket Report - December 10, 2012

Keywords: interstate commerce act, FAA, generic drugs, reverse-payment settlement agreements

Last Friday (December 7, 2012), the Supreme Court granted certiorari in three cases of interest to the business community:

Motor Carriers- Interstate Commerce Act- Federal Preemption Federal Arbitration Act- Class Arbitration Patent-Infringement Suits- Generic Drugs- Reverse-Payment Settlement Agreements Motor Carriers -Interstate Commerce Act -Federal Preemption

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). Last Friday, the Supreme Court granted certiorari in Dan's City Used Cars, Inc. v. Pelkey, No. 12-52, to decide whether section 14501(c)(1) preempts negligence and consumer-protection claims based on the manner in which a towing company disposed of a vehicle to collect a debt secured by a lien.

The plaintiffs alleged that the defendant towing company towed his car while he was incapacitated with a serious medical condition. He claimed that although his attorney contacted the towing company before the car was scheduled to be sold at public auction, in an attempt to arrange for the return of the vehicle, the towing company falsely stated that it had already sold the car. The towing company subsequently traded plaintiff's car to a third party, providing no compensation to the plaintiff.

The plaintiff asserted claims based on New Hampshire's Consumer Protection Act, a separate New Hampshire law that prescribes the requirements for collecting towing charges when selling a vehicle at auction, and the common-law duty of a bailee to exercise reasonable care while in possession of a bailor's property. The trial court granted summary judgment to the towing company, holding that section 14501(c)(1) preempted the plaintiff's claims.

The Supreme Court of New Hampshire reversed, holding that Congress did not intend to displace state-law claims challenging the manner in which custodians of towed vehicles dispose of them to collect towing and storage debts. Pelkey v. Dan's City Used Cars, Inc., 44 A.3d 480 (N.H. 2012). The court concluded that section 14501(c)(1) did not apply because the plaintiff's state-law claims did not involve "the transportation of property," but only the manner in which the towing company auctioned off the car to pay its debt. The court also held that section 14501(c)(1) did not apply because the state-law claims were not sufficiently related to a towing company's actual "service," explaining that section 14501(c)(1) is not so broad as to preempt all possible civil claims against motor carriers.

The Supreme Court's...