Eddie's Leaf Spring Shop v. Colorado Puc

• Decision Date: 13 October 2009
• Docket Number: No. 08SA359.,08SA359.
• Citation: 218 P.3d 326
• Parties: EDDIE'S LEAF SPRING SHOP AND TOWING LLC, Plaintiff-Appellant. v. COLORADO PUBLIC UTILITIES COMMISSION OF the STATE of Colorado, Defendant-Appellee.
• Court: Colorado Supreme Court

218 P.3d 326

EDDIE'S LEAF SPRING SHOP AND TOWING LLC, Plaintiff-Appellant. v. COLORADO PUBLIC UTILITIES COMMISSION OF the STATE of Colorado, Defendant-Appellee.

No. 08SA359.

Supreme Court of Colorado, En Banc.

October 13, 2009.

Harvey V. Mabis, Appearing Pro Se on behalf of Eddie's Leaf Spring Shop and Towing LLC, Fort Collins, Colorado.

John W. Suthers, Attorney General, Mariya Barmak, Assistant Attorney General, Public Officials/PUC Unit, State Services Section, Denver, Colorado, Attorneys for Defendants-Appellees.

Justice BENDER delivered the Opinion of the Court.

I. Introduction

Eddie's Leaf Spring Shop and Towing LLC ("Eddie's Towing"), challenges a Civil Penalty Assessment Notice for failure to provide records to the Public Utilities Commission ("PUC"). An Administrative Law Judge ("ALJ") allowed Harvey V. Mabis, the owner's brother, to proceed pro se on behalf of Eddie's Towing. The district court upheld the fine assessed to Eddie's Towing. Pursuant to C.A.R. 3(b) and section 40-6-115(5), C.R.S. (2009), Eddie's Towing seeks direct appellate review from this court of the civil penalty that the PUC assessed.

Eddie's Towing claims that 49 U.S.C. § 14501(c) (2006) preempts PUC regulations concerning towing carriers. Additionally, Eddie's Towing contends that the PUC rule authorizing a civil penalty for failure to provide records constitutes a warrantless search in violation of the U.S. and Colorado Constitutions. Eddie's Towing also makes other arguments that we address in this opinion. We hold that 49 U.S.C. § 14501(c) does not preempt the state from regulating towing carriers conducting non-consensual tows. We also hold that the regulation authorizing records requests is not a warrantless search in violation of the U.S. and Colorado Constitutions. In addition, we find no merit to Eddie's Towing's other arguments. Hence, we affirm the district court's order upholding the civil penalty and remand this case to the district court with instructions that it return the case to the PUC for proceedings consistent with this opinion.

II. Facts and Proceedings Below

Eddie's Towing operates as a towing carrier and has obtained a permit from the PUC. See § 40-13-106, C.R.S. (2009). On August 19, 2006, Harvey Mabis, acting on behalf of Eddie's Towing, towed James Rice's car without his consent. Rice filed a complaint with the PUC alleging that Eddie's Towing refused a timely release of his car and personal belongings, including his wife's insulin medication. The PUC initiated an investigation into the alleged complaint.

Pursuant to PUC regulations, a towing carrier must be available to release or provide access to a towed motor vehicle during the first forty-eight hours of storage if the owner makes a proper request. Rule 6507(d)(I)(A), 4 Colo.Code Regs. § 723-6 (2006) (subsequently amended and recodified at Rule 6512).¹ In addition, a towing carrier must complete a tow record/invoice for all non-consensual tows. Rule 6509(a). Towing carriers must make towing authorizations available to PUC enforcement officials upon request and produce other business records within two to ten days of a PUC request. Rule 6005(c).

From January 26, 2007, until March 1, 2007, a lead investigator from the PUC made numerous requests to obtain the towing records from Eddie's Towing. Eddie's Towing responded to the lead investigator's correspondence by asking for his credentials and the basis of the complaint. A different employee of the PUC, whom Mabis had known for twenty years, left a voicemail with Mabis verifying the credentials of the lead investigator. On March 1, 2007, the lead investigator sent a final letter to Eddie's Towing asking for records related to Rice's complaint. The lead investigator sought a copy of the tow record/invoice, the name and telephone number of the person who authorized the initial tow and a statement from Eddie's Towing explaining its refusal to release Rice's vehicle. Eddie's Towing again refused to turn over the records, asking for the credentials of the lead investigator and making various allegations that the PUC had "no probable cause" or authority to ask for records.

The PUC fined Eddie's Towing for one violation of failure to release a vehicle from storage, pursuant to Rule 6507(d)(I)(A) (2006), and ten violations of failure to provide records (one for each day from March 12 until March 23), pursuant to Rule 6005(c). To expedite the proceedings before the ALJ, the PUC dismissed the violation for failure to release the vehicle. The ALJ recommended that the PUC assess a fine to Eddie's Towing totaling $2,750 for failure to provide its towing records, and the PUC accepted this recommendation.² On appeal, the district court upheld the PUC's findings and its assessment of a civil penalty.

III. Standard of Review

By statute, the scope of judicial review of a PUC order is limited to:

whether the [PUC] has regularly pursued its authority, including a determination of whether the decision under review violates any right of the petitioner under the constitution of the United States or of the State of Colorado, and whether the decision of the [PUC] is just and reasonable and whether its conclusions are in accordance with the evidence.

§ 40-6-115(3), C.R.S. (2009); Trans Shuttle, Inc. v. Pub. Utils. Comm'n, 89 P.3d 398, 403 (Colo.2004).

Courts reviewing a PUC decision determine questions of law de novo and are not bound by the PUC's rulings on legal issues. § 40-6-115(2), (3); Colo. Office of Consumer Counsel v. Pub. Utils. Comm'n, 42 P.3d 23, 26 (Colo.2002). Nevertheless, the PUC is the agency charged with administration of the public utilities laws, and thus, the courts should defer to the PUC's interpretation of the public utilities statutes and regulations. Powell v. Colo. Pub. Utils. Comm'n, 956 P.2d 608, 613 (Colo.1998). A rule adopted pursuant to a statutory rule-making proceeding is presumed to be valid, and the burden is upon the challenging party "to demonstrate that the rule-making body acted in an unconstitutional manner, exceeded its statutory authority, or otherwise acted in a manner contrary to statutory requirements." City of Aurora v. Pub. Utils. Comm'n, 785 P.2d 1280, 1287 (Colo.1990) (quoting Regular Route Common Carrier Conference v. Pub. Utils. Comm'n, 761 P.2d 737, 743 (Colo. 1988)). In reviewing factual issues, a court may not overturn the PUC's findings of fact if they are supported by substantial evidence in the record. Powell, 956 P.2d at 613.

IV. Analysis

A. Preemption

Eddie's Towing contends that 49 U.S.C. § 14501(c) (2006), which prohibits a state from enacting laws related to a price route or service of a motor carrier, preempts state regulation of towing carriers conducting non-consensual tows.

It is well settled that a state law that conflicts with federal law is without effect. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). A federal statute may preempt state action based on express language in a congressional enactment, by implication from the depth and breadth of a congressional scheme that occupies the legislative field, or by implication because of a conflict with a congressional enactment. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001) (citations omitted).

Eddie's Towing cites the general rule of 49 U.S.C. § 14501(c) to support the proposition that a state may not enact laws or regulations related to a price, route or service of any motor carrier:

Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

49 U.S.C. § 14501(c)(1). Under this provision, Eddie's Towing argues that the State of Colorado cannot regulate towing carriers.

The statute contains two exceptions to this general rule: one pertaining to the state's safety regulatory authority, 49 U.S.C. § 14501(c)(2)(A), and another pertaining to the state's ability to require prior written authorization for nonconsensual tows, 49 U.S.C. § 14501(c)(5). With respect to the first exception, the statute preserves the state's ability to enact legislation regarding safety regulatory authority: "paragraph (1) ... shall not restrict the safety regulatory authority of a State with respect to motor vehicles." 49 U.S.C. § 14501(c)(2)(A); City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 442, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002). Although the Tenth Circuit has not addressed the scope of this exception, other circuits' interpretations are instructive. In Tillison v. Gregoire, 424 F.3d 1093, 1096 (9th Cir.2005), the Ninth Circuit considered a Washington statute that required the person or public official requesting the impound to provide a signed authorization to the tow truck operator before the operator could proceed with the impound. The court concluded that it was reasonable that the Washington State Legislature had public safety in mind when it enacted the statute, and thus, the statute fell within the exception. Id. at 1103. Other circuits have also interpreted this exception broadly to permit regulation of towing carriers when the rules are genuinely responsive to public safety concerns. VRC LLC v. City of Dallas, 460 F.3d 607, 615 (5th Cir.2006); Galactic Towing v. City of Miami Beach, 341 F.3d 1249, 1252 (11th Cir.2003).

Under the second exception, states retain the authority to require that a person towing a motor vehicle from private property have prior written authorization. The statute provides:

Nothing in this section shall be construed to prevent a State from requiring that, in the case of a motor vehicle to be towed from private property without the...