Schmidt v. Tavenner's Towing & Recovery, LLC

• Decision Date: 14 June 2019
• Docket Number: No. A-1-CA-35863,A-1-CA-35863
• Citation: 448 P.3d 605
• Parties: Donald L. SCHMIDT, Individually, Mary Lee Schmidt, Individually, Laura Tweed, and Pegasus Planes LLC, as Power of Attorney for Donald L. Schmidt and Mary Lee Schmidt, Plaintiffs-Appellants, v. TAVENNER’S TOWING & RECOVERY, LLC, and Fred Garner, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

448 P.3d 605

Donald L. SCHMIDT, Individually, Mary Lee Schmidt, Individually, Laura Tweed, and Pegasus Planes LLC, as Power of Attorney for Donald L. Schmidt and Mary Lee Schmidt, Plaintiffs-Appellants,

v.TAVENNER’S TOWING & RECOVERY, LLC, and Fred Garner, Defendants-Appellees.

No. A-1-CA-35863

Court of Appeals of New Mexico.

Filing Date: June 14, 2019

Michael Danoff & Associates, P.C., Michael L. Danoff, Ryan P. Danoff, Albuquerque, NM, for Appellants.

Lewis Brisbois Bisgaard & Smith LLP, Ryan T. Saylor, Albuquerque, NM, for Appellees.

MEDINA, Judge.

{1} Plaintiffs, Donald and Mary Schmidt, owners of a Glastar aircraft (the airplane), sued Defendant, Tavenner’s Towing & Recovery, LLC (Tavenner’s), on claims for negligence, breach of implied contract, and breach of the implied covenant of good faith and fair dealing, after the airplane caught fire and was completely destroyed while being towed by Tavenner’s.¹ The district court granted Tavenner’s Rule 1-012(B)(6) NMRA motion to dismiss, arguing that the Federal Aviation Administration Authorization Act (FAAAA), 49 U.S.C. § 14501(c)(1) (2012), preempted Plaintiffs’ claims. We reverse and remand.

BACKGROUND

{2} The facts alleged in the amended complaint are as follows. In late 2014, Plaintiffs’ airplane crashed in Torrance County, New Mexico. The Torrance County Sheriff’s Department contacted Tavenner’s to pick up the airplane. Tavenner’s took possession of the airplane, loaded it onto a tow truck, and was in the process of towing the airplane when it caught fire and was completely destroyed. All claims were based on allegations that Tavenner’s failed to properly load, care for, and transport the airplane and that this caused the airplane’s destruction. The complaint alleges no other conduct resulting in the damages claimed.

{3} Tavenner’s filed a motion to dismiss under Rule 1-012(B)(6), arguing that "Plaintiffs’ allegations concern the transportation of personal property from a crash site in Moriarty, New Mexico, to Tavenner’s Towing & Recovery in Moriarty, NM" and that the FAAAA expressly preempts Plaintiffs’ claims. After briefing and a hearing on the matter, the district court entered a memorandum of decision stating that it had reviewed the cases cited by the parties and concluded that Plaintiffs’ claims against Tavenner’s should be dismissed on the basis of preemption. This appeal followed.

STANDARD OF REVIEW

{4} "A district court’s decision to dismiss a case for failure to state a claim under Rule 1-012(B)(6) is reviewed de novo." N.M. Pub. Schs. Ins. Auth. v. Arthur J. Gallagher & Co. , 2008-NMSC-067, ¶ 11, 145 N.M. 316, 198 P.3d 342 (internal quotation marks and citation omitted). Preemption is a question of law reviewed de novo. See Humphries v. Pay & Save, Inc. , 2011-NMCA-035, ¶ 6, 150 N.M. 444, 261 P.3d 592.

{5} A motion to dismiss under Rule 1-012(B)(6) "merely tests the legal sufficiency of the complaint[,]" by inquiring whether the complaint alleges facts sufficient to establish the elements of the claims asserted. Envtl. Improvement Div. of N.M. Health & Env’t Dep’t v. Aguayo , 1983-NMSC-027, ¶ 10, 99 N.M. 497, 660 P.2d 587 ; see C & H Constr. & Paving, Inc. v. Found. Reserve Ins. Co. , 1973-NMSC-076, ¶ 9, 85 N.M. 374, 512 P.2d 947. Under this inquiry, "the well-pleaded material allegations of the complaint are taken as admitted; but conclusions of law or unwarranted deductions of fact are not admitted." C & H. Constr. & Paving, Inc. , 1973-NMSC-076, ¶ 9, 85 N.M. 374, 512 P.2d 947 (internal quotation marks and citation omitted). "A complaint may be dismissed on motion if clearly without any merit; and this want of merit may consist in an absence of law to support a claim of the sort made, or of facts sufficient to make a good claim[.]" Id. (alteration, internal quotation marks, and citation omitted).

{6} Courts addressing motions to dismiss based on the argument that claims are expressly preempted by federal law ask whether the complaint’s allegations show that the preemption provision at issue encompasses a plaintiffs’ claims. See Travel All Over the World, Inc. v. Kingdom of Saudi Arabia , 73 F.3d 1423, 1428-31 (7th Cir. 1996) (stating, on appeal from an order treating a motion to dismiss common-law claims based on express preemption by the Airline Deregulation Act of 1978 (ADA) as a Fed. R. Civ. P. 12(b)(6) motion and granting that motion, that the court "must determine if the plaintiffs can prove any set of facts that would entitle them to relief" and that this required the court "to interpret whether the ADA’s express preemption provision encompasses the plaintiffs’ common law claims" while "accepting all the well-pleaded allegations in the complaint as true"); cf. Dan’s City Used Cars, Inc. v. Pelkey , 569 U.S. 251, 260, 133 S.Ct. 1769, 185 L.Ed.2d 909 (2013) (stating, in addressing FAAAA preemption argument raised on summary judgment, that "our task is to identify the domain expressly pre[ ]empted" (internal quotation marks and citation omitted)); Boyz Sanitation Serv., Inc. v. City of Rawlins , 889 F.3d 1189, 1198 (10th Cir. 2018) (analyzing FAAAA preemption argument raised on summary judgment by inquiring whether state and local regulations concerning garbage collection fall within the FAAAA’s "preemptive scope" and, if so, whether the impact "is too insignificant to warrant preemption").

PREEMPTION

{7} The preemption doctrine is rooted in the Supremacy Clause of the United States Constitution, which provides that "the Laws of the United States ... shall be the supreme Law of the Land[.]" U.S. Const. art. VI. "Congress has the power to preempt state law." Choate v. Champion Home Builders Co. , 222 F.3d 788, 791 (10th Cir. 2000) ; see Oneok, Inc. v. Learjet, Inc. , ––– U.S. ––––, 135 S. Ct. 1591, 191 L.Ed.2d 511 (2015) (explaining that, as a consequence of the Supremacy Clause, Congress may "pre[ ]empt, i.e., invalidate, a state law through federal legislation"). "In the interest of avoiding unintended encroachment on the authority of the [s]tates, however, a court interpreting a federal statute pertaining to a subject traditionally governed by state law will be reluctant to find pre[ ]emption. Thus, pre[ ]emption will not lie unless it is the clear and manifest purpose of Congress." CSX Transp, Inc. v. Easterwood , 507 U.S. 658, 663-64, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993) (internal quotation marks and citation omitted); see Cipollone v. Liggett Group, Inc. , 505 U.S. 504, 516-17, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (stating that "[c]onsideration of issues arising under the Supremacy Clause starts with the assumption that the historic police powers of the [s]tates are not to be superseded by Federal Act unless that is the clear and manifest purpose of Congress" and that "Congress’ enactment of a provision defining the preemptive reach of a statute implies that matters beyond that reach are not preempted" (alterations, omission, internal quotation marks, and citation omitted)); see also Palmer v. St. Joseph Healthcare P.S.O., Inc. , 2003-NMCA-118, ¶¶ 38-39, 134 N.M. 405, 77 P.3d 560 (stating the general preemption principles applied by appellate courts in New Mexico, including the "strong presumption against preemption" (internal quotation marks and citation omitted)).

{8} Tavenner’s argues that the FAAAA expressly preempts Plaintiffs’ state common-law claims. Accordingly, "we must use ordinary principles of statutory interpretation to evaluate whether the state law falls within the scope of the federal provision precluding state action[,]" and "focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre[ ]emptive intent." Boyz Sanitation Serv., Inc. , 889 F.3d at 1198 (internal quotation marks and citation omitted); see Dan’s City , 569 U.S. at 260, 133 S.Ct. 1769 (stating that courts attempting to "identify the domain expressly pre[ ]empted" must "focus first on the statutory language, which necessarily contains the best evidence of Congress’ pre[ ]emptive intent" (internal quotation marks and citations omitted)). "[T]he defendant bears the burden of showing Congress’ intent to preempt." Self v. United Parcel Serv., Inc. , 1998-NMSC-046, ¶ 7, 126 N.M. 396, 970 P.2d 582.

DISCUSSION

A. The FAAAA

{9} The preemption provision at issue here evolved from a statute concerning deregulation of the domestic airline industry, summarized by the United States Supreme Court as follows:

The [ADA], 92 Stat. 1705, largely deregulated the domestic airline industry. In keeping with the statute’s aim to achieve "maximum reliance on competitive market forces," Congress sought to "ensure that the [s]tates would not undo federal deregulation with regulation of their own." Congress therefore included a preemption provision, now codified at 49 U.S.C. § 41713(b)(1), prohibiting [s]tates from enacting or enforcing any law "related to a price, route, or service of an air carrier."

Two years later, the Motor Carrier Act of 1980, 94 Stat. 793, extended deregulation to the trucking industry. Congress completed the deregulation 14 years therefore, in 1994, by expressly preempting state trucking regulation. Congress did so upon finding that state governance of intrastate transportation of property had become "unreasonably burdensome" to "free trade, interstate commerce, and American consumers." Borrowing from the ADA’s preemption clause, but adding a new qualification, § 601(c) of the FAAAA supersedes state laws "related to a price, route, or service of any motor carrier with respect to transportation of property."

Dan’s City , 569 U.S. at 255-56, 133 S.Ct. 1769 (omission and citations omitted).

{10} Section 14501 of the FAAAA, entitled "Federal authority over intrastate transportation," provides in relevant part:

[A s]tate ... 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 ... with respect to the transportation

...