In Schmidt v. Tavenner's Towing & Recovery, LLC, the New Mexico Court of Appeals reversed the trial court and held that the Federal Aviation Administration Authorization Act ("FAAAA") did not preempt the plaintiffs' negligence claim. Plaintiffs brought suit after their plane caught fire and was destroyed while being towed by defendant Tavenner's Towing & Recovery, LLC ("Tavenner's"). Plaintiffs sued Tavenner's, alleging negligence, breach of implied contract, and breach of the implied covenant of good faith and fair dealing. Plaintiffs' "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 trial court granted Tavenner's Motion to Dismiss, finding that the FAAAA preempted plaintiffs' claims. Plaintiffs appealed.
On appeal, the court reversed and held that the FAAAA did not preempt plaintiffs' negligence claim. In reaching its holding, the court discussed the history and purpose of the preemption doctrine. Referencing Supreme Court precedent, the court noted that "preemption will not lie unless it is the clear and manifest purpose of Congress." The court then analyzed the applicable language of the FAAAA, which states:
[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 of property.
49 U.S.C. § 14501(c)(1). Acknowledging that the Supreme Court has stated that state common-law rules fall comfortably within the language of the FAAAA preemption provision, the court nonetheless analyzed whether the FAAAA preempted the plaintiffs' state common-law claims in this case. In ultimately holding that the FAAAA did not preempt the plaintiffs' negligence claim, the court relied on Supreme Court decisions that limited the scope of preemption: "Significantly, however, the Court also has cautioned that the FAAAA does not preempt 'state laws affecting carrier prices, routes, and services in only a tenuous, remote, or peripheral manner.'"
The court then found that "[a]lthough Plaintiffs' negligence claim relates to the transportation of property, the claim does not target or affect the regulation of motor carriers in general." Accordingly, the court found "the relationship between Plaintiffs' negligence action to a motor carrier's prices, routes, and services too tenuous to be preempted by the FAAA[A]."
In addition to finding the relationship too tenuous, the court also noted that if the FAAAA did preempt the plaintiffs' claims, they would be without legal recourse for sources of damage recovery. The court noted that "federal courts have reasoned that the absence of any alternative judicial remedy or recourse is evidence that common-law actions to recover for personal injury or property damage are not preempted." The court also found persuasive the FAAAA's language requiring motor carriers to have liability insurance to pay for damages resulting from negligence. The court reasoned that the statute would not require liability insurance if the FAAAA preempted negligence based claims.
Although the court found that the FAAAA did not preempt the plaintiffs' negligence claim in this case, the court did not decide whether the FAAAA preempted the plaintiffs' contract-based claims, finding the "allegations ... insufficient to permit analysis of ... whether the FAAAA expressly preempts the [contract-based] claim[s]." Schmidt v. Tavenner's Towing & Recovery, LLC, No. A-1-CA35863, 2019 N.M. App. LEXIS 75 (N.M. App. June 14, 2019).
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