What can we help you find today?

Wrecker Regulations

Print This PagePrint This Page Send by EmailSend by Email
Reviewed Date: June 02, 2017

Original Author: 
Hemsley, Sid
Date of Material: 
Feb 17, 2009

Motor vehicles--Laws and regulations
Parking--Laws and regulations
Traffic--Laws and regulations

Wrecker Regulations

MTAS was asked whether the city can regulate the number of wreckers that can be on the city's approved towing list.


FROM: Sid Hemsley, Senior Law Consultant

DATE: February 17, 2009

RE: Wrecker Regulations


Your question is this: Can the city regulate the number of wreckers that can be on the city’s approved towing list?

The answer to that question is whether such a regulation can be successfully defended as a “safety” regulation that is “genuinely responsive to safety concerns,” under 49 U.S.C. § 14501(c). The answer to that question is not necessarily easy to come by, but I think it may be difficult to show that a particular numerical limit on the approved towing list meets the above standard. As far as I can determine, there are no cases in the United States that deal with a numerical limitation on the number of wrecker permits, but there are a number of cases involving wrecker regulations that are based on the safety consideration of eliminating or reducing “wreck-chasing” by tow trucks. Such regulations are usually strict enough to effectively limit the number of wrecker permits. Indeed, that is the reason wrecker owners who are unhappy with those regulations challenge them.

There are a large number of wrecker regulation cases in the United States, but I will focus mainly on the ones that are defended on the ground that they reduce “wreck-chasing.” I assume that would be the ground upon which a numerical limitation on wreckers on an approved list would be defended.

As we shall see below, wrecker regulations based on reducing “wreck-chasing” that effectively limit the number of wrecker permits have been upheld where they are shown to be “genuinely responsive to safety concerns,” rather than to economic and other concerns. In earlier wrecker regulation cases, the courts were generally satisfied that the regulations were “genuinely responsive to safety concerns” if the language of the regulations and of the testimony supporting them were grounded in a purpose of reducing “wreck-chasing.” But in the U.S. Second Circuit Court of Appeals in recent cases involving such regulations that court has tightened the test. The Second Circuit now imposes a two prong test. The first one is whether the regulations contain language geared toward reducing “wreck-chasing.” The second one determines whether the regulations actually work to reduce “wreck-chasing.” That seems to be a logical test, given the question of whether the wrecker regulation is “genuinely responsive to safety concerns.” But I am not sure that the Sixth Circuit Court of Appeals, in which Tennessee is located, or the Tennessee state courts, would adopt the Second Circuit’s stricter test for whether a wrecker regulation meets that test. But I must add here that I am not sure that a numerical limit on the number of wreckers on the approved wrecker list would meet either test.

As a matter of historical interest, the answer to your question was probably governed for a short period by the U.S. Sixth Circuit Court of Appeals case of Petrey v. City of Toledo, 246 F.3d 548 (2000). In that case, the Sixth Circuit adopted a “market participation” doctrine. Under that doctrine, the government enacting wrecker regulations governing nonconsensual tows was acting as a “market participant“; that is, the purchaser of wrecker services. In that capacity, it had authority to adopt broad wrecker regulations and those regulations were not governed by 49 U.S.C. § 14501(c). Under the market participant theory, presumably, a government could have imposed a numerical limitation on the number of wreckers on an approved rotation list, at least with respect to nonconsensual tows. However, the general consensus is that the “market participant doctrine” was overturned with Petrey by the U.S. Supreme Court case of City of Columbus v. Ours Garage and Wrecker Service, Inc., 536 U.S. 424 (2002) (which also came to the High Court from the Sixth Circuit).

Ours Garage & Wrecker Service sets up and answers the question of what wrecker regulations allow local governments to impose under § 14501(c):

Federal preemption prescriptions relating to motor carriers contained in 49 U.S.C. § 14501(c) (1994 ed., Supp. V), specifically to save to States “safety regulatory authority ... with respect to motor vehicles,” § 14501(c)(2)(A). This case presents the question of whether state power preserved in § 14501(c)(2)(A) may be delegated to municipalities, permitting them to exercise safety regulatory authority over local tow-truck operations.

The federal legislation preempts provisions by “a state [or] political subdivision of a State ... related to a price, route, or service of any motor carrier ... with respect to the transportation of property.” § 14501(c)(1). As an exception to this general rule, congress provided that the preemption directive “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” § 14501(c)(2)(A). Section 14501(c)(1)’s statement of the general rule explicitly includes “State[s]” and their “political subdivision[s.].” The exception for safety regulations, however, specifies only “State[s]” and does not mention “political subdivision[s].” § 14501(c)(2)(A). [At 428]

The question, then, was whether, under 49 U.S.C. § 14501(c), municipalities could even adopt rules governing wrecker safety regulations. The court did not answer the question of whether the City of Columbus’ wrecker regulations passed legal muster.

Here is what 49 U.S.C., §14501(c) expressly says:

- 49 U.S.C. § 14501(c)(1): GENERAL RULE. - 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 ... with respect to the transportation of property

- 49 U.S.C. § 14501(c)(2): MATTERS NOT COVERED.- Paragraph (1)-

(A) Shall not restrict the safety regulator authority of a State with respect to motor vehicles ... or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization;

(B) does not apply to the transportation of household goods; and

(c) does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law, regulation, or other provision relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle.

The argument in Ours Garage & Wrecker Service was whether only the state, or the state and its political subdivisions, had the right to enact safety regulations pertaining to tow trucks. As that Supreme Court itself acknowledged, the courts of appeal were divided on that question. In the Sixth Circuit, Petrey v. City of Toledo had held that § 14501(c) preserved the right of only the state to adopt safety regulations related to tow trucks. But it had also ruled that with respect to nonconsensual tows, “Toledo, when acting as a market participant, may set certain standards and ultimate choose those towers which are best able to perform non-consensual police tows for it, without being subject to § 14501(c)’s preemption provisions.” [At 555] But as I indicated above, Ours Garage & Wrecker Service seems to have rejected Petrey’s “market participant” doctrine, along with its ruling that only the state can enact wrecker safety regulations:

We hold that § 14501(c) does not bar a State from delegating to municipalities and other local units the State’s authority to establish safety regulations governing motor carriers of property, including tow trucks. A locality, as § 14501(c) recognizes, is a “political subdivision” [Emphasis is the Court’s.] of the State. Ordinarily, a political subdivision may exercise whatever portion of the state power the State, under its own constitution and laws, chooses to delegate to the subdivision. Absent a clear statement to the contrary, Congress’ reference to the “regulatory authority of a State” should be read to preserve, not preempt, the traditional prerogative of the States to delegate their authority to their constituent parts. [At 429]

The problem with Ours Garage & Wrecker Service, is that the U.S. Supreme Court did not decide which, if any, of the city wrecker regulations at issue in that case, qualified as exercises of “safety regulatory authority.” Likewise, it gave no guidance on what safety regulations would pass constitutional muster, except for one important clue:

We reiterate that § 14501(c)(2)(A) shields from preemption only “Safety regulatory authority” (and “authority of a State to regulate ... with regard to minimum amounts of financial responsibility relating to insurance requirements”). Local regulation of prices, routes, or services of tow trucks that is not genuinely responsive to safety concerns garners no exemption from § 14501(c)(1) preemption rule. [Emphasis is mine.]

In a nutshell, here is the way municipal wrecker regulation authority stands under 49 U.S.C. § 14501(c):

- Generally, a municipality cannot pass rules and regulations governing price, route or service, except that a municipality can enact and enforce rules and regulations governing the price of nonconsensual tows.

- A municipality can enact and enforce wrecker regulations governing price, route or service if those regulations are “genuinely responsive to safety concerns.”

As I said above, I have been unable to find a case that deals with the sole question of whether a numerical limitation on the number of wreckers on the approved wrecker list will meet the safety related standard, but there are several cases that deal with wrecker rotation lists based on the ground that they prevent “wreck chasing,” and the safety problems that go with it. Such regulations have been upheld in several cases. In Capitol City Towing and Recovery Inc. v. State, 873 So.2d 706 (La. App. 1 Cir. 2004), Louisiana state wrecker regulations were challenged by the plaintiff, who alleged that the following rules based on state statutes and regulations were economically rather than safety related. The first group of challenged regulations, said the court:

institute a ban on solicitation of towing business by tow truck operators. [Statutory citations omitted by me.] The State submitted the affidavit of Captain Wayne Ryland of the Louisiana State Police, who attested that in order to obtain business, tow trucks barge through intersections, down highways and even through accident scenes to be the first tow truck at the scene. Captain Ryland attested that tow truck operators fought over tows, interfered with medical care of victims, and solicited to take victims to doctors and lawyers to gain towing business. This type of regulation aimed at preventing “wreck chasing” has preciously been upheld by federal courts in Ace Auto Body and Cole cases as falling within the state’s safety regulatory authority. Likewise we find the ban on solicitation to be designed to protect the public from the safety hazards associated with wreck chasing, and any economic benefits on intrastate towing are incidental, thus bringing the ban on solicitation within the safety exemption. Additionally, as the regulation on the use of CB radios and police communications, found in Section 1917E and 1933C of Title 55, also further the State’s goal of eliminating “wreck-chasing” by the towing industry, they too fall within the safety exception. [At 711-12]

In 1999, the U.S. Second Circuit Court of Appeals upheld a wrecker regulation designed to prevent “wreck-chasing” in Ace Auto Body and Towing, Ltd. v. City of N.Y., 171 F.3d 765, 777 (2d Cir. 1999), on the ground that the regulation was “reasonably related to safety.” That case was one to which the court in Capitol Hill Towing, above pointed as support for its wrecker regulation designed to control wreck-chasing. Another such case was Cole v. City of Dallas, 314 F.3d 730 (5th Cir. 2002), in which the court upheld wrecker regulations that prohibited persons from receiving wrecker permits who had a criminal history, documented mental illness and unsafe driving records, on the ground that such regulations wee “designed to curtail confrontation between truck operators and non-consenting vehicle owners,” [At 735] That was the stated purpose of the city’s wrecker regulation ordinance, and is similar to the purpose of reducing “wreck-chasing.”

But the Second Circuit changed its mind between 1999 and 2008. In Automobile Club of New York v. Dykstra, 520 F.3d 210 (2008). In Automobile Club of New York, the City of New York cited Ace Auto Body and Capitol Hill in its argument that the city’s wrecker regulations were “reasonably related to safety.” But the court noted that since Ours Garage & Wrecker Service was decided by the U.S. Supreme Court, the question of whether a wrecker regulation adopted by a state or municipality fell within the safety exemption of 49 U.S.C. § 14501(c) turned on the issue of whether it was “genuinely responsive to safety concerns” rather than whether it was “reasonably related to safety” The court declared that Ours Garage “limited the ongoing significance of Ace Auto Body.” It also imposed a higher standard for making that determination.

The wrecker regulation in Automobile Club of New York required every wrecker in New York City to have a wrecker license to operate in, or even to pass through, New York City. The ostensible purpose of the regulation was to prevent tow truck operators from monitoring police radios and “chasing each other to reach the scene of an accident first.” [At 212] Obtaining a wrecker license required the owner to pay $600 per tow truck and $20 per driver, an additional fee for a fingerprint and criminal record check; proof of liability insurance, a cash bond of $5,000 or a $200 cash contribution to the Tow Truck Industry Trust Fund, Corp., with New York state regulation and inspection requirements. The licensing scheme also established the Directed Accident Response Program, which required that all vehicles disabled within the city be removed by licensed towers assigned on a rotating basis, and banned the solicitation of disabled vehicles by unassigned towers.” [At 214] Now a wrecker regulation had to pass a two step test to take it by 49 U.S.C. § 14501(c): (1) “The court must consider any specific expressions of legislative intent in the statute itself as well as in the legislative history.” (2) Then it must assess those “purported safety justifications ... in light of the existing record evidence.” [At 215.]

The wrecker regulation in this case failed both tests. It failed the first test because when the wrecker regulations were ordinally enacted, the mayor’s office declared that their primary purpose was to eliminate wreck-chasing, but when the city began to enforce those regulations several years later, “the city council did not discuss safety concerns, noting instead strengthening enforcement would solve a ‘jurisdictional problem’ posed by the number of towers failing to renew their licenses in addition to providing consumers with ‘timely, accurate ... information regarding their rights.’” [At 215] It failed the second test because the city could not explain why imposing the wrecker licensing and other regulations on all tow trucks, including those passing through the city and those not soliciting business, would reduce wreck-chasing. Furthermore, the city, had presented no evidence to support the proposition that the regulations had actually reduced wrecker-chasing.

Automobile Club of New York relied somewhat on Loyal Tire & Auto Center v. Town of Woodbury, 445 F.3d 136 (2d Cir. 2006), in which the same court declared that “... whether or not [Woodbury’s towing law] is reasonably related to safety, it is not genuinely responsive to safety concerns.” [At 148 n. 6] There wrecker operators were qualified to be on the city’s rotational list if they were within one mile of the city police department. The city justified the regulation on two main safety grounds: “(1) vehicle owners who walk first to the police station to retrieve their cars could then walk in relative safety on sidewalks within the one-mile radius to a tow yard”; and (2) using two companies located outside of Woodbury would require the town to send police officers outside the jurisdiction and “dilute the police presence in Woodbury.” [At 141] Citing Ours Garage & Wrecker Service, the court declared that the city’s regulation was “not genuinely responsive to safety concerns...” [At 145] The legislative history of the city’s towing ordinance showed no evidence of safety concerns, “but instead are replete with expressions of dissatisfaction with services provided by Loyal Tire and a desire to exclude Loyal Tire, as well as other out of town businesses form the town’s rotating tow list....” [At 146] Neither did the record support that city’s argument that the “one mile radius” rule would reduce the number of dangerous tows; in many cases tows performed by Loyal Tire would be shorter than tows performed by tow companies within the one mile radius of the police station, and the record showed that only one person had ever walked to the tow yard from the police station. The city’s rule about keeping the police within the city was not genuinely safety related, because the record showed that the police regularly went outside the jurisdiction to provide assistance to other police departments. In short, the regulations failed the Second Circuit’s two prong test for determining whether they were “genuinely responsive to safety concerns.”

Similarly, in Tow Operators Working to protect Their Right to Operate on the streets of Kansas City v. City of Kansas City, Missouri, 338 F.3d 873 (8th Cir. 2003), Kansas City “joined a number of other cities in moving to stop the practice known as ‘wreck-chasing.’” [At 874] The city’s ordinance made it:

unlawful for the owner or operator of a tow vehicle to ... [s]top at or proceed to the scene of an accident unless called to the scene requested to stop, or flagged down by the owner or operator of a vehicle involved in an accident or request to perform the service by a law enforcement officer. [At 874.]

The city also designed a “system in which the Kansas City police will dispatch approved towing contractors to accident scenes on a rotating basis.” [At 874]

Plaintiffs sued the city on the ground that under the system in which the approved wrecker would be dispatched would not qualify for the rotation list. But they made what seem to be breathtaking legal and procedural errors, in light of Ours Garage & Wrecker Service, which preceded it by at least a year. Their sole argument was that the safety exception in § 49 U.S.C § 14501(c) was “limited only to a State’s safety laws and regulations and does not apply to local ordinances.” The district court held that the ordinance was safety-oriented and not an economic regulation because it “undisputedly is intended to eliminate the practice and results of wreck-chasing as described in other cases.” [At 875]

The plaintiffs appealed the district court’s decision, even though the U.S. Supreme Court had ruled earlier in Ours Garage and Wrecker Service, that it was within the authority of a state to delegate its power to its political subdivisions to regulate motor vehicles. The Court of Appeals upheld the district court, pointing out that reality to the plaintiffs, and declared that the plaintiff’s had essentially thrown away their case, assuming that the ordinance was safety-oriented, and failing to go forward with creating a factual dispute on that issue, “for example, evidence showing that the Ordinance, either in purpose or effect, [Emphasis is mine.] is the prohibited regulation of prices, routes or service, rather than genuine safety regulation.” [At 876] The court’s language about “either in purpose or effect” of the ordinance suggests that it might have applied the two pronged tests that the Second Circuit eventually applied, had the case came to it had that question actually been before it.

The unreported case of Houston Professional Towing Association v. City of Houston, Texas, 2005 WL 2121552 (S.D. Texas), reflects a challenge to the City of Houston’s wrecker ordinance on a number of grounds, including the ground that safety ground advanced by the city to support the policy was pretextual. The city’s wrecker ordinance was a complicated one, dividing the city into 29 zones and gave certain wrecker services the exclusive right to tow vehicles in those zones. The court appears to have acknowledged that the record supported the city’s arguments that the wrecker regulations reduced the problem of secondary accidents and “wreck-chasing,” but still concluded that the economic impact of the regulations were more than incidental to tow truck operators. Twenty-five percent of tow revenues came from freeway tows, which were governed by the exclusive towing contracts in the 29 zones. In addition, the towing contracts were let to the highest bidders. The regulations also effectively defined all freeway tows as nonconsensual tows even where the driver of the vehicle subject to a tow under the regulations had the abilit y and willingness to contract for his own tow. The court declared all of those regulations grounded the exclusive contracts in economics rather than safety, and invalidated them However, in doing so, the court suggested that the city could regulate the number of tow trucks that could operate on any certain segment of the freeway at a given time, and that the city could make other provisions to intercept “wreck-chasing,” and traffic congestion at accident locations. But this case seems to me to reflect a test of whether the regulations are “genuinely responsive to safety concerns” more along the lines of the Second Circuit’s test. The court looked at what the regulations at issue actually did, rather than merely their purposes reflected in the regulations.

The city reflected in your question probably must ask itself two questions about a numerical limitation on the number of wreckers on its approved wrecker list:

- What is the genuinely safety related reason for that numerical limitation? If it is to reduce or prevent “wreck-chasing,” that purpose must show up in its regulations, and be supported by the record..

- Does the avowed safety related reason for the numerical limitation actually advance the genuinely safety related reason for the regulation? If the avowed reason is the reduction or elimination of wreck-chasing,” does the regulation actually accomplish that purpose?


About Our Knowledgebase

Information written by MTAS staff was based on the law at the time and/or a specific sets of facts. The laws referenced may have changed and/or the technical advice provided may not be applicable to your city or circumstances. Always consult with your city attorney or an MTAS consultant before taking any action based on information posted to this website.