Orca Bay Seafoods v. Northwest Truck Sales, Inc. Kamco, Inc., an Oklahoma Corporation

Congress passed a law requiring true odometer disclosures on transfers of vehicles. The Secretary of Transportation wrote a regulation exempting large trucks. We hold that the regulation is invalid.

FACTS

Orea Bay Seafoods bought a truck in which the odometer showed much less than the true mileage, so it sued the used truck dealer from which it bought the truck, Northwest Truck Sales, and the truck’s previous owner, Kamco, Inc. Orea bought the truck from Northwest in 1989, which had bought it a few days earlier from Kamco. It was a 1987 Mercedes diesel weighing more than 27,500 pounds with around 126,000 miles on it. The odometer showed only about 24,000 miles when Orea purchased it.

Congress passed a law to require true odometer readings, or disclosure that actual mileage is unknown. Vehicle Information and Cost Savings Act, Pub.L. No. 92-513, 86 Stat. 961 (1972) (codified as amended at 15 U.S.C. §§ 1981-91 ). The Secretary of Transportation exempted transfers of trucks with gross vehicle weight ratings of more than 16,000 pounds. 15 C.F.R. § 580.6 (a)(1). The magistrate judge dismissed Orca’s statutory claim because the regulation exempts large trucks such as the one at…