Checker Cab Phila. v. Phila. Parking Auth.

306 F.Supp.3d 710

CHECKER CAB PHILADELPHIA, et al., Plaintiffs,

v.The PHILADELPHIA PARKING AUTHORITY and Vincent Fenerty, Defendants.

CIVIL ACTION NO. 16–4669

United States District Court, E.D. Pennsylvania.

Signed January 29, 2018

Brett Adam Berman, Mark J. Fanelli, Fox Rothschild LLP, Philadelphia, PA, Danielle Friedman, Palmarella, Curry & Raab, P.C., Wayne, PA, for Plaintiffs.

Patrick J. Doran, Gary D. Fry, Archer & Greiner PC, Dennis G. Weldon, The Philadelphia Parking Authority, Philadelphia, PA, Jordan Louise Fischer, Archer & Greiner PC, Haddonfield, NJ, for Defendants.

MEMORANDUM RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Baylson, J.

I. Introduction

Legal challenges by the taxicab industry to the advent of so-called Transportation Network Companies ("TNCs") such as Uber and Lyft are not new. This lawsuit, brought by taxi companies, does not seek to impose liability on TNCs themselves, but rather against the governmental agency responsible for regulating taxicabs in Philadelphia, the Philadelphia Parking Authority ("PPA"), for not doing more to combat TNCs before TNCs were legalized in Philadelphia.

Plaintiffs, Checker Cab Philadelphia and several hundred other medallion-holding taxi companies (collectively, "Checker"), seek damages from Defendant PPA and its former executive director, Defendant Vincent Fenerty, alleging their inaction toward TNCs violated the U.S. Constitution in two ways:

First, that PPA's failure to apply taxicab regulations to or otherwise regulate TNCs violated the Equal Protection Clause; and

Second, the diminution in value of taxi medallions caused by the failure to regulate TNCs constituted a taking of Checker's property without just compensation of law in violation of the Fifth and Fourteenth Amendments.

Checker initially sought damages, declaratory relief, and an injunction.

After this lawsuit was filed, the Court permitted intervention to Germantown Cab Company (Germantown), a non-medallion-holding taxi company serving several Philadelphia neighborhoods.

Defendants' motions for summary judgment as to both Checker and Germantown are presently before the Court. Checker and Germantown (collectively, the "Taxi Companies") have separately opposed these motions; both have also filed a motion pursuant to Rule 56(d) and a motion to file a supplemental memorandum.

II. Background

A. Regulatory Scheme and History

In 1947, the Pennsylvania General Assembly enacted the Parking Authorities Law ("PAL"), which created municipal parking authorities. Blount v. Philadelphia Parking Auth., 600 Pa. 277, 278, 965 A.2d 226 (2009). In 2004, the General Assembly amended Title 53 of the PAL to give the Philadelphia Parking Authority—as opposed to the Pennsylvania Public Utility Commission ("PUC")—the responsibility of regulating taxicab and limousine services in Philadelphia. See 53 Pa. C.S. §§ 5701 – 5745 (these statutes are commonly referred to as Act 94); Bucks County Servs, Inc. v. Philadelphia Parking Auth., 71 A.3d 379, 383 (Pa. Commw. Ct. 2013) ("Act 94 transferred jurisdiction over taxicab service within the City from the Commission to the Authority").

Specifically, Act 94 lists one of the "purposes and powers" of PPA as being "to act as an independent administrative commission for the regulation of taxicabs and limousine service." 53 Pa. C.S. § 5505(23). It further gives PPA the power to "prescribe such rules and regulations as it deems necessary to govern the regulation of taxicabs within cities of the first class under this chapter." 53 Pa. C.S. § 5722 (emphasis added); see also 53 Pa. C.S. § 5742 (using the same language to allow PPA to regulate "limousine service").

Act 94 defines "taxicab" as:

[a] motor vehicle designed for carrying no more than eight passengers, exclusive of the driver, on a call or demand service basis and used for the transportation of persons for compensation either on:

(1) A citywide basis as authorized by a certificate of public convenience and a corresponding medallion issued by the authority; or

(2) A non-citywide basis as authorized by a certificate of public convenience issued by the authority and without a corresponding medallion.

Act 94 defines "call or demand service" or "taxicab service" as:

Local common carrier service for passengers, rendered on either an exclusive or nonexclusive basis, where the service is characterized by the fact that passengers normally hire the vehicle and its driver either by telephone call or by hail, or both. The term does not include limousine service.

53 Pa. C.S. § 5701.

Under Act 94, medallions are defined as "property," which "cannot be revoked or cancelled by [PPA]." 53 Pa. C.S. § 5713. In addition, the statute limits the number of taxi medallions that can be issued by PPA; the statute initially capped the number of medallions at 1,600, with the possibility of issuing 15 additional medallions annually, up to a cap of 1,750. 53 Pa. C.S. § 5711.

In 2005, pursuant to Act 94 and its delegation of legislative authority, PPA promulgated its first set of taxicab and limousine regulations. 53 Pa. C.S. §§ 5722, 5742 ; Bucks County Servs., Inc., 71 A.3d 379, 383. In 2011, PPA promulgated the regulations that are currently operative. See 52 Pa. Code §§ 1011, et seq.

In November 2016, the Pennsylvania General Assembly passed legislation, known as Act 164, granting TNCs permanent legal authority to operate throughout Pennsylvania, including within Philadelphia. Act 164 added a new chapter to the Parking Authorities Law, entitled "Transportation Network Companies," which is codified at 53 Pa. C.S. §§ 57A01 –22, and amended the definition of "taxicab service" or "call or demand service" in 53 Pa. C.S. § 5701 to exempt TNCs. 2016 Pa. Legis. Serv. Act 2016–164. Sections of the newly enacted Chapter 57A govern issues such as TNC licensure, insurance requirements, driver credentials, fare rates, and the like. 53 Pa. C.S. §§ 57A01 –22. In addition, Act 164 lessens certain regulatory requirements on traditional taxicabs, and requires TNCs to pay assessments of 1.4% of gross revenues in Philadelphia to PPA. 2016 Pa. Legis. Serv. Act 2016–164. Act 164 also directs PPA to enact a new set of regulations governing for-hire transportation in Philadelphia that also governs TNCs. Id.

B. Types of Taxicabs in Philadelphia

Checker and Germantown are owners of two different types of taxicabs operating in Philadelphia: "medallion taxicabs" (such as those operated by Checker), which may provide citywide taxicab service, and "partial-rights taxicabs," such as those operated by Germantown, which are not entitled to provide citywide service. 52 Pa. Code § 1011.2. Taxicabs may be ordered by telephone call or street hail. 53 Pa. C.S. § 5701 ("taxicab service" "is characterized by the fact that passengers normally hire the vehicle and its driver either by telephone call or by hail, or both").

Checker Plaintiffs, who comprise over one hundred medallion taxicab companies including such recognizable companies as 215GETACAB, Crescent Cab, and Freedom Taxi, hold "certificates of public convenience ... issued by PPA to own and operate Philadelphia medallion taxicabs" and possess "hundreds" of medallions in total. (Checker Am. Compl. ¶¶ 20–21.)

Intervenor Germantown Cab Company is a company operating partial-rights taxicabs. Germantown holds a certificate of public convenience from the Public Utilities Commission allowing it to provide taxicab service in various towns in Montgomery County, as well as the Philadelphia neighborhoods of Germantown, Mt. Airy, Roxborough, Manayunk, and Chestnut Hill. (Germantown Second Am. Compl ¶ 1, ECF 89; Germantown SOF ¶ 100, ECF 152–2.)

C. Penalties for Unauthorized Taxicab Vehicles and Additional PPA Powers

In Philadelphia, vehicles "may not be operated as a taxicab with citywide call or demand rights ... unless a certificate of public convenience is issued by the authority authorizing the operation of the taxicab and a medallion is attached to the hood of the vehicle." 53 Pa. C.S. § 5714(a)(1). Although the Parking Authorities Law does not define "authorized vehicle" or "unauthorized vehicle," the statute contains a section entitled "Certificate and medallion required" and sets forth penalties for "unauthorized vehicles":

(f) Unauthorized vehicles.—Operating an unauthorized vehicle as a taxicab, or giving the appearance of offering call or demand service with an unauthorized vehicle, without first having received a certificate of public convenience and a medallion is a nontraffic summary offense in the first instance and a misdemeanor of the third degree for each offense thereafter. The owner and the driver of a vehicle being operated as or appearing as a taxicab without a certificate of public convenience and a medallion are also subject to civil penalties pursuant to section 5725. Civil penalties which have been assessed and collected shall be deposited in the fund.

53 Pa. C.S. § 5714(f). The statute further empowers PPA to impound vehicles "utilized to provide call or demand service" in Philadelphia operating without a certificate of public convenience issued by PPA. 53 Pa. C.S. § 5714(g).

The statute also bestows upon PPA a number of more general powers to effect the purposes of the enacting statute, including the power to sue and be sued; to "investigate and examine the condition and management of any entity providing taxicab and limousine service"; to engage in all acts "necessary ... to carry out the powers granted to the authority by this chapter or any other statute"; as well as to "prescribe such rules and regulations as it deems necessary to govern the regulation of taxicabs ... under this chapter." 53 Pa. C.S. §§ 5505(2), (17), (24), 5722.

III. Procedural History

On August 29, 2016, Plaintiff Checker Cab Philadelphia, Inc. and several hundred other medallion-holding taxicab companies filed this action. (Compl., ECF 1.) At that time, TNCs, most notably Uber and Lyft, had operated in Philadelphia for several years, but Pennsylvania had not yet enacted...