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Rosemont Taxicab Co., Inc. v. Philadelphia Parking Authority

Commonwealth Court of Pennsylvania

May 22, 2013

Rosemont Taxicab Co., Inc., Petitioner
v.
Philadelphia Parking Authority, Respondent

Submitted: August 17, 2012

BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge

OPINION

MARY HANNAH LEAVITT, Judge [1]

Rosemont Taxicab Co., Inc. (Rosemont) petitions for review of an adjudication of the Philadelphia Parking Authority, Taxicab and Limousine Division (Parking Authority) denying its request to acquire the license of Concord Coach USA t/a Bennett Taxicab (Bennett Taxicab) to provide taxicab service in a part of Philadelphia. The Parking Authority denied Rosemont's application for the stated reason that it lacked (1) sufficient technical expertise and (2) a commitment to provide safe and lawful taxicab service. The Public Utility Commission reached the opposite conclusion. Accordingly, it approved Rosemont's application to acquire Bennett's license to provide taxicab service outside Philadelphia. For over three years, Rosemont has been operating under its Commission-issued certificate of public convenience. Concluding that the evidence is insufficient to support the Parking Authority's conclusion, we reverse.

Central to the Public Utility Commission's regulation of public utilities is a certificate of public convenience, which every utility must acquire before it can operate lawfully. See 66 Pa. C.S. §1101 (public utility may supply service where a certificate of public convenience is "first had and obtained.") The Commission will grant a certificate of public convenience where "necessary or proper for the service, accommodation, convenience, or safety of the public." 66 Pa. C.S. §1103(a). An existing certificate of public convenience can be transferred to a new holder "[u]pon the approval of such application by the [C]ommission." 66 Pa. C.S. §1102(a)(3); South Hills Movers, Inc. v. Pennsylvania Public Utility Commission, 601 A.2d 1308, 1309 (Pa. Cmwlth. 1992). The applicant for a transfer must satisfy the standards in Section 1103(a) of the Public Utility Code, and in the Commission's regulation, by demonstrating the technical expertise to provide the utility service and a commitment to provide that service in a safe and lawful manner. 52 Pa. Code §41.14; Lehigh Valley Transportation Services, Inc. v. Pennsylvania Public Utility Commission, 56 A.3d 49, 55 (Pa. Cmwlth. 2012).

In 2004, the General Assembly transferred the responsibility for regulating limousine and taxicab service in Philadelphia from the Commission to the Parking Authority. See Act of July 16, 2004, P.L. 758, No. 94 (Act 94). The Parking Authority's authority with respect to this new regulatory regime is set forth in Chapter 57 of the act commonly referred to as the Parking Authority Law, as amended, 53 Pa. C.S. §§5701-5745. Otherwise, the Public Utility Commission remains responsible for regulating limousine and taxicab service in Pennsylvania. As does the Public Utility Code, the Parking Authority Law requires the approval of the Parking Authority before one of its certificates of public convenience can transfer from one taxicab company to another. 53 Pa. C.S. §5711(c)(5).[2]

Bennett Taxicab has operated for many years under a certificate of public convenience issued by the Public Utility Commission. This certificate authorizes it to operate in Delaware and Montgomery counties as well as a small part of the City of Philadelphia. Because of its small service area in Philadelphia, Bennett Taxicab is known as a partial rights taxicab company.[3] This means that Bennett Taxicab can provide point-to-point service in Philadelphia to persons hailing one of its taxis so long as both points lie within the bounds of its small service area in Philadelphia. This distinguishes it from the 1, 600 medallion taxicabs in Philadelphia that since 2004 have held certificates of public convenience issued exclusively by the Parking Authority. These certificates give medallion taxicabs the right to provide point-to-point service anywhere in the City of Philadelphia. The 2004 transfer of taxicab regulation did not impact Bennett Taxicab's ability to continue to operate in the service area listed in its pre-2004 certificate of public convenience issued by the Public Utility Commission.

In May 2008, Rosemont filed an application with the Public Utility Commission to acquire Bennett Taxicab's certificate of authority. Holding that Rosemont had the requisite technical expertise to provide service and a commitment to do so in a safe and legal manner, the Commission granted Rosemont's transfer application under 52 Pa. Code §41.14.[4] The Commission determined that it lacked jurisdiction to approve the transfer of Bennett Taxicab's Philadelphia service area and directed Rosemont to present that request to the Parking Authority.

Rosemont did so. The Parking Authority, by its Director of the Parking Authority's Taxicab and Limousine Division, denied the application. Rosemont appealed, and a hearing officer conducted a hearing on September 22, 2011, at which the Parking Authority had the burden of proving Rosemont unfit to operate in Philadelphia. A licensed utility is entitled to a presumption that it holds the technical and financial capacity and propensity to operate safely and legally, and it is the party opposing the utility's application that bears the burden of proof. South Hills Movers, 601 A.2d at 1310; Lehigh Valley Transportation, 56 A.3d at 58. In accordance with these principles, the parties stipulated that Rosemont enjoyed a presumption that it satisfied the standards in 52 Pa. Code §41.14 and, thus, was fit to acquire Bennett Taxicab's service area in Philadelphia. The parties also stipulated that it was the Parking Authority's burden to rebut that presumption.

Jacob Gabbay, Rosemont's president, testified in support of Rosemont's application. He explained that he and his daughter, Tiffany Rachel Karsenty, each hold a 50% ownership interest in Rosemont. She and her husband, Avi Karsenty, manage Rosemont's day-to-day operations. Both Gabbay and the Karsentys have many years of experience in the taxicab business. Gabbay began his career as a cab driver in the 1970s, and he has owned and operated Germantown Cab Co., which has 130 taxicabs, for over 30 years.

Gabbay testified that over the years, Germantown Cab has filed various applications with the Public Utility Commission that required a showing that it had the requisite technical expertise and a commitment to operate safely and legally; each application has been granted by the Commission. This included his application to purchase 30 certificates of public convenience and medallions for city-wide service in Philadelphia.[5] During its 30 years of operation, Germantown Cab has consistently operated as a certificate holder in good standing.

Rosemont owns approximately 30 taxicabs, and it operates separately from Germantown Cab from its own facility. Rosemont's garage employs mechanics who routinely inspect the vehicles, making any needed repairs they find. Gabbay removes vehicles from service when they develop mechanical problems that affect safety. Gabbay testified that "[s]afety is [the] number one" priority for Rosemont. Reproduced Record at 59 (R.R. __).

Gabbay characterized his relationship with the Public Utility Commission as "excellent." R.R. 58-59. On the other hand, Gabbay acknowledged that he has had disagreements with the Parking Authority over its efforts to regulate Germantown Cab's operations in areas that Gabbay believes to be the responsibility of the Commission. For example, Germantown Cab has challenged the Parking Authority's authority to order shields in all of its vehicles, which the Public Utility Commission does not require; to require Germantown Cab to comply with a driver certification program; and to require Germantown Cab to file certificate renewal applications in addition to the renewal it files with the Commission.

Gabbay explained that Germantown Cab and Rosemont have challenged citations issued by the Parking Authority that he believes non-meritorious. However, he explained that the companies abide by the ultimate court ruling, regardless of outcome. He also testified that were the courts to hold that limited service taxicab companies must bow to the standards of the Parking Authority, even when they conflict with the standards imposed by the Public Utility Commission, then Germantown Cab and Rosemont "will play by the rules" and "comply from A to Z." R.R. 92-93, 96.

Gabbay estimated that Germantown Cab and Rosemont together make over 2, 000 trips every day. Since 2004, the companies have responded to every safety issue pointed out by the Parking Authority, even when they did not agree with the Parking Authority's exercise of authority. He stated that both companies have been operating lawfully within the bounds of their certificates of public convenience issued by the Public Utility Commission. Gabbay explained that Germantown Cab has a right to pick up or drop off passengers within its service area in Philadelphia; nevertheless, his drivers are frequently stopped and questioned by the Parking Authority's inspectors. Gabbay acknowledged that neither Rosemont nor Germantown Cab is authorized to provide point-to-point service throughout the entire City and that he would fire a driver who did that, explaining that neither company tolerates such violations.

Gabbay's son, Joseph Gabbay, who helps to manage Germantown Cab, and on occasion, Rosemont, then testified. He explained that the Parking Authority issued three citations to Germantown Cab for alleged safety issues during the 2010-2011 fiscal year, and it appealed each citation. When asked whether Germantown Cab had $14, 000 in outstanding parking tickets, Joseph Gabbay responded in the negative, explaining that because Germantown Cab is in the fleet program, individual taxicab drivers, not the company, are responsible for parking tickets issued to a vehicle.

For its part, the Parking Authority presented the testimony of its enforcement manager, William Schmid, who testified that the Parking Authority issued a citation to Rosemont on March 13, 2009, for providing unauthorized point-to-point service in Philadelphia, i.e., "outside of rights." In July 2009, the citation was adjudicated and resulted in a $500 fine. On April 2, 2009, the Parking Authority issued a second citation to Rosemont for operating outside of rights, and it resulted in a $1, 000 fine. Schmid testified that the Parking Authority had issued ten other citations to Rosemont. Two citations were rescinded, and the others have not been adjudicated. One of the citations was issued for "operating outside of rights" to a vehicle with mileage over 267, 000 miles, which is over the limit allowed by the Parking Authority, and with an expired state inspection sticker. However, it had not yet been adjudicated. In sum, during a period of three years, Rosemont has twice been adjudicated to have violated the Parking Authority Law for which it paid penalties in the amount of $1, 500.

Schmid then testified about the 197 citations that the Parking Authority issued to Germantown Cab between August 2005 and August 2010. Of that total, 49 were safety related; 27 were for operating outside of rights; one was administrative; 10 related to drivers' certificates; 11 were meter violations; and 99 were for not appearing for a scheduled inspection with the Parking Authority. Schmid acknowledged that the 99 citations ...


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