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Freidman v. Philadelphia Parking Auth.

United States District Court, E.D. Pennsylvania

May 14, 2015

FREIDMAN, et al.
v.
PHILADELPHIA PARKING AUTHORITY, et al.

MEMORANDUM

KEARNEY, J.

The Fourteenth Amendment, as enforced by 42 U.S.C. §1983, guarantees citizens’ rights to due process and equal protection of law. The First Amendment empowers citizens to freely speak on matters of public importance without fear of retaliation by those acting under color of state law. These protections, however, do not empower businesses to automatically transform business priorities conflicting with regulatory oversight into property and liberty interests subject to constitutional protection. Opening a taxi service with touted unique offerings to Philadelphians four years ago, Plaintiffs allegedly faced regulatory scrutiny and delay in expanding their business priorities orchestrated by the Philadelphia Parking Authority and two of its senior officials. In the accompanying Order on Defendants’ motion, we dismiss Plaintiffs’ prolix recitation of alleged harms to their business priorities as depriving them of due process or equal protection. At this preliminary stage, we find Plaintiffs’ specific litany of Defendants’ multiple actions allegedly retaliating against Plaintiffs’ public challenges and regulatory protests of Defendants’ oversight of taxi service states a §1983 claim for First Amendment retaliation. Plaintiffs do not state grounds for mandamus. Discovery into the First Amendment retaliation claim, damages and possible Eleventh Amendment immunity will inform our further analysis.

I. FACTS ALLEGED IN COMPLAINT

In 2011, Plaintiffs[1] launched a taxi service to provide Philadelphians with unique services, including wheelchair accessible vehicles (“WAV”) and “green” vehicles. (Complaint at ¶50). Under its regulatory authority, Defendant Philadelphia Parking Authority (“PPA”) issued numerous certificates of public convenience (“CPCs”) and accompanying medallions to Plaintiffs. For reasons not pled, Defendant Milstein allegedly released Plaintiff Freidman’s personal financial information to brokers who were unrelated to transfers of a CPC and medallion, then accused Freidman of falsifying personal financial statements and other documents. (Id.) Milstein made these statements in retaliation for the Plaintiffs’ decision to contract with a broker not approved by Milstein. (Id. ¶57) Plaintiffs then raised Milstein’s allegedly retaliatory conduct to the Defendants PPA and Fenerty who may have hired a private investigator to investigate Milstein’s comments. Plaintiffs allege that PPA’s investigator instead investigated Friedman’s qualifications to purchase medallions, and then withheld the investigator’s report. (Id. ¶60) Plaintiffs claim PPA notified medallion buyers and sellers not to do business with Plaintiffs because transfers with Plaintiffs took more time to complete. Allegedly motivated by Plaintiffs’ decision to contract with an unfavored broker, Defendants allegedly undertook a series of actions designed to hinder or impede Plaintiffs’ ability to operate their taxi business in Philadelphia.

Application for dispatcher certificate [¶¶ 64-93]

Plaintiffs’ first claim, in chronological order, is Defendants delayed eight months in approving their application for a dispatcher certificate. (Id. ¶¶ 64-93) In July 2011, Freedom Taxi applied for a dispatcher certificate at the same time it filed a petition to convert medallion cabs to WAVs or “green” vehicles. Freedom Taxi wanted to contract with a meter system company known as Creative Mobile Technologies, LLC (“CMT”), and not PPA’s favorite vendor. While their dispatcher application remained pending, Plaintiffs Friedman and Abitbol made public statements about the lack of “green” and WAVs in Philadelphia and publicly criticized PPA generally for their oversight. In less than four months, PPA “conditionally approved” the dispatcher application and required Freedom Taxi to meet certain other requirements within thirty (30) days. By December 2011, PPA approved Plaintiffs’ application but only permitted Plaintiffs to provide dispatch services to “green” vehicles or WAVs. Thereafter, Plaintiffs sought a waiver and by March 13, 2012, Freedom Taxi sought reconsideration of the PPA’s Order denying in part and conditionally granting in part Freedom Taxi’s waiver request. Thereafter, PPA advised Plaintiffs that its issues were moot. (Id. ¶85). Plaintiffs allege that PPA’s delayed for eight (8) months in approving the application and petition to retaliate against Freedom Taxi’s choice to use CMT rather than Verifone and for Plaintiffs’ public statements critical of the PPA. (Id. ¶¶ 86-87).

Plaintiffs’ broker applications [¶94-108]

Approximately three (3) months after filing its reconsideration on the application for dispatcher certificate, Plaintiffs Friedman and Abitbol filed broker applications with PPA to be able to buy and sell taxi medallions. In September 2013, PPA conditionally approved Plaintiff Abitbol’s broker application subject to him attending mandatory training. As learned at oral argument, PPA then approved Friedman’s broker application during the pendency of this case. Plaintiffs allegedly still need to satisfy additional PPA training requirements to obtain full licensure, which they had not done as of oral argument.[2] (Oral Arg. Tr., p. 29).

Plaintiffs purchase $30 million in taxi medallions [¶¶108-122]

Sometime in early 2013, Plaintiffs applied for the transfer of $30 million of medallions. In May 2013, a third party, Germantown Cab Company (“Germantown Cab”) tried to file a protest to the Plaintiffs’ transfer but did not pay the filing fee and PPA rejected its protest filing. Germantown Cab filed an action in Commonwealth Court and during its pendency, PPA settled with Germantown Cab allowing it to file a protest and waive its filing fee. Plaintiffs allege that PPA’s settlement with Germantown Cab caused their $30 million transfer to be delayed.

Plaintiffs protest other medallion transfer applications and PPA allegedly retaliates

Plaintiffs then discovered PPA approved deficient transfer applications with incomplete financial documentation, insufficient credit scores, unreleased liens, missing corporate documents and insufficient business and financial plans. (Complaint at ¶125) Accordingly, Plaintiffs believed they would be harmed if the PPA continued to approve these applications without minimum requirements. As such, in October 2013, Freedom Taxi began protesting medallion transfer applications that it believed to be deficient. (Id. at ¶129)

A large portion of Plaintiffs’ Complaint specifies a variety of PPA’s actions allegedly taken solely against them to retaliate against their protesting alleged deficient transfer applications. (Id. at ¶¶ 130–257). These actions include a campaign to punish Plaintiffs by: threatening Freedom Taxi vehicles with inspection delays and harder inspection processes; issuing groundless citations for Freedom Taxi’s technology; harassing drivers regarding security deposits; withholding key documents from Freedom Taxi in its inspection of the medallion transfers; “embarrassing Friedman and Abitbol at hearings”; disparaging remarks about Freedom Taxi at a board meeting; delaying ruling on a petition to amend the regulations; threatening to sanction Freedom Taxi for protesting; blaming Plaintiffs for declining medallion values in the industry; issuing a second round of citations for Freedom Taxi’s use of technology; requesting protests of Plaintiffs’ medallions in the Pennsylvania Bulletin; actively seeking to prevent Plaintiff Friedman from expanding his medallion ownership in Boston; and, sending untruthful letters to hearing officers blaming Freedom Taxi after PPA’s denial of new wheelchair accessible vehicle medallions.

II. ANALYSIS

Plaintiffs seek damages, injunctive relief and mandamus claiming, under 42 U.S.C. § 1983, each Defendant: wrongly retaliated against Plaintiffs’ exercise of their First Amendment rights of free speech and protest; violated each Plaintiff’s Fourteenth Amendment rights to procedural and substantive due process and equal protection; and, failed to exercise statutory ...


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