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Checker Cab Philadelphia v. Philadelphia Parking Authority and Vincent Fenerty

United States District Court, E.D. Pennsylvania

June 6, 2017

Checker Cab Philadelphia, Plaintiffs,
v.
The Philadelphia Parking Authority and Vincent Fenerty, Defendants.

          MEMORANDUM RE: MOTIONS TO DISMISS

         I. Introduction

         This case was filed by over 300 Philadelphia medallion-holding taxi cab operators (“Medallion Plaintiffs, ” or “Plaintiffs”) against the Philadelphia Parking Authority (“PPA”) and its former Executive Director under the Equal Protection Clause and Takings Clause of the United States Constitution. Their claims relate to the entry of Transportation Network Companies (“TNCs”), such as Uber and Lyft, into the for-hire transportation market. After Plaintiffs filed suit, a non-medallion holding taxi company, Germantown Cab Company (“Intervenor”) intervened. Pending before the Court are two motions brought by Defendants under Rule 12(b)(6), for failure to state a claim:

(1) Defendants' Motion to Dismiss the Medallion Plaintiffs' Amended Complaint; and
(2) Defendants' Motion to Dismiss Intervenor's Second Amended Complaint.

         Following substantial briefing and argument, the Court will deny the pending Motions to Dismiss in part and grant them in part.

         II. Factual and Procedural Background

         a. Overview

         TNCs are technology-based transportation companies that enable a customer to arrange a ride with a driver via smartphone application. Two well-known TNCs are Uber Technologies, Inc. (“Uber”) and Lyft, Inc. (“Lyft”). TNCs first entered the Philadelphia market in October 2014 and have increasingly become widespread as an alternative service to traditional taxi cabs. Medallion Am. Compl. (ECF 70) at ¶ 4. Plaintiffs allege that because of PPA's immense regulatory burden on Philadelphia taxis, and no regulation as to TNCs, the TNCs were able to market themselves as “better, faster, and cheaper” than a taxi. Medallion Am. Compl. ¶ 11. Plaintiffs allege that at least in part as a result of that, TNCs grew in popularity, at the expense of taxicab operators such as Plaintiffs. Medallion Am. Compl. ¶ 11. Plaintiffs' claims are based on the disparity in treatment between taxis and TNCs. Plaintiffs allege that Defendants violated their constitutional rights by simultaneously enforcing strict regulations on taxis and failing to regulate TNCs at all, and are liable for damages.

         b. 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 (2009). In 2004, the General Assembly amended Title 53 of the PAL to give the Philadelphia Parking Authority (“PPA”)-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 the 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 the 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 the 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.”
[1]

         Under Act 94, medallions are defined as property rights that cannot be revoked or cancelled. 53 Pa. C.S. § 5713. In addition, the statute limits the number of taxi medallions that can be issued by the PPA to 1, 600 medallions. 53 Pa. C.S. § 5711.

         In 2005, pursuant to Act 94 and its delegation of legislative authority, the 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, the PPA promulgated the regulations that are currently operative. See 52 Pa. Code §§ 1011, et seq.

         In November 2016, the Pennsylvania General Assembly passed legislation granting TNCs permanent legal authority to operate throughout Pennsylvania, including within Philadelphia. This legislation has been referred to as Act 164. Act 164 lessens certain regulations on taxi cabs, and requires TNCs to pay assessments of 1.4% of gross revenues in Philadelphia to the PPA. Act 164 also directs the PPA to enact a new set of regulations governing for-hire transportation in Philadelphia to be inclusive of TNCs.

         c. Procedural History

         1. Preliminary ...


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