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Boston Taxi Owners Association, Inc. v. Baker

United States District Court, D. Massachusetts

January 24, 2017

Boston Taxi Owners Association, Inc. and Steven Goldberg Plaintiffs,
v.
Governor Charles Baker, Angela M. O'Connor, Jolette A. Westbrook, Robert Hayden, Stephanie Pollack, Thomas P. Glynn and David M. Gibbons Defendants.

          MEMORANDUM & ORDER

          NATHANIEL M. GORTON, UNITED STATES DISTRICT JUDGE

         This case arises out of a purported dispute between taxicab medallion owners, Boston Taxi Owners Association, Inc. and Stephen Goldberg (“plaintiffs”), and Massachusetts Governor Charles Baker and six other defendants who represent the Commonwealth of Massachusetts, the Massachusetts Port Authority and the Massachusetts Convention Center Authority. Plaintiff's complaint about the Commonwealth's decision to apply a regulatory scheme to transportation network companies (“TNCs”) different from that applied to taxicabs by several municipalities.

         Plaintiff filed a motion for a preliminary injunction in November, 2016, and defendants separately moved to dismiss the case for failure to state a claim. For the following reasons, plaintiff's motion for a preliminary injunction will be denied and defendants' separate motions to dismiss will be allowed.

         I. Background

         A. Local Regulation of the Taxi Industry

         The primary sources of regulation for the taxicab industry are the municipalities which are authorized by M.G.L. c. 40, § 22 to regulate local taxi businesses. As a result, taxis are subject to a variety of regulatory schemes.

         In the City of Boston specifically, the Police Commissioner (“the Commissioner”) exercises that regulatory authority. The Commissioner requires anyone who drives or is “in charge of” a “hackney carriage” (i.e. taxicab) to possess a license known as a “taxicab medallion.”

         In 2008, the Commissioner issued a comprehensive set of taxicab regulations under Boston Police Department Rule 403 (“Rule 403”). Rule 403 defines a taxicab as

[a] vehicle used or designed to be used for the conveyance of persons for hire from place to place within the City of Boston.

         Since its inception, Rule 403 has not been applied to livery vehicles, despite the fact that the rule's broad definition of a taxicab would seem to encompass them.

         The rule requires all taxicab operators, inter alia, to possess a medallion, maintain a properly equipped and functioning taxicab, display a hackney carriage license at all times, refrain from cell phone use while operating a taxicab and belong to an approved dispatch service or “radio association.” Rule 403 also sets out the approved manner in which a taxicab in the City can engage customers.

         Beginning in 2012, transportation network companies such as Uber, Lyft and Sidecar began operations in Boston and surrounding communities. The cellular phone, app-based, for-hire transportation services have quickly gained popularity and serve as an alternative to traditional taxicab or livery services. The new companies rely, to varying degrees, on drivers who provide pre-arranged transportation services in their own private vehicles.

         The City of Boston did not issue regulations specifically targeted at such companies nor did it enforce Rule 403 against them.

         B. State Regulation of TNCs

         In July, 2016, the General Court enacted and the Governor of Massachusetts signed into law a comprehensive statute, M.G.L. ch. 159A½ (“the Act”), regulating TNCs at the state level.

         The Act defines a TNC as

a corporation, partnership, sole proprietorship or other entity that uses a digital network to connect riders to drivers to pre-arrange and provide transportation.

Id. § 1. The Act also delegates regulation of TNCs to a new state “division” within the Massachusetts Department of Public Utilities (“DPU”). Id. § 2. That division implements insurance requirements, monitors fare estimates, ensures the safety and annual inspection of TNC vehicles and monitors the accommodation of riders with special needs. Id. The division also issues permits, which must be annually renewed, to TNCs and it has the power to conduct hearings and impose penalties on TNCs which are noncompliant with the Act. Id. §§ 3, 6.

         Moreover, the Act ostensibly removes TNCs from local regulation. Section 10 provides, in part:

[N]o municipality or other local or state entity, except the Massachusetts Port Authority . . . may subject a [TNC] to the municipality's or other local or state entity's rate or other requirements . . . .

M.G.L. ch. 159A½, § 10. The Act does not, however, prevent municipalities from regulating “traffic flow and traffic patterns to ensure public safety and convenience.” Id.

         C. Procedural History

         In September, 2016, plaintiffs filed a five-count complaint, in which they allege violations of the Takings Clause (Count IV) and “due process/equal protection” provisions (Count V) of the United States Constitution. So-called Counts I (declaratory judgment), II (injunctive relief) and III (damages) simply describe plaintiffs' requested relief. Plaintiffs subsequently moved for a preliminary injunction to direct defendants to suspend enforcement of M.G.L. ch. 159A½ and to regulate TNCs under the local taxicab regulations, namely Rule 403.

         Defendant David M. Gibbons, the Executive Director of the Massachusetts Convention Center Authority (“MCCA”) responded to plaintiffs' complaint in October, 2016, with a motion to dismiss for lack of standing and failure to state a claim.

         In December, 2016, defendants 1) Governor Baker, 2) Angela M. O'Connor, Jolette A. Westbrook and Robert Hayden, representatives of the DPU and 3) Stephanie Pollack, Transportation Secretary of the Massachusetts Department of Transportation, jointly moved to dismiss plaintiffs' complaint. That same day, defendant Thomas P. Glynn, Chief Executive Officer of the Massachusetts Port Authority (“Massport”) filed his own motion to dismiss plaintiffs' complaint for failure to state a claim.

         Plaintiffs' motion for a preliminary injunction and defendants' motions to dismiss ...


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