Albuquerque Cab Company, Inc. v. Lyft, Inc. et al

Filing 37

MEMORANDUM OPINION AND ORDER by Magistrate Judge Steven C. Yarbrough granting 10 Motion to Dismiss for Failure to State a Claim; granting 14 Motion to Dismiss for Failure to State a Claim. Plaintiff shall have until April 8, 2019 to file an amended complaint. (kfg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
ALBUQUERQUE CAB COMPANY, INC.,
Plaintiff,
v.

Civ. No. 17-1006 SCY/KBM

LYFT, INC., UBER TECHNOLOGIES,
INC., and HINTER-NM, LLC,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING MOTIONS TO DISMISS
The central question presented in this case is whether two transportation network
companies were subject to and liable under the Motor Carrier Act (MCA) for their operations in
New Mexico prior to the enactment of the Transportation Network Company Services Act
(TNCSA). Defendants have moved to dismiss Plaintiff’s complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6), arguing that the answer to this question should be “no.” See Docs. 10
& 14. The Court agrees that the current complaint is insufficient under Federal Rule of Civil
Procedure 8 to state a claim under the Motor Carrier Act and the New Mexico Unfair Practices
Act. However, because Plaintiff originally filed the complaint in New Mexico state court, which
has a more lenient pleading standard, the Court will dismiss the complaint without prejudice and
grant Plaintiff leave to file an amended complaint by April 8, 2019.

1

I.

FACTUAL AND PROCEDURAL BACKGROUND
On August 24, 2017, Plaintiff filed a single-count complaint in state court against

Defendants for damages arising “under the New Mexico Motor Carrier Act and Unfair Practices
Act.” Doc. 1-1 (Compl.) at 1. Plaintiff is a New Mexico corporation with its primary place of
business in Bernalillo County, New Mexico.1 Compl. ¶ 1. Plaintiff is an authorized transportation
service2 carrier under the Motor Carrier Act and holds at least one Certificate3 issued by the
Public Regulation Commission (PRC) to provide services as a motor carrier. Id. Defendants
Uber Technologies, Inc. and Hinter-NM, LLC (collectively, Uber) removed the case to federal
court on diversity jurisdiction grounds on October 5, 2017. Doc. 1. Defendant Lyft, Inc. (Lyft)
filed a notice of consent to removal on that same date. Doc. 4.
Plaintiff alleges that Defendants began providing “transportation services to the public in
Bernalillo County, New Mexico” in or before April 2014. Compl. ¶ 15. Defendants “provided a
tool for requesting vehicles-for-hire to users who download their free ‘smart phone application’
(‘the App’). Users who open the App on their mobile phone are shown a map of their location or
designated pick-up point and the available vehicles in that vicinity.” Compl. ¶ 12. Plaintiff
alleges that Defendants were “transportation service carriers” that provided “transportation
services to the public for hire,” and, in return, Defendants received renumeration or

1
The following allegations are taken from Plaintiff’s complaint. The Court accepts these
allegations as true and recites them in a light most favorable to Plaintiff.
2

A “transportation service” is defined in the Motor Carrier Act as “transportation subject to the
jurisdiction of the commission, offered or provided by a motor carrier, that requires the carrier to
obtain an operating authority from the commission under the Motor Carrier Act . . . .” NMSA
1978, § 65-2A-3(LLL).

3

A “certificate” is defined in the Motor Carrier Act as “the authority issued by the commission
to a person that authorizes the person to offer and provide a certificated service as a motor carrier
. . . .” NMSA 1978, § 65-2A-3(G).
2

compensation, either directly or indirectly from the provision of transportation services. Compl.
¶¶ 11, 13, 14.
Plaintiff alleges that, although Defendants were “motor carriers”4 as defined in the Motor
Carrier Act, they did not obtain Certificates to operate under the Motor Carrier Act. Compl.
¶¶ 16, 17. Accordingly, on May 23, 2014, the PRC issued an Order to Show Cause and Cease
and Desist Order against Defendants, directing them to cease operations in New Mexico “unless
and until they obtained a Certificate under the Motor Carrier Act.” Compl. ¶ 24.
Approximately a week later, on May 29, 2014, Uber applied to the PRC for a Temporary
Authority under the Motor Carrier Act to operate a Specialized Passenger Service.5 Compl. ¶ 18.
At the same time, Uber filed a petition with the PRC “seeking waivers from certain operating
requirements under the Motor Carrier Act which apply to taxi services.” Compl. ¶ 19. On June
23, 2014, Lyft filed a motion to intervene in the Uber proceeding before the PRC. Compl. ¶ 20.
Plaintiff asserts that Defendants’ PRC filings “constitute admissions that [they] are operating a
transportation service in New Mexico subject to the jurisdiction of the Motor Carrier Act.”
Compl. ¶ 21.
On June 25, 2014, the PRC denied Uber’s application for Temporary Authority to operate
as a Specialized Passenger Service. Compl. ¶ 22. According to Plaintiff, the PRC issued the
denial based in part on its finding that “the proposed service does not meet minimum operating

4
A “motor carrier” is defined in the Motor Carrier Act as a “person offering or providing
transportation of persons, property or household goods for hire by motor vehicle, whether in
intrastate or interstate commerce . . . .” NMSA 1978, § 65-2A-3(FF).
5

A “specialized passenger service” is defined in the Motor Carrier Act as the “intrastate
transportation for hire of passengers with special physical needs by specialized types of vehicles,
or for specialized types of service to the public or community, as the commission may by rule
provide . . . .” NMSA 1978, § 65-2A-3(CCC).
3

standards for transportation service carriers under New Mexico law.” Compl. ¶ 22. Despite this
denial, Plaintiff alleges, Defendants “knowingly and intentionally and unlawfully continued to
operate in New Mexico” in violation of the Cease and Desist Order issued by the PRC. Compl.
¶ 23.
Effective May 18, 2016, New Mexico enacted the TNCSA, which Plaintiff acknowledges
“provided a framework to legalize the Defendants’ actions”. Compl. ¶ 26. On August 15, 2016,
the PRC enacted regulations pursuant to the TNCSA “that allowed Defendants to apply for
certificates to operate legally in New Mexico.” Compl. ¶ 28. Lyft did not apply for a certificate
under the TNCSA and ceased operations in New Mexico. Compl. ¶¶ 30-31. Uber applied for and
was granted certificates to operate under the TNCSA. Compl. ¶ 29. Uber has thus continuously
operated in New Mexico since April 2014. Compl. ¶ 32.
Plaintiff alleges that from April 2014 until TNCSA certificates were granted,
“Defendants operated in violation of the Motor Carrier Act.”6 Compl. ¶ 33. Plaintiff asserts that
it lost revenue due to Defendants’ “unfair and illegal activities” and that Defendants’ “unfair
practices” ultimately led it to cease operations. Compl. ¶¶ 34-35. Plaintiff claims to have been
damaged as a result of Defendants’ “unauthorized service” because Plaintiff incurred reductions
in revenues as potential passengers opted to use Defendants’ services instead of Plaintiff’s.
Compl. ¶¶ 39-40. Plaintiff further alleges that Defendants have not collected gross receipts taxes
from passengers in violation of applicable law and that Defendants willfully violated the PRC’s
cease and desist order. Compl. ¶¶ 45. The complaint brings a single cause of action for “damages
under the Motor Carrier Act and Unfair Practices Act.” Compl. at 5-7.

6
Since Lyft did not apply for a certificate under the TNCSA, this allegation seemingly would not
apply to all Defendants, as Plaintiff asserts. The complaint does not otherwise indicate when
Lyft’s alleged violation of the Motor Carrier Act ended.
4

II.

APPLICABLE LEGAL STANDARDS
Although New Mexico law governs the substantive analysis of Plaintiff’s claims, the

Court applies federal procedural law in analyzing the legal sufficiency of Plaintiff’s complaint.
See Brigance v. Vail Summit Resorts, Inc., 883 F.3d 1243, 1249 (10th Cir. 2018); see also
Brokers’ Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1099 (10th Cir. 2017)
(applying federal law to procedural questions in a diversity case and applying the substantive law
of the forum state to analyze the underlying claims). In this case, Defendants seek dismissal of
Plaintiff’s claims pursuant to Federal Rule of Civil Procedure 12(b)(6). See Doc. 10 at 4, Doc. 14
at 6.
“[T]o withstand a Rule 12(b)(6) motion to dismiss, a complaint must contain enough
allegations of fact, taken as true, to state a claim to relief that is plausible on its face.” Khalik v.
United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). A court considering a challenge under Rule 12(b)(6) may proceed
according to a “two-pronged approach.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). First, a
court “can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.” Id. “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.” Id.
Second, “[w]hen there are well-pleaded factual allegations, a court should assume their veracity
and then determine whether they plausibly give rise to an entitlement to relief.” Id. For purposes
of this second prong, the Court “accept[s] the well-pled factual allegations in the complaint as
true, resolve[s] all reasonable inferences in the plaintiff’s favor, and ask[s] whether it is plausible
that the plaintiff is entitled to relief.” Diversey v. Schmidly, 738 F.3d 1196, 1199 (10th Cir. 2013)
(internal citations and quotation marks omitted). “A claim is facially plausible when the

5

allegations give rise to a reasonable inference that the defendant is liable.” Mayfield v. Bethards,
826 F.3d 1252, 1255 (10th Cir. 2016).
“Generally, the sufficiency of a complaint must rest on its contents alone.” Gee v.
Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010).
There are exceptions to this restriction on what the court can consider, but they
are quite limited: (1) documents that the complaint incorporates by reference; (2)
documents referred to in the complaint if the documents are central to the
plaintiff’s claim and the parties do not dispute the documents’ authenticity; and
(3) matters of which a court may take judicial notice.
Id. (citations and internal quotation marks omitted). “If a district court intends to rely on other
evidence, it must convert the Rule 12(b)(6) motion to a motion for summary judgment, giving
proper notice to the parties.” Id. (citing Fed. R. Civ. P. 12(d)); see also Brokers’ Choice of Am.,
861 F.3d at 1103 (“When a party presents matters outside of the pleadings for consideration, as a
general rule the court must either exclude the material or treat the motion as one for summary
judgment.”) (internal quotation marks and citations omitted). Under Federal Rule of Civil
Procedure 12,
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56. All parties must be given a reasonable
opportunity to present all the material that is pertinent to the motion.
Fed. R. Civ. P. 12(d). A court has broad discretion under Rule 12(d) to refuse to accept the
extra-pleading materials and resolve the motion solely on the basis of the pleading itself. See
Lowe v. Town of Fairland, Okla., 143 F.3d 1378, 1381 (10th Cir. 1998). Reversible error may
occur if a court considers matters outside the pleadings but fails to convert the motion to
dismiss into a motion for summary judgment. Id.
Here, the parties have presented numerous documents for the Court’s consideration in
ruling on Defendants’ respective 12(b)(6) motions to dismiss. Specifically, Defendant Lyft has
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attached several exhibits in support of its motion and reply brief. See Docs. 14-1 to 14-15.
Similarly, while Defendant Uber did not initially attach documents to its initial motion, it did
file two exhibits in support of its reply brief. See Docs. 30-1 and 30-2. And although no
documents were attached as exhibits to Plaintiff’s complaint, Plaintiff has also included a
number of exhibits with its response brief. See Doc. 27-1.
The Court will not convert Defendants’ motions to dismiss into motions for summary
judgment. To do otherwise would require the Court to give notice to the parties and allow each
party an opportunity to present any additional extra-pleading evidence – an inefficient process
that would be better left for a motion for summary judgment filed in the normal course of the
discovery process. The Court will therefore consider only those exhibits that fit within the
limited exceptions set forth in Gee – i.e., exhibits that are properly the subject of judicial notice
or that are referred to in Plaintiffs’ complaint and central to its claims. To the extent any such
exhibits are considered, the Court will explain its reasons for doing so in its analysis.
III.

ANALYSIS
Uber and Lyft move to dismiss on the primary ground that neither company is a

“transportation service carrier” as defined under New Mexico law. Uber and Lyft further argue
that the New Mexico Unfair Practices Act (UPA), a consumer protection law, does not provide a
cause of action to business competitors like Plaintiff. Finally, they argue that Plaintiff’s
complaint fails to set forth a sufficient factual basis for its allegations of causation under the
UPA. Based on the allegations contained in Plaintiff’s current complaint, the Court agrees with
Defendants’ first argument and, therefore, grants without prejudice Defendants’ motions to
dismiss. Further, the Court allows Plaintiff to amend its complaint and declines to issue an

7

opinion regarding Defendants’ remaining arguments, which Defendants may renew if Plaintiff
does file an amended complaint.
A. Plaintiff Does Not Sufficiently Allege That Defendants Are Transportation Service
Carriers As Defined In The MCA.
The motions to dismiss assert that Defendants’ only involvement in the New Mexico
transportation services industry consisted of “develop[ing] a mobile-phone application that
allows users easily to request transportation from third-party transportation providers.” Doc. 10
at 1; see also Doc. 14 at 1 (“Defendants operate peer-to-peer ridesharing platforms that allow
drivers using their own vehicles to connect with individuals looking for rides in their area.”).
Under this reasoning, Defendants assert, it follows that Uber and Lyft are not themselves
“transportation service carriers”; they merely provide software platforms “to connect drivers
operating their own vehicles with individuals looking for rides.” Doc. 14 at 9. In response,
Plaintiff argues that “a company including Lyft and Uber, that hires employees (or even
independent contractors) to drive people from place to place in exchange for money is a Motor
Carrier and is providing ‘transportation services.’” Doc. 27 at 7. Plaintiff further argues that
whether Defendants “offer or provide the transportation of persons by motor vehicle or carry
passengers” is a question of fact, not law. Id.
To the extent Plaintiff argues that Defendants are “transportation service carriers” based
on the mere act of providing a tool to connect drivers with users, the Court disagrees. Plaintiff’s
complaint alleges:
Defendants Uber, Hinter and Lyft provided a tool for requesting vehicles-for-hire
to users who download their free “smart phone application” (“the App”). Users
who open the App on their mobile phones are shown a map of their location or
designated pick-up point and the available vehicles in that vicinity.

8

Compl. ¶ 12. The plain language of the Motor Carrier Act demonstrates that companies who
provide this type of connection service, and do no more, are not “transportation service carriers.”
When interpreting a statute under New Mexico law, “[r]ules of statutory construction are
provided by both the Legislature in the Uniform Statute and Rule Construction Act and by New
Mexico case law.” See State v. Tufts, 2016-NMSC-020, ¶ 3 (citing NMSA 1978, §§ 12-2A-1 to 20 (1997)). The Court’s principal goal is “to determine and give effect to the Legislature’s
intent.” Marbob Energy Corp. v. N.M. Oil Conservation Comm’n, 2009-NMSC-013, ¶ 9, 206
P.3d 135, 139. In doing so, the Court “look[s] first to the plain meaning of the statute.”
Moongate Water Co., Inc. v. City of Las Cruces, 2013-NMSC-018, ¶ 6, 302 P.3d 405, 407. The
Court is to “give words their ordinary meaning, and if the statute is clear and unambiguous,” the
Court will “refrain from further statutory interpretation.” Id. (internal quotation marks omitted).
The starting point for determining whether a company is a “transportation service carrier”
is to look at the definition of “transportation service,” which is defined as “transportation . . .
offered or provided by a motor carrier.” NMSA 1978, § 65-2A-3(LLL). In turn, “motor carrier”
and “carrier” are defined as “a person offering or providing transportation of persons . . . for hire
by motor vehicle.” Id. § 65-2A-3(FF). These passages unambiguously do not apply to software
developers.7 If Defendants are correct that their only involvement in the transportation market in
New Mexico was to develop and make available software for smart phones, they are also correct
that they do not offer or provide transportation of persons for hire by motor vehicle.

Because the Court finds the MCA unambiguous as applied to the allegations in the operative
complaint, the Court need not reach the parties’ arguments regarding the legislature’s intent in
subsequently enacting the TNSCA. Cf. Estate of Brice v. Toyota Motor Corp., 2016-NMSC-018,
¶ 5, 373 P.3d 977 (only when “the Legislature’s intent is not clear from the plain language of a
statute” should a court “consider the statute’s history and background”).
7

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Plaintiff resists this conclusion, dropping a footnote in its brief to assert that “Uber and
Lyft provide transportation services by contracting with (and under New Mexico law,
employing) drivers who receive dispatches from Uber and Lyft to pick up passengers”; and that
“Lyft and Uber provide marketing, training, screening, auto standards, credit card processing
services and pay some (not all) gross receipts taxes for their drivers.” Doc. 26 at 8 n.3. The Court
does not reach the question of whether factual allegations such as these contained in Plaintiff’s
brief would be sufficient to state a claim against Defendants, as Plaintiff does not present these
same factual allegations in its complaint. See Gee, 627 F.3d at 1186.
In addition to alleging that Defendants provide a tool to connect drivers with users,
Plaintiff alleges that “Defendants provided transportation services to the public for hire.” Compl.
¶ 13. Plaintiff does not, however, specifically describe what Defendants do to provide
transportation services. If this conclusory statement is based on the tool Defendants provide to
connect drivers with users, this allegation is insufficient to state a claim, as set forth above. If
this conclusory statement is based on some other actions Defendants have taken, Plaintiff must
describe those actions in the complaint. It is not enough for Plaintiff to simply state in
conclusory fashion that Defendants are transportation service carriers as that term is used in the
MCA. See Iqbal, 556 U.S. at 679 (“a court considering a motion to dismiss can choose to begin
by identifying pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth”). Thus, the Court agrees with Defendants that Plaintiff’s complaint fails to
allege facts sufficient to state a claim.
B. Defendants Are Not Collaterally Estopped From Arguing That They Are Not Subject
To The MCA.
Plaintiff argues that Defendants participated in proceedings before a state regulatory body
and so are now estopped from arguing that the MCA does not govern their activities. Doc. 27 at

10

8-9. As discussed above, Plaintiff relies on extrinsic materials in making its arguments. Because
the parties do not dispute that these are publicly filed records, the Court will take judicial notice
of the regulatory orders attached to the parties’ submissions. See Hodgson v. Farmington City,
675 F. App’x 838, 840-41 (10th Cir. 2017) (it is proper to “tak[e] judicial notice of public
records from the parties’ administrative and judicial proceedings” where the documents have a
“direct relation” to the present case).
In New Mexico,8 to invoke collateral estoppel,
the moving party must demonstrate that (1) the party to be estopped was a party to
the prior proceeding, (2) the cause of action in the case presently before the court
is different from the cause of action in the prior adjudication, (3) the issue was
actually litigated in the prior adjudication, and (4) the issue was necessarily
determined in the prior litigation.
Shovelin v. Cent. New Mexico Elec. Co-op., Inc., 1993-NMSC-015, ¶ 10, 850 P.2d 996, 1000. “If
the movant introduces sufficient evidence to meet all elements of this test, the trial court must
then determine whether the party against whom estoppel is asserted had a full and fair
opportunity to litigate the issue in the prior litigation.” Id. “This issue is within the competence
of the trial court, and [the court of appeals] review[s] the trial court’s determination for an abuse
of discretion.” Id.9
The Court declines to enforce collateral estoppel against Defendants based on the PRC’s
Final Order Amending The Commission’s Motor Transportation Rules Pertaining To
Transportation Network Companies, attached to Plaintiff’s Response as Exhibit E. As

As Defendants correctly point out, this issue is governed by state law in a diversity-jurisdiction
case. Reed v. McKune, 298 F.3d 946, 949 (10th Cir. 2002).

8

9

By contrast, the doctrine of res judicata, which is also invoked by Plaintiff, “bars religitation of
the same claim.” Alba v. Hayden, 2010-NMCA-037, ¶ 6, 237 P.3d 767, 769 (internal quotation
marks omitted and emphasis added). As Defendants point out, res judicata is inapplicable here
because Plaintiff’s UPA claim was not litigated before the PRC.
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Defendants point out, this Final Order is a rulemaking action, not an adjudicative determination.
Hartnett v. Papa John’s Pizza USA, Inc., 828 F. Supp. 2d 1278, 1285 (D.N.M. 2011) (“for
preclusion to apply to an administrative decision the administrative body must be acting in a
judicial capacity and resolve disputed questions of fact properly before it”). The Final Order
itself makes clear that the PRC made its decision based on a regulatory notice-and-comment
procedure, not an adversarial process. Doc. 27-1 at 24-25 (describing written comments filed by
Lyft, among others, and a public comment hearing at which no one spoke). There is no
indication in the Final Order that the parties engaged in any discovery or were permitted to
participate in an evidentiary hearing. These type of “procedural differences between the agency
and court actions” constitute sufficient basis to deny the application of collateral estoppel.
Shovelin v. Cent. New Mexico Elec. Co-op., Inc., 1993-NMSC-015, ¶ 20, 850 P.2d 996, 1004.
Without addressing the formal requirements of collateral estoppel, Plaintiff makes
arguments based on numerous other PRC filings attached to its Response. Doc. 27 at 5-6.
Plaintiff argues that the Court should take “judicial notice” of the PRC’s determinations in these
filings. Id. at 5. While the Court may take judicial notice of their existence, it does not follow
that the Court defers to the conclusions stated therein for the truth of the matter. See Tal v.
Hogan, 453 F.3d 1244, 1265 n.24 (10th Cir. 2006) (“The documents may only be considered to
show their contents, not to prove the truth of matters asserted therein.” (internal quotation marks
and alteration omitted)). Plaintiff does not offer any other alternative doctrine upon which this
Court should defer to the PRC’s findings, and the Court declines to invent any.
C. Because The Court Is Granting Defendants’ Motion To Dismiss, The Court Need Not
Determine The Issue Of Standing.
Defendants argue that Plaintiff lacks standing to bring a claim under the New Mexico
UPA because, rather than suing to redress consumer harm, Plaintiff only seeks to recover its own

12

lost business revenue. Docs. 10 at 10-11; Doc. 14 at 12-15. Defendants claim that numerous
courts have found that a UPA plaintiff may not seek to redress competitive rather than consumer
harm. Doc. 29 at 9 (citing, for example, Fisher Sand & Gravel Co. v. FNF Constr., Inc., No. 10CV-0635 RB/SMV, 2013 WL 12122650, at *2 (D.N.M. July 1, 2013)). Plaintiff counters that
the MCA explicitly provides that “an authorized transportation service carrier[] may bring an
action pursuant to the Unfair Practices Act,” NMSA 1978, § 65-2A-33, and thus clearly grants
standing to Plaintiff, who is an authorized transportation service carrier. See Compl. ¶ 1 (noting
the MCA).
After the parties submitted their briefs on this issue, the New Mexico Court of Appeals
issued a decision holding that business competitors may bring UPA claims, “provided that the
conduct alleged involves trade practices that either implicate consumer protection concerns or
are addressed to the market generally.” GandyDancer, LLC v. Rock House CGM, LLC, 2018NMCA-064, ¶ 12, 429 P.3d 338, 343; see Doc. 34 (Plaintiff’s notice of supplemental authority).
Plaintiff’s complaint does not demonstrate that the complained-of conduct “either implicate[s]
consumer protection concerns or [is] addressed to the market generally.” See Docs. 35 & 36
(Defendants’ responses to notice of supplemental authority). Rather, the complaint alleges only
that “Defendants offered and provided transportation services” in violation of the law, “‘for hire’
and upon the request of a consumer.” Compl. ¶¶ 41-42. Thus, Plaintiff’s complaint fails to allege
facts the New Mexico Court of Appeals in GandyDancer found necessary to a successful UPA
claim brought by a business competitor. Of course, given that the case is currently pending
before the New Mexico Supreme Court, whether a business competitor can bring a UPA and, if

13

so, what the business competitor must show to sustain such a claim, may change.10 See
GandyDancer, LLC v. Rock House CGM, LLC, No. S-1-SC-37201.
As noted, the New Mexico Court of Appeals issued its decision after the parties
submitted their briefs. Further, the parties’ supplemental notices were necessarily limited in
scope. If Plaintiff files an amended complaint, the Court would benefit from more
comprehensive briefing on this issue. At this point, the Court need not decide this issue and
declines to do so.
D. Because Plaintiff Fails To Allege Facts Sufficient To Establish That Defendants Are
Transportation Service Carriers, The Court Need Not Determine Whether Plaintiff
Has Sufficiently Plead Causation And Damages.
Finally, Defendants move to dismiss the complaint because Plaintiff fails to plead facts
plausibly establishing that Defendants’ conduct caused Plaintiff’s damages. Doc. 10 at 11-12;
Doc. 14 at 15-16. Although Plaintiff is not required to “set forth a prima facie case for each
element” of its claim, it must still state sufficient facts to establish a “nexus” or a “link” between
the challenged conduct and damages, other than “sheer speculation.” Khalik v. United Air Lines,
671 F.3d 1188, 1192, 1194 (10th Cir. 2012). Plaintiff sets forth allegations related to damages as
follows:
34. Plaintiff has lost revenue due to Defendants’ unfair and illegal activities.
35. As a result of the unfair practices of Defendants, Plaintiff ceased business
operations.
...

10
While the Court need not defer to the New Mexico Court of Appeals’ decision in
GandyDancer and evaluates it only for its persuasive value, the Court’s interpretation of New
Mexico law must give way to the New Mexico Supreme Court’s decision. Sellers v. Allstate Ins.
Co., 82 F.3d 350, 352 (10th Cir. 1996).

14

39. Plaintiff is a persons [sic] who has been damaged as a result of Defendants’
unauthorized service.
40. Plaintiffs have incurred reductions in revenues as potential passengers have
used Defendants’ unlawful services instead of Plaintiffs.
Doc. 1-1 at 5-6.
These allegations do not explain how Defendants’ alleged regulatory violations caused
Plaintiff’s lost revenue or caused Plaintiff to cease business operations. This leaves Plaintiff
with the theory that an unlawfully operating company which takes business from a lawfully
operating company necessarily damages the lawfully operating company in violation of the
UPA. Of course, the success of this theory depends on a determination that Plaintiff alleged
facts sufficient to state a claim that Defendants operated unlawfully in the first place. This
“unlawfulness” question then ties into the question of whether Defendants were transportation
service providers subject to regulation under the MCA. The Court need not presently decide
these issues. Because the Court is dismissing Plaintiff’s complaint for other reasons and granting
Plaintiff leave to amend, the Court declines to decide if the current allegations regarding
causation pass muster under Iqbal.
E. Plaintiff Shall Have Leave To Amend Its Complaint.
Throughout its response, Plaintiff repeatedly asserts that it has additional factual material
with which it can supplement the allegations in this case. Doc. 27 at 8 n.3 & 16-17. Plaintiff
argues:
A complaint filed in New Mexico state court is subject to a relaxed pleading
standard. When the case is removed to federal court, the complaint is subject to
the more rigorous Twombly standard. Although a complaint crafted to meet the
state’s notice pleading standard may survive a motion to dismiss in that forum,
upon removal it might fail to state a claim under the more rigorous federal
standard.
Doc. 27 at 3 n.2. The Court agrees.

15

Echoing the language of the Federal Rules, New Mexico’s Rules of Civil Procedure
require that a complaint contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” NMRA, Rule 1-008(A)(2). New Mexico, however, has declined to
follow the United States Supreme Court’s interpretation of Federal Rule 8, as articulated in
Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
Instead, New Mexico has criticized it: “The plausibility standard created by the two U.S.
Supreme Court cases adds a determination of likelihood of success on the merits so that a trial
judge can dismiss a claim, even where the law does provide a remedy, if that judge does not
believe it is plausible the claim will succeed.” Madrid v. Vill. of Chama, 2012-NMCA-071, ¶ 17,
283 P.3d 871, 876. Thus, a party filing in New Mexico state district court should not expect to
have to comply with the federal standard.
Federal Rule of Civil Procedure 15 permits a plaintiff to amend a complaint as of right
only within 21 days after serving it or 21 days after service of a Rule 12(b) motion. Fed. R. Civ.
P. 15(a)(1). “In all other cases, a party may amend its pleading only with the opposing party’s
written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2). But “[t]he court should freely give
leave when justice so requires.” Id. The Court agrees that, due to the difference between the
standards articulated by New Mexico and the U.S. Supreme Court, a plaintiff whose suit is
removed from state court to federal court should generally be permitted to amend the complaint
if it is determined not to comply with Twombly and Iqbal.
IV.

CONCLUSION
For the forgoing reasons, Defendants Uber Technologies, Inc. and Hinter-NM, LLC’s

Motion to Dismiss (Doc. 10) and Lyft, Inc.’s Motion to Dismiss (Doc. 14) are GRANTED.

16

Plaintiff’s complaint (Doc. 1-1) is dismissed without prejudice. Plaintiff shall have until April 8,
2019 to file an amended complaint.

___
__________
STEVEN C. YARBROUGH
UNITED STATES MAGISTRATE JUDGE
Presiding by consent

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