Vo v. City Of Houston et al

Filing 80

SUMMARY JUDGMENT OPINION and ORDER granting 75 MOTION for Leave to File Defendants' Reply to Plaintiff's Reply and Opposition to Defendants' Motion for Summary Judgment, denying 70 MOTION In Limine, and granting 67 MOTION for Summary Judgment. (Signed by Magistrate Judge Stephen Wm Smith) Parties notified. (jmarchand)

V o v. City Of Houston et al

D o c . 80

UNITED STATES DISTRICT COURT S O U T H E R N DISTRICT OF TEXAS H O U S T O N DIVISION T HIEN AN VO, P l a i n t i ff , vs. C ITY OF HOUSTON, ET AL., D e fen d a n ts. § § § § § § §

C IVIL ACTION H-09-1061

S U M M A R Y JUDGMENT OPINION AND ORDER P la in tif f 's challenge to the city's regulatory scheme for taxi cabs is before the court on d e f e n d a n t s' motion for summary judgment (Dkt. 67).1 Having reviewed the parties'

su b m iss io n s and the law, the court grants defendants' motion and dismisses this case with p r e ju d ic e .2 B a c k gro u n d V e h ic le s for hire, including taxicabs, in the City of Houston are regulated by Chapter 4 6 , Art. II, of the Code of Ordinances. On December 12, 2007, the City Counsel and Mayor o f Houston passed Ordinance 2007-1419, which amended certain provisions of Chapter 46.3 O rd in a n c e 2007-1419 sets out a scheme for distributing 211 taxicab permits to existing

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The parties have consented to the jurisdiction of this Magistrate Judge for all purposes, including entry of final judgment (Dkt. 44). Plaintiff's motion in limine (Dkt. 70) is denied. Defendants' motion for leave to file a reply (Dkt. 75) is granted. The court takes judicial notice of the relevant ordinances, which are exhibits A and B to defendants' motion.

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p e rm it holders and 11 permits to new applicants. The distribution was scheduled to take p la c e on June 11, 2008, but to date has not taken place.4 O n May 29, 2008, an association representing about 60 small company permit holders su e d the City alleging that Ordinance 2007-1419 violated equal protection under the 14th A m e n d m e n t to the Constitution. On June 11, 2008, United States District Judge David H ittn e r issued a temporary injunction blocking the distribution and lottery pending the o u tc o m e of the lawsuit. On April 26, 2010, the district court adopted the recommendation o f Magistrate Judge John R. Froeschner granting summary judgment to the City.5 P la in tif f Thien An Vo filed this complaint on April 9, 2009, while the association's la w s u it was pending. At that time, Vo was a licensed taxicab driver in Houston, operating u n d e r a contract with Greater Houston Transportation Company.6 Vo is not qualified to a p p ly for a new permit under City ordinance § 46.65(a)(7) because she does not have at least 5 years experience in the last 10 years, with at least 2 of those years in Houston. She applied f o r a permit in March 2007 and was rejected. Therefore, she did not apply in 2008 to p a rtic ip a te in the distribution scheme established by Ordnance 2007-2419. Vo alleges that

th e City's entire taxicab regulatory scheme, Chapter 46 of Art. II as amended by Ordinance

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Permits are to be distributed to existing permit holders based on company size. Qualified new applicants are to be entered into a lottery to determine the 11 recipients. See Greater Houston Small Taxicab Co. Owners Assoc. v. City of Houston, No. H-08-1702 (S.D. Tex., March 25, 2010), defendants' ex. D. Vo and Greater Houston Transportation Company have since parted ways under disputed circumstances that are not relevant to this analysis. See Dkts. 70, 73. 2

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2 0 0 7 -1 4 1 9 , violates her right to equal protection of the law under the 14th Amendment. Vo f u rth e r alleges that the City violated her due process rights in passing Ordinance 2007-1419. V o seeks a declaratory judgment striking down the Ordinance and an injunction preventing im p le m e n ta tio n of the distribution scheme, $300,000 in compensatory damages, and $ 1 ,2 0 0 ,0 0 0 in punitive damages to fund a liaison between drivers and City regulators. A n a ly sis S u m m a ry judgment is appropriate if no genuine issues of material fact exist, and the m o v in g party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). The party m o v in g for summary judgment has the initial burden to prove there are no genuine issues of m a te ria l fact for trial. Provident Life & Accident Ins. Co. v. Goel, 274 F.3d 984, 991 (5th C ir. 2001). Dispute about a material fact is "genuine" if the evidence could lead a reasonable ju ry to find for the nonmoving party. In re Segerstrom, 247 F.3d 218, 223 (5th Cir. 2001). " A n issue is material if its resolution could affect the outcome of the action." Terrebonne P a r is h Sch. Bd. v. Columbia Gulf Transmission Co., 290 F.3d 303, 310 (5th Cir. 2002). T h e City first challenges Vo's standing to bring this lawsuit. Second, the City argues th a t Vo cannot meet her burden to show that its regulatory scheme fails the "rational re latio n sh ip " test. 1. S t a n d in g / R ip e n e s s

T h e issue of Article III standing must be addressed prior to adjudication on the merits. S e e Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 93-102 (1998). Federal

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ju ris d ic tio n extends only to "cases" and "controversies." Standing to sue is part of what m a k e s a justiciable "case." The irreducible constitutional minimum of standing contains three re q u ire m e n ts. First and foremost, there must be alleged (and ultimately p ro v e d ) an injury in fact ­ a harm suffered by the plaintiff that is concrete and a c tu a l or imminent, not conjectural or hypothetical. Second, there must be c a u sa tio n ­ a fairly traceable connection between the plaintiff's injury and the c o m p l a in e d -o f conduct of the defendant. And third, there must be re d re ss a b ility ­ a likelihood that the requested relief will address the alleged in ju ry. This triad of injury in fact, causation, and redressability constitutes the c o re of Article III's case-or-controversy requirement, and the party invoking f e d era l jurisdiction bears the burden of establishing its existence. Id . at 103-04. T o determine whether claims are ripe, the court evaluates (1) the fitness of the issues fo r judicial resolution, and (2) the potential hardship to the parties caused by declining court c o n s id e ra tio n . Texas v. United States, 497 F.3d 491, 498 (5th Cir. 2007). "The doctrines of rip en ess and standing often overlap in practice particularly in an examination of whether a p la in tif f has suffered a concrete injury." Id. at 496. The City attacks the "injury in fact," or ripeness, aspect of justicability. According to the City, Vo's claims are not ripe because she did not apply to participate in the distribution s c h e m e established by Ordinance 2007-1419, and because the distribution has not taken p la c e. V o wants a permit to drive a taxicab in Houston but cannot get one from the City. Vo c o n c ed e s she did not apply for a permit as a new applicant in order to take part in the d istrib u tio n scheme under Ordinance 2007-1419. But she did apply in March 2007. There 4

is no dispute that she is not a qualified applicant under § 46.65 with or without regard to O rd in a n c e 2007-1419. That fact is one of the aspects of the regulatory scheme that Vo a ttac k s as unconstitutional. Moreover, the fact that the distribution scheme set forth in O rd in a n c e 2007-1419 has been on hold due to lawsuits and injunctions does not make her claim purely conjectural. The City could enforce the ordinance at any time.7 The court c o n c lu d e s that Vo has suffered an injury in fact sufficient to confer standing and ripeness.8 2. E q u a l Protection ­ Rational Basis Review

P la in tif f asserts the City's taxicab ordinances oppress the class of taxicab drivers such a s herself and privilege the class of "permittees," most of which are not actually taxicab d riv e rs but entities that lease cars to drivers. The Equal Protection Clause of the Fourteenth Amendment to the United States C o n stitutio n requires the state to treat similarly situated persons in a similar manner. C u n n i n g h a m v. Beavers, 858 F.2d 269, 272 (5th Cir. 1988). Government classifications that

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The injunction against implementation of the scheme issued in Greater Houston Small Taxicab Co. Owners Assoc. dissolved April 26, 2010 when final judgment was entered in that case. That decision is on appeal and the City apparently has no immediate plans to implement the distribution scheme, but there is no indication that the injunction remains in place. The City has not addressed the causation and redressability aspects of standing. Given that Vo's injury is a direct result of the ordinances she is challenging, Vo has satisfied the causation requirement for justiciability. The court further finds that Vo's claims are redressable. Whether or not Vo has a valid cause of action "does not implicate subjectmatter jurisdiction, i.e., the court's statutory or constitutional power to adjudicate the case." Steel, 523 U.S. at 89 (emphasis in original). The court has the power to grant Vo the relief she seeks, i.e., a determination that the taxicab ordinance is unconstitutional, and thus her claim is redressable. 5

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tar g e t suspect classes (such as race or national origin) or infringe upon fundamental rights (s u c h as free speech) require strict scrutiny. Mass. Brd. of Retirement v. Murgia, 427 U.S. 3 0 7 , 312 (1976). But classifications that do not target suspect classes or groups or

f u n d a m e n ta l interests are subject to a more deferential rational basis review. Id. at 313-14; C u n n in g h a m , 858 F.2d at 273. The distribution ordinance at issue here makes classifications b a se d on the size of taxicab companies, and based on whether a driver has a minimum a m o u n t of experience driving a cab. The right to hold a taxicab permit is not a fundamental right. See City of New Orleans v . Dukes, 427 U.S. 297, 303-04 (1976).9 There is no classification in the ordinance scheme b ase d on a suspect class nor any infringement on a fundamental right. "In short, the judiciary m a y not sit as a superlegislature to judge the wisdom or desirability of legislative policy d e te rm in a tio n s made in areas that neither affect fundamental rights nor proceed along suspect lin e s, . . . in the local economic sphere, it is only the invidious discrimination, the wholly a rb itra ry act, which cannot stand consistently with the Fourteenth Amendment." Id. Therefore, the City's ordinances are presumed valid and must be upheld if any rational b a s is exists for them. Cunningham, 858 F.2d at 273. The City's classification scheme does n o t have to be perfect, it does not even need to be the least restrictive means of achieving a p e rm is s ib le end. The burden of proof to negate any rational basis for the ordinance is on the
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See Greater Houston Small Taxicab Co. Owners Assoc. v. City of Houston, No. H-08-1702, slip op. at n.3 (S.D. Tex. March 25, 2010) (gathering cases in which federal courts have upheld facially unequal transportation service regulatory schemes under the rational basis test). 6

p la in tif f . Hodel v. Indiana, 452 U.S. 314, 331-32 (1981). The City is not required to a rtic u la te any reason at all for its legislative choices at the time it makes them, and it is not n ec essa ry for the City to show that it was actually motivated by the reasons it gives in support o f them. F.C.C. v. Beach Communications, Inc., 508 U.S. 307, 315 (1993). Recitals in the o rd in a n c e itself can serve to identify the relevant governmental interests. See Frisby v. S c h u ltz, 487 U.S. 474, 477-78 (1988); N.W. Enterprises Inc. v. City of Houston, 352 F.3d 1 6 2 , 176 (5th Cir. 2003). Ordinance 2007-1419 recites several governmental interests it is designed to address, inc lu d in g encouraging competition, creating a distribution scheme to better allow the industry to recover form recent catastrophic events, allowing mid-sized companies to grow into fullse rv ice companies better able to meet the needs of the community, greater distribution to s m a ll taxicab companies than under the previous distribution plan, ensuring access by new e n tra n t entrepreneurs, increasing driver training, increasing the number of wheelchair a c c e s s ib le vehicles, and better serving the needs of the riding public. Section 46.66 of the Code of City Ordinances provides the following reasons for a re g u late d permit distribution plan such as that established in Ordinance 2007-1419: (i) to f o ste r enhanced competition within the taxicab industry, (ii) to increase the level and quality o f taxicab service available to the public for other than city airport departure trips, and (iii) to promote more efficient utilization of taxicabs, which purposes should enhance the public s a tis f a c tio n and generate operating cost and fare savings.

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C le a rly, public safety is a legitimate government interest. Section 46.65(a)(7)'s r e q u ir e m e n t that new entrant applicants "within the preceding period of ten years had at least f iv e years active and practical taxicab business experience, with at least two of those in the c ity," is rationally related to the interest of public safety. The fact that those who receive a p e rm it by purchase or assignment from an existing permit holder do not necessarily have to m e e t this requirement does not negate this rational basis. Again, the City's determinations in this regard are not based on any suspect classifications and thus the court gives great d e f e r e n c e to the City's legislative policy determinations. T h e City's regulatory scheme undoubtedly works to Vo's economic disadvantage. U n a b le to secure a permit in her own right, Vo is forced to work as a contract driver under a contractual arrangement with a permit holder that requires her to pay the permit holder le a se fees. However, the fact that some people may suffer economic hardship as a result of th e ordinance does not mean that there is no rational basis to support it. See Hodel, 452 U.S. a t 331-32. The result may not seem fair to Vo and others in her position, but absolute f a irn e ss to all will rarely if ever be achieved by any regulatory scheme. Vo has not and c a n n o t meet her burden "to negate every conceivable basis which might support" the City's ta x ic a b ordinance s. See Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356, 364 ( 1 9 7 3 ) . The City is entitled to summary judgment on Vo's equal protection claims.

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3.

D u e Process

Vo alleges that Ordinance 2007-1419 was illegitimately enacted because it was the p ro d u c t of a working group consisting of a small group of permittees who provided in a c c u ra te information to City Council. A plaintiff asserting a federal due process claim must first establish a protected p ro p e rty or liberty interest. American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59 (1999); S im i Inv. Co., Inc. v. Harris County, Tex,236 F.3d 240, 249 (5th Cir. 2000). As noted above, V o has no constitutional right to hold a taxicab permit. Moreover, the record reflects no p r o c e d u r a l irregularities of constitutional import in the legislative process.1 0 P r io r to passage of Ordinance 2007-1419, the City formed industry working or s ta k e h o ld e r groups to provide insight and comment on the permit computation and d i str ib u tio n process. Indeed, Vo participated in some of these working group meetings. H o w e v e r, Vo contends that taxicab drivers like herself were not given notice of the meeting at which a vote on the working group's final recommendations was taken and thus were p re c lu d e d from voting. There is no constitutional requirement that the City form a working

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Vo makes conclusory statements that the regulatory scheme is unconstitutionally vague. But she has pointed to no language in the ordinances that is vague. The ordinances at issue are painfully detailed and specific. Indeed, Vo is certainly clear about the impact of the ordinances on her ability to operate a taxicab in Houston. There is no support for a claim that the ordinance is unconstitutionally vague under the due process clause. See Roark & Hardee LP v. City of Austin, 522 F.3d 533, 546 (5th Cir. 2008) (where a law that does not threaten to infringe constitutionally protected conduct is challenged facially as unduly vague, the plaintiff "must demonstrate that the law is impermissibly vague in all of its applications."). To the extent Vo asserts such a claim, it is dismissed. 9

g ro u p or follow its recommendations prior to enacting legislation. Irregularity in the working g ro u p process does not render the City's legislative acts unconstitutional. Thus, Vo's s u b s ta n tiv e and procedural due process claims are dismissed. Conclusion and Order D e f e n d a n ts ' motion for summary judgment (Dkt. 67) is granted and plaintiff's claims a re dismissed with prejudice. The court will issue a separate final judgment. S ig n e d at Houston, Texas on September 10, 2010.

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