Citations
- 306 F. Supp. 3d 710
Full opinion text
Baylson, J.
I. Introduction
Legal challenges by the taxicab industry to the advent of so-called Transportation Network Companies ("TNCs") such as Uber and Lyft are not new. This lawsuit, brought by taxi companies, does not seek to impose liability on TNCs themselves, but rather against the governmental agency responsible for regulating taxicabs in Philadelphia, the Philadelphia Parking Authority ("PPA"), for not doing more to combat TNCs before TNCs were legalized in Philadelphia.
Plaintiffs, Checker Cab Philadelphia and several hundred other medallion-holding taxi companies (collectively, "Checker"), seek damages from Defendant PPA and its former executive director, Defendant Vincent Fenerty, alleging their inaction toward TNCs violated the U.S. Constitution in two ways:
First, that PPA's failure to apply taxicab regulations to or otherwise regulate TNCs violated the Equal Protection Clause; and
Second, the diminution in value of taxi medallions caused by the failure to regulate TNCs constituted a taking of Checker's property without just compensation of law in violation of the Fifth and Fourteenth Amendments.
Checker initially sought damages, declaratory relief, and an injunction.
After this lawsuit was filed, the Court permitted intervention to Germantown Cab Company (Germantown), a non-medallion-holding taxi company serving several Philadelphia neighborhoods.
Defendants' motions for summary judgment as to both Checker and Germantown are presently before the Court. Checker and Germantown (collectively, the "Taxi Companies") have separately opposed these motions; both have also filed a motion pursuant to Rule 56(d) and a motion to file a supplemental memorandum.
II. Background
A. 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, 965 A.2d 226 (2009). In 2004, the General Assembly amended Title 53 of the PAL to give the Philadelphia Parking Authority-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 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 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 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.
53 Pa. C.S. § 5701.
Under Act 94, medallions are defined as "property," which "cannot be revoked or cancelled by [PPA]." 53 Pa. C.S. § 5713. In addition, the statute limits the number of taxi medallions that can be issued by PPA; the statute initially capped the number of medallions at 1,600, with the possibility of issuing 15 additional medallions annually, up to a cap of 1,750. 53 Pa. C.S. § 5711.
In 2005, pursuant to Act 94 and its delegation of legislative authority, 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, PPA promulgated the regulations that are currently operative. See 52 Pa. Code §§ 1011, et seq.
In November 2016, the Pennsylvania General Assembly passed legislation, known as Act 164, granting TNCs permanent legal authority to operate throughout Pennsylvania, including within Philadelphia. Act 164 added a new chapter to the Parking Authorities Law, entitled "Transportation Network Companies," which is codified at 53 Pa. C.S. §§ 57A01 -22, and amended the definition of "taxicab service" or "call or demand service" in 53 Pa. C.S. § 5701 to exempt TNCs. 2016 Pa. Legis. Serv. Act 2016-164. Sections of the newly enacted Chapter 57A govern issues such as TNC licensure, insurance requirements, driver credentials, fare rates, and the like. 53 Pa. C.S. §§ 57A01 -22. In addition, Act 164 lessens certain regulatory requirements on traditional taxicabs, and requires TNCs to pay assessments of 1.4% of gross revenues in Philadelphia to PPA. 2016 Pa. Legis. Serv. Act 2016-164. Act 164 also directs PPA to enact a new set of regulations governing for-hire transportation in Philadelphia that also governs TNCs. Id.
B. Types of Taxicabs in Philadelphia
Checker and Germantown are owners of two different types of taxicabs operating in Philadelphia: "medallion taxicabs" (such as those operated by Checker), which may provide citywide taxicab service, and "partial-rights taxicabs," such as those operated by Germantown, which are not entitled to provide citywide service. 52 Pa. Code § 1011.2. Taxicabs may be ordered by telephone call or street hail. 53 Pa. C.S. § 5701 ("taxicab service" "is characterized by the fact that passengers normally hire the vehicle and its driver either by telephone call or by hail, or both").
Checker Plaintiffs, who comprise over one hundred medallion taxicab companies including such recognizable companies as 215GETACAB, Crescent Cab, and Freedom Taxi, hold "certificates of public convenience ... issued by PPA to own and operate Philadelphia medallion taxicabs" and possess "hundreds" of medallions in total. (Checker Am. Compl. ¶¶ 20-21.)
Intervenor Germantown Cab Company is a company operating partial-rights taxicabs. Germantown holds a certificate of public convenience from the Public Utilities Commission allowing it to provide taxicab service in various towns in Montgomery County, as well as the Philadelphia neighborhoods of Germantown, Mt. Airy, Roxborough, Manayunk, and Chestnut Hill. (Germantown Second Am. Compl ¶ 1, ECF 89; Germantown SOF ¶ 100, ECF 152-2.)
C. Penalties for Unauthorized Taxicab Vehicles and Additional PPA Powers
In Philadelphia, vehicles "may not be operated as a taxicab with citywide call or demand rights ... unless a certificate of public convenience is issued by the authority authorizing the operation of the taxicab and a medallion is attached to the hood of the vehicle." 53 Pa. C.S. § 5714(a)(1). Although the Parking Authorities Law does not define "authorized vehicle" or "unauthorized vehicle," the statute contains a section entitled "Certificate and medallion required" and sets forth penalties for "unauthorized vehicles":
(f) Unauthorized vehicles.-Operating an unauthorized vehicle as a taxicab, or giving the appearance of offering call or demand service with an unauthorized vehicle, without first having received a certificate of public convenience and a medallion is a nontraffic summary offense in the first instance and a misdemeanor of the third degree for each offense thereafter. The owner and the driver of a vehicle being operated as or appearing as a taxicab without a certificate of public convenience and a medallion are also subject to civil penalties pursuant to section 5725. Civil penalties which have been assessed and collected shall be deposited in the fund.
53 Pa. C.S. § 5714(f). The statute further empowers PPA to impound vehicles "utilized to provide call or demand service" in Philadelphia operating without a certificate of public convenience issued by PPA. 53 Pa. C.S. § 5714(g).
The statute also bestows upon PPA a number of more general powers to effect the purposes of the enacting statute, including the power to sue and be sued; to "investigate and examine the condition and management of any entity providing taxicab and limousine service"; to engage in all acts "necessary ... to carry out the powers granted to the authority by this chapter or any other statute"; as well as to "prescribe such rules and regulations as it deems necessary to govern the regulation of taxicabs ... under this chapter." 53 Pa. C.S. §§ 5505(2), (17), (24), 5722.
III. Procedural History
On August 29, 2016, Plaintiff Checker Cab Philadelphia, Inc. and several hundred other medallion-holding taxicab companies filed this action. (Compl., ECF 1.) At that time, TNCs, most notably Uber and Lyft, had operated in Philadelphia for several years, but Pennsylvania had not yet enacted permanent legislation or regulations allowing TNCs to operate legally in Philadelphia, as discussed further below.
Checker asserted that PPA "arbitrarily violated [their] constitutional rights by applying burdensome and costly tariffs and regulations to Philadelphia taxicabs, while not equally taxing or regulating ... Transportation Network Companies ... which operate in Philadelphia as de facto taxis in direct competition" with Checker. (Compl. ¶ 4.) Checker further asserted that PPA had "unconstitutionally deprived Checker of their exclusive taxicab medallion property rights by allowing thousands of other vehicles to provide taxi service in Philadelphia despite not owning taxicab medallions." (Id. ¶ 11.)
On September 1, 2016, Checker moved for a temporary restraining order and a preliminary injunction. (Mot. for TRO and Prelim. Inj., ECF 2.)
Germantown moved to intervene on September 21, 2016. (Germantown Mot. to Intervene, ECF 20.) Germantown did not file a separate motion for TRO and/or preliminary injunction. Germantown's motion to intervene was granted on October 4, 2016. (Order Granting Mot. to Intervene, ECF 41.)
The Court heard two days of testimony in conjunction with the preliminary injunction on September 28 and 29, 2016, and held oral argument the following week. (N.T. 9/28/17-10/4/17, ECF 50, 51, 53.) Checker presented six witnesses:
1) Robert Willis, who ran a business marketing advertisements on LCD screens on the tops of taxicabs;
2) Robert Familant, an employee of Progressive Credit Union, a major lender to the taxicab industry;
3) Frank Walker, a taxi driver;
4) Everett Abitbol, founder and owner of Freedom Taxi;
5) Khalid Alvi, a taxi driver; and
6) Inna Friedman, a taxi industry lender and medallion broker.
(N.T. 9/28/17, ECF 50.)
Defendants presented testimony from four witnesses:
1) Defendant Fenerty;
2) PPA General Counsel Dennis Weldon;
3) PPA Deputy Director of the Taxi and Limousine Division and Manager of Enforcement William Schmid; and
4) PPA Deputy Executive Director Corinne O'Connor.
(Id.; N.T. 9/29/17, ECF 51.)
Checker's witnesses testified to the extensive safety regulation and rising monetary assessments to which the taxicab industry was subject, as well as the decline in business and concomitant fall in medallion values since TNCs had arrived in Philadelphia. (Id. ) Defendants' witnesses described the difficulties of enforcing the law against a popular, disruptive, and well-financed industry that by that time had been legalized in the remainder of the Commonwealth. (Id. )
The parties entered settlement discussions before Magistrate Judge Rice.
Checker and Defendants (but not Germantown) reached agreement on several issues. (Tr. of Settlement Conference, ECF 66.) Defendants agreed that if then-pending legislation to legalize TNCs in Philadelphia were passed, PPA would immediately begin enforcing the requirements of that law; in return, Checker would withdraw the portion of the case requesting injunctive relief. (Id. )
On November 4, 2016-the day that the contemplated legislation, Act 64, was enacted-Checker filed a three-count Amended Complaint, its operative Complaint in this litigation, which did not seek injunctive relief. (Checker Am. Compl., ECF 70.)
Count I alleged that PPA had violated the taxi companies' equal protection rights by applying taxicab regulations and levying assessments against medallion-holding taxicabs but not TNCs. (Id. ¶¶ 113-122.)
Count II asserted that PPA's inaction toward TNCs had allowed TNCs to intrude on Checker's exclusive property rights in medallions, which amounted to a taking of private property without just compensation in violation of the Fifth and Fourteenth Amendments. (Id. ¶¶ 123-138.)
Count III requested declaratory judgment on the equal protection and takings theories. (Id. ¶¶ 139-143.)
Checker also sought compensatory and punitive damages, interest, and attorneys' fees. (Id. ¶¶ 144.)
Germantown filed a five-count Second Amended Complaint, its operative Complaint, on January 4, 2017. (Germantown Second Am. Compl., ECF 89.)
Count I alleged that PPA had violated Germantown's equal protection rights by regulating and taxing them but not TNCs. (Id. ¶¶ 48-61.)
Count II alleged an equal protection violation because Germantown, and not TNCs, was subject to territorial restrictions in the wake of Act 164. (Id. ¶¶ 62-81.)
Count III asserted that the 1.4% annual revenue assessment on TNCs, 1% annual revenue assessment on medallion taxis, and the per-vehicle assessments on Germantown imposed as a result of Act 164 violated Germantown's equal protection rights. (Id. ¶¶ 82-93.)
Count IV alleged that Act 164 was unlawful special legislation. (Id. ¶¶ 94-111.)
Count V sought injunctive relief as to Act 164's alleged unconstitutionality. (Id. ¶¶ 112-22.)
Defendants moved to dismiss both operative Complaints for failure to state a claim. (Mot. to Dismiss Checker Am. Compl, ECF 74; Mot. to Dismiss Germantown Second Am. Compl., ECF 96.) Checker filed a memorandum in partial support of Defendants' motion to dismiss Germantown's Second Amended Complaint, in which it asked this Court to dismiss the claims raised by Germantown that "exceed[ed] the scope of Plaintiffs' Amended Complaint and the relief requested therein." (Mem. in Partial Support of Defs.' Mot. to Dismiss, ECF 107 at 4.)
On June 6, 2017, the Court granted in part and denied in part the motions to dismiss. (Order, ECF 130.) The Court found that Checker and Germantown had stated a claim for an equal protection violation based on the theory that PPA had arbitrarily failed to regulate TNCs while enforcing regulations on traditional taxicabs prior to the enactment of Act 164 (Count I of the respective operative Complaints). (Mem. on Mot. to Dismiss, ECF 129.) In reaching this conclusion, the Court relied extensively on a district court decision from Boston finding that taxi companies had stated a claim on a similar failure-to-regulate theory, and distinguished other cases in which taxi companies had brought equal protection challenges to separate regulatory regimes for taxicabs and TNCs. (Id. at 9-11 (citing Boston Taxi Owners Ass'n, Inc. v. City of Boston, 180 F.Supp.3d 108 (D. Mass. 2016) ) ). The Court also allowed Checker's takings claim to proceed (Count II), noting that Pennsylvania law defined medallions as property and emphasizing the differences between the Pennsylvania statutory scheme and the regulations in Boston and other cities where courts had dismissed claims on similar takings theories. (Mem. on Mot. to Dismiss, ECF 129 at 14.)
While the Court allowed Germantown's arbitrary-failure-to-regulate equal protection claim to proceed (Count I), it dismissed the remainder of Germantown's claims because those claims (Counts II-IV) did not relate to the theory of the case brought by Checker. (Id. at 12 n.5.) The Court also noted that counsel for Germantown had stated at oral argument that it was no longer seeking prospective injunctive relief (Count V). (Id. at 5 n.2.) Finally, the Court denied Defendant Fenerty's qualified immunity defense. (Id. at 14-15.)
Thereafter, the parties engaged in substantial discovery, which included both written discovery, document discovery, and depositions. The Court required PPA and Germantown to make one or two individuals available, and Checker was to make between one and three individuals available, for depositions to be taken pursuant to Fed. R. Civ. P. 30(b)(6). (Order re: Discovery, ECF 146.)
At the close of discovery, Defendants moved for summary judgment. (Mot. for Summ. J. as to Checker, ECF 147; Mot. for Summ. J. as to Germantown, ECF 148.) Thereafter, Checker sought relief pursuant to Rule 56(d) to be permitted additional discovery on the grounds that Defendants' corporate designees had been insufficiently prepared for their depositions. (Mot. for Relief, ECF 150.) Germantown filed a short statement joining Checker's Rule 56(d) motion. (Mot. for Relief, ECF 151.) After summary judgment briefing was completed, Checker sought leave to file a supplemental memorandum to their opposition to summary judgment. (Mot. to File a Supplemental Mem., ECF 161.) Germantown filed a short statement joining this motion as well. (Mot. to File a Supplemental Mem., ECF 162.) The summary judgment motions, the Rule 56(d) motion, and the motion to file a supplemental memorandum are now ripe for decision.
Oral argument was held on January 24, 2018. The Court has considered the post-argument letters, which are docketed.
IV. Defendants' Motions for Summary Judgment
Defendants filed separate motions for summary judgment as to Checker and Germantown. (Defs.' Mot. for Summ. J. as to Checker, ECF 147; Defs.' Mot. for Summ. J. as to Germantown, ECF 148.) Defendants also filed separate statements of undisputed facts as to Checker and Germantown in numbered paragraphs in accordance with this Court's rules. (Defs.' Checker SOF, ECF 147-2; Defs.' Germantown SOF, ECF 148-2.) The statements of facts, which are largely identical, describe PPA's statutory authority to regulate taxicabs, the operation of TNCs, enforcement efforts by PPA against TNCs, PPA's role in crafting legislation intended to legalize TNCs statewide, and that legislation's ultimate enactment. (Id. )
In memoranda accompanying the motions to dismiss, Defendants argue that they are entitled to summary judgment on all theories advanced by Checker and Germantown.
A. Taxi Companies' Equal Protection Clause Theories
With respect to both Taxi Companies, Defendants argue that they are entitled to summary judgment on the Taxi Companies' claims for violation of the Equal Protection Clause of the Fourteenth Amendment. (Defs.' Mem. in Support of Mot. for Summ. J as to Checker ("Defs.' Checker Br.") at 27-64, ECF 147-1; Defs.' Mem. in Support of Mot. for Summ. J as to Checker ("Defs.' Germantown Br.") at 27-65, ECF 148-1.) Defendants reproduce their briefing on the equal protection issues essentially verbatim in the two memoranda of law. (Id. )
Defendants address the Taxi Companies' equal protection claims as presenting two theories:
1) PPA arbitrarily failed to regulate TNCs in violation of the Equal Protection Clause; and
2) PPA selectively enforced existing taxicab regulations on taxicabs, but not TNCs.
Defendants argue that they are entitled to summary judgment on the Taxi Companies' arbitrary-failure-to-regulate theory because numerous other courts-including the U.S. Court of Appeals for the Seventh Circuit, the Pennsylvania Commonwealth Court, and various other federal district courts-have held that TNCs and taxicabs are not similarly situated classes for purposes of the Equal Protection Clause in the context of failure-to-regulate equal protection claims such as asserted in this litigation. (Id. ) According to Defendants, the fact that TNCs and taxicabs are not similarly situated precludes any equal protection disparate treatment claim (such as the failure-to-regulate claim), and in any event, the Taxi Companies fail to meet their burden on rational basis review. (Id. )
Defendants argue that they are also entitled to summary judgment on the Taxi Companies' selective enforcement equal protection theory for several reasons. (Defs.' Checker Br. at 48-64; Defs.' Germantown Br. at 48-65.) Proceeding from the position that TNCs were illegal taxicabs, Defendants contend that the only enforcement action PPA was legally allowed to take with respect to TNCs was to impound vehicles and issue citations. (Defs.' Checker Br. at 50-51; Defs.' Germantown Br. at 50-51.) Defendants next contend that taxicabs as legal market participants and TNCs as illegal market participants are not similarly situated, and the equal protection rights of legal market participants such as the Taxi Companies are therefore not affected by the amount of enforcement against illegal competitors. (Defs.' Checker Br. at 50-52; Defs.' Germantown Br. at 51-53.) Finally, Defendants assert that PPA did not act with an unlawful or discriminatory motive toward the Taxi Companies, as is necessary to support a claim for selective enforcement. (Defs.' Checker Br. at 53-65; Defs.' Germantown Br. at 53-65.)
B. Checker's Takings Clause Claim
Defendants argue that they are also entitled to summary judgment on Checker's claim that PPA's failure to regulate TNCs amounted an unconstitutional taking of taxi medallions. (Defs.' Checker Br. at 65-75.) Although Defendants concede that Checker had a property interest in taxicab medallions, Defendants argue that any takings claim offered by Checker necessarily rests on the assumption that Checker had a right either to the value of a taxicab medallion, or a right to exclude TNCs from the transportation-for-hire market itself. (Id. ) Both of these premises, Defendants argue, have been universally rejected by other courts. (Id. )
C. Judicial Estoppel Claims
In a consolidated reply brief filed as to both Checker and Germantown, Defendants respond to the Taxi Companies' arguments regarding judicial estoppel. (Defs.' Consolidated Reply Br. at 3-5, ECF 158.) As discussed below, the Taxi Companies argue that PPA should be judicially estopped from arguing that TNCs and taxicabs are similarly situated classes by virtue of positions that PPA took before the Court of Common Pleas in litigation over citations on TNC drivers, Than My Trinh v. Philadelphia Parking Authority, 2016 WL 3566288 (Pa. Com. Pl. May 18, 2016). Defendants assert that the doctrine of judicial estoppel simply does not apply in this case because PPA had asserted a different legal position in the Court of Common Pleas litigation. PPA states it had previously asserted that TNCs were illegally providing call or demand service within the text of the statute and that position is not the same as Defendants' argument in this case that TNCs and taxicabs are not similarly situated under the Equal Protection Clause. (Defs.' Reply Br. at 3-5.) Defendants further assert that PPA did not take these positions in bad faith, as would be required for the Court to apply judicial estoppel. (Id. )
V. Taxicab Companies' Responses
Checker and Germantown each separately oppose Defendants' motions for summary judgment.
A. Checker Arguments
1. The PPA Statute
Checker begins its opposition to Defendants' motion for summary judgment with a review of the PPA statute in order to refute Defendants' argument that PPA's enforcement powers relative to TNCs were limited to citations and impoundments. Checker lists many powers PPA enjoyed pursuant to 53 Pa. C.S. § 5505(d), including the ability "[t]o sue and be sued" and "[t]o do all acts and things necessary ... to carry out the powers granted to the authority by this chapter or any other statute." (Checker Mem. in Opp. to Defs.' Mot. to Dismiss ("Checker Br.") at 30.) Checker then argues that TNCs provided "call or demand service" or "taxicab service" within the meaning of 53 Pa. C.S. § 5701, thereby bringing TNCs within the regulatory jurisdiction of PPA. (Id. at 33-38.) Checker argues that "[t]he breadth of § 5701's language afforded PPA the flexibility to regulate both foreseen and unforeseen actors that provided 'call or demand service,' such as partial-rights taxicabs, unauthorized service providers known as 'hack taxicabs,' and even TNCs." (Checker Br. at 34.) Thus, pursuant to the powers set forth by statute, PPA could have promulgated emergency regulations for TNCs or sought an injunction against the operation of TNCs in Philadelphia, but chose to do neither. (Id. at 31-32.)
2. PPA's Failure to Regulate in Violation of the Fourteenth Amendment Equal Protection Claim
In the next major section of its brief, Checker asserts that Defendants are not entitled to summary judgment on Checker's Fourteenth Amendment failure-to-regulate claim because, as a threshold matter, taxicabs and TNCs are similarly situated for purposes of the Equal Protection Clause-both taxicabs and TNCs provided "call or demand" service in the Philadelphia market. (Id. at 44.) In Checker's view, the fact that PPA enforced existing regulations against taxicabs but did not issue regulations for TNCs or seek an injunction against them constituted disparate treatment in violation of the Equal Protection Clause for which Defendants offered no rational basis. (Id. at 45-49.) Without much specificity, Checker asserts that genuine issues of material fact exist so as to defeat summary judgment. (Id. at 49.)
3. Checker's Selective Enforcement Claim
Checker then offers a brief alternative argument, largely devoted to distinguishing Defendants' case law support, that PPA's failure to regulate satisfied the elements for a selective enforcement claim under the Equal Protection Clause. (Id. at 49-53.) This argument will be discussed in greater detail, infra.
4. Checker's Takings Claim
Checker argues that PPA inaction toward TNCs caused substantial drops in taxicab medallion values, which "amount[ed] to a taking without just compensation" in violation of the Fifth and Fourteenth Amendments to the U.S. Constitution. (Id. at 56.) Unlike their counterparts in other cities, Philadelphia taxicab medallions are statutorily defined as "property" in 53 Pa. C.S. § 5713(a), and, as Checker would have it, therefore conferred "exclusive property rights." (Id. at 60.) Checker describes the PPA statute as "expressly provid[ing] that Philadelphia taxicab medallions possessed exclusive property rights that would be insulated from large-scale 'illegal' 'call or demand service' providers by its exclusive regulator-the PPA." (Id. ) Because of the uniqueness of the Pennsylvania statutory scheme, Checker considers case law from other cities to be inapposite. (Id. )
Relying on the testimony of Robert Familant, an employee of a credit union involved in the taxi lending industry, who had testified in support of Checker at the preliminary injunction hearing, Checker also argues that PPA had approached medallion lenders to encourage them to lend in Philadelphia, and then destroyed that very lending market through inaction toward TNCs, which caused medallion values to plummet. (Id. at 59-60.)
5. The Taxi Companies' Claim re: Judicial Estoppel
Finally, Checker contends that PPA should be judicially estopped from arguing to this Court that taxicabs and TNCs are similarly situated by virtue of positions it took before the Court of Common Pleas in appeals of PPA citations on private vehicle owners and impoundments of vehicles used for transportation for hire, without a medallion. (Id. at 64-72.) In one such case, PPA defended the citation and impoundment as follows in its brief:
[Appellant]'s vehicle was being operated as an unauthorized service provider, and therefore subject to the Authority's jurisdiction. [Appellant] argues strenuously that Lac was operating not as a taxicab or limousine, but rather as a TNC which is not regulated by the Authority simply because the trip was booked using the UberX application on a cellphone, rather than the traditional telephone call or on-street hail. However using an alternate means of technology to secure the service does not redefine what the service is.
Quite simply, [Appellant] allowed Lac to use her vehicle to hold himself out as a common carrier to transport individuals between two points in Philadelphia in a vehicle not authorized for such a purpose, with the expectation of receiving compensation for doing so. Regardless of the name ascribed to it ... such activity is clearly in violation of the Parking Authorities Law and the Regulations.
(PPA Br. to Com. Pl. Ct. at 9, Ex. 16 to Checker Br., ECF 153-5.) Thereafter, the Court of Common Pleas found that the service at issue was "simply a variant of a 'hack' taxi cab." Than My Trinh v. Philadelphia Parking Authority, 2016 WL 3566288 at *1 (Pa. Com. Pl. May 18, 2016).
Rejecting the arguments that PPA was without jurisdiction, Judge Carpenter found the ride "was hailed via the UBERX phone app, which falls within the legislative definition of a 'telephone call' and a 'hail' and, thus, [the appellant's] vehicle was providing 'call or demand' taxi service. Such 'call or demand' taxi service within the City was provided without the requisite PPA certification." Id. at *2. Because the PPA had jurisdiction to enforce its regulations, the court upheld the fine. Id.
Checker regards the above passage in the PPA brief to the Court of Common Pleas as a representation by PPA that TNCs and taxicabs provide the same service; thus, any argument made to this Court subsequent to its successful briefing represents a "bad faith change in positions on taxicabs and TNCs." (Checker Br. at 65.) Checker requests that Defendants be estopped from asserting five legal positions:
(1) The PPA lacked the statutory authority to regulate TNCs similarly to taxicabs under 53 Pa. C.S. § 5505(d) and 53 Pa. C.S. §§ 5701, et seq.
(2) Taxicabs and TNCs are not similarly situated and direct competitors.
(3) TNCs do not provide the same "call or demand service" as taxicabs under 53 Pa. C.S. § 5701.
(4) The term "hail" is limited to street hails under 53 Pa. C.S. § 5701.
(5) The fact that taxicabs rely primarily on street hails and TNCs rely e-hails [sic] to secure its riders is a valid basis for distinguishing the two entities.
( Id. at 66.)
In the alternative, Checker requests that PPA's change in position relative to TNCs be construed as an admission that genuine issues of material fact exist in this case: "PPA's contradictory and inexplicable 'about face' on its obligations to regulate TNCs creates genuine issues of material fact that must be decided by the jury." (Id. at 72.)
B. Germantown Brief
1. Selective Enforcement
Germantown frames its equal protection challenge in terms of selective enforcement, which Germantown asserts it has "proven." (Germantown Br. at 7, ECF 152-1.)
As a threshold matter, Germantown sets forth some six reasons why Germantown, as a partial-rights taxicab company, is similarly situated to TNCs:
a. Germantown is similarly situated to TNCs because the PPA's regulations do not permit Germantown to pick-up street hails outside of their territory in Philadelphia, yet prearranged rides are permitted, like Uber and Lyft.
b. Germantown is similarly situated to TNCs because, like Uber and Lyft, Germantown maintains a certificate of authority issued by the PUC.
c. Germantown is similarly situated to TNCs because, like Uber and Lyft, Germantown's certificate of authority issued by the PUC allows it the ability to offer its services on an exclusive and non-exclusive basis.
d. Germantown is similarly situated to TNCs because, like Uber and Lyft, Germantown also provides prearranged trips.
e. Germantown is similarly situated to TNCs because, like Uber and Lyft, when prearranged trips are dispatched by Germantown, the identity of the rider is made known to the driver of the dispatched taxi prior to the commencement of the trip.
f. Germantown is similarly situated to TNCs because Uber drivers at times pick-up anonymous passengers who have no contract with Uber.
(Id. at 11.)
Germantown next argues that, through PPA's failure to regulate TNCs, Defendants engaged in arbitrary and capricious action that "should not be entitled to governmental deference." (Id. at 15.) It argues that PPA could have issued regulations for TNCs pursuant to 53 Pa. C.S. § 5722 -which allows PPA to promulgate rules and regulations "as it deems necessary to govern the regulation of taxicabs"-but failed to exercise its statutory authority. (Id. at 15-18.) In addition, PPA lacked any rational basis for its failure to promulgate TNC regulations or seek injunctive relief. (Id. at 18-19.) According to Germantown's reading of the record, agency decisions, and statutory authority, PPA employees witnessed but ignored illegal TNC activity in Philadelphia, and entrusted TNC enforcement to an inadequate enforcement team. (Id. at 19-23.) At the time that PPA was doing next to nothing to combat TNCs, "PPA did not hold back at its efforts in revoking Germantown Cab's certificate for public convenience" or "disputing a 2015 assessment approximating $250,000 that the PPA lodged on Germantown." (Id. at 24-25.)
Finally, Germantown asserts that when PPA vigorously enforced existing laws on Germantown at the same time as it failed to regulate TNCs, PPA acted with an improper motive-namely, in retaliation for Germantown's voicing its opposition to PPA policy, including by speaking up at public meetings and filing lawsuits against PPA. (Id. at 25-32.)
Together, these courses of conduct constituted "selective enforcement of [PPA's] regulations," which "should be found violative of Germantown's Equal Protection rights." (Id. at 32.)
2. Judicial Estoppel
Germantown also echoes Checker's argument that positions PPA took in appeals of citations on TNC vehicle owners and impoundments of TNC vehicles judicially estops Defendants from arguing that taxicabs and TNCs are not similarly situated. (Id. at 7-9.) Unlike Checker, Germantown did not request that these purportedly inconsistent litigation positions be construed as an admission that genuine issues of material fact exist. (Id. )
VI. TNCs
The parties do not attempt to define Transportation Network Companies (TNCs) before proceeding to discuss the purported similarities or differences between taxicabs and TNCs. The Court, however, infers from the submissions of all parties that TNCs are a business model through which customers must use a smartphone app to arrange transportation from a driver, who picks up and transports a passenger, usually in the driver's personal vehicle. Compensation is handled by requiring the customer to "register" a credit card with the TNC's website, which then makes a charge for the ride on the customer's credit card. No cash is accepted unless the customer voluntarily gives the driver a gratuity. (Defs.' Checker SOF at ¶ 22; Checker Br. at 16, 33; Germantown SOF ¶ 22.) Two well-known TNCs are Uber and Lyft. (Defs.' Checker SOF at ¶ 22; Checker Br. at 1; Germantown Br. at 11.)
Defendants make several contentions about the operation of TNCs, which emphasize the differences between taxicabs and TNCs, that the Taxi Companies dispute.
Defendants assert that TNCs may not accept "anonymous street hails"-i.e., a raised hand-and that the identity of a TNC rider is known to a TNC driver. (Defs.' Checker SOF ¶ 22, 26; Defs.' Germantown SOF ¶ 22, 26.) Germantown states that it is possible for a passenger to hail a TNC anonymously if a third party arranges a ride. (Germantown SOF ¶ 23.)
Checker denies Defendants' assertion that TNCs do not accept cash, but instead require payment through an app user's verified credit card. (Defs.' Checker SOF ¶ 24; Defs.' Germantown SOF ¶ 24.) Checker denies this, but offers no facts of its own. (Checker SOF ¶ 24.) Germantown claims that it is possible to pay for an Uber ride via gift certificate. (Germantown SOF ¶ 24.)
Defendants assert that TNC drivers often work part-time to earn supplemental income, drive their own private vehicles, and put less wear and tear on those vehicles by driving fewer miles. (Defs.' Checker SOF ¶ 26; Defs.' Germantown SOF ¶ 26.) The Taxi Companies deny this without providing additional facts. (Checker SOF ¶ 26; Germantown SOF ¶ 26.)
Defendants assert that TNCs "serve a customer base which desires to use only a smartphone to complete the entire transaction, including arranging and paying for the trip, with no need for cash or credit cards, and which has come to expect timely responsiveness which taxicabs have not historically provided, particularly outside urban centers." (Defs.' Checker SOF ¶ 27; Defs.' Germantown SOF ¶ 27.) Checker notes that taxicab companies also allowed customers to order taxis through apps even before the arrival of TNCs in Philadelphia. (Checker SOF ¶ 27.) Germantown denies knowing whether this statement is correct. (Germantown SOF ¶ 27.)
Overall, to the extent that the operations of TNCs are relevant to the issue of "similarly situated" under the Fourteenth Amendment Equal Protection Claim, the disputes about TNCs are not material. The Court can take judicial notice that TNCs are a novel transportation service made possible by digital technology that did not exist until, approximately, the last five years but TNCs have proven immensely popular with the public, particularly in an urban environment.
VII. PPA Enforcement Efforts Against TNCs
A. Undisputed Facts
1. PPA enforcement and Legal Action in Philadelphia
At the time TNCs began operating in Philadelphia, Pennsylvania law did not make any explicit provision for TNCs. At oral argument, both the Taxi Companies and PPA agreed that TNCs were operating illegally in Philadelphia until Act 164 came into effect.
Between October 14, 2014, and June 2016, PPA impounded one hundred TNC vehicles, which were towed at a cost of $1,000 each to recover. (Defs.' Checker SOF ¶ 51; Checker SOF ¶ 51.) PPA also issued "hundreds" of citations of $1,000 to TNCs and drivers. (Defs.' Checker SOF ¶ 51; Checker SOF ¶ 51.)
PPA filed administrative complaints before its own adjudicative body against Uber in August 2015 and against Lyft in January 2016, seeking fines of $1,000 for each day that those companies operated illegally in Philadelphia. (Administrative Complaints, ECF 147-13.)
On June 6, 2016, PPA, Uber, and its wholly owned subsidiary Rasier-PA executed a "Settlement Agreement and Mutual Release" in which PPA agreed to "cease all impound and enforcement actions" until September 30, 2016 against drivers for those TNCs and to stay all matters involving drivers and/or the parties to the agreement in exchange for payment, pending the legalization of TNCs in Philadelphia. (Temporary Settlement Agreement, ECF 147-13 at 23-29).
PPA did not file any court action seeking to enjoin the operation of TNCs in Philadelphia or promulgate regulations governing TNCs prior to the enactment of Act 164 on November 4, 2016. (Defs.' Amended Responses to Checker's Requests for Admission ¶ 14, ECF 153-8.)
However, taxicab companies filed a lawsuit in 2014 seeking injunctive relief against Uber, which asserted claims of unfair competition, false advertising, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). Checker Cab Philadelphia, Inc. v. Uber Techs., Inc., No. CIV.A. 14-7265, 2015 WL 966284, at *1 (E.D. Pa. Mar. 3, 2015). PPA was not a party to this litigation. Id. The district court denied an injunction on the unfair competition claims:
Plaintiffs premise their unfair competition claims on Defendants' alleged violation of various state and local laws and regulations pertaining to the operation of taxi cab services in Philadelphia. Indeed, Plaintiffs acknowledge as much in their brief: "The gravamen of Plaintiffs' Complaint is that the Uber defendants are operating an illegal gypsy cab operation in the City of Philadelphia in violation of law and regulation." [ECF 12 at p. 6].
Therefore, with respect to the injunctive relief Plaintiffs seek for their state unfair competition claim, this Court finds that these issues are best left to the state and local legislative bodies and regulatory authorities charged with implementing and enforcing the ordinances and regulations that Plaintiffs here seek to enforce by way of private litigation ... Plaintiffs ... have fallen far short of demonstrating a likelihood of success on the merits of their unfair competition claim as needed to obtain a preliminary injunction.
Id.*4. The Third Circuit affirmed. Checker Cab of Philadelphia Inc. v. Uber Techs., Inc., 643 Fed.Appx. 229 (3d Cir. 2016).
2. Legalization of TNCs Outside Philadelphia and PPA Lobbying Efforts
On November 13, 2014, approximately one month after Uber had commenced Philadelphia operations, the Public Utilities Commission granted Rasier-PA, a wholly owned subsidiary of Uber, experimental authority to operate in most counties of Pennsylvania. (Application of Rasier-PA, ECF 147-14.) The PUC decision explicitly did "not authorize Rasier-PA to provide experimental service originating or terminating at points in the City of Philadelphia." (Id. at 78 n.25) (emphasis original).
PPA was involved in efforts to craft legislation that would legalize TNCs across the Commonwealth, including Philadelphia. (Defs.' Checker SOF ¶ 64; Defs.' Germantown SOF ¶ 65; Checker SOF ¶ 64; Germantown SOF ¶ 65.) On June, 11, 2015, Defendant Fenerty testified before the Consumer Affairs Committee of the Pennsylvania House of Representatives:
TNCs currently operate in Philadelphia. At the end of the day, a TNC is a vehicle that picks up a customer upon request, drives that customer to a desired destination and charges a fee to do so. TNCs may use newer technology to arrange and pay for transportation services, but the service they provide is indistinguishable from that which has long been provided by other for hire services providers ...
While the growth of TNCs may reduce customer volume for other service providers in certain markets, if all providers are operating on a level regulatory playing field, competition will dictate success. Otherwise, an imbalance in competition will imperil further limousine advances and ... major taxicab initiatives ...
I would be remiss if I did not mention the Authority's frustration with the on-going illegal activities of Uber (through Uber "X") and Lyft in Philadelphia ... Without legal precedent and over the Authority's clear prohibition, both Uber and Lyft have opted to launch illegal "for hire" vehicle transportation services in Philadelphia.
(Fenerty Testimony, Ex. 21 to Defs.' Checker Mot. to Dismiss, ECF 147-15.) On February 4, 2016, PPA chairman Joseph Ashdale wrote a letter to Representative Bob Godshall, chair of the committee, in which Ashdale stated, "We have never concealed our objective, which is to reach consensus on a bill to legalize TNC's in a way that benefits Philadelphia's traveling public ... for over a year the Authority has consistently supported the legalization of TNCs, if done properly. That position may not sit well with many taxicab and limousine owners in Philadelphia, but we believe it is the right thing to do for the public." (Ashdale Letter, Ex. 22 to Defs.' Checker Mot. to Dismiss, ECF 147-15.)
PPA was involved in negotiations with legislators, representatives of Uber and Lyft, and the City of Philadelphia as the legislation that became Act 164 progressed. (Defs.' Checker SOF ¶ 64-68; Checker SOF ¶ 64-68.)
Act 164 was signed by Governor Wolf on November 4, 2016. Act 164 added an entirely new Chapter 57A to the Parking Authorities Law, entitled "Transportation Network Companies," which is codified at 53 Pa. C.S. §§ 57A01 -22, and amended the definition of "taxicab service" or "call or demand service" in 53 Pa. C.S. § 5701 to exempt TNCs. 2016 Pa. Legis. Serv. Act 2016-164. The new sections of Chapter 57A contain sections governing TNC licensure, insurance requirements, driver credentials, fare rates, and the like. 53 Pa. C.S. §§ 57A01 -22. As noted above, Act 164 also lessens certain regulations on taxi cabs, and requires TNCs to pay assessments of 1.4% of gross revenues in Philadelphia to PPA. 2016 Pa. Legis. Serv. Act 2016-164.
B. Disputed Facts
Although both Checker and Germantown assert a number of disputes of fact, the overarching dispute is essentially one of narrative. PPA portrays itself to this Court as an aggressive regulator doing its best, with limited resources, to carry out enforcement actions as it traditionally did. PPA emphasizes the challenges it faced in navigating the divergent interests of the taxicab industry, TNCs, the legislature, and the public. The Taxi Companies depict PPA as ineffectual at every turn in enforcing laws against TNCs-an enforcement effort they assert that the taxicab industry subsidized-and the PPA was all too eager to overlook flagrant violations of the law, even when personally witnessed by top PPA employees. The Taxi Companies detail the changing positions of PPA regarding TNCs, allege a "secret" deal between PPA and Uber in summer 2016, and imply that they were excluded from legislative efforts to craft TNC legislation.
Additional discussion of Checker's and Germantown's statements of undisputed facts, which both Checker and Germantown divide into two sections-first responding to PPA's facts and then adducing facts of their own-is set forth below. In many cases, Germantown denies Defendants' contentions without citing to facts in the record, and the Court will therefore discuss only those portions of the counter-statements of facts that contain record support. The Court will omit discussion of the statutory framework, which is discussed elsewhere in this memorandum.
The Taxi Companies dispute that PPA enforcement was the reason an early TNC, SideCar, left Philadelphia. (Checker SOF ¶ 28; Germantown SOF ¶ 36.)
The Taxi Companies deny that Uber began operating its UberX service in Philadelphia on October, 14, 2014. (Checker SOF ¶ 29; Germantown SOF ¶ 29.)
Checker asserts that the limited relevant discovery period concerning TNC activity in this case is from October 2014 to the passage of Act 164 of November 4, 2016; however, Checker notes that Defendant Fenerty met with Uber executives prior to 2014, who advised Fenerty that they were coming to Philadelphia and refused to submit to regulation. (Defs.' Checker SOF ¶ 29; Checker SOF ¶ 29.)
The Taxi Companies sharply contest PPA's assertion that "PPA took steps from the very outset to combat the illegal operations of TNCs." (Defs.' Checker SOF ¶ 35; Checker SOF ¶ 35; Germantown SOF ¶ 36.) Germantown asserts that "PPA did nothing to combat the operations of TNCs, but instead looked the other way while TNCs operated." (Germantown SOF ¶ 36.) Checker asserts, with numerous citations, facts that PPA failed to take steps from the very outset to combat the illegal operation of TNCs, including the fact that PPA had previously met with representatives of TNCs, who had effectively put PPA on notice that TNCs would be expanding into the Philadelphia market. (Defs.' Checker SOF ¶ 35; Checker SOF ¶ 35.) Checker implies that part of the motivation was to seek approval from the TNCs that PPA would be a "friendly regulator"-although Checker does not specifically use that phrase. Checker asserts that PPA "failed to seek injunctive relief against Uber to shut down the use of its smartphone app, which would have crippled its operations and forced them to submit to fair regulation." (Checker SOF ¶ 37.)
Checker cites a number of other facts concerning Uber operations and PPA enforcement. (Checker SOF ¶ 41-44.) While Checker cites to testimony regarding software Uber used to thwart regulators, it repeatedly mentions the fact that PPA failed to seek injunctive relief; in one of many somewhat repetitive assertions, Checker asserts that "while PPA was swinging its regulatory hammer against taxicabs, its enforcement actions against TNCs were virtually non-existent." (Id. )
Checker denies PPA's statement that PPA "solicited the assistance of both taxicab medallion owners and drivers to provide new phones to create 'fresh' TNC accounts to continue these enforcement efforts," and asserts that PPA pushed all of its costs associated with regulating TNCs on to the taxicab industry. (Defs.' Checker SOF ¶ 45; Checker SOF ¶ 45.) Checker therefore implies that PPA increased the taxicabs' costs of doing business at the same time PPA's inaction allowed Uber to establish a foothold in Philadelphia and begin its marketing activity without any kind of regulatory oversight, let alone a regulatory oversight similar to what PPA was exercising against taxicabs.
Checker cites testimony from Defendant Fenerty that PPA refused to join a taxicab lawsuit against TNCs in this Court, Checker Cab Philadelphia, Inc. v. Uber Techs., Inc., No. CIV.A. 14-7265, 2015 WL 966284 (E.D. Pa. Mar. 3, 2015), described above. (Checker SOF ¶ 50.)
PPA and the Taxi Companies differ in their interpretation of the 2014 decision of the Public Utilities Commission on the application of Rasier-PA, a wholly owned subsidiary of Uber, to operate in much of Pennsylvania outside of Philadelphia. PPA reads the relevant language of the decision granting TNCs legal authority to operate in parts of the Commonwealth to mean that PPA had jurisdiction over TNCs whose starting point and ending point were both in Philadelphia. The Taxi Companies interpret that same language to mean that PPA could enforce the law against TNCs whose starting point or ending point was in Philadelphia. (Defs.' Checker SOF ¶ 47-48; Checker SOF ¶ 47-48; Germantown SOF ¶ 49.)
As a result of their respective readings of the PUC decision on TNCs outside of Philadelphia, the parties disagree as to whether PPA willfully overlooked or discounted the significance of Uber's violations of law or PPA regulations, particularly with respect to TNC vehicles operating at 30th Street Station in Philadelphia and Philadelphia International Airport whose point of origin or destination might be in a place where TNC service had been legalized. (Defs.' Checker SOF ¶¶ 51-61; Checker SOF ¶¶ 51-61; Germantown SOF ¶¶ 54-55.) Checker quotes former Mayor Nutter about the failure of regulation over TNCs, because PPA was a state agency over which the City had no control. (Checker SOF ¶ 62.)
Checker asserts that Defendant Fenerty was involved in drafting proposed TNC regulations in Harrisburg-which Defendants do not deny-and emphasizes that the taxicab industry criticized PPA for taking inconsistent positions on TNCs. (Checker SOF ¶ 64-68.)
The parties characterize the implications of the "Settlement Agreement and Mutual Release" entered into between PPA, Uber, and its subsidiary Rasier-PA in sharply contrasting terms. PPA describes the agreement as "a temporary agreement to help alleviate a temporary transportation crisis in Philadelphia-pursuant to which PPA agreed to temporarily stay enforcement for 90 days." (Defs.' Checker SOF ¶ 71; Defs.' Germantown SOF ¶ 72.) Germantown asserts that "[t]he PPA Uber Deal authorized Uber to provide citywide taxicab service in Philadelphia without complying with ... 53 Pa. C.S. §§ 5701 - 5745." (Germantown SOF ¶ 81.) Checker describes this agreement as a "secret deal" allowing Uber "to operate during the Democratic National Convention." (Checker SOF ¶ 130.)
The Court finds that many of the Taxi Companies' additional facts overlap with the previous disputes over PPA's statement of undisputed facts. (Checker SOF ¶ 79, et seq.) Many of the Taxi Companies' disputed facts also rephrase the main position of Checker that there are "no differences between taxicabs and TNCs." (Checker SOF ¶ 103; Germantown SOF 95-105.)
Checker describes PPA's communications with financial lenders concerning the taxicab industry, and the finances of PPA itself. (Id. ¶ 80-90.) According to Checker, PPA refused to endorse deregulation of the taxicab industry. (Id. ¶ 87.) Checker describes the increase and subsequent decrease of the value of taxicab medallions, which occurred at the same time as PPA increased its annual medallion assessments and fees on taxicabs. (Id. ¶ 88-89.) Finally, Checker implies that PPA's resources were not at all limited during the relevant time period, noting that PPA holds over $370 million in assets, including over $107 million in restricted cash and investments. (Id. ¶ 90.)
Checker makes many additional assertions about meetings with members of the Pennsylvania legislature or with Uber, and testimony given by Defendant Fenerty and others about the operations of TNCs. (Id. ¶ 91-96.)
1. Conclusion re Disputed Facts
For the reasons stated below, the Court finds that these disputed, or purportedly disputed, facts are either irrelevant to the principles of constitutional law governing this litigation, or insufficient to create a genuine issue of material fact that would defeat Defendants' motions for summary judgment.
The Taxi Companies have raised a number of issues as to whether PPA could have, or should have done, more to regulate TNCs as they were starting up their business operations in Philadelphia.
PPA asserts that that there are no material disputes of fact. The Court agrees. What PPA did or did not do is not in dispute. PPA's motivations, intent, and competence are disputed, but these disputes are not relevant under established law. The Court has reviewed above the extensive argument and contentions about PPA's failures to act as it was arguably authorized to act, with regard to the advent of TNCs.
The Court can conclude, from the Taxi Companies' evidence taken in the light most favorable to the Taxi Companies, that PPA at times was ineffective, inconsistent, contradictory, and confusing-in its public conduct and in its statements made in various venues such as the testimony before the legislature, and in certain judicial proceedings. The Taxi Companies have also shown that at times PPA appeared conciliatory to the advent of the TNCs, knowing that their growing popularity among the public posed a threat to the economic vitality and viability of taxicabs.
VIII. Legal Standard
Summary judgment is appropriate if the movant can show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is "material" if it "might affect the outcome of the suit under the governing law." Id.
A party seeking summary judgment bears the initial responsibility for informing the district court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the moving party's initial burden can be met simply by "pointing out to the district court that there is an absence of evidence to support the non-moving party's case." Id. at 325, 106 S.Ct. 2548. Summary judgment is appropriate if the non-moving party fails to rebut the motion by making a factual showing "that a genuine issue of material fact exists and that a reasonable factfinder could rule in its favor." Id. Under Rule 56, the Court must view the evidence presented on the motion in the light most favorable to the opposing party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
IX. Equal Protection Claims
Ultimately, this action concerns the Taxi Companies' accusation that PPA effectively-and unconstitutionally-stood by while TNCs destroyed their business. Does the Constitution entitle the Taxi Companies to damages?-That is the question at the heart of this lawsuit.
The Taxi Companies assert two theories by which PPA's failure to regulate TNCs violated the Taxi Companies' rights under the Equal Protection Clause of the Fourteenth Amendment: the failure to regulate TNCs amounted to disparate treatment of "similarly situated" providers of transportation-for-hire services, and PPA selectively enforced existing taxicab regulations.
A. Disparate Treatment
The Fourteenth Amendment to the U.S. Constitution prohibits states from "deny[ing] to any person within its jurisdiction the equal protection of the laws." U.S. Const. amend. XIV. The Supreme Court has described the Equal Protection Clause as "essentially a direction that all persons similarly situated should be treated alike." City of Cleburne, Tex. v. Cleburne Living Ctr., 473 U.S. 432, 439, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985). "An essential element of a claim of selective treatment under the Equal Protection Clause is that the comparable parties were similarly situated"-namely, that "they are alike in all relevant aspects." Startzell v. City of Philadelphia, Pennsylvania, 533 F.3d 183, 203 (3d Cir. 2008) (quotations and citations omitted). The parties agree that rational-basis review applies in this case. (Defs.' Checker Br. at 31; Checker Br. at 41.) Under rational basis review, "the burden is upon the challenging party to negative any reasonably conceivable state of facts that could provide a rational basis" for the disparity in treatment. Bd. of Trustees of Univ. of Alabama v. Garrett, 531 U.S. 356, 367, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001).
Checker, which asserts a disparate treatment theory, complains that Defendants failed to take meaningful enforcement action while enforcing burdensome regulations against existing taxicabs. (Checker Br. at 21-24.) As discussed above, Checker repeatedly asserts that taxicabs are similarly situated to TNCs, and that PPA could have and should have sought an injunction against the operation of TNCs, but chose not to; furthermore, PPA failed to advance any rational basis for its inaction. (Id. at 41-49.)
In response, Defendants urge this Court to adopt the reasoning of the Seventh Circuit and numerous district courts throughout the country, which have ruled against taxicab companies bringing equal protection claims against regulators for failure to regulate TNCs. Defendants characterize these decisions as having uniformly concluded TNCs and taxicabs not to be similarly situated for purposes of the Equal Protection Clause. (Defs.' Checker Br. at 34-39.)
Defendants rely principally on Illinois Transportation Trade Ass'n v. City of Chicago, 839 F.3d 594 (7th Cir. 2016) (Posner, J.), the only federal appellate case discussing an equal protection disparate treatment challenge by taxicab companies to regulators' treatment of TNCs. In that case, the plaintiffs, companies that owned and operated taxicabs or livery vehicles in Chicago and companies that provided services to taxicab and livery companies, alleged two claims for violation of the equal protection clause, which the district court discussed separately. Illinois Transportation Trade Ass'n v. City of Chicago, 134 F.Supp.3d 1108, 1114 (N.D. Ill. 2015), aff'd in part, rev'd in part, 839 F.3d 594 (7th Cir. 2016). Count II alleged that Chicago taxi regulators lacked a rational basis for their initial failure to enforce taxicab regulations on TNCs. Id. Count III alleged that a new city ordinance governing TNCs (known as TNPs) established an unconstitutional, two-tiered regulatory scheme that placed lesser regulatory burdens on TNCs through the ordinance than the city imposed on taxicabs through existing law.