Becky's Broncos, LLC v. Town of Nantucket

138 F.4th 73

• Court: Court of Appeals for the First Circuit
• Decided: May 23, 2025
• Docket: 24-1649
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 24-1649

BECKY'S BRONCOS, LLC; JAMES BROAD; REBECCA MCCRENSKY,

Plaintiffs, Appellants,

v.

TOWN OF NANTUCKET; NANTUCKET TOWN SELECT BOARD,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Angel Kelley, U.S. District Judge]

Before

Rikelman, Selya,* and Kayatta, Circuit Judges.

Lucas Newbill, with whom Law Offices of Lucas Newbill was on brief, for appellants. Matthew J. Hamel, with whom Jason W. Crotty and Pierce Davis & Perritano LLP were on brief, for appellees.

May 23, 2025

* Judge Selya heard oral argument in this matter and participated in the semble, but he does not participate in the issuance of the panel's decision. The remaining two panelists therefore issue this opinion pursuant to 28 U.S.C. § 46(d). KAYATTA, Circuit Judge. In 2023, James Broad and Rebecca

McCrensky began operating a car-rental agency, Becky's Broncos,

LLC (collectively with Broad and McCrensky, "Becky's"), without

the requisite approval from local authorities -- the Town of

Nantucket and Nantucket Town Select Board (collectively,

"Nantucket"). Nantucket soon ordered Becky's to stop its

unsanctioned car-rental operations, prompting Becky's to seek

preliminary injunctive relief in the District of Massachusetts.

For the following reasons, we affirm the district court's denial

of Becky's request.

I.

In 1988, Nantucket adopted a barebones licensing-and-

fee plan for rental cars on the Island of Nantucket (the "Island").

The plan barred unlicensed rental-car operations and instructed

Nantucket to "issue a license to each approved applicant,"

contingent on payment of a $100 annual fee per rental motor

vehicle. Later that year, Massachusetts passed a special act

retroactively approving the plan and authorizing Nantucket to

adopt implementing bylaws in the future.

In 1997, Nantucket amended the plan by introducing a

capped medallion system. The amendment provided:

The total number of motor vehicles available for lease on the [Island] shall not exceed six hundred fifty (650). [Nantucket] shall issue each rental agency one Rental Vehicle Medallion (RVM) for each motor vehicle listed

- 2 - in its 1996 application and which received a rental sticker. Each RVM constitutes the non expiring right to lease [out] one motor vehicle.

Thus, per local law (the "ordinance"), to operate on the Island,

a rental agency requires both an agencywide license and a medallion

for each vehicle it operates. According to Becky's, only six

companies -- five local firms and the national brand Hertz -- had

submitted license applications in 1996 and were thus entitled to

medallions in 1997.

Nantucket subsequently raised the medallion cap to 700

but otherwise left it substantively unchanged. Today, five local

companies hold 382 medallions, Hertz holds 310 medallions, and

eight medallions have reverted to Nantucket. The five local

companies appear to overlap with -- or be successors-in-interest

to -- the five local operators that obtained medallions in 1997.

Under the ordinance, Nantucket retains discretion to "re-issue[],"

"retain[]," or "retire[]" unapportioned medallions. Nantucket

provides no process for awarding licenses to new agencies or for

reissuing the eight medallions that it has retained since 2021.

Becky's began operating on the Island in 2023. The

company rented out two vehicles without a license or medallions,

and Nantucket ordered it to shut down at the end of the tourism

season. While this order apparently conformed with Nantucket's

treatment of other unlicensed, unmedallioned operators, it

- 3 - differed from Nantucket's permissive attitude toward Turo -- an

online platform through which individuals can rent out their

personal vehicles. Claiming that the ordinance may not cover

Turo's facilitation of peer-to-peer rentals, Nantucket allows Turo

rentals without licenses or medallions. In June 2024, local

vehicle owners offered 162 cars for rent on Turo, despite

possessing no licenses or medallions.

In May 2024, Becky's sued Nantucket for monetary and

injunctive relief. Two weeks later, Becky's moved for a temporary

restraining order and preliminary injunction against Nantucket's

enforcement of the ordinance against Becky's. The following month,

the district court held a hearing at which the parties debated the

motion. The court issued a memorandum and order denying the motion

one month later. Becky's Broncos, LLC v. Town of Nantucket,

No. 24-cv-11308, 2024 WL 3402769, at *1 (D. Mass. July 12, 2024).

Becky's timely appealed the district court's denial of a

preliminary injunction.

II.

When ruling on a motion for a preliminary injunction, a

district court must consider four factors: (1) "the movant's

likelihood of success on the merits," (2) "whether and to what

extent the movant will suffer irreparable harm in the absence of

injunctive relief," (3) "the balance of relative hardships," and

(4) "the effect, if any, that an injunction or the lack of one may

- 4 - have on the public interest." Russomano v. Novo Nordisk Inc., 960

F.3d 48, 52 (1st Cir. 2020) (cleaned up). "The party seeking the

preliminary injunction bears the burden of establishing that these

four factors weigh in its favor." Esso Standard Oil Co. (P.R.) v.

Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006). That said, "the

four factors are not entitled to equal weight in the decisional

calculus; rather, likelihood of success is the main bearing wall

of the four-factor framework." Corp. Techs., Inc. v. Harnett, 731

F.3d 6, 9–10 (1st Cir. 2013) (cleaned up).

"We review the district court's ruling on a motion for

a preliminary injunction for abuse of discretion. Within that

framework, we examine legal questions de novo, findings of fact

for clear error, and the balancing of the four factors for abuse

of discretion." Russomano, 960 F.3d at 53 (quotation marks and

citations omitted). When a district court denies a preliminary

injunction and the movant "do[es] not argue on appeal that the

[other three factors] mandate an injunction even if [its] claims

are not likely to succeed on the merits," we may rest an affirmance

solely on an unlikelihood-of-success holding. Ocean State

Tactical, LLC v. Rhode Island, 95 F.4th 38, 43 (1st Cir. 2024);

see also Santiago v. Municipality of Utuado, 114 F.4th 25, 42 (1st

Cir. 2024) (similar).

- 5 - III.

Becky's advances four arguments as to why it will likely

succeed on the merits. We address each in turn and hold that

Becky's has not demonstrated reversible error.

A.

Becky's first contends that the ordinance violates the

dormant Commerce Clause, which bars states and localities from

pursuing "economic protectionism -- that is, regulatory measures

designed to benefit in-state economic interests by burdening out-

of-state competitors." New Energy Co. of Ind. v. Limbach, 486

U.S. 269, 273 (1988). To ascertain whether a regulatory measure

is so designed, we look for evidence of "either discriminatory

purpose or discriminatory effect," recognizing "the primacy of

[the latter] in the dormant Commerce Clause analysis of facially

neutral legislation." Am. Trucking Ass'ns v. R.I. Tpk. & Bridge

Auth., 123 F.4th 27, 36–37 (1st Cir. 2024) (citation omitted).

Becky's argues that the ordinance discriminates in

effect because, as applied, it "insulates from competition five

in-state companies and one out-of-state company doing business as

a local one." At the threshold, Nantucket suggests that Becky's

status as an in-state company means that it cannot trace its

alleged harms to the ordinance and therefore lacks Article III

standing. See Wine & Spirits Retailers, Inc. v. Rhode Island, 481

F.3d 1, 12 (1st Cir. 2007). We disagree. Becky's clearly asserts

- 6 - an injury directly caused by the ordinance and that would be

redressed by an injunction against the ordinance. Cf. Houlton

Citizens' Coal. v. Town of Houlton, 175 F.3d 178, 183 (1st Cir.

1999) ("In Commerce Clause jurisprudence, cognizable injury is not

restricted to those members of the affected class against whom

states or their political subdivisions ultimately discriminate.").

Nantucket also appears to suggest that Becky's cannot assert this

claim because its injuries lie outside the zone of interests

protected by the dormant Commerce Clause. Cf. City of Los Angeles

v. County of Kern, 581 F.3d 841, 845, 846–49 (9th Cir. 2009).

However, even assuming that such an argument is tenable under

Supreme Court precedent, we need not reach it because we conclude

that Becky's claim fails on the merits. See Gianfrancesco v. Town

of Wrentham, 712 F.3d 634, 638 (1st Cir. 2013).

As for the merits, in a paradigmatic case involving

unconstitutional discriminatory effect, a court considers whether

"the [challenged] law chills interstate activity by creating a

commercial advantage for goods or services marketed by local

private actors." Dep't of Revenue of Ky. v. Davis, 553 U.S. 328,

347 (2008). Before the district court, "[t]he proponent of a

dormant Commerce Clause claim bears the burden of proof as to

discrimination." All. of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 40

(1st Cir. 2005). We treat a district court's finding of "no

compelling evidence of discriminatory effect" as a factual finding

- 7 - entitled to respect unless "clearly erroneous." Wine & Spirits,

481 F.3d at 14.

Becky's has not met its burden of showing that the

district court clearly erred in finding insufficient evidence of

discriminatory effect.1 The district court weighed Becky's

evidence -- the history of the ordinance, its early implementation,

the role played by Hertz, and the lack of enforcement against

Turo -- to conclude that Becky's failed to meet its evidentiary

burden. See Becky's Broncos, 2024 WL 3402769, at *3–4.

We cannot fault this analysis. At bottom, the record

before the district court evinces an ordinance that favors

incumbents regardless of their status as in-state or out-of-state

businesses. It takes no toll on interstate commerce rising to the

level of discrimination. In fact, an out-of-state enterprise owns

nearly half of the extant medallions. And Becky's produces no

evidence that any out-of-state enterprises seek to rent out

additional cars on the Island. Instead, the record indicates that

only one company currently seeks a new license and medallions:

Becky's, a local company. In other words, as the record stands,

1 Becky's argues that the district court made no such finding -- i.e., that the court cabined its analysis to "discriminatory intent" and "gloss[ed] over the fact that a law can be discriminatory based on" effect. We read the district court's opinion differently: The court laid out the proper legal standard and found insufficient evidence of both discriminatory intent and discriminatory effect. See Becky's Broncos, 2024 WL 3402769, at *3.

- 8 - no out-of-state enterprise alleges a burden from being unable to

participate more fully in the Island's car-rental marketplace. We

thus discern no basis upon which to conclude that the district

court clearly erred in finding insufficient evidence of

discriminatory effect.2

B.

Becky's next argues that the ordinance runs afoul of

federal and state antitrust law by "unreasonably restrain[ing]

trade." In rejecting this argument, the district court relied on

the doctrine of state-action immunity, Becky's Broncos, 2024 WL

3402769, at *4, which exempts from the Sherman Antitrust Act and

the Massachusetts Antitrust Act certain state and municipal

actions, see Parker v. Brown, 317 U.S. 341, 350–52 (1943); Mass.

Gen. Laws ch. 93, § 7 (2025) (exempting from the Massachusetts

Antitrust Act "[a]ny activities which are exempt from any of the

federal antitrust laws"). Rather than addressing the district

court's rationale that the doctrine of state-action immunity

shields the ordinance, we exercise our prerogative to affirm the

district court on an alternative ground, raised by Nantucket on

2 These same facts lead us to conclude that Becky's has not shown a likelihood of success under its theory that the ordinance imposes a burden on interstate commerce that "is clearly excessive in relation to [its] putative local benefits." Fam. Winemakers of Cal. v. Jenkins, 592 F.3d 1, 9 n.9 (1st Cir. 2010) (citation omitted) (describing the test from Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)).

- 9 - appeal, that is manifest in the record.3 See United States v.

Sirois, 119 F.4th 143, 152 (1st Cir. 2024).

The Sherman Antitrust Act, 15 U.S.C. §§ 1–7, contains

two main regulatory provisions: "Section 1 applies only to

concerted action that restrains trade. Section 2, by contrast,

covers both concerted and independent action, but only if that

action monopolizes or threatens actual monopolization, a category

that is narrower than restraint of trade." Am. Needle, Inc. v.

NFL, 560 U.S. 183, 190 (2010) (cleaned up). In its complaint,

Becky's alleges that "[t]he actions of Defendants complained of

herein violate the Sherman Act, 15 U.S.C. §§ 1, 2." Becky's does

not distinguish between the two sections or offer any specific

allegations from which we can deduce the theory of antitrust

liability on which its claim rests. Becky's appellate briefs take

a similarly nonspecific approach.

At the preliminary-injunction stage, Becky's "bears the

burden of establishing" a likelihood of success on the merits.

Esso Standard Oil, 445 F.3d at 18. In the absence of a concrete

theory of the merits from Becky's, we cannot possibly conclude

that Becky's has shown that it will likely succeed on the merits

of its claim.

3 Becky's asks that we declare the district court's state- action-immunity holding erroneous, even if we affirm its decision on other grounds. We decline this invitation and therefore do not reach the parties' state-action-immunity arguments.

- 10 - C.

Becky's briefly advances a procedural due process

argument that Nantucket has impermissibly infringed its "property

interest" in a license because, in its view, the ordinance

"requires the Select Board to issue a license to all paying

applicants." But even if we accept Becky's interpretation of the

ordinance's licensing provision, Becky's offers no similar

argument concerning the ordinance's medallion provision. Indeed,

the ordinance only mandates that Nantucket issue medallions to

rental agencies that received licenses in 1996,4 and it allows

Nantucket to "re-issue[]," "retain[]," or "retire[]" unapportioned

medallions as it sees fit.

Because Becky's requires both a license and medallions

to operate, and because it develops no claim to a "property

interest" in medallions, it cannot secure preliminary injunctive

relief under its procedural due process argument.

D.

Finally, Becky's presses a substantive due process

challenge. Because Becky's does not assert a fundamental liberty

4 "[Nantucket] shall issue each rental agency one rental vehicle medallion (RVM) for each motor vehicle listed in its 1996 [license] application and which received a rental sticker."

- 11 - interest,5 we subject the ordinance to rational basis review.6 See

Mulero-Carrillo v. Román-Hernández, 790 F.3d 99, 107 (1st Cir.

2015). Thus, we must rule against Becky's if "any reasonably

conceivable state of facts . . . could provide a rational basis

for the" ordinance. Id. (quoting FCC v. Beach Commc'ns, Inc., 508

U.S. 307, 313 (1993)).

Nantucket justifies the ordinance as a means of

alleviating "parking, traffic safety, open space, and congestion

concerns." Nantucket has produced evidence to substantiate those

concerns, and we have previously recognized "traffic safety and

community aesthetics" as "constitut[ing] significant governmental

interests." Naser Jewelers, Inc. v. City of Concord, 513 F.3d 27,

34 (1st Cir. 2008). The ordinance, which directly limits the

number of rental cars on Nantucket's roads, "rationally relate[s]

to [these] legitimate government" interests. Mulero-Carrillo, 790

F.3d at 107. And Nantucket has rationally explained its decision

not to enforce the ordinance against Turo, citing both legal issues

and enforcement-capacity concerns. Indeed, Nantucket's position

5 On reply, Becky's calls our attention to Broad and McCrensky's fundamental right to associate as a family. Becky's has waived this argument by raising it for the first time on reply, and we thus do not address it. See Bekele v. Lyft, Inc., 918 F.3d 181, 186 (1st Cir. 2019). 6 Nantucket argues that an even laxer standard applies. Because we conclude that the ordinance survives rational basis review, we need not decide whether Nantucket is correct.

- 12 - that the ordinance cannot reach Turo only magnifies Nantucket's

desire to minimize other sources of traffic, such as Becky's.

IV.

Discerning no reversible error in the district court's

unlikelihood-of-success-on-the-merits holding, we affirm its

denial of Becky's motion for a preliminary injunction.

- 13 -