Desoto Cab Co. v. Picker

196 F. Supp. 3d 1107, 2016 U.S. Dist. LEXIS 94809, 2016 WL 3913643
CourtDistrict Court, N.D. California
DecidedJuly 20, 2016
DocketCase No. 15-cv-04375-EMC
StatusPublished
Cited by2 cases

This text of 196 F. Supp. 3d 1107 (Desoto Cab Co. v. Picker) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Desoto Cab Co. v. Picker, 196 F. Supp. 3d 1107, 2016 U.S. Dist. LEXIS 94809, 2016 WL 3913643 (N.D. Cal. 2016).

Opinion

ORDER DENYING DEFENDANTS’ MOTION TO DISMISS

EDWARD M. CHEN, United States District Judge •

Plaintiff Desoto Cab Company, Inc., d/b/a Flywheel Taxi (“Flywheel”), has filed a suit for declaratory and injunctive relief against the Commissioners of the California Public Utilities Commission (“CPUC”), in their official capacities only. Flywheel, a “traditional” taxi company, asserts a § 1983 equal protection claim against the CPUC based on its assertion of jurisdiction over new transportation carriers such as Uber, Lyft, and Sidecar. Flywheel contends that these so-called transportation network carriers (“TNCs”)1 are de facto taxi companies and therefore should be subject to the same rules and regulations as traditional taxi companies, which are governed not by the CPUC but rather by local municipalities such as the San Francisco Municipal Transportation Agency (“SFMTA”). The gist of Flywheel’s complaint is that the CPUC’s rules and regulations are less strict than the rules and regulations of, e.g., the SFMTA, so that, by exercising jurisdiction to regulate TNCs and freeing them of the more demanding regulatory requirements of the SFMTA, the CPUC is affording TNCs more favorable treatment than traditional taxi companies. According to Flywheel, because TNCs are taxi companies just like traditional taxi companies, all should be treated equally: all should be regulated by either local municipalities such as the SFMTA or the CPUC.

The CPUC moved to dismiss Flywheel’s complaint based on ripeness, jurisdictional, and joinder grounds. Having considered the parties’ briefs and accompanying submissions, the Court hereby DENIES the motion to dismiss.

I. FACTUAL & PROCEDURAL BACKGROUND

A. California Public Utilities Code and CPUC Orders and Decisions

Before reviewing the allegations in Flywheel’s FAC, the Court first considers relevant sections from the California Public Utilities Code and then some of the orders/decisions issued by the CPUC regarding TNCs.2

Chapter 8 of the California Public Utilities Code governs “charter-party carriers of passengers.” “ ‘[Cjharter-party carrier of passengers’ means every person engaged in the transportation of persons by motor vehicle for compensation, whether in common or contract carriage, over any public highway in this state.” Cal. Pub. Util. Code § 5360. Charter-party carriers of passengers are required to “operate on a prearranged basis”; “prearranged basis” means “the transportation of the prospective passenger was arranged with the carrier by the passenger, or a representative of the passenger, either by written contract or telephone.” Id. § 5360.5; see also [1110]*1110id. § 5381.5(a) (providing that the CPUC must “ensure that every charter-party carrier of passengers operates on a prearranged basis within the state”). The distinction between charter-party carriers and traditional taxi companies seems to turn on this concept of “prearranged.” Traditional taxicabs can provide an on-demand service — ie., they can be hailed in the street — and therefore there is no prearrangement. Charter-party carriers, in contrast, may not be hailed in the street.

The CPUC has the authority to “supervise and regulate every charter-party carrier of passengers in the State.” Id. § 5381; see also Cal. Const., art. XII, § 4 (providing that the CPUC “may fix rates and establish rules for the transportation of passengers”). Chapter 8, however, does not apply to “[t]axicab transportation service licensed and regulated by a city or county,” Cal. Pub. Util, Code § 5353(g), or to “transportation service.. .rendered wholly within the corporate limits of a single city or city and county and licensed and regulated by ordinance.” Id. § 5353.5; see also id. § 5353(a) (providing the same); Cal. Gov’t Code § 53075.5 (providing that, “[notwithstanding Chapter 8 (commencing with Section 5351) of Division 2 of the Public Utilities Code, every city or county shall protect the public health, safety, and welfare by adopting an ordinance or resolution in regard to taxicab transportation service rendered in vehicles designed for carrying not more than eight persons, excluding the driver, which is operated within the jurisdiction of the city or county”).

In December 2012, the CPUC issued an order instituting rulemaking related to TNCs. See generally Docket No. 22 (Ex. A) (order instituting rulemaking (“OIR”)). The CPUC’s order took note of the new business model being used by TNCs such as Uber, Lyft, and Sidecar and expressed concern about the potential impact of these companies on public safety. The CPUC sought comment on various issues, including not only safety and insurance but also “how the Commission’s existing jurisdiction ... should be applied to businesses like Uber, Sidecar, and Lyft.” Docket No. 22 (Ex. A) (OIR at 6); see also Docket No. 22 (Ex. A) (OIR at 10) (summarizing issues for which comment was sought).

In September 2013, the CPUC issued a decision adopting rules and regulations related to TNCs. This decision shall hereinafter be referred to as the Phase I decision. See generally Docket No. 22 (Ex. B) (Phase I decision). •

With respect to the issue of the CPUC’s jurisdiction over TNCs, the Phase I decision stated as follows:

California law currently recognizes and regulates three modes of passenger transportation for compensation: taxi services, regulated by cities and/or counties; and charter-party carrier services, and passenger-stage companies, regulated by the Commission. In recent years, the communications revolution in wireless service, smartphones, and on-line apps has further facilitated the development and adoption of passenger transportation for compensation to a point where passengers seeking rides can be readily connected with drivers willing to provide rides in private vehicles. This development in passenger transportation for compensation, referred to in this proceeding as TNCs and associated with companies including UberX, Lyft, and Sidecar, does not fit neatly into the conventional understandings of either taxis or limousines, but that does not mean that this Commission’s responsibility to public safety in the transportation industry should be ignored and/or left for individual companies or the market place to control.

Docket No. 22 (Ex. B) (Phase I Decision at 11-12).

[1111]*1111Accordingly, in the Phase I decision, the CPUC set certain rules and regulations for each TNC — e.g., “we require each TNC (not the individual drivers) to obtain a permit from the California Public Utilities Commission (Commission), require criminal background checks for each driver, establish a driver training program, implement a zero-tolerance policy on drugs and alcohol, and require insurance coverage.” Docket No. 22 (Ex. B) (Phase I Decision at 3).

The Phase I decision, however, did not foreclose further rules and regulations applicable to TNCs. Indeed, the decision ordered

a second phase to this proceeding to review the Commission’s existing regulations over limousines and other charter-party carriers to ensure that the public safety rules are up to date, and that the rules are responsive to the needs of today’s transportation market.

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Related

Overton v. Uber Techs., Inc.
333 F. Supp. 3d 927 (N.D. California, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
196 F. Supp. 3d 1107, 2016 U.S. Dist. LEXIS 94809, 2016 WL 3913643, Counsel Stack Legal Research, https://law.counselstack.com/opinion/desoto-cab-co-v-picker-cand-2016.