Desoto Cab Co. v. Picker

228 F. Supp. 3d 950, 2017 U.S. Dist. LEXIS 5004, 2017 WL 118810
CourtDistrict Court, N.D. California
DecidedJanuary 12, 2017
DocketCase No. 15-cv-04375-EMC
StatusPublished
Cited by7 cases

This text of 228 F. Supp. 3d 950 (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, 228 F. Supp. 3d 950, 2017 U.S. Dist. LEXIS 5004, 2017 WL 118810 (N.D. Cal. 2017).

Opinion

ORDER GRANTING DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS

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.1 Flywheel, a “traditional” taxi company, asserts a § 1983 equal protection claim against the CPUC based on the agency’s assertion of jurisdiction over new transportation carriers such as Uber, Lyft, and Sidecar. Flywheel contends that these so-called transportation network carriers (“TNCs”) are de facto taxi companies and therefore should be subject to the same rules and regulations as traditional taxi companies, which are regulated not by the CPUC but rather by local municipalities. The gist of Flywheel’s complaint is that the CPUC’s rules and regulations governing TNCs are less strict than the rules and regulations of the local municipalities governing traditional taxis so that, in the final analysis, the TNCs are more favorably treated. According to Flywheel, TNCs are de facto taxi companies much like traditional taxi companies, and thus all should be regulated by local municipalities or all should be regulated by the CPUC, rather than subjected to a disparate bifurcated regime. Failure to do so, according to Flywheel, violates the Equal Protection Clause of the Fourteenth Amendment.

Currently pending before the Court is the CPUC’s motion for judgment on the pleadings, or in the alternative, for summary judgment.

I. FACTUAL & PROCEDURAL BACKGROUND

A. Regulatory Framework

As an initial matter, the Court takes judicial notice of the following:

• Article XII, § 4 of the California Constitution provides that the CPUC “may fix rates and establish rules for the transportation of passengers.” Cal. Const., art. XII, § 4.
• Article XII, § 8, of the California Constitution, provides “A city, county, or other public body may not regulate matters over which the Legislature grants regulatory power to the [CPUC]. This section does not affect power over public utilities re[953]*953lating to the making and enforcement of police, sanitary, and other regulations concerning municipal affairs pursuant to a city charter existing on October 10, 1911, unless that power has been revoked by the city’s electors, or the right of any city to grant franchises for public utilities or other businesses on terms, conditions, and in the manner prescribed by law.” Cal. Const., art. XII, § 8. The California Supreme Court has explained that, under this provision, “the powers of control over existing public utilities which were vested in any city at the time ... are still retained by such city.” Title Guar. & Trust Co. v. Railroad Com. of Cal., 168 Cal. 295, 301, 142 P. 878 (1914) (discussing provision in California Constitution that was the predecessor to Article XII, § 8).
• Under the California Public Utilities Code, the CPUC “shall see that the provisions of the Constitution and statutes of this State affecting public utilities ... are enforced and obeyed.... ” Cal. Pub. Util. Code § 2101.
• Chapter 8 of the California Public Utilities Code governs “charter-party carriers of passengers.” “ ‘[CJhar-ter-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,” with “prearranged basis” meaning that “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.
• Under Chapter 8, the CPUC has the authority to “supervise and regulate every charter-party carrier of passengers in the State.” Id. § 5381. Among other things, the CPUC is required to “ensure that every charter-party carrier of passengers operates on a prearranged basis within the state.” Id. § 5381.5(a).
• Chapter 8 contains a provision that expressly states the chapter does not apply to, inter alia, “[tjaxicab transportation service licensed and regulated by a city or county, by ordinance or resolution, rendered in vehicles designed for carrying not more than eight persons.” Cal. Pub. Util. Code § 5353(g); see also Cal. Gov’t Code § 53075.5 (providing that, “[njotwithstanding 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”).2

Accordingly, under the state statutory framework, taxicab companies, unlike charter-party carriers of passengers, are specifically excluded from the CPUC’s jurisdiction; they are regulated by cities and counties, not by the CPUC.

[954]*954B. Operative Complaint

Against this backdrop, Flywheel alleges as follows in its first amended complaint (“FAC”).

Flywheel is “a taxi company that operates on-demand transportation services in the City and County of San Francisco.” FAC ¶ 13. As a traditional taxi company, Flywheel is regulated by the San Francisco Municipal Transportation Agency (“SFMTA”) and not the CPUC. See FAC ¶¶ 11-12. “The CPUC does not have jurisdiction over and cannot regulate taxi transportation services in California. City and county governments have exclusive jurisdiction over taxi transportation services in California.” FAC ¶ 3.

“In October 2012, the SFMTA exercised jurisdiction over UberX, Lyft and Sidecar and began to regulate them as taxi companies.” FAC ¶ 20. However, some two months later (ie., in December 2012), the CPUC instituted a rulemaking process to assess how companies such as UberX, Lyft, and Sidecar should be regulated. See FAC ¶ 21.

In September 2013, the CPUC issued a decision in which it adopted rules and regulations that govern TNCs (ie,, the Phase I Decision), thus, implicitly asserting jurisdiction over TNCs. This created a scheme where TNCs are regulated by the CPUC whereas traditional taxi companies are regulated by local municipalities.

With respect to the issue of the CPUC’s jurisdiction over TNCs, the CPUC noted as follows in its Phase I Decision:

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.

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Cite This Page — Counsel Stack

Bluebook (online)
228 F. Supp. 3d 950, 2017 U.S. Dist. LEXIS 5004, 2017 WL 118810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/desoto-cab-co-v-picker-cand-2017.