426 Bloomfield Ave. Corp. v. City of Newark

• Decision Date: 02 November 1995
• Docket Number: Civ. A. No. 95-1974 (MTB).
• Citation: 904 F. Supp. 364
• Parties: 426 BLOOMFIELD AVENUE CORP., t/a C & J Towing Service; B & C Towing, Inc.; and Dente Bros. Towing, Inc., Plaintiffs, v. CITY OF NEWARK, Defendant.
• Court: U.S. District Court — District of New Jersey

904 F. Supp. 364

426 BLOOMFIELD AVENUE CORP., t/a C & J Towing Service; B & C Towing, Inc.; and Dente Bros. Towing, Inc., Plaintiffs, v.CITY OF NEWARK, Defendant.

Civ. A. No. 95-1974 (MTB).

United States District Court, D. New Jersey.

November 2, 1995.

Edmond M. Konin, Mason, Griffin & Pierson, Princeton, NJ, for Plaintiffs.

Kevin P. Malone, Assistant Corporate Counsel, Michelle Hollar-Gregory, Corporate Counsel, City of Newark, Newark, NJ, for defendantCity of Newark.

B. Stephen Finkel, Assistant Attorney General, Office of the Attorney General of New Jersey, R.J. Hughes Justice Complex, Trenton, NJ, for petitionerAndrew J. Karpinski, New Jersey Commissioner of Insurance.

OPINION

BARRY, District Judge.

This matter has come before the court on plaintiffs' motion and defendant's cross-motion for summary judgment pursuant to Fed. R.Civ.P. 56(c).For the reasons set forth below, plaintiffs' motion will be denied and defendant's cross-motion will be granted as to Count One of plaintiffs' complaint.Also for the reasons set forth below, this court will abstain from ruling with respect to the remainder of plaintiffs' claims, and those claims will be dismissed.

I.STATEMENT OF THE CASE

As a municipal corporation, the City of Newark("the City") is authorized by the State of New Jersey to provide towing and storage services necessary and appropriate to the performance of municipal functions by contracting for such services with private towing and storage companies.Traditionally, the City had secured its towing and storage services through a system of public bidding.Towing contracts were awarded to the successful bidders in each of the four towing districts within the City limits.¹In return for being awarded a towing contract, the recipient was obligated to make certain payments to the City.Between 1991 and January 1995, however, the City awarded no towing contracts and, instead, entered into a series of "emergency arrangements" with towers, including plaintiffs, for the provision of towing services.

On January 4, 1995, the Newark City Council adopted OrdinanceNo. 6S & FA010495 ("the Ordinance").The Ordinance eliminated the bidding system, and established a new rotational system for the provision of the City's towing and storage needs.²The Ordinance mandates the licensing of participating towers, and imposes minimum personnel, equipment and insurance requirements.In addition, it sets maximum fees which participating towers may charge for services including towing, winching, mileage, storage, and cancellation.The Ordinance regulates only non-consensual towing activity — that is, the towing of privately owned vehicles (typically damaged, illegally parked, or found stolen and abandoned) performed at the request of the City and eventually paid for by the owner of the vehicle.³Towers found in violation of the Ordinance are subject to a $1,000 fine and the revocation of their "Official Tower's" license.

On January 1, 1995, the Federal Aviation Administration Authorization Act ("the Act") of 1994 became effective, and was codified at 49 U.S.C. § 11501(h) as part of the Interstate Commerce Act.The Act provides that,

a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... or any motor private carrier with respect to the transportation of property.

49 U.S.C. § 11501(h)(1).

Plaintiffs are three towing companies that regularly have provided non-consensual towing services for the City.They bring this action to enjoin enforcement of the Ordinance, and for a declaration of its illegality.Specifically, plaintiffs contend, in Count One of their complaint, that the Ordinance is preempted by the federal Act.In Count Two, plaintiffs claim that the Ordinance is unfairly excessive in the requirements imposed on towers, is excessively burdensome on the public interest, is vague and overbroad, is arbitrary and capricious, and is unrelated to a legitimate government interest.In Count Three, plaintiffs allege that the Ordinance was adopted for the unlawful purpose of retaliating against plaintiffs for their refusal to pay allegedly unlawful fees imposed upon them by the City under the old bidding system.⁴

In response to Count One, the City alleges that the Act does not apply to municipal nonconsensual towing operations and, thus, does not preempt the Ordinance.⁵In answering Counts Two and Three of plaintiffs' complaint, the City contends that the Ordinance was adopted as a rational response to endemic abuses under the prior bidding system including the overcharging of customers and the towers' refusal to honor the lawful terms of their municipal contracts.All parties have stipulated that no material facts are in dispute and have moved for summary judgment.

II.JURISDICTION AND STANDING

This court has jurisdiction under 28 U.S.C. § 1331."A plaintiff who seeks injunctive relief from state regulation, on the ground that such regulation is preempted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail, thus presents a federal question which the federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve."Shaw v. Delta Air Lines, Inc.,463 U.S. 85, 96 n. 14, 103 S.Ct. 2890, 2899 n. 14, 77 L.Ed.2d 490(1983)(exercising jurisdiction over plaintiff's claims for both injunctive and declaratory relief).

In order to have standing to sue, plaintiffs must show the existence of injury-in-fact that is caused by the defendant's actions, and that is redressable by this court.Sammon v. New Jersey Bd. of Med. Examiners,66 F.3d 639(3d Cir.1995)(quoting standard enunciated in Lujan v. Defenders of Wildlife,504 U.S. 555, 560-61, 112 S.Ct. 2130, 2136-37, 119 L.Ed.2d 351(1992)).Because the Ordinance currently is in effect, plaintiffs are suffering injury-in-fact by being compelled under the Ordinance to charge lower prices than they allege they are entitled to charge under the federal Act.In addition, plaintiffs meet the redressability requirement in that plaintiffs' injury obviously would be redressed by a favorable decision.Plaintiffs have standing to sue.

III.DISCUSSION

Because this case deals with express, rather than implied, federal preemption, the only issue for consideration is whether the Act prohibits the type of towing regulated by the Ordinance.The scope of the Act's preemptive force is strikingly broad.Subject to limited exceptions, the Act is a blanket prohibition on state and local regulation of trucking prices, routes, and services.If the Act reaches municipal non-consensual towing, then, it necessarily would conflict with and preempt the Ordinance, at least with respect to the service and rate schedules contained in sections 3and10 of the Ordinance.

A.The Federal Act

"The question whether a certain state action is pre-empted by federal law is one of congressional intent.The purpose of Congress is the ultimate touchstone."Ingersoll-Rand Co. v. McClendon,498 U.S. 133, 137-38, 111 S.Ct. 478, 481-82, 112 L.Ed.2d 474(1990)(internal quotation marks omitted)."To discern Congress' intent we examine the explicit statutory language and the structure and purpose of the statute."Id. at 138.Thus, this court initially must reject plaintiffs' suggestion that the terms of the specific subsection at issue in this case must be interpreted literally, and without reference to the entire statute."In so concluding, we do nothing more, of course, than follow the cardinal rule that a statute is to be read as a whole, since the meaning of statutory language, plain or not, depends on context."King v. St. Vincent's Hospital,502 U.S. 215, 221, 112 S.Ct. 570, 574, 116 L.Ed.2d 578(1991).See alsoKokoszka v. Belford,417 U.S. 642, 650, 94 S.Ct. 2431, 2435, 41 L.Ed.2d 374(1974)(stating that a court must consider "the whole statute(or statutes on the same subject) and the objects and policy of the law, as indicated by its various provisions, and give to it such a construction as will carry into execution the will of the Legislature").

Accordingly, to understand the scope of the Federal Aviation Administration Authorization Act of 1994(enacted as subsection (h) to 49 U.S.C. § 11501), one must read it in the context of the entire Interstate Commerce Act, of which it is a part.Unfortunately, the Interstate Commerce Act consists of a complex web of exceptions, exemptions and cross-references which must be parsed through both individually and collectively.

On August 23, 1994, President Clinton signed the Act into law, and it became effective on January 1, 1995.Wholly apart from the facial limits of its title, which give this court some pause, the Act amended 49 U.S.C. § 11501(encaptioned "Interstate Commerce Commission authority over intra state transportation"(emphasis added)) to include a new subsection (h) entitled "Pre-emption of State economic regulation of motor carriers."That subsection, the crux of this case, deregulates certain intrastate trucking activity by providing, in part, that,

(1) General rule.— Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force or effect of law related to a price, route, or service of any motor carrier (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4) of this title) or any motor private carrier with respect to the transportation of property.

49 U.S.C. § 11501(h)(1).The Act goes on in subsections (2) and (3) to exempt the "safety regulatory authority of a State with respect to motor vehicles," state regulations with regard to the size, weight and insurance coverage of vehicles, the transportation of household goods, and...