703 F.3d 262 (5th Cir. 2012), 12-30921, Dennis Melancon, Inc. v. City of New Orleans

Docket Nº:12-30921.
Citation:703 F.3d 262
Opinion Judge:KING, Circuit Judge.
Party Name:DENNIS MELANCON, INCORPORATED, individually and on behalf of and as representative of all CPNC owners in the City of New Orleans; Patrick Murphy, individually and on behalf of and as representative of all CPNC owners in the City of New Orleans; Eric Husted, individually and on behalf of and as representative of all CPNC owners in the City of New Or
Attorney:John T. Culotta (argued), Andrew G. Legrand, Culotta Law Firm, L.L.C., David M. McDonald (argued), Bernard, Cassisa, Elliot & Davis, A.P.L.C., Leonard Marty Berins (argued), Gerald Wasserman, L.L.C., Gerald Wasserman, Law Office of Gerald Wasserman, Metairie, LA, Ike Spears (argued), Spears & Spe...
Judge Panel:Before STEWART, Chief Judge, and KING and OWEN, Circuit Judges.
Case Date:December 18, 2012
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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703 F.3d 262 (5th Cir. 2012)

DENNIS MELANCON, INCORPORATED, individually and on behalf of and as representative of all CPNC owners in the City of New Orleans; Patrick Murphy, individually and on behalf of and as representative of all CPNC owners in the City of New Orleans; Eric Husted, individually and on behalf of and as representative of all CPNC owners in the City of New Orleans; William Kerner, IV, The Succession of, individually and on behalf of and as representative of all CPNC owners in the City of New Orleans, Plaintiffs-Appellees-Cross-Appellants,

v.

CITY OF NEW ORLEANS, Defendant-Appellant-Cross-Appellee.

Monroe Coleman; Coleman Cab Company; Placido Cab Service, Incorporated; Veterans Cab Company, L.L.C.; Patio Cabs; U.S. Cabs; Niran Gunasekara; Wesner Derosier; Alliance Cab Service, L.L.C., Plaintiffs-Appellees-Cross-Appellants,

v.

City of New Orleans, Defendant-Appellant-Cross-Appellee.

Cedric Richard; Postene Louisjeune; Herman W. Woods; Calvin Levy; William A. Marks, Incorporated; Vahid Habib; Bosna Express, L.L.C.; Panamerica, L.L.C.; Matta's Transportation Company; Ramsis Transportation, Incorporated; Aiman Gibrial; Perle Des Antilles, L.L.C.; Eastern Cab, Incorporated; Royal Cab, Incorporated; Jeanmarie Desir; Messilien Georges; Brissette, Incorporated; Travis K. Brissette; Liberty Bell Cab, L.L.C.; Riverbend Cab, L.L.C.; Pelican Cab, L.L.C.; Halid Habib; Hampton Transportation and Cab Service CPNC 997, L.L.C., Plaintiffs-Appellees-Cross-Appellants,

v.

Pura Bascos; Malachi Hull; City of New Orleans, Defendants-Appellants-Cross-Appellees.

No. 12-30921.

United States Court of Appeals, Fifth Circuit.

December 18, 2012

Page 263

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John T. Culotta (argued), Andrew G. Legrand, Culotta Law Firm, L.L.C., David M. McDonald (argued), Bernard, Cassisa, Elliot & Davis, A.P.L.C., Leonard Marty Berins (argued), Gerald Wasserman, L.L.C., Gerald Wasserman, Law Office of Gerald Wasserman, Metairie, LA, Ike Spears (argued), Spears & Spears, New Orleans, LA, for Plaintiffs-Appellees-Cross-Appellants.

James M. Garner (argued), Debra Jean Fischman, Sher Garner Cahill Richter Klein & Hilbert, L.L.C., Bobby Marzine Harges, Matthew Joseph Lindsay, Mary Katherine Taylor, Sharonda R. Williams (argued), City Attorney's Office, New Orleans, LA, for Defendants-Appellants-Cross-Appellees.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before STEWART, Chief Judge, and KING and OWEN, Circuit Judges.

KING, Circuit Judge.

This case involves three consolidated lawsuits filed by plaintiffs who challenge the lawfulness of various ordinances enacted by the City of New Orleans regulating that city's taxicab industry. After the plaintiffs obtained from a Louisiana state court a temporary restraining order prohibiting enforcement of the ordinances, the City of New Orleans filed a motion for declaratory relief in federal court, seeking to dissolve the restraining order. The plaintiffs, in turn, moved for a preliminary injunction prohibiting enforcement of the ordinances. The district court granted in part and denied in part each motion, and both parties now appeal. For the reasons set forth below, we VACATE the district court's order insofar as it granted a preliminary injunction; we AFFIRM that order insofar as it denied a preliminary injunction; and we REMAND the case for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1956, the City of New Orleans (" the City" ) passed various ordinances creating

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the regulatory framework within which the City's taxicab industry currently operates. Since that time, the industry has been heavily regulated. One important aspect of the City's regulatory framework is the requirement imposed by section 162-151 of the Municipal Code of Ordinances (the " Municipal Code" ) that a taxicab operator obtain from the City a certificate of public necessity and convenience (" CPNC" ) prior to operating a vehicle as a taxicab. Orleans Parish, La., Code of Ordinances § 162-151 (2000). Until 2009, section 162-186 limited to a total of 1,600 the number of CPNCs the City could issue. Orleans Parish, La., Code of Ordinances § 162-186 (2004). As a result of this limited supply, and because the City permitted CPNC holders to transfer their certificates for consideration, a secondary market developed for the exchange of CPNCs. While all CPNC transfers required approval by the City, a related ordinance provided that such approval would be granted upon the transferee's completion of various City-imposed requirements. Orleans Parish, La., Code of Ordinances § 162-321 (1995).

In April 2012, the City enacted various ordinances amending and adding to the regulatory framework governing the taxicab industry. Eight of those provisions are presently at issue: (1) section 162-58 prohibits the issuance of CPNCs for vehicles that previously have been used as taxicabs or law enforcement vehicles, or that have been titled as " salvage," " rebuilt," " junk," " total loss," or " reconditioned" ; (2) section 162-59 provides that " CPNCs are privileges and not rights" ; (3) section 162-321 allegedly makes previously mandatory transfers of CPNCs discretionary, and prohibits their transfer during the pendency of a suspension or revocation proceeding; (4) section 162-609 requires all taxicabs to maintain trip sheets for a two-year period; (5) section 162-613 places an age limit of eleven model years on vehicles used as taxicabs beginning August 1, 2012, and seven model years beginning January 1, 2014; 1 (6) section 162-659 declares that all taxicabs must have credit/debit card machines equipped with Passenger Information Monitors that permit wireless communication to and from the taxicabs; (7) section 162-660 mandates that all taxicabs be equipped with a security camera; and (8) section 162-661 requires that taxicabs be fitted with global positioning systems (" GPS" ).

Shortly after the City enacted these ordinances, three groups of individuals and companies— all of whom either own or hold interests in CPNCs (" Plaintiffs" )— filed separate lawsuits in state and federal court challenging the ordinances.2 In particular, Plaintiffs asserted that sections 162-59 and 162-321, the ordinances declaring CPNCs to be " privileges and not rights" and allegedly making their transfer discretionary: (1) effected a regulatory taking under the Fifth Amendment, and (2) impaired the obligation of contract, in violation of the federal and Louisiana constitutions, as well as various Louisiana state laws. Plaintiffs further asserted that sections 162-58, 162-609, 162-613, 162-659, 162-660, and 162-661— all of which pertain to taxicab upgrade requirements (" the Upgrade Ordinances" ): (1) violated the Fourteenth Amendment's Equal Protection

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Clause, (2) constituted excessive governmental regulation that imposed an unreasonable financial burden, (3) effected a regulatory taking under the Fifth Amendment, (4) violated the right to privacy, and (5) impaired the obligation of contract, in violation of the federal and Louisiana constitutions, as well as various Louisiana state laws.

On July 20, 2012, a Louisiana state court issued a temporary restraining order (" TRO" ) prohibiting the City from enforcing the challenged ordinances, most of which were due to take effect on August 1, 2012. The underlying case subsequently was removed to the United States District Court for the Eastern District of Louisiana and consolidated with two related cases that also had been removed to, or were originally filed in, that court. On July 27, 2012, the City filed a motion for declaratory relief, seeking a declaration dissolving the TRO. Plaintiffs, in turn, moved for a preliminary injunction prohibiting enforcement of the ordinances.

After a two-day hearing, the district court granted in part and denied in part the City's motion for declaratory relief and Plaintiffs' motion for a preliminary injunction. Underlying the court's ruling was its conclusion that Plaintiffs had satisfied the requirements for obtaining a preliminary injunction in connection with sections 162-59 and 162-321. Most significantly, the court held that Plaintiffs had demonstrated a substantial likelihood of prevailing on their allegation that sections 162-59 and 162-321 affected protectable property rights— the CPNCs— upon which an unconstitutional regulatory taking had been imposed. However, the court also concluded that Plaintiffs had not demonstrated a substantial likelihood of prevailing on their allegation that sections 162-59 and 162-321 constituted legislation impairing the obligation of contract, nor had they satisfied the requirements for obtaining a preliminary injunction in connection with their numerous allegations related to the Upgrade Ordinances.

The City appeals, arguing that the district court erred in holding that Plaintiffs demonstrated a substantial likelihood of prevailing on their allegation that CPNCs are protectable property and that sections 162-59 and 162-321 effect a regulatory taking. Plaintiffs also appeal, claiming the district court erred by: (1) holding that they had not demonstrated a substantial likelihood of prevailing on their claim that sections 162-59 and 162-321 constituted legislation impairing the obligation of contract, and (2) denying their motion for a preliminary injunction in connection with the Upgrade Ordinances. We expedited the briefing and also heard oral argument on an expedited basis.

II. STANDARD OF REVIEW

We review a district court's ultimate decision to grant or deny a preliminary injunction for abuse of discretion.3 Janvey v. Alguire, 647 F.3d 585, 591-92, 595...

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