Ace Auto Body & Towing, Ltd. v. City of New York
| Decision Date | 26 March 1999 |
| Docket Number | Docket Nos. 97-9499,97-9551 |
| Citation | 171 F.3d 765 |
| Court | U.S. Court of Appeals — Second Circuit |
| Parties | Fed. Carr. Cas. P 84,089 ACE AUTO BODY & TOWING, LTD.; Atlam Towing Service, Inc.; Bangs Towing, Inc.; Ben's Towing Service; Bills Towing Service, Inc.; Bragg Towing Co.; Broadway Auto Service, Inc.; C & J Collision Service, Inc.; Charles Schmidt and Sons, Inc.; Chester's Highway Garage of PW, Inc.; CK Towing, Inc.; Dave's Heavy Towing, Inc.; Do-Rite Reliable Towing, Inc.; Efficiency Enterprise, Inc.; East Coast Industrial Uniform Corp.; F & B Truck Repair & Maintenance, Inc.; Galasso Trucking, Inc.; Gesco Ice Cream Vending Corp.; Hendrickson Towing, Inc.; Kenny's Fleet Maintenance, Inc.; Leonard Auto Body; Marjam Supply Co., Inc.; Model Towing & Recovery, Inc.; Murray Rude Services, Inc.; Parkview Towing Corp.; Plaza Ambulette Service, Inc.; Rapid Armored Corporation; Sunny Day Enterprise Industries, Ltd.; Tommy Bug Auto Repairs, Inc.; Ultimate Transport, Inc.; Zant Pre Inc., doing business as presant glass, Plaintiffs-Appellants-Cross-Appellees, v. The CITY OF NEW YORK, Defendant-Appellee-Cross-Appellant. |
Bruce J. Robbins, Eastchester, New York, for Plaintiffs-Appellants-Cross-Appellees.
Mordecai Newman, New York, New York (Jeffrey D. Friedlander, Acting Corporation Counsel of the City of New York, Larry A. Sonnenshein, Robin Binder, New York, New York, of counsel), for Defendant-Appellee-Cross-Appellant.
Before: NEWMAN, CARDAMONE, and PARKER, Circuit Judges.
Looming over our Republican form of government, where each state in the exercise of sovereignty enacts its own laws, lies the Supremacy Clause of the U.S. Constitution, from which clause has been derived a legal concept known--to judges and lawyers, if not to laypersons--as preemption. Preemption, the doctrine by which federal law supplants contrary state and local law, is the subject of this appeal. Plaintiffs, who are members and affiliates of the regional and New York City tow truck industry, filed an action against the defendant City in the United States District Court for the Southern District of New York (Denise Cote, Judge) challenging a City ordinance aimed at eliminating the practice of "chasing"--where tow trucks race one another to an accident scene in competition for business--on the grounds that the regulation of intrastate towing is a field explicitly preempted by federal law. The challenge was turned down.
This appeal requires us to determine the extent to which a federal statute, 49 U.S.C. § 14501(c), preempts New York City laws regulating the municipal tow truck industry and, in addition, on the City's cross-appeal, to determine whether such preemption is beyond Congress' authority under the Commerce Clause, U.S. Const. art. I, § 8, cl. 3.
New York City laws governing municipal towing are codified in the City Administrative Code (Admin.Code), Title 20, Chapter 2, Subchapter 31, §§ 20-495 to -528 (1996). The implementing regulations, promulgated by the New York City Department of Consumer Affairs (Department), are found in the Rules of the City of New York (RCNY), Title 6, Chapter 2, Subchapter EE, §§ 2-361 to -376 (1995). Because these laws are voluminous and were examined in detail by the district court, see Ace Auto Body & Towing, Ltd. v. City of New York, No. 96 Civ. 6547(DLC), 1997 WL 669891, at * 1-* 4 (S.D.N.Y. Oct. 28, 1997) (Ace ), we limit our discussion to those aspects most pertinent to this appeal.
The City towing laws require tow truck businesses and operators employed by them to be licensed to engage in towing by the Department. See Admin. Code § 20-496. To qualify for a license, a towing company must maintain liability insurance, post a surety bond or cash alternative, and demonstrate that its principals have no relevant criminal history. See Admin. Code §§ 20-498(a), -499, -500; 6 RCNY §§ 2-362, -375. License requirements for operators include a minimum age of 18 years, possession of an appropriate driver's license, and lack of traffic or criminal convictions. See Admin. Code § 20-498; 6 RCNY § 2-364. Additional rules govern the mechanical safety of tow trucks, the information displayed on trucks, reporting, and recordkeeping. See Admin. Code §§ 20-501, -503, -507; 6 RCNY §§ 2-363, -365.
Under its towing laws, the City has established two management programs applicable to vehicles disabled by accidents and weighing less than 15,000 pounds: the Directed Accident Response Program (DARP), see Admin. Code § 20-518; and the Special Accident Response Districts Program (SARD), see id. § 20-518.1. The legislative history informs us, and plaintiffs concede, that both programs were adopted to eliminate the practice of "chasing," in which tow truck operators monitor police radio transmissions to learn of vehicular accidents and then race each other, often recklessly, to accident scenes to earn fees from the resultant towing and ancillary repair work.
Under DARP, the Department has divided New York City into zones, and it maintains a list of qualified towing companies in each zone. See id. § 20-518(a)(2). As accidents occur within a given zone, the Police Department summons an approved towing company to the accident scenes on a rotating basis. The number of qualified companies per zone is not limited. However, it is important to note that a disabled vehicle to which DARP applies must be removed by an approved tower summoned by the police; it cannot be removed by a tower called independently by the operator of the disabled vehicle. See id. § 20-518(b)(1).
Under SARD, enacted to supplement DARP, the Department has designated certain City areas as districts and then subdivided each district into zones. One towing company per zone has exclusive responsibility for removing all vehicles in that zone for a specified period of time; other companies are not permitted to tow, even when called by the motorists involved. See id. § 20-518.1(a)(1), (c)(1). The maximum number of companies allowed to tow within a SARD zone is three, and if more than three meet certain initial requirements, then the three authorized are chosen by lottery. See id. § 20-518.1(a)(1), (b)(2); 6 RCNY § 2-371.1(d).
DARP and SARD participants are, in addition, required to maintain their own storage and repair facilities. See Admin. Code § 20-518(b)(3) (DARP); 6 RCNY § 2-371(h)-(n) (DARP); Admin. Code § 20-518.1(b)(1)(h) (SARD); 6 RCNY § 2-371.1(e)-(i) (SARD).
The City towing laws also establish the Rotation Tow Program (ROTOW). As its name suggests, ROTOW (like DARP) authorizes companies to tow vehicles on a rotating basis; however, ROTOW applies only to motor vehicles "suspected of having been stolen or abandoned," as well as to certain other unattended vehicles. See Admin. Code § 20-519(a)(1). ROTOW companies must meet criteria ensuring their ability to remove vehicles promptly, see 6 RCNY § 2-372(e)-(h), and they must maintain storage facilities that meet specified requirements, see id. § 2-372(i).
The towing laws also prescribe maximum rates for towing and storage of all vehicles, whether or not the tow in question is governed by DARP or SARD. See Admin. Code § 20-509; 6 RCNY § 2-368. Flat rates for towing and storage are specified for vehicles towed under ROTOW. See Admin. Code § 20-519(c)(1).
It is in this context of municipal governance that plaintiffs allege that the New York City towing laws are preempted by 49 U.S.C. § 14501(c). That statute declares a state or municipality "may not enact or enforce a law ... related to a price, route, or service of any motor carrier ... with respect to the transportation of property." 49 U.S.C. § 14501(c)(1) (1994 & Supp. I 1995) (codifying the FAA Authorization Act of 1994, Pub.L. No. 103-305, § 601(c), 108 Stat. 1569, 1606, as amended by the ICC Termination Act of 1995, Pub.L. No. 104-88, § 103, 109 Stat. 803, 899).
At the same time, subdivision (2) of § 14501(c), entitled "Matters Not Covered," exempts various categories of motor carrier regulation from preemption, two of which are relevant in the case at hand. First, the prohibition on state and local regulation does not
restrict the safety regulatory authority of a State with respect to motor vehicles ... or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization.
Id. § 14501(c)(2)(A). Second, this prohibition
does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law ... relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle.
Id. § 14501(c)(2)(C).
Believing, as noted, that § 14501(c) preempted the City's towing laws, plaintiffs sued the City on August 28, 1996 seeking declaratory and injunctive relief against enforcement of those laws. On October 27, 1997 Judge Cote issued an opinion and order granting in part and denying in part the parties' cross-motions for summary judgment, and judgment was entered three days later. See Ace, 1997 WL 669891.
In ruling on the parties' cross-motions for summary judgment, the district court held that the towing laws largely withstood plaintiffs' preemption challenge. See id. at * 7-* 11. It reasoned that although § 14501(c)(1) generally preempted intrastate regulation of vehicular towing, the safety and financial responsibility exceptions under § 14501(c)(2)(A) were sufficiently broad to exempt the City towing laws from preemption with respect to the SARD, DARP, and ROTOW programs as well as the...
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