Ass'n of Taxicab Operators, USA v. Yellow Checker Cab Co. of Dallas

• Decision Date: 28 November 2012
• Docket Number: Civil Action No. 3:10–CV–1638–N.
• Parties: ASSOCIATION OF TAXICAB OPERATORS, USA., et al., Plaintiffs, v. YELLOW CHECKER CAB COMPANY OF DALLAS/FORT WORTH, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

910 F.Supp.2d 971

ASSOCIATION OF TAXICAB OPERATORS, USA., et al., Plaintiffs,

v.YELLOW CHECKER CAB COMPANY OF DALLAS/FORT WORTH, INC., et al., Defendants.

Civil Action No. 3:10–CV–1638–N.

United States District Court,

N.D. Texas,

Dallas Division.

Nov. 28, 2012.

Kelly D. Hollingsworth, K Hollingsworth & Assoc. PC, Dallas, TX, for Plaintiffs.

M. Forest Nelson, Leonard H. Plog, II, Burt Barr & Associates, Dallas, TX, for Defendants.

ORDER

DAVID C. GODBEY, District Judge.

This Order addresses four motions for summary judgment or partial summary judgment, one filed by each of Defendants Yellow Checker Cab Company of Dallas/Fort Worth, Inc. (“Yellow”) [Doc. 22]; Jet Taxi, Inc. (“Jet”) [25]; Irving Holdings, Inc. (“Irving”) [29]; and MSS Transportation, Inc. d/b/a Freedom Cab Company (“Freedom”) [30]. Each movant has requested relief for itself only, and each requests different relief. The Court grants Yellow's, Jet's, and Irving's motions. The Court denies Freedom's motion.

I. The Dallas–Forth Worth Area Taxicab Antitrust Dispute

Dallas, Tarrant, and Collin Counties do not allow individual drivers to operate taxicabs. Instead, a licensed taxicab driver seeking to operate a taxicab must pay a “stand fee” to a permit holder (“Holder”), an entity approved by local regulators to operate a fleet of taxicabs. In exchange for the stand fee, the Holder gives the driver one or more of several items and services: a decal that allows the driver to operate a taxi in a particular place or places, insurance, dispatch services, branding, and trade name rights. Decal holders charge various stand fees, depending on the decals and dispatch services the operators receive in exchange for paying the fee.

Plaintiffs D.E.C.D.A., Inc. d/b/a StarCab; Maredi Corporation d/b/a United Cab Company; E.P.D.A., Inc. d/b/a Alamo Cab, Inc.; and Walaal Corporation d/b/a Ambassador Cab Company (collectively “Holder Plaintiffs”) are authorized taxicab decal holders in Dallas, Tarrant, and Collin Counties. The other plaintiffs are licensed drivers who operate taxicabs in the region and the Association of Taxicab Operators, which represents members who claim to be affected by Defendants' conduct. Most of the defendants who have answered in this case (collectively “Answering Defendants”) ¹ are also decal holders (collectively “Holder Defendants”) and thus the Holder Plaintiffs' direct competitors. The Holder Defendants are Yellow; Freedom; Jet; ABC Cab, Inc. d/b/a Eagle Cab Company (“Eagle”); U.S. Cab, LLC (“U.S. Cab”); Ambaco, LLC d/b/a Diamond Cab Company (“Diamond”); and Racason, Inc. d/b/a State Taxicab Company (“State Taxicab”). The remaining defendant, Irving Holdings, Inc. (“Irving”) is the corporate parent of the other Answering Defendants.

Plaintiffs allege that the Holder Defendants collectively authorize approximately fifty-two percent of the taxicabs operating in Dallas, Tarrant, and Collin Counties. They further assert that two individuals, Jack Bewley and Jeff Finkel, control all the Defendant entities. Id. at ¶ 34. Bewley and Finkel allegedly gained this control through a series of mergers or acquisitions accomplished in the latter half of 2007. Id. at ¶ 45. The Holder Defendants allegedly charged several different stand fees that are at issue in this case: (1) a $215 weekly fee that included use of a computer dispatch system, (2) a $110 weekly fee that included a decal authorizing service at DFW Airport and in the City of Dallas, and (3) a $99 monthly fee enabling the operator to pick up passengers only at DFW Airport (the “DFW Stand Fee”). Compl. ¶ 33. The DFW Stand Fee does not allow a taxicab to pick up passengers in any city or at Dallas Love Field, and it does not include any dispatch or GPS services.

Plaintiffs's assert that the Holder Defendants charge stand fees to their associated taxicabs that are lower than the stand fees that the Holder Plaintiffs charge to their associated taxicabs, and also lower than the Holder Defendants' average operational costs. Compl. ¶¶ 30–33, 42. They also allege that Defendants conspired to monopolize the taxicab industry by use of these lower stand fees in violation of the Clayton Act and engaged in price fixing and predatory pricing in violation of the Sherman Antitrust Act. Id. ¶¶ 35–46. Reading the Complaint broadly, then, Plaintiffs appear to allege five causes of action: (1) price fixing under section 1 of the Sherman Act, 15 U.S.C. § 1; (2) price fixing under section 2 of the Sherman Act, id. § 2; (3) predatory pricing under section 1 of the Sherman Act; (4) predatory pricing under section 2 of the Sherman Act; and (5) illegal mergers in violation of section 7 of the Clayton Act, 15 U.S.C. § 18.

Yellow, Jet, Irving, and Freedom now move for summary judgment or partial summary judgment. Yellow asks for summary judgment as to all Sherman Act claims and the portions of the Clayton Act claim based on predatory pricing and price fixing. Jet requests summary judgment as to both the Sherman Act predatory pricing claims and the Clayton Act predatory pricing claim. Irving moves for summary judgment as to the Clayton Act claim. Finally, Freedom moves for summary judgment as to all claims.

II. Standards of Review

A. Summary Judgment

Courts “shall grant summary judgment if the movant shows that there is no genuinedispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In making this determination, courts must view all evidence and draw all reasonable inferences in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). The moving party bears the initial burden of informing the court of the basis for its belief that there is no genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

When a party bears the burden of proof on an issue, “he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir.1986). When the nonmovant bears the burden of proof, the movant may demonstrate entitlement to summary judgment either by (1) submitting evidence that negates the existence of an essential element of the nonmovant's claim or affirmative defense, or (2) arguing that there is no evidence to support an essential element of the nonmovant's claim or affirmative defense. Celotex, 477 U.S. at 322–25, 106 S.Ct. 2548. Once the movant has made this showing, the burden shifts to the nonmovant to establish that there is a genuine issue of material fact so that a reasonable jury might return a verdict in its favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Moreover, “[c]onclusory allegations, speculation, and unsubstantiated assertions” will not suffice to satisfy the nonmovant's burden. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir.1996) (en banc). Indeed, factual controversies are resolved in favor of the nonmoving party “ ‘only when an actual controversy exists, that is, when both parties have submitted evidence of contradictory facts.’ ” Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th Cir.1999) (quoting McCallum Highlands, Ltd. v. Washington Capital Dus, Inc., 66 F.3d 89, 92 (5th Cir.1995)).

Because Plaintiffs did not respond to any of the four summary judgment motions Defendants have filed, the Court accepts each movant's asserted facts as undisputed. See, e.g., United States v. Dallas Area Rapid Transit, 96 F.3d 1445 (5th Cir.1996) (affirming grant of summary judgment when district court accepted movant's evidence as undisputed after nonnmovant failed to respond). “A summary judgment nonmovant who does not respond to the motion is relegated to [his] unsworn pleadings, which do not constitute summary judgment evidence.” Bookman v. Shubzda, 945 F.Supp. 999, 1002 (N.D.Tex.1996) (citing Solo Serve Corp. v. Westowne Assocs., 929 F.2d 160, 165 (5th Cir.1991)). If a party “fail[s] to respond to a [ ] motion for summary judgment, the inquiry must be whether the facts presented by the [moving party] create an appropriate basis to enter summary judgment against the” nonmoving party. Adams v. Travelers Indem. Co. of Connecticut, 465 F.3d 156, 164 (5th Cir.2006).

B. Sherman Act

1. Section 1.—Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce.” 15 U.S.C. § 1. Section 1 prohibits only actions that unreasonably restrain competition. See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 885, 127 S.Ct. 2705, 168 L.Ed.2d 623 (2007). To prevail on a claim under section 1, a plaintiff must prove three elements: (1) the defendants engaged in a conspiracy; (2) that restrained trade; (3) in the relevant market. See Golden Bridge Tech., Inc. v. Motorola, Inc., 547 F.3d 266, 271 (5th Cir.2008) (citing Apani Sw., Inc. v. Coca–Cola Enters., Inc., 300 F.3d 620, 627 (5th Cir.2002)). If, after the plaintiff successfully proves that a conspiracy occurred, “the court determines that the defendant's conduct ‘would always or almost always tend to restrict competition and decrease output,’ the restraint is per se illegal and no further inquiry occurs.” Id. at 271 (quoting Leegin, 551 U.S. at 886, 127 S.Ct. 2705). If the court deems that no per se violation has occurred, “the plaintiff will also have to prove that the conduct unreasonably restrains trade in light of actual market forces under the rule of reason.” Id. “To prove a Section 1 violation under rule of reason analysis, [plaintiffs] must show that the defendants' activities caused an injury to competition.” See Doctor's Hosp., Inc. v. Se. Med. Alliance, Inc., 123...