Cardinal Towing & Auto Repair, Inc. v. City of Bedford, Tex.

• Citation: 180 F.3d 686
• Decision Date: 22 July 1999
• Docket Number: No. 98-10194,98-10194
• Parties: CARDINAL TOWING & AUTO REPAIR, INC.; David Matoke, Individually, Plaintiffs-Appellants, v. CITY OF BEDFORD, TEXAS, a Municipal Corporation; Rick Hurt, Mayor of City of Bedford in his official and individual capacity; Becky Grein, City Council Member in her official and individual capacity; Lisa Daly, City Council Member in her official and individual capacity; Stephen Peak, City Council Member in his official and individual capacity; Charles Orean, City Council Member in his official and individual capacity; Danny McDowell, City Council Member in his official and individual capacity; Leahmon Chambers, City Council Member in his official and individual capacity; Jim R. Simpson, Chief of Police in his official and individual capacity; B&B Wrecker Services, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 686

180 F.3d 686

CARDINAL TOWING & AUTO REPAIR, INC.; David Matoke Individually, Plaintiffs-Appellants, v. CITY OF BEDFORD, TEXAS, a Municipal Corporation; Rick Hurt Mayor of City of Bedford in his official and individual capacity; Becky Grein, City Council Member in her official and individual capacity; Lisa Daly, City Council Member in her official and individual capacity; Stephen Peak, City Council Member in his official and individual capacity Charles Orean, City Council Member in his official and individual capacity; Danny McDowell, City Council Member in his official and individual capacity; Leahmon Chambers City Council Member in his official and individual capacity; Jim R. Simpson, Chief of Police in his official and individual capacity; B&B Wrecker Services, Inc., Defendants-Appellees.

No. 98-10194.

United States Court of Appeals, Fifth Circuit.

July 22, 1999.

Michael Patrick McGovern, Ayres & Parkey, Knoxville, TN, Gilbert Craig Hubble, Law Office of Charles W. Settle, Arlington, TX, for Plaintiffs-Appellants.

James Thomas Jeffrey, Jr., Remington & Jeffrey, Arlington, TX, for City of Bedford, Texas, Rick Hurt, Becky Grein, Lisa Daly, Stephen Peak, Charles Orean, Danny McDowell, Leahmon Chambers and Jim R. Simpson.

James A. Cribbs, Paul Thomas Francis, Cribbs & McFarland, Arlington, TX, for B&B Wrecker Services, Inc.

Jonathan E. Bruce, Stephenson-Anderson & Associates, Houston, TX, for Austin Towing Association, Amicus Curiae, Galveston Towing & Storage Lot Association, Amicus Curiae, Houston Professional Towing Association, Amicus Curiae and Lubbock Towing Association, Amicus Curiae.

Gilbert D. Douglas, Houston, TX, for City of Houston, Texas, Amicus Curiae.

Deborah Lynne Klein, Assistant City Attorney of San Antonio, Litigation Division, San Antonio, TX, for City of San Antonio, Amicus Curiae.

William Alan Wright, Haynes & Boone, Dallas, TX, Debra Janece McComas, Haynes & Boone, Houston, TX, for Texas Towing Corporation, Amicus Curiae.

Appeal from the United States District Court for the Northern District of Texas.

Before GARWOOD, DAVIS and DeMOSS, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiffs-appellants Cardinal Towing & Auto Repair, Inc. and its owner David Matoke (collectively, Cardinal) sued defendants-appellees--the City of Bedford, Texas, the members of the City Council, the City's Police Chief and B&B Wrecker Services, Inc. (all appellees collectively, the City)--complaining of the City's 1995 towing ordinance and the 1996 award of the City's towing contract thereunder to defendant-appellee B&B Wrecking Services, Inc. (B&B). The suit alleged preemption by 49 U.S.C. § 14501(c) and intentional racial discrimination. The district court granted summary judgement for the City. We affirm.

Facts and Procedural History

The City of Bedford--located outside of Fort Worth--has a population of about 45,000. The Bedford police have the authority to call tow trucks to remove vehicles on public streets that are abandoned or disabled in accidents. These "police tows" were historically handled using a rotation system. Local towing companies that applied and met certain requirements were placed on a police list, and a police tow job would go to the company whose turn it was. The towed vehicle would be stored at the tower's lot and the owner would ultimately pay for the service. For a number of reasons, in November 1995 the City decided to abandon this system and instead contract with a single company to perform all of the tows requested by the City police. Accordingly, the City repealed the previous statutory scheme and passed the here-challenged ordinance directing that the City's non-consensual City police tows be handled by the recipient of the contract with the City. As before, the owner of the vehicle would actually pay for the service. The ordinance did not affect non-consensual tows requested by private property owners--property owners remained free to strike agreements with any towing company they wished; nor did it affect situations in which the owner of a disabled car was available and expressed a preference for a particular company at the scene of the accident. ¹ The ordinance thus limited itself to purely non-consensual situations in which the Bedford police requested a tow.

The City drafted contract specifications and solicited bids. The evidence demonstrates that none of the City defendants were aware at the time these specifications were drafted that David Matoke was an African-American (or of the race of the owner(s) of B&B). Applicants were required to comply with a number of requirements, the most significant of which were a guarantee of response time within fifteen minutes and access to a class eight wrecker. Class eight wreckers are large towing vehicles able to remove tractor trailer trucks. Cardinal, B&B and another company submitted bids to the City. Cardinal's bid stated it was "minority owned." Cardinal averred below that it had "made arrangements to acquire" a class eight wrecker and stated in its bid that it would take some time to put the wrecker in service. In the interim, it stated that it would be able to call on a class eight wrecker owned by another company, Beard's Towing. A letter from Beard's was attached, in which access to a wrecker was confirmed. However, the letter reflects that Beard's was only able to guarantee a response time averaging forty-five minutes to an hour. The City Council in February 1996 voted to award the contract to B&B. The members of the City Council testified that at that time they were unaware of the race of either Matoke or B&B's owner(s). After the award of the contract, Cardinal protested, claiming that it had been discriminated against. In the wake of these allegations, the City decided to rebid the contract. The second set of bid specifications contained some additional requirements, including ownership of a class eight wrecker, maintenance of an office at the company's vehicle storage facility, and computerized record keeping. The specifications were later amended by raising the required insurance level. Cardinal's second bid stated that it was in the process of acquiring a class eight wrecker and suggested usage of Beard's in the interim. Cardinal also claimed that it was in the process of establishing compliance with the computerized records and office at the storage location requirements and both would be completed a month and a half after the bid was submitted.

The City Council in September 1996 again awarded the contract to B&B. Cardinal filed suit in the Northern District of Texas on February 19, 1997, requesting a declaratory judgement that the City's police tow contracting ordinance constituted regulation related to the price, route, or service of a motor carrier with respect to the transportation of property and was thus preempted under 49 U.S.C. § 14501(c). The complaint also sought damages for intentional racial discrimination under section 1981 and section 1983. On November 4, 1997, the City filed for summary judgement. Cardinal responded by moving for partial summary judgement on the preemption issue. On January 9, 1998, the district court granted summary judgement for the City. This appeal followed.

Discussion

We review a district court's grant of summary judgment employing the standard of review it employed. Dutcher v. Ingalls Shipbuilding, 53 F.3d 723, 725 (5th Cir.1995). Summary judgment must be affirmed when the non-moving party has failed to demonstrate that a material issue of fact is present. In reviewing the record, we must view all facts in the light most favorable to the nonmovant. We review questions of law de novo. Id.

Cardinal's first and principal argument (to which the vast majority of its brief is devoted) is that the district court erred in refusing to find the Bedford ordinance preempted under federal law. It claims that the ordinance and the contract awarded pursuant to it constituted regulation or a provision having the force and effect of law governing ground transportation, and is thus barred under the express preemption clause contained in 49 U.S.C. § 14501(c). The City claims that the ordinance was not regulation, but rather an ordinary contracting decision of a proprietary nature and thus is outside the scope of section 14501(c) preemption. In the alternative, the City argues that if the ordinance is regulation, it is exempted from preemption under section 14501(c)(2)(A)'s exemption for safety related regulation. We find it unnecessary to address the application of the exemption, since we conclude that the City's actions here were proprietary and did not constitute the type of regulation covered in the statute's preemption clause. We also find that Cardinal's race discrimination claim lacks merit.

I. Preemption by 49 U.S.C. § 14501(c)

Under the Supremacy Clause of the Constitution, "the Laws of the United States ... shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. Art. VI, cl. 2. Federal law preempts state law under the clause whenever 1) Congress has expressly preempted state action, 2) Congress has installed a comprehensive regulatory scheme in the area, thus removing the entire field from the state realm, or 3) state action directly conflicts with the force or purpose of federal law. See Hodges v. Delta Airlines, Inc., 44 F.3d 334, 335 n. 1 (5th Cir.1995) (en banc ). Preemption of municipal ordinances is governed under the same standards as would apply to a state law. See Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 111 S.Ct. 2476, 2482, 115 L.Ed.2d 532 (1991). However, when preemption is invoked to prevent a state or municipality from wielding its traditional police powers, congressional intent to displace that authority must be "clear and manifest." See California v. ARC America Corp., 490 U.S. 93, 109 S.Ct. 1661, 1665, 104 L.Ed.2d 86 (1989). The setting of the...