Greater Houston Small Taxicab Co. Owners Ass'n v. City of Houston
| Decision Date | 10 October 2011 |
| Docket Number | No. 10–20381.,10–20381. |
| Citation | 660 F.3d 235 |
| Parties | GREATER HOUSTON SMALL TAXICAB COMPANY OWNERS ASSOCIATION, Plaintiff–Appellant, v. CITY OF HOUSTON, TEXAS, Defendant–Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
OPINION TEXT STARTS HERE
Martin Jonathan Siegel (argued), Law Office of Martin J. Siegel, P.C., Daniel J. Goldberg, Houston, TX, for Plaintiff–Appellant.
Mary H. Burke, Sr. Asst. City Atty. (argued), Judith Lee Ramsey, Sr. Atty. (argued), City of Houston Legal Dept., Houston, TX, for Defendant–Appellee.
Timothy Mason Sandefur, Pacific Legal Found., Sacramento, CA, for Pacific Legal Foundation, Amicus Curiae.Appeal from the United States District Court for the Southern District of Texas.
Before JONES, Chief Judge, and KING and BARKSDALE, Circuit Judges.
The Greater Houston Small Taxicab Company Owners Association, a group representing taxicab companies that hold only one to three permits for cabs, asserts that the City of Houston's plan to distribute new taxicab permits violates the Equal Protection Clause of the Fourteenth Amendment. The district court granted summary judgment to the City. We AFFIRM.
On December 12, 2007, the Houston City Council (“the City”) passed Ordinance 2007–1419 (“the Ordinance”) authorizing 211 additional taxicab permits to be allocated over the subsequent four-year period. New taxicab permits had not been issued in Houston since 2001, and the City wanted to expand its cab fleets. The ordinance planned to distribute new permits based on the size of the taxi company. The size categories are:
As the chart illustrates, small companies would enter a lottery for 16 new permits in the first year, and would have no opportunities for additional permits in years 2–4.
The City developed this plan after consulting with a number of key stakeholders. It formed a “Taxicab Working Group” comprising current taxi permit holders, community leaders, and City Council members. The group, which included three sub-committees, met over the course of several months to develop the proposal that ultimately became the Ordinance.
Most of the reasoning behind this distribution scheme is explained in the Ordinance's preamble and in a memo to the City drafted by the City's Finance and Administration Director. The City viewed the four large companies as “full-service taxicab companies” in that they offer, among other things, full 24–hour radio dispatch services and complete on-site repair facilities for their vehicles. The mid-large companies offer only “limited radio dispatch services.” Mid-small and small companies, by contrast, generally do not offer 24–hour service; they communicate by cell phone and tend to operate primarily at the airports. The City concluded further that larger taxi companies are better able to provide disabled access vehicles and more efficient, environmentally friendly taxicabs.
As a supplement to this distribution scheme, the Code of Ordinances for the City authorizes additional permitting in limited circumstances. Under § 46–66(d), “a qualified other applicant who meets the criteria set forth below may petition the city council requesting that he be granted permits or additional permits....”2 Subsection 46–66(e) provides the “total number of additional permits granted to all petitioners” under subsection (d) “may not exceed 25 percent of the available permit number.” According to the City, this provision acts as a safeguard to provide additional permit opportunities for smaller companies that could, in fact, provide the same services as the larger taxi companies.
Plaintiff-appellant, the Greater Houston Small Taxicab Company Owners Association (“the Association”), represents approximately 60 of the 117 small taxi companies that each hold one to three taxi permits with the City. The Association filed an action under 42 U.S.C. § 1983 against the City in May 2008, arguing that the distribution proposal in the Ordinance violated the Fourteenth Amendment's Equal Protection Clause. The Association first obtained a temporary restraining order preventing the City from enforcing the distribution plan. The Association then sought declaratory and injunctive relief.
The City moved to dismiss. Following limited discovery, the court converted the motion to dismiss to a motion for summary judgment and held for the City. The Association has timely appealed.
DePree v. Saunders, 588 F.3d 282, 286 (5th Cir.2009) (internal citations and quotations omitted); see also Fed.R.Civ.P. 56(a).
On appeal, the Association contends that the Ordinance violates equal protection by drawing impermissible distinctions between taxi companies based on their size.3 The Association claims that because there is no meaningful distinction in the level of service provided by mid-small taxi companies and small taxi companies, the City cannot permissibly guarantee the growth of the mid-small companies by awarding them many new permits while essentially preventing the growth of 101 out of the 117 small taxi companies that offer the same service.4 The Association argues further that the City's real motivation is economic favoritism.
The parties agree that the constitutional challenge at issue is reviewed according to the rational basis test. Under this standard, a legislative classification will be upheld “if there is a rational relationship between the disparity of treatment and some legitimate governmental purpose.” Heller v. Doe, 509 U.S. 312, 320, 113 S.Ct. 2637, 125 L.Ed.2d 257 (1993). Because all legislation classifies its objects, differential treatment is justified by “any reasonably conceivable state of facts.” Id. Legislation need not pursue its permissible goal by using the least restrictive means of classification; consequently, the Equal Protection Clause is not violated “merely because the classifications made ... are imperfect.” Johnson v. Rodriguez, 110 F.3d 299, 306 (5th Cir.), cert. denied, 522 U.S. 995, 118 S.Ct. 559, 139 L.Ed.2d 400 (1997) (quotation omitted). Despite its deference, however, the rational basis test “is not a toothless one.” Schweiker v. Wilson, 450 U.S. 221, 234, 101 S.Ct. 1074, 67 L.Ed.2d 186 (1981). A “necessary corollary to and implication of rationality as a test is that there will be situations where proffered reasons are not rational.” Doe v. Pa. Bd. of Prob. & Parole, 513 F.3d 95, 112 n. 9 (3d Cir.2008). We consider each of those prongs—legitimate purpose and rational relationship—in turn.
The Association argues that the Ordinance represents a desire to prefer one or two classes of taxi companies over similarly situated competitors with no resulting public benefit. This, the Association claims, is not a legitimate purpose for a city ordinance.
The Association directs us to a number of cases in which federal courts have invalidated (much different) state and local laws under the rational basis test, but it relies most heavily on Craigmiles v. Giles, 312 F.3d 220 (6th Cir.2002). In Craigmiles, the Sixth Circuit overturned a Tennessee law requiring all casket sellers, including those who provided no funeral services, to obtain a funeral director's license. The Sixth Circuit held that the law bore no rational relationship to the goals advocated by the government, which included, inter alia, a desire to make businesses that deal with bereaved clients more attuned to the grieving process. Id. at 228. The court found that the law advanced an “obvious illegitimate purpose” by imposing “a significant barrier to competition in the casket market.” Id. The legislature's stated goals were also “pretextual,” a “naked attempt to raise a fortress protecting the monopoly rents that funeral directors extract from consumers.” Id. at 229. The Association interprets Craigmiles and similar cases to mean that the Equal Protection Clause requires ordinances to further a public goal rather than isolated private interests.
The City counters that its purpose is not economic favoritism, but rather encompasses the goals articulated in Houston's Taxicab Code, “(i) to foster enhanced competition within the taxicab industry, (ii) to increase the level and quality of taxicab service available...
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